UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C.  20549
 
 FORM
20-F
 
 [
]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 OR
 
 [X]  ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE   ACT
OF 1934
 
 For the
fiscal year ended December 31,
2007
 
 OR
 
 [
]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 
 For the
transition period from ___________ to __________
 
 OR
 
 [
]  SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 Date of
event requiring this shell company report: ______
 
 Commission
File Number: 000-51337
 
 AMERICAN GOLDRUSH
CORP.
 (Exact
name of Registrant as specified in its charter)
 
 British Columbia,
Canada
 (Jurisdiction
of incorporation or organization)
 
 1155 West Pender Street,
Suite 708, Vancouver, British Columbia, Canada V6E 2P4
 (Address
of principal executive offices)
 
 Securities
to be registered pursuant to Section 12(b) of the Act:
 
 None
 
 Securities
to be registered pursuant to Section 12(g) of the Act:
 
 Common Stock, Fully Paid and
Non-Assessable Common Shares, Without Par Value
 (Title of
Class)
 
 Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
 
 Indicate
the number of outstanding shares of each of the issuer's classes of capital or
common stock as of the close of the period covered by the annual report: The
registrant has one class of Common Stock with 41,613,920 shares outstanding as
of December 31, 2007 and May 22, 2008.  No preferred shares issued and
outstanding.
  1
  Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act   Yes [  ]  No
[X]
 
 If this
report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934. Yes [  ] No [X]
  Note –
Checking the box above will not relieve any registrant required to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from
their obligations under those Sections.
  
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past ninety days.  Yes [X]  No
[  ]
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.  See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act.
 
 Large
accelerated filer  [  ] Accelerated
filer  [  ] Non-accelerated filer [X]
 
 Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:
 
 U.S.
      GAAP [  ]
              International
      Financial Reporting Standards as issued by the International Accounting
      Standards Board [  ]
              Other
      [ X]
 
 If
“Other” has been checked in response to the previous question, indicate by check
mark which financial statement item the registrant has elected to
follow.
 Item 17 [
X] Item 18 [  ]
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)  Yes [  ]  No
[X]
 
 Index to
Exhibits on Page 75
  2
  AMERICAN
GOLDRUSH CORP.
 
 FORM
20-F ANNUAL REPORT 2007
 
 TABLE
OF CONTENTS
 
 
 Mining
      Glossary
              4Introduction
              5Part
      IItem
      1.
              Identity
      of Directors, Senior Management and Advisors
              6Item
      2.
              Offer
      Statistics and Expected Timetable
              6Item
      3.
              Key
      Information
              6Item
      4.
              Information
      on the Company
              15Item
      4A.
              Unresolved
      Staff Comments
              30Item
      5.
              Operating
      and Financial Review and Prospects
              30Item
      6.
              Directors,
      Senior Management and Employees
              37Item
      7.
              Major
      Shareholders and Related Party Transactions
              42Item
      8.
              Financial
      Information
              43Item
      9.
              The
      Offer and Listing
              45Item
      10.
              Additional
      Information
              45Item
      11.
              Quantitative
      and Qualitative Disclosures About Market Risk
              50Item
      12.
              Description
      of Other Securities Other Than Equity SecuritiesPart
      IIItem
      13.
              Defaults,
      Dividend Arrearages and Delinquencies
              50Item
      14.
              Material
      Modifications to the Rights of Security Holders and Use of
      Proceeds
              50Item
      15.
              Controls
      and Procedures
              50Item
      16.
              Reserved
              52Part
      IIIItem
      17.
              Financial
      Statements
              53Item
      18.
              Financial
      Statements
              53Item
      19.
              Exhibits
              75Financial
      Statements
              54Signature
      Page
              76
 
  3
  Mining
Glossary
 
 Au:
              GoldBreccia:
              Rock
      composed of sharp-angled fragments embedded in a fine-grained
      matrix.Deposit:
              A
      mineralized body which has been physically delineated by sufficient
      drilling, trenching, and/or underground work, and found to contain a
      sufficient average grade of metal or metals to warrant further exploration
      and/or development expenditures. Such a deposit does not qualify as a
      commercially mineable ore body or as containing reserves of ore, unless
      final legal, technical, and economic factors are
  resolved.Hectare:
              A
      unit of area in the metric system equal to 100 acres, or 10,000 square
      meters, and the equivalent of 2.471 acres in British Imperial and U.S.
      Customary measure.Mineralized
      material:
              Tonnage
      and grade estimate for non-reserve materials where sampling and geologic
      understanding is sufficient for classification as reserves, but that may
      not pass the economic test.Ore:
              A
      natural aggregate of one or more minerals which, at a specified time and
      place, may be mined and sold at a profit or from which some part may be
      profitably separated.Quartz:
              A
      common mineral, silicon dioxide, occurring in crystals and
      grains.Stratigraphy:
              The
      arrangement of rock strata, especially as to geographic position and
      chronological order of sequence.
 
  4
  INTRODUCTION
 
 We were
formed as a corporation under the federal laws of Canada pursuant to the Canada
Business Corporations Act on August 8, 2003. We are an exploration stage company
engaged principally in the acquisition, exploration, and if warranted and
feasible, development of natural resource properties in North
America.
 
 In this
Annual Report, the “Company”, “American Goldrush Corp.”, “Goldrush”, "we",
"our", and "us", refer to American Goldrush Corp. (unless the context otherwise
requires).  Summary discussions of documents referred to in this
Annual Report may not be complete, and we refer you to the actual documents for
more complete information.  Our principal corporate offices are
located at Suite 708 – 1155 West Pender Street, Vancouver, British Columbia, V6E
2P4.
 
 BUSINESS
OF AMERICAN GOLDRUSH CORP.
 
 American
Goldrush Corp. is principally a company engaged in the acquisition and
exploration of mineral properties. The Company currently has entered into two
property option agreements relating to one property in Arizona and one in
British Columbia, Canada.
 
 FINANCIAL
AND OTHER INFORMATION
 
 In this
Annual Report, unless otherwise specified, all dollar amounts are expressed in
Canadian Dollars (“CDN$” or “$”).  The Government of Canada permits a
floating exchange rate to determine the value of the Canadian Dollar against the
U.S. Dollar (US$).
 
 
 FORWARD-LOOKING
STATEMENTS
 
 This
Annual Report includes forward-looking statements, principally in ITEM #4,
“Information on the Company” and ITEM #5, “Operating and Financial Review and
Prospects".  We have based these forward-looking statements largely on
our current expectations and projections about future events and financial
trends affecting our business.  These forward-looking statements are
subject to risks, uncertainties and assumptions including, among other things,
the factors discussed in this Annual Report under ITEM #3, “Key Information,
Risk Factors" and factors described in documents that we may furnish from time
to time to the Securities and Exchange Commission.
 
 The words
"believe", "may", "estimate", "continue", "anticipate", "intend", "expect", and
similar words are intended to identify forward-looking statements.  In
light of these risks and uncertainties, the forward-looking information, events
and circumstances discussed in this Annual Report might not
occur.  Our actual results and performance could differ substantially
from those anticipated in our forward-looking statements.  We
undertake no obligation to update publicly or revise any forward-looking
statements because of new information, future events or
otherwise.
  5
  PART
I
 
 ITEM
1.IDENTITY OF DIRECTORS,
SENIOR MANAGEMENT AND ADVISORS
 ---
Not applicable ---
 
 ITEM
2.  OFFER STATISTICS AND EXPECTED TIMETABLE.
 ---
Not applicable ---
 
 ITEM
3.  KEY INFORMATION.
 
 3.A Selected Financial
Data
 
 The
selected financial data of the Company for the fiscal years ended December, 31
2007, 2006 and 2005 and for the fiscal period from August 8, 2003 (inception) to
December, 31 2007 was derived from the financial statements of the Company that
have been audited by BDO Dunwoody LLP independent registered public accounting
firm, as indicated in their audit reports, which are included elsewhere in this
Annual Report.
 
 The
selected financial data should be read in conjunction with the financial
statements and other financial information included elsewhere in the Annual
Report.
 
 The
Company has not declared any dividends since incorporation and does not
anticipate that it will do so in the foreseeable future.  The present
policy of the Company is to retain all available funds for use in its operations
and the expansion of its business.
 
 Table No.
1 is derived from the financial statements of the Company, which have been
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP).  There are no material numerical differences between Canadian
GAAP and US GAAP, as applicable to the Company.
 
 Table
No. 1
 Selected
Financial Data
 (CDN$)
 
 
 
 August
      8, 2003Year
              
              
              Year
              
              
              Year
              
              
              (inception)
      toEnded
              
              
              Ended
              
              
              Ended
              
              
              December
      31,12/31/07
              
              
              12/31/06
              
              
              12/31/05
              
              
              2004Revenue
              
              $Nil
              
              
              $Nil
              
              
              $Nil
              
              
              $NilExpenses
              
              $
              (351,943
              )
              
              $
              (1,945,540
              )
              
              $
              (101,396
              )
              
              $
              (102,802
              )Loss
      from operations
              
              $
              (351,943
              )
              
              $
              (1,945,540
              )
              
              $
              (101,396
              )
              
              $
              (102,802
              )Net
      Loss and OtherComprehensive
      Loss
              
              $
              (346,255
              )
              
              $
              (1,946,089
              )
              
              $
              (102,926
              )
              
              $
              (102,802
              )Basic
      and diluted (Loss) Per Share
              
              $
              (0.01
              )
              
              $
              (0.05
              )
              
              $
              (0.00
              )
              
              $
              (0.00
              )Dividends
      Per Share
              
              $Nil
              
              
              $Nil
              
              
              $Nil
              
              
              $NilWeighted
      Avg. Shares
              
              
              41,613,920
              
              
              
              40,997,133
              
              
              
              39,557,350
              
              
              
              -Period-end
      Shares
              
              
              41,613,920
              
              
              
              41,613,920
              
              
              
              39,557,350
              
              
              
              39,557,350Working
      Capital (deficiency)
              
              $
              32,679
              
              
              $
              355,721
              
              
              $
              (69,918
              )
              
              $
              (2,067
              )Long-Term
      Debt
              
              $Nil
              
              
              $Nil
              
              
              $Nil
              
              
              $NilShare
      Capital
              
              $
              684,442
              
              
              $
              684,442
              
              
              $
              100,735
              
              
              $
              100,735Shareholders’
      Equity (Capital Deficit)
              
              $
              53,940
              
              
              $
              359,088
              
              
              $
              (69,918
              )
              
              $
              (2,067
              )Total
      Assets
              
              $
              84,334
              
              
              $
              418,249
              
              
              $
              23,748
              
              
              $
              29,249
 
 
  6
  3.A.3.  Exchange
Rates
 
 In this
Annual Report, unless otherwise specified, all dollar amounts are expressed in
Canadian Dollars (CDN$).  The Government of Canada permits a floating
exchange rate to determine the value of the Canadian Dollar against the U.S.
Dollar (US$).
 
 Table No.
2 sets forth the exchange rates for the Canadian Dollar at the end of each of
the three fiscal years ended December 31, 2007, 2006 and 2005, the average rates
for the period and the range of high and low rates for the
period.  The data for April 2008 and for each month during the most
recent six months is also provided.
 
 For
purposes of this table, the rate of exchange means the noon buying rate in New
York City for cable transfers in foreign currencies as certified for customs
purposes by the Federal Reserve Bank of New York.  The table sets
forth the number of Canadian Dollars required under that formula to buy one U.S.
Dollar.  The average rate means the average of the exchange rates on
the last day of each month during the period.
 
 Table
No. 2
 U.S.
Dollar/Canadian Dollar
 
 
 Period
              Average
              High
              Low
              CloseApril
      2008
              1.14
              1.11
              1.16
              1.12March
      2008
              1.00
              0.98
              1.03
              1.03February
      2008
              1.00
              0.98
              1.02
              0.98January
      2008
              1.01
              0.98
              1.03
              1.00December
      2007
              1.00
              0.98
              1.02
              0.99November
      2007
              0.97
              0.91
              0.99
              0.99Fiscal
      Year Ended December 31, 2007
              1.07
              0.91
              1.19
              0.98Fiscal
      Year Ended December 31, 2006
              1.13
              1.10
              1.17
              1.17Fiscal
      Year Ended December 31, 2005
              1.21
              1.15
              1.27
              1.17
 
 
 3.B.  Capitalization
and Indebtedness
 
 --- Not
applicable ---
 
 3.C.  Reasons for
the Offer and Use of Proceeds
 
 --- Not
applicable ---
 
 3.D.  Risk
Factors
 
 This
investment has a high degree of risk.  Before you invest you should
carefully consider the risks and uncertainties described below and the other
information in this prospectus.  If any of the following risks
actually occur, our business, operating results and financial condition could be
harmed and the value of our stock could go down.  This means you could
lose all or a part of your investment.
 
 
  7
  RISKS
RELATING TO OUR COMPANY
 
 1.
              As
      only three of our directors, Messrs. Gourlay, Kehmeier and Cann, have
      technical training or experience in exploring for, starting, and operating
      a mine, we will have to hire qualified consultants. If we cannot locate
      qualified consultants, we may have to suspend or cease operations which
      will result in the loss of your
investment.
 
 Only
three of our directors, Messrs. Gourlay, Kehmeier and Cann have experience with
exploring for, starting, and operating a mine. Except for these three
individuals, none of our executive officers have any technical training or
experience in exploring for, starting, and operating a mine. As such, we will
have to hire qualified consultants to perform surveying and exploration of our
properties. The other executive officers and director have no direct training or
experience in these areas and as a result may not be fully aware of many of the
specific requirements related to working within the industry. Their decisions
and choices may not take into account standard engineering or managerial
approaches, mineral exploration companies commonly use. Consequently our
operations, earnings and ultimate financial success could suffer irreparable
harm due to management's lack of experience in this industry. As a result we may
have to suspend or cease operations which will result in the loss of your
investment.
 
 2.
              Not
      all of our properties have been examined by a professional geologist or
      mining engineer and we have no known mineral reserves on any of our
      properties. Without mineral reserves we cannot generate income, and if we
      cannot generate income we will have to cease
  operations.
 
 The South
Vulture and GQ properties have not been examined by a professional geologist or
mining engineer.  As such, we have no known mineral reserves on any of
our properties. Without mineral reserves, we have nothing to economically
remove. If we have nothing to economically remove from any of our properties, we
cannot generate income and in such a situation, we will have to cease operations
which will result in the loss of your investment.
 
 3.
              Weather
      interruptions in the Province of British Columbia may delay our proposed
      exploration operations. Such delay will extend the time when we may be
      able to generate revenues.
 
 Our
proposed exploration work on the GQ Property can only be performed approximately
five to six months out of the year. This is because rain and snow cause travel
to our claims to be difficult during six to seven months of the year. During the
winter, we are unable to conduct exploration operations on the GQ Property. This
could delay exploration and subsequent removal of any mineralized material,
should any be discovered. As a result of the delay in removing mineralized
material, no revenue will be generated by us, which will result in the loss of
your investment. Access to our properties in Arizona is not affected by
weather.
 
 4.
              Since
      Messrs. Gourlay, Kehmeier, Praill and Cann, directors of the Company, have
      other outside business activities and will only be devoting 20% of their
      time to our operations, our operations may be sporadic. This may result in
      periodic interruptions or suspensions of exploration which may result in
      the loss of your investment.
 
 Since our
directors and executive officers have other outside business activities and will
only be devoting 20% of their time to our operations, our operations may be
sporadic and only occur at times which are convenient to Messrs. Gourlay,
Kehmeier, Praill and Cann. As a result, exploration of our properties may be
periodically interrupted or suspended.
 
 
 5.
              Our
      auditors’ opinion on our December 31, 2007 financial statements includes
      an explanatory paragraph in respect of there being substantial doubt about
      our ability to continue as a going
concern.
 
 We have incurred a net loss of
$2,498,072 for the period from August 8, 2003 (inception) to December 31,
2007.  We anticipate generating losses for at least the next 12
months.  Therefore, there is substantial doubt about our ability to
continue operations in the future as a going concern as described
in
  8
  the
Comments for US Readers on Canada – US Reporting Differences by our auditors
with respect to the financial statements for the year ended December 31,
2007.  Our financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts of and classification of liabilities that might be necessary in the
event the Company cannot continue in existence.
 
 Our
plans to deal with this uncertainty include raising additional capital or
entering into a strategic arrangement with a third party. If we cannot continue
as a viable entity, our shareholders may lose some or all of their investment in
our company.
 
 6.
              If
      we are unable to obtain additional funding, our business operations will
      be harmed.  Even if we do obtain additional financing our then
      existing shareholders may suffer substantial
  dilution.
 
 We will
require additional funds to meet our obligations under our existing property
option agreements and to acquire and development interests in new properties
that we want to explore for natural mineral resources in the future. We
anticipate that we will require up to approximately CDN $161,000 to fund our
continued operations for the next twelve months. With the proceeds of $201,600
received in January 2008 from the assignment of the Margarita Property we have
sufficient cash to meet our minimum obligations  for the next twelve
months.  However, in the future, or if we expand our operations in the
next twelve months,  additional capital will be required to
effectively support the operations and to otherwise implement our overall
business strategy. The inability to obtain additional capital will restrict our
ability to grow and may reduce our ability to continue to conduct business
operations.  If we are unable to obtain additional financing, we will
likely be required to curtail our development plans which could cause the
company to become dormant. Any additional equity financing may involve
substantial dilution to our then existing shareholders.
 
 7.
              If
      we do not continue to make payments under our Property Option Agreements
      for our properties, we will lose our interest in the properties as well as
      losing all monies incurred in connection with the
    properties.
 
 We have currently secured, under the
two separate Property Option Agreements with two separate individuals, the right
to acquire a 100% interest in the two properties.  Pursuant to the
Option Agreements, we may continue to exercise the options only by making a
series of annual cash payments and incurring net expenditures on the respective
properties.  See the Property option agreements” description located
in the section entitled “Section 4.D - Property Plant, and Equipment” of this
20-F for a more detailed description of the Option Agreements. If we do not make
the required payments or incur the required expenditures in accordance with the
Option Agreements we will lose our option to purchase the respective property
and may not be able to continue to execute our business objectives if we are
unable to find an alternate exploration interest.  Each of our
property option agreements are separate from each other and the termination of
one agreement will not impact our rights under any of the other
agreements.
 
 8.
              Because
      our business involves numerous operating hazards, we may be subject to
      claims of a significant size which would cost a significant amount of
      funds and resources to rectify. This could force us to cease our
      operations, which will cause you a loss of your
  investment.
 
 Our
operations are subject to the usual hazards inherent in exploring for minerals,
such as general accidents, explosions, chemical exposure, and
craterings.  The occurrence of these or similar events could result in
the suspension of operations, damage to or destruction of the equipment involved
and injury or death to personnel. Operations also may be suspended because of
machinery breakdowns, abnormal climatic conditions, failure of subcontractors to
perform or supply goods or services or personnel shortages. The occurrence of
any such contingency would require us to incur additional costs and force us to
cease our operations, which will cause you a loss of your
investment.
 
 9.
              Damage
      to the environment could also result from our operations.  If
      our business is involved in one or more of these hazards, we may be
      subject to claims of a significant size which could force us to cease our
      operations.
  9
  
 Mineral
resource exploration, production and related operations are subject to extensive
rules and regulations of federal, provincial, state and local
agencies.  Failure to comply with these rules and regulations can
result in substantial penalties.  Our cost of doing business may be
affected by the regulatory burden on the mineral industry since the rules and
regulations frequently are amended or interpreted.  We cannot predict
the future cost or impact of complying with these laws.
 
 Environmental
enforcement efforts with respect to mineral operations have increased over the
years, and it is possible that regulation could expand and have a greater impact
on future mineral exploration operations.  Although our management
intends to comply with all legislation and/or actions of local, provincial,
state and federal governments, non-compliance with applicable regulatory
requirements could subject us to penalties, fines and regulatory actions, the
cost of which could harm our results of operations.  We cannot be sure
that our proposed business operations will not violate environmental laws in the
future.
 
 Our
operations and properties are subject to extensive federal, state, provincial
and local laws and regulations relating to environmental protection, including
the generation, storage, handling, emission, transportation and discharge of
materials into the environment, and relating to safety and health. These laws
and regulations may do any of the following: (i) require the acquisition of a
permit or other authorization before exploration commences, (ii) restrict the
types, quantities and concentration of various substances that can be released
into the environment in connection with exploration activities, (iii) limit or
prohibit mineral exploration on certain lands lying within wilderness, wetlands
and other protected areas, (iv) require remedial measures to mitigate pollution
from former operations and  (v)  impose
substantial  liabilities  for  pollution  resulting  from  our  proposed
operations.
 
 The
exploration of mineral reserves are subject to all of the usual hazards and
risks associated with mineral exploration, which could result in damage to life
or property, environmental damage, and possible legal liability for any or all
damages. The exploration activities may be subject to prolonged disruptions due
to the weather conditions surrounding the location of the GQ
Property.  Access to our properties in Arizona is not affected by
weather.  Difficulties, such as unusual or unexpected rock formations
encountered by workers but not indicated on a map, or other conditions may be
encountered in the gathering of samples and information, and could delay our
exploration program.  Even though we are at liberty to obtain
insurance against certain risks in such amounts we deem adequate, the nature of
those risks is such that liabilities could over exceed policy limits or be
excluded from coverage.  We do not currently carry insurance to
protect against these risks and we may not obtain such insurance in the
future.  There are also risks against which we cannot, or may not
elect to insure.  The costs, which could be associated with any
liabilities, not covered by insurance or in excess of insurance coverage or
compliance with applicable laws and regulations may cause substantial delays and
require significant capital outlays, thereby hurting our  financial
position, future earnings, and/or competitive positions.  We may not
have enough capital to continue operations and you will lose your
investment.
 
 10.
              Because
      of the speculative nature of exploration and development, there is a
      substantial risk that our business will
fail.
 
 The
search for valuable natural resources on our properties is extremely risky as
the exploration for natural resources is a speculative venture involving
substantial risk. Few properties that are explored are ultimately developed into
producing mines. Problems such as unusual or unexpected formations and other
conditions are involved in mineral exploration and often result in unsuccessful
exploration efforts.  Because the probability of an individual
prospect ever having reserves is extremely remote, in all probability our
properties do not contain any reserves, and any funds we spent on exploration
will probably be lost. In such a case, we would be unable to complete our
business plan.
 
 Mineral
exploration involves a high degree of risk and exploration projects are
frequently unsuccessful.  To the extent that we continue to be
involved in mineral exploration, the long-term success of our operations will be
related to the cost and success of our exploration programs. The risks
associated with mineral exploration include:
  10
  ·      the
identification of potential mineralization  based on superficial
analysis;
 
 ·      the
quality of our management and our geological and technical expertise;
and
 
 ·      the
capital available for exploration and development.
 
 Substantial
expenditures are required to determine if a project has economically mineable
mineralization.  It may take several years to establish proven and
probable reserves and to develop and construct mining and processing facilities.
Problems such as unusual or unexpected formations and other conditions are
involved in mineral exploration and often result in unsuccessful exploration
efforts.  In such a case, we would be unable to develop our
business.
 
 11.
              We
      may not be able to compete with current and potential exploration
      companies, some of whom have greater resources and experience than we do
      in developing mineral reserves.
 
 The
natural resource market is intensely competitive, highly fragmented and subject
to rapid change.  We may be unable to compete successfully with our
existing competitors or with any new competitors.  We compete with
many exploration companies which have significantly greater personnel,
financial, managerial, and technical resources than we do. This competition from
other companies with greater resources and reputations may result in our failure
to maintain or expand our business.
 
 12.
              If
      we lose the services of any of our management team we may not be able to
      continue to operate our business and may be required to cease
      operations.
 
 We are
presently dependent to a great extent upon the experience, abilities and
continued services of Andrew Gourlay, our Director, Chairman, President, Chief
Executive Officer and Operating Officer. Mr. Gourlay, who currently spends
approximately 1 day per week working on the Company’s business, has an extensive
background in the natural resource exploration industry and the loss of his
services would negatively impact our operations. If we lost the services of this
individual we would be forced to find other qualified management to assist us in
location and exploration of a property. This would be costly to us in terms of
both time and expenses.  We do not maintain an employment agreement
with Mr. Gourlay nor do we have key-man life insurance on him. Therefore, if we
were unable to replace the services and experience of Mr. Gourlay, we may be
forced to discontinue our operations.
 
 13.
              The
      prices of metals are highly volatile and a decrease in metals prices could
      result in us incurring losses.
 
 The
profitability of natural resource operations are directly related to the market
prices of the underlying commodities.  The market prices of metals
fluctuate significantly and are affected by a number of factors beyond our
control, including, but not limited to, the rate of inflation, the exchange rate
of the dollar to other currencies, interest rates, and global economic and
political conditions.  Price fluctuations in the metals markets from
the time development of a mine is undertaken and the time production can
commence can significantly affect the profitability of a
mine.  Accordingly, we may begin to develop a mineral property at a
time when the price of the underlying metals make such exploration economically
feasible and, subsequently, incur losses because metals prices have
decreased.  Adverse fluctuations of metals market price may force us
to curtail or cease our business operations.
 
 14.
              Our
      principal stockholders, officers and directors own a controlling interest
      in our voting stock and investors will not have any voice in our
      management, which could result in decisions adverse to our general
      shareholders.
 
 Our
officers and directors, in the aggregate, beneficially own approximately or have
the right to vote 72.3% of our outstanding common stock. As a result, these
stockholders, acting together, will have the ability to control substantially
all matters submitted to our stockholders for approval including:
 
 ·
              election  of  our  board  of  directors;
 ·
              removal  of  any  of  our  directors;
  11
  ·
              amendment  of  our  Articles
      of
      Incorporation  or  bylaws;  and
 ·
              adoption
      of measures that could delay or prevent a change in control or impede a
      merger, takeover or other business combination involving
    us.
 
 As a
result of their ownership and positions, our directors and executive officers
collectively are able to influence all matters requiring shareholder approval,
including the election of directors and approval of significant corporate
transactions. In addition, sales of significant amounts of shares held by our
directors and executive officers, or the prospect of these sales, could affect
the market price of our common stock if the marketplace does not orderly adjust
to the increase in shares in the market and the value of your investment in the
Company may decrease.  Management's stock ownership may discourage a
potential acquirer from making a tender offer or otherwise attempting to obtain
control of us, which in turn could reduce our stock price or prevent our
stockholders from realizing a premium over our stock price.
 
 15.
              We
      are an exploration stage company and the probability that commercially
      viable deposits or "reserves" exists in the property is extremely
      remote.
 
 We are an
exploration stage company with no known commercially viable deposits, or
"reserves" on our properties. Therefore, determination of the
existence  of  a  reserve  will  depend  on
appropriate  and  sufficient  exploration  work  and
the  evaluation  of  legal, economic, and
environmental  factors. If we fail to find a commercially viable
deposit on any of our properties our financial condition and results of
operations will suffer.  If we cannot generate income from the
properties we will have to cease operation which will result in the loss of your
investment.
 
 
 16.
              We
      may not have the funds to purchase all of the supplies, manpower and
      materials we need to begin exploration which could cause us to delay or
      suspend operations.
 
 Competition
and unforeseen limited sources of supplies in the industry could result in
occasional spot shortages of supplies, manpower and certain equipment such as
bulldozers and excavators that we might need to conduct exploration. If there is
a shortage or scarcity, we cannot compete with larger companies in the
exploration industry for supplies, manpower and equipment.  In the
event that the prices for such resources rise above our affordability levels, we
may have to delay or suspend operations.  In the event we are forced
to limit our exploration activities, we may not find any minerals, even though
our properties may contain mineralized material. Without any minerals we cannot
generate revenues and you may lose your investment.
 
 17.
              Because
      of the early stage of development and the nature of our business, our
      securities are considered highly
speculative.
 
 Our
securities must be considered highly speculative, generally because of the
nature of our business and the early stage of its development. We are engaged in
the business of exploring and, if warranted and feasible, developing natural
resource properties.  Our current properties are in the exploration
stage only and are without known reserves of natural
resources.  Accordingly, we have not generated any revenues nor have
we realized a profit from our operations to date and there is little likelihood
that we will generate any revenues or realize any profits in the short
term.  Any profitability in the future from our business will be
dependent upon locating and developing economic reserves of natural resources,
which itself is subject to numerous risk factors as set forth herein. Since we
have not generated any revenues, we will have to raise additional monies through
the sale of our equity securities or debt in order to continue our business
operations.
 
 18.
              It
      is possible that there may be native or aboriginal claims to our property,
      which could result in us incurring additional expenses to explore our
      properties.
 
 Although we believe that we have the
right to explore our properties, we cannot substantiate that there are no native
or aboriginal claims to the properties. Native groups have made extensive land
claims to large areas of land within British Columbia and various parts of the
United States.  The status of such claims is uncertain, and has not
been resolved despite lengthy and expensive court
proceedings.  If
  12
  a native
or aboriginal claim is made to any of our properties, it would negatively affect
our ability to explore this property as we would have to incur significant legal
fees protecting our right to explore the property. We may also have to pay third
parties to settle such claims.  If it is determined that there is a
legitimate claim to any of our properties then we may be forced to return this
property without adequate consideration.  Even if there is no legal
basis for such claim, the costs involved in resolving such matter may force us
to delay or curtail our exploration completely.  When we make the
application to commence our exploration activities, representatives of Native
groups will have the right to participate in, or may be consulted in, review by
regulatory authorities of our proposed mining operations.  If this
occurs, we may have to incur additional resources and it may take longer to
obtain the required permits.
 
 RISKS
RELATING TO OUR COMMON SHARES
 
 19.
              We
      may, in the future, issue additional common shares, which would reduce
      investors’ percent of ownership and may dilute our share
      value.
 
 Our
Articles of Incorporation authorize the issuance of an unlimited number of
common shares without par value and an unlimited number of preferred shares
without par value.  The future issuance of our unlimited authorized
common shares may result in substantial dilution in the percentage of our common
shares held by our then existing shareholders. We may value any common shares
issued in the future on an arbitrary basis.  The issuance of common
shares for future services or acquisitions or other corporate actions may have
the effect of diluting the value of the shares held by our investors, and might
have an adverse effect on any trading market for our common shares.
 
 20.
              Our
      common shares are subject to the "Penny Stock" Rules of the SEC and the
      trading market in our securities is limited, which makes transactions in
      our stock cumbersome and may reduce the value of an investment in our
      stock.
 
 The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain
exceptions.  For any transaction involving a penny stock, unless
exempt, the rules require:
 
 ·
              that
      a broker or dealer approve a person's  account for transactions
      in  penny  stocks;  and
 ·
              the
      broker or dealer  receive from the investor a
      written  agreement to
      the  transaction,  setting forth the identity and
      quantity of the
      penny  stock  to  be  purchased.
 
 In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
 
 ·
              obtain
      financial information and investment experience objectives of
      the  person;  and
 ·
              make
      a  reasonable  determination  that  the  transactions  in
      penny stocks are  suitable  for that person and the
      person has  sufficient
      knowledge  and  experience  in  financial  matters  to
      be capable of
      evaluating  the  risks  of  transactions  in  penny  stocks.
 
 The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
 
 ·
              sets  forth  the  basis
      on  which  the  broker  or  dealer  made
      the
  suitability  determination;  and
 ·
              that
      the broker or dealer received a signed,  written agreement from
      the  investor  prior  to  the  transaction.
 
 Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules.  This may make it more difficult for investors to
dispose of our Common shares and cause a decline in the market value of our
stock.
 
 Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered
  13
  representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions.  Finally,
monthly statements have to be sent disclosing recent price information for the
penny stock held in the account and information on the limited market in penny
stocks.
 
 21.
              We
      have registered a significant number of common shares underlying our
      warrants and stock options that may be available for future
      sale.  The sale of these shares may depress the market price of
      our Common shares and shareholders could suffer a loss on their
      investment.
 
 As of May
22, 2008, we had 41,613,920 common shares issued and outstanding, warrants
outstanding to purchase an aggregate of 32,163,140 common shares and stock
options outstanding to purchase an aggregate of 650,000 common
shares.  We have registered 9,557,350 common shares and 28,500,000
common shares underlying warrants, for a total of 38,057,350 common
shares.  All of these shares and those shares underlying the warrants
have been registered and may be sold without restriction.  If such
warrants are exercised in full and converted to common shares, our shareholders
may experience a decline in the price of our common shares as such common shares
are sold into the open market.  If such decline in the price of our
common shares were to materialize, shareholders could suffer a loss on their
investment.
 
 On June
24, 2005, we registered our 2005 Stock Option plan pursuant to which stock
options were granted in 2005.  No stock options were granted in 2007
or 2006.  Such common shares underlying stock options are freely
tradable upon exercise of such options.
 
 22.
              There
      is no current trading market for our securities and if a trading market
      does not develop, purchasers of our securities may have difficulty selling
      their shares.
 
 We
applied for admission for quotation of our securities on the OTC Bulletin Board
in April 2008.  Our application is currently in the process of being
reviewed by the regulator.  As a result,  there is currently
no established public trading market for our securities and an active trading
market in our securities may not develop or, if developed, may not be
sustained.    If for any reason our common shares are not
listed on the OTC Bulletin Board or a public trading market does not otherwise
develop, purchasers of the shares may have difficulty selling their common
shares should they desire to do so.  No market makers have committed
to becoming market makers for our common shares and none may do so.
 
 23.
              State
      securities laws may limit secondary trading, which may restrict the states
      in which and conditions under which you can sell the Company’s common
      shares.
 
 Secondary trading in the Company’s
common stock will not be possible in any state until the common shares are
qualified for sale under the applicable securities laws of the state or there is
confirmation that an exemption, such as listing in certain recognized securities
manuals, is available for secondary trading in the state. If we fail to register
or qualify, or to obtain or verify an exemption for the secondary trading of,
the common shares in any particular state, the common shares could not be
offered or sold to, or purchased by, a resident of that state. In the event that
a significant number of states refuse to permit secondary trading in our common
shares, the liquidity for the common shares could be significantly impacted thus
causing you to realize a loss on your investment.
 
 24.
              We
      are a “foreign private issuer”, and you may not have access to the
      information you could obtain about us if we were not a “foreign private
      issuer”.
 
 We are
considered a "foreign private issuer" under the Securities Act of 1933, as
amended. As an issuer incorporated in Canada, we will be required to prepare our
annual and interim financial statements in accordance with Canadian generally
accepted accounting principles. For purpose of our annual disclosure obligations
in the United States, we will annually file in the United States financial
statements prepared in accordance with Canadian GAAP together with a
reconciliation to US GAAP.  In addition, as a foreign private issuer
we will not have to file quarterly reports with the SEC nor will our directors,
officers and 10% stockholders be subject to Section 16(b) of the Exchange Act.
As a foreign private issuer we will not be subject to the proxy rules of Section
14 of the Exchange Act. Furthermore, Regulation FD does not
  14
  apply to
non-U.S. companies and will not apply to us. Accordingly, you may not be able to
obtain information about us as you could obtain if we were not a “foreign
private issuer”.
 
 25.
              Because
      we do not intend to pay any cash dividends on our common shares, our
      stockholders will not be able to receive a return on their shares unless
      they sell them.
 
 We intend
to retain any future earnings to finance the development and expansion of our
business. We do not anticipate paying any cash dividends on our common shares in
the foreseeable future.  Unless we pay dividends, our stockholders
will not be able to receive a return on their shares unless they sell
them.
 
 26.
              We
      may become a passive foreign investment company, or PFIC, which could
      result in adverse U.S. tax consequences to U.S.
  investors.
 
 If we are
a “passive foreign investment company” or “PFIC” as defined in Section 1297 of
the Code, U.S. Holders will be subject to U.S. federal income taxation under one
of two alternative tax regimes at the election of each such U.S. Holder. Section
1297 of the Code defines a PFIC as a corporation that is not formed in the
United States and either (i) 75% or more of its gross income for the taxable
year is “passive income”, which generally includes interest, dividends and
certain rents and royalties or (ii) the average percentage, by fair market value
(or, if we elect, adjusted tax basis), of its assets that produce or are held
for the production of “passive income” is 50% or more. Whether we are a PFIC in
any year and the tax consequences relating to PFIC status will depend on the
composition of our income and assets, including cash. U.S. Holders should be
aware, however, that if we become a PFIC, it may not be able or willing to
satisfy record-keeping requirements that would enable U.S. Holders to make an
election to treat us as a “qualified electing fund” for purposes of one of the
two alternative tax regimes applicable to a PFIC. We strongly urge U.S. holders
or potential shareholders to consult their own tax advisor concerning the impact
of these rules on their investment in us.
 
 27.
              Because
      our Company and three of our directors are located outside the United
      States, it may be difficult for an investor to enforce within the United
      States any judgments obtained against us or any of our officers and
      directors.
 
 Our
Company and three of our directors are located outside of the United States and
we do not currently maintain a permanent place of business within the United
States. In addition, three of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of such persons' assets are located outside the United States. As a
result, it may be difficult for an investor to effect service of process or
enforce within the United States any judgments obtained against us or our
officers or directors, including judgments predicated upon the civil liability
provisions of the securities laws of the United States or any state thereof. In
addition, there is uncertainty as to whether the courts of Canada would
recognize or enforce judgments of United States courts obtained against us or
our directors and officers predicated upon the civil liability provisions of the
securities laws of the United States or any state thereof. There is even
uncertainty as to whether the Canadian courts would have jurisdiction to hear
original actions brought in Canada against us or our directors and officers
predicated upon the securities laws of the United States or any state
thereof.
 
 ITEM
4.  INFORMATION ON THE COMPANY
 
 4.A. HISTORY AND CORPORATE
DEVELOPMENT OF THE COMPANY
 
 We were
formed as a corporation under the Federal laws of Canada pursuant to the Canada
Business Corporations Act on August 8, 2003. We are a natural resource
exploration stage company and anticipate acquiring, exploring, and if warranted
and feasible, developing natural resource properties.
 
 We are a
mineral exploration company in the exploration stage, and cannot give assurance
that commercially viable minerals exist on the property.  Extensive
geological analysis of our properties will be required before we can make an
evaluation as to the economic feasibility of developing or finding valuable
resources on these grounds. We have not, as yet, identified any mineral
resources on our properties.
  15
  
 Taylor
Claims
 
 On
February 18, 2004, the Company entered into a Property Option Agreement giving
the Company the
 exclusive
right and option to acquire a 100% interest in the Taylor Claims located in the
Lillooet Mining Division in the Province of British Columbia. The Property
Option Agreement was amended on November 29, 2004.  The Company may
have exercised the option by making cash payments totalling $70,000 and
incurring net expenditures on the property of at least $525,000.  The
Company paid the initial $5,000 deposit as required under the initial Property
Option Agreement.  The Company also paid an additional $5,000 upon the
signing of the amendment.  On November 23, 2005, the Company
terminated the Property Option Agreement.
 
 South Vulture
Property
 
 On March
24, 2006, the Company entered into a Property Option Agreement giving the
Company the exclusive right and option to acquire a 100% interest in a mineral
exploration permit covering the South Vulture property located in Maricopa
County, Arizona.  The Company may exercise the option by making cash
payments totalling CDN $27,294 (USD $25,000) and incurring net expenditures on
the property of at least CDN $119,793 (USD $120,000) by March 24,
2010.  The Company paid the initial CDN $5,850 (USD $5,000) deposit as
required under the Property Option Agreement and made the annual payments of CDN
$5,660 (USD $5,000) and CDN $5,870 (USD $5,000) due March 24, 2008 and 2007
respectively.
 
 GQ
Property
 
 On June
1, 2006 we entered into a property option agreement with Warner Gruenwald to
acquire a 100% interest in a property in the Province of British Columbia known
as the GQ Property.  We may exercise our option by making cash
payments totalling CDN $100,000 and incurring net expenditures of CDN $110,000
by June 1, 2010.  The Company made the $10,000 payment on June 1, 2007
and also met its obligations with respect to the minimum exploration
expenditures for 2007.
 
 Margarita
Property
 
 On July
14, 2006 we entered into a property option agreement with James Sorrell to
acquire a 100% interest in a property in Santa Cruz County, Arizona known as the
Margarita Property.  We made an initial payment of CDN $39,300 (USD
$35,000) upon signing the agreement and we may exercise our option by making
further cash payments totalling CDN $822,908 (USD $825,000) by May 31, 2012 and
incurring net expenditures of CDN $675,405 (USD $675,000) by May 31,
2009.  Also on July 14, 2006 in relation to the Company entering into
the Margarita Property Option Agreement, the Company entered into a Finder’s Fee
Agreement with Fred Brost under which it is estimated that if the Company makes
all of the scheduled property option payments to Mr. Sorrell, the amount paid
under the Finder’s Fee Agreement to Mr. Brost will be CDN $30,730 (USD
$31,000).
 
 The
Company paid the initial payment of CDN $39,300 (USD $35,000) upon signing the
Margarita Property Option Agreement and paid CDN $3,930 (USD $3,500) under the
Finder’s Fee Agreement.  In addition, On May 31, 2007 the Company made
the property option payment of CDN $54,650 (USD $50,000) and the related
finders’ fee payment of CDN $5,465 (USD $5,000) and also met its obligations
with respect to the minimum exploration expenditures for 2007.
 
 On
January 29, 2008, the Company entered into an Assignment and Assumption
Agreement (the “Agreement”) with Patriot Gold Corp. (“Patriot”) to assign the
Company’s rights and obligations under the Margarita Property Option Agreement
to Patriot.  Pursuant to the Agreement, Patriot assumed the rights,
and agreed to perform all of the duties and obligations, of the Company arising
under the Margarita Property Option Agreement. Simultaneous with the execution
and delivery of the Agreement, Patriot paid the Company CDN $201,600 (USD
$200,000) which amount represents the full payment and satisfaction for the
assignment to Patriot by the Company.  Included in the assignment to
Patriot were, without limitation, all sums incurred by the Company in connection
with its exploration of the Margarita Property which includes
the
  16
  refunding
of the reclamation bond previously paid by the Company to the Forest Service in
Arizona, all expenditure credits incurred by the Company prior to the execution
of the Agreement and all property option payments made to the Margarita
Property. In addition, as the Company also assigned all of its rights and
obligations under the Finders’ Fee Agreement to Patriot, it is no longer
required to make further payments.  Subsequent to the execution of the
Agreement, the Company did not retain any interest in the Margarita
Property.
 
 No
commercially viable mineral deposit may exist on our mineral
claims.  Our plan of operations is to carry out geological analysis of
these claims in order to ascertain whether they possess deposits of gold or
silver.  We can provide no assurance to investors that our mineral
claims contain a commercially viable mineral deposit until appropriate
exploratory work is done and an evaluation based on that work concludes further
work programs are justified.  At this time, we definitely have no
known reserves on our mineral claims.
 
 For the
period from August 8, 2003 (inception) to December 31, 2007, we did not generate
any revenue.
 
 Our
principal offices are located at 1155 West Pender, Suite 708, Vancouver, British
Columbia V6E 2P4; our telephone number is (778) 786-1540. We do not yet maintain
an Internet address.
 
 4.B. BUSINESS
OVERVIEW
 
 We are an
exploration stage company incorporated under the Canada Business Corporations
Act in British Columbia, Canada on August 8, 2003 under the name “American
Goldrush Corporation.”  Our registered office is located at 1200 – 750
West Pender Street, Vancouver, British Columbia, V6C 2T8, and our head office
and principal place of business located at 1155 West Pender, Suite 708,
Vancouver, British Columbia V6E 2P4.  Our telephone number is (778)
786-1540.
 
 We are a
natural resource exploration stage company and anticipate acquiring, exploring,
and if warranted and feasible, developing natural resource properties. We may
seek relationships with other mineral exploration and development companies that
will allow us to exploit idle and/or undeveloped resources.
 
 MATERIAL EFFECTS OF
GOVERNMENT REGULATIONS
 
 Mineral
resource exploration, production and related operations are subject to extensive
rules and regulations of federal, state and local agencies.  We may be
required to obtain work permits, post bonds and perform remediation work for any
physical disturbance to the land in order to comply with these
laws.  While our planned exploration program budgets for regulatory
compliance, there is a risk that new regulations could increase our costs of
doing business and prevent us from carrying out exploration
program.
 
 Failure
to comply with these rules and regulations can result in substantial
penalties.  Our cost of doing business may be affected by the
regulatory burden on the mineral industry. We believe that compliance with the
laws will not adversely affect our business operations.
 
 Environmental
enforcement efforts with respect to mineral operations have increased over the
years, and it is possible that regulation could expand and have a greater impact
on future mineral exploration operations.  Although our management
intends to comply with all legislation and/or actions of local, provincial,
state and federal governments, non-compliance with applicable regulatory
requirements could subject us to penalties, fines and regulatory actions, the
cost of which could harm our results of operations.  We cannot be sure
that our proposed business operations will not violate environmental laws in the
future.
 
 ANTICIPATED CHANGES TO
FACILITIES AND EMPLOYEES
 
 Management
of the Company anticipates no changes to either facilities or employees in the
near future.
  17
  SEASONALITY,
DEPENDENCY UPON PATENTS, LICENSES, CONTRACTS, PROCESSES, SOURCES AND AVAILIBILTY
OF RAW MATERIALS
 
 Certain
of the Company’s properties are in remote locations and subject to significant
temperature variations and changes in working conditions.  It is not
possible to actively explore the Company’s property in British Columbia
throughout the year because seasonal changes in the weather.  If
exploration is pursued at the wrong time of year, the Company may incur
additional costs to address issues relating to the weather.
 
 If we
commence drilling, shortages or an increase in cost of drilling rigs, equipment,
supplies or personnel could delay or interrupt our operations, which could
impact our financial condition and results of operations.  Drilling
activity in the geographic areas in which we conduct drilling activities may
increase, which would lead to increases in associated costs, including those
related to drilling rigs, equipment, supplies and personnel and the services and
products of other vendors to the industry. Increased drilling activity in these
areas may also decrease the availability of rigs.  We do not have any
contracts with providers of drilling rigs and, consequently we may not be able
to obtain drilling rigs when we need them.  Therefore, our drilling
and other costs may increase further and necessary equipment and services may
not be available to us at economical prices.
 
 COMPETITION
 
 The
mineral exploration industry is intensely competitive, highly fragmented and
subject to rapid change.  We may be unable to compete successfully
with our existing competitors or with any new competitors.  We compete
with many exploration companies which have significantly greater personnel,
financial, managerial, and technical resources than we do.  This
competition from other companies with greater resources and reputations may
result in our failure to maintain or expand our business.
 
 4.C. ORGANIZATIONAL
STRUCTURE
 
 The
Company is not part of a group and has no subsidiaries.
 
 4.D. PROPERTY, PLANT AND
EQUIPMENT
 
 CORPORATE
OFFICES
 
 We do not
own any real property.  We currently lease our corporate headquarters
at 1155 West Pender, Suite 708, Vancouver, British Columbia V6E 2P4, for CDN
$235 per month.  We believe that our rented properties are adequate
for our current and immediately foreseeable operating needs.  We do
not have any policies regarding investments in real estate, securities or other
forms of property.
 
 A
detailed description of the Company’s exploration properties with additional
information for the properties of major significance to the Company is outlined
below:
 
 SOUTH VULTURE
PROPERTY
 
 Acquisition
of Interest
 
 On March
24, 2006, the Company executed a Property Option Agreement (the “Agreement”)
with Fred Brost (“Optionor”) granting the Company the right to a mineral
exploration permit covering mining interests in Arizona currently issued to the
Optionor.  The property, known as the South Vulture Property (the “SV
Property”), consists of an exploration permit covering approximately 560 acres
in Maricopa County, Arizona, approximately 16 miles southwest of Wickenburg,
Arizona.
 
 The
Company may exercise the option by making cash payments totaling CDN $27,294
(USD $25,000) by March 24, 2010 and incurring net expenditures on the Property
of at least CDN $119,793 (USD $120,000) by March 24, 2010.  In order
to earn a 100% interest in the exploration permit covering the South
Vulture
  18
  Property,
the Company must pay Mr. Brost and incur expenditures relating to mining
operations in accordance with the following schedule:
 
 The
Company must make the following payments and incur the exploration expenditures
as noted below in order to retain our interest in the South Vulture
Property:
 
 Date
              
              Property
      Payments
              Exploration
      ExpendituresUpon
      execution of the agreement
              
              USD  $5,000
              -March
      24, 2007
              
              USD  $5,000
              USD  $10,000March
      24, 2008
              
              USD  $5,000
              USD  $20,000March
      24, 2009
              
              USD  $5,000
              USD  $40,000March
      24, 2010
              
              USD  $5,000
              USD  $50,000Total
              
              USD  $25,000
              USD  $120,000
 
 The
Company paid the initial CDN $5,850 (USD $5,000) upon executing the agreement as
required under the initial Property Option Agreement and made the annual
payments of CDN $5,660 (USD $5,000) and CDN $5,870 (USD $5,000) due March 24,
2008 and 2007 respectively. The Company also met its obligation with respect to
minimum exploration expenditures for 2007.
 
 The
Company must use Mr. Brost for his mineral exploration expertise on the SV
Property and Mr. Brost shall invoice the Company for work performed at
commercially competitive rates. All work performed on the SV Property will be
under the direction and at the discretion of the
Company.  Furthermore, both the Company and Mr. Brost have the right
to assign, sell, mortgage or pledge their rights in the Property Option
Agreement or on the SV Property. If the Company assigns or sells the SV
Property, Mr. Brost will be entitled to receive a payment equaling 5% of the
fair market value of the SV Property at the time of any such sale or
assignment.  In addition, any mineral interests staked, located,
granted or acquired by either party which is located within 2 miles of the SV
Property boundary will be included in the option granted to the
Company.
 
 The
Agreement will terminate if the Company fails to comply with any of its
obligations in the Agreement and fails to cure such alleged breach. The Company
also has the right to terminate the Agreement by giving notice to Mr.
Brost.
 
 We will
lose our option if we fail to make any payment according to schedule or if we
fail to incur the requisite expenditures prior to March 24 of any given year.
Any amounts paid to Mr. Brost are non-refundable.  If within 30 days
of receipt of a written notice from Fred Brost that a payment was not made in a
timely manner, we do not cure the default or give Mr. Brost notice that we deny
that such default has occurred, the option will terminate. If we give notice and
deny that a default has occurred, the option will not terminate until an Arizona
court determines that we are in default. In addition, we have the right to
terminate the Property Option Agreement at any time by giving notice of our
election to terminate.
 
  19
  Location
 
 
 
  20
  The
property is located about 16 miles southwest of Wickenburg, Arizona, the nearest
town of any size.  Access to the property is via the Vulture Mine
Road, a paved county road that passes within a few feet of the Southeast corner
of the Property.  The Property can be reached from Wickenburg in about
20 minutes and from the airport in Phoenix in about 1.5 hours.
 
 South
Vulture Property Permit Information
 
 The South
Vulture Property is covered by Arizona State exploration permit no. 08-110130
issued to Fred Brost on March 21, 2006.  The land relating to the
permit is legally described as LOTS 1 2 S2N2 S2 and covers 559.99
acres.  The permit gives the holder the right to surface rights
necessary for the prospecting and exploration for minerals.
 
 The
Property is on land managed by the Bureau of Land Management (BLM) with mineral
rights belonging to the State of Arizona.  The current state Mineral
Exploration Permit can be converted to a state Mineral Lease if a mineral
deposit is discovered.  The Mineral Exploration Permit and can be
renewed for up to a total of five years.  Mineral Leases are granted
for 20 years.
 
 Regional
Geology
 
 The
Property is located in the Vulture Mountains.  The middle to low
elevations are underlain by foliated thin flows of basalt, pyroclastic and
volcaniclastic rocks and clastic sedimentary rocks of Proterozoic age which have
been metamorphosed to greenschist to lower amphibolite facies.  These
rocks are intruded by a stock of quartz monzonite.  Gold in the region
is native metal and electrum associated with euhedral pyrite, argentiferous
galena, and minor chalcopyrite and sphalerite.  The gold is present in
quartz veins within and subparallel to the porphyritic quartz monozonite sill,
as dispersed grains within sill, and in veins, veinlets, and areas of
sillification within Proterozoic rocks immediately adjacent to the
sill.
 
 Placer
gold is also known.  It is juvenile coarse and fine
gold.  Nuggets containing quartz, galena, and dendritic gold have been
found in the basal Quarternary gravels.
 
 Property
Geology
 
 The
property is located principally on desert alluvium near the pediment of the
Vulture Mountains.  Locally, pre-Cambrian metamorphic rocks are
intruded by a Cretacious quartz monzonite stock, which lies west of the Vulture
Mine and just north of the Property.   The gold mineralization in
the area is associated with an apophysis of this stock.  Small
outcrops of Precambrian rocks are present at several places on the
Property.
 
 Previous
Work
 
 Freeport
McMoran Gold Company (“Freeport”) drilled 93 rotary-hammer holes on and
immediately adjacent to the property in 1984-1987.  Total length of
drilling was approximately 12,000 feet, with holes ranging in depth from 70 to
330 feet. This drilling indicated the presence of a large gold anomaly in
pre-Cambrian schist under an average of about 50 feet of
alluvium.  While the gold mineralization encountered was low grade,
Freeport identified a NW-trending fault running across the NE corner of the
property, with the portion of the property SW of the fault being dropped
down.  The significance of this fault, if any, is not
known.
 
 During
2006 the Company completed a magnetic survey of the SV Property in order to help
define the intrusive boundaries of the property.  The survey covered a
rectangular area of about 1.45 km (0.9 miles) by 0.75 km (0.47 miles) and
consisted of 30 lines, approximately 0.75 km (0.47 miles) long and spaced 50
meters (164 feet) apart.  An interpretation of the data did not reveal
any specific targets but three areas were identified as being of interest for
future evaluation.
 
  21
  During
2007 the Company completed a gird-controlled Mobil Metal Ion (MMI)
survey.  A total of 180 soil samples were collected from a depth of
10-25 cm below the point at which soil formation was initiated. The samples were
taken in the southwest quarter of the property and covered an area 1,600 meters
by 1,900 meters.  Samples were bagged and shipped to SGS Laboratories
in Toronto, Ontario, Canada for analysis for the presence of 33 metallic
ions.  Analytical finish for all extractions was by inductively
coupled plasma-mass spectrometry (ICP-MS).  Based on the results of
the MMI survey, the Company did not receive any clear direction as to potential
drill targets.  However, there was some good correlation between the
MMI study results and the location of drill holes completed by previous property
owners.  The Company is currently evaluating its next step but it does
not plan on drilling in 2008.
 
 Planned
Work by the Company for 2008
 
 The
Company has received a drilling budget from the property owner but we do not
have any current plans to undertake a drill program in 2008.  While
the Company has not determined its course of action for 2008, any work
undertaken will most likely consist of the application of a geophysical method
that can be modeled or additional MMI work.
 
 GQ
PROPERTY
 
 Acquisition
of Interest
 
 On June
1, 2006, the Company executed a Property Option Agreement with Warner Gruenwald
granting the Company the right to a 100% interest in a mineral exploration
property located in British Columbia, Canada. The property, known as the GQ
Property, consists of four claims and covers approximately 1,300 acres in the
Kamloops Mining District of British Columbia.
 
 The
Company may exercise the option by making cash payments totaling CDN $100,000
and incurring net expenditures on the property of at least CDN $110,000 by June
1, 2010.  Minimum payments due under the Property Option Agreement are
summarized as follows:
 
 Property
              
              ExplorationDate
              Payments
              
              ExpendituresJune
      1, 2007
              CDN
      $10,000
              
              CDN
      $10,000June
      1, 2008
              CDN
      $20,000
              
              CDN
      $20,000June
      1, 2009
              CDN
      $30,000
              
              CDN
      $30,000June
      1, 2010
              CDN
      $40,000
              
              CDN
      $50,000Total
              CDN
      $100,000
              
              CDN
      $110,000
 
 
 The
Company made the $10,000 payment on June 1, 2007 and also met its obligations
with respect to the minimum exploration expenditures for 2007.
 
 The
Company must use the Mr. Gruenwald for his mineral exploration expertise on the
GQ Property and he shall invoice the Company for work performed at commercially
competitive rates. All work performed on the GQ Property will be under the
direction and at the discretion of the Company.  Furthermore, both the
Company and Mr. Gruenwald have the right to assign, sell, mortgage or pledge
their rights in the Property Option Agreement or on the GQ
Property.  In addition, any mineral interests staked, located, granted
or acquired by either party that are located within two miles of the GQ Property
boundary will be included in the option granted to the Company.
 
  22
  The GQ
Property is subject to a 2% net smelter return (“NSR”)
royalty.  Should the Company obtain title to the GQ Property, the
Company will have the one-time right exercisable for 90 days following
completion of a bankable feasibility study to buy up to 50% of Mr. Gruenwald’s
NSR interest, an amount equal to 1% NSR, for CDN $500,000.
 
 We will
lose our option if we fail to make any payment according to schedule or if we
fail to incur the requisite expenditures prior to June 1 of any given year. Any
amounts paid to Mr. Gruenwald are non-refundable.  If within 30 days
of receipt of a written notice from Warner Gruenwald that a payment was not made
in a timely manner, we do not cure the default or give Mr. Gruenwald notice that
we deny that such default has occurred, the option will terminate. If we give
notice and deny that a default has occurred, the option will not terminate until
and unless a single arbitrator in arbitration under the rules of The Arbitration
Act of British Columbia determines that we are in default. In addition, we have
the right to terminate the Property Option Agreement at any time by giving
notice of our election to terminate.
 
  23
  Location
 
 
 
  24
  The GQ
Property is located 45 kilometers west-northwest of the community of Revelstoke
in southern British Columbia.  Access is via the Trans Canada highway
between Sicamous and Revelstoke and the Gorge Creek logging road near
Malakwa.  The gravel logging roads accessing the GQ Property are
regularly maintained.
 
 Claim
Status
 
 Originally,
the GQ Property encompassed 1,298 hectares (13 km2) and was
covered by the Province of British Columbia Mining Division tenure numbers
521731, 533372, 533373, and 533374 as legally registered to Warner
Gruenwald.  During 2006, the Company added two additional claims
contiguous to the north of the GQ Property (claims 553670 and 553669) which
added 709 hectares (7.09 km2).  The
new claims form part of the GQ Property Option Agreement.  The mining
claims give the holder the right to surface rights necessary for the prospecting
and exploration for minerals.
 
 Property
Geology
 
 The GQ
Property is situated in the rugged terrain of the Antsey Range along the west
flank of the Monashee Mountains.  The Monashee Mountain Range is
characterized by temperate climate and moderately high
precipitation.  Winter snow packs of 3 to 5 meters are not uncommon at
higher elevations.  The GQ Property and surrounding area is located
within the metamorphic, plutonic, and sedimentary rocks of the Omineca
Belt.  The area is underlain by a thick succession of metamorphic
rocks of the Shuswap and Monashee Complexes.  The Antsey granitic
pluton and related dykes, sills, and pegmatitic bodies intrude the metamorphic
rocks.  Several northwesterly trending linears (faults) are
interpreted to transect the GQ Property.  Local scale faults and
shears usually dip steeply to the west.  Mineralization occurs as
semiconformable lenses comprised of quartz, pyroxene, scapolite and fine-grained
sulphides.  Calc-silicate proximal to granitic intrusive rocks host
the majority of mineralization.  These host rocks strike northerly and
generally dip from 50 to 60 degrees west.  The showings often display
an unusual ‘granular texture’ with infillings of pyrrhotite, pyrite, minor
chalcopyrite, and scheelite.  Sulphide content ranges from 5 to
30%.  The showings appear to occur along specific stratigraphic
horizons (i.e cal-silicate) that are likely to be laterally
extensive.
 
 Previous
Work
 
 Prior to
1999, there was no evidence of mineral occurrences or records of work documented
on the GQ Property.  Between September 1999 and September 2000 a work
program consisting of stream sampling, prospecting, and soil and rock sampling
was undertaken.  A total of 53 stream silt, 46 panned concentrate, and
3 moss mat samples were collected from the GQ Property.  In addition,
a total of 46 rock and 30 soil samples were collected and submitted to
ALS-Chemex Labs for analysis.  The exploration program resulted in the
discovery of new mineral showings and anomalous drainages.  Anomalous
amounts of gold, bismuth, copper, tellurium and tungsten were found to be
present on the GQ Property.  Although very limited in scope, the
exploration program demonstrated the potential for intrusion related gold
deposits.
 
 In 2006,
the Company completed another soil and rock sampling program.  A total
of 24 rock and 108 soil samples were collected and sent to Acme Analytical Labs
for analysis.  The rock and soil samples were analyzed for 36 elements
using Coupled Plasma – Mass Spectrometer (ICP-MS).  The ICP-MS
technique is capable of ultra low detection limits in the parts per billion or
parts per trillion range.  The exploration program resulted in the
discovery of four new mineral showings and abundant mineralized float were
discovered.  As with prior sampling programs anomalous amounts of
gold, bismuth, copper, tellurium and tungsten were found to be present on the GQ
Property.  Evidence indicates the presence of at least
four
  25
  distinct
and separate mineralized calc-silicate “horizons” (SE Showing, Spur D, Spurs
A-B, and NE Showings) within a thick sequence of metamorphic
rocks.  The potential lateral and down dip extent of these horizons
along with the hydrothermal and possible mineralizing effects of the nearby
Antsey Pluton offer significant exploration potential.
 
 The
Company completed a 2007 exploration program which was a follow up to the 2006
program.  The field work was conducted June 9 to 18 and September 4 to
5, 2007.  The first program consisted of grid based soil sampling and
magnetometer surveys along with prospecting, rock sampling and stream sampling
on the original claims.  The second program consisted of road based
soil sampling, prospecting, and rock sampling on the new claims acquired in
2006.  The geochemical aspect of the program covered three separate
grids totaling 5.6 kilometers consisting of chain and compass lines run at UTM
east-west orientation.  Magnetometer readings were taken at 12.5 meter
intervals over all grid lines (5.6 km) using a Geometrics G816
magnetometer.  A total of 40 rock, 318 soil, and 6 stream sediment
samples were collected and shipped to Acme Analytical Labs in Vancouver, British
Columbia, Canada.  Soil samples were analyzed for 36 elements using
ICP-MS.
 
 The 2007
geochemical and magnetic surveys yielded similar results as those from 2006 in
that mineralization on the GQ Property occurs in four general areas on the
property. The 2007 geochemical and magnetic surveys indicated the potential for
the discovery of mineralized calc-silicate horizons in the SE Showing and Spur D
grid areas.  The known NE Showing bedrock occurrence and inferred
calc-silicate horizons in the Spur A-B also offer exploration
potential.
 
 Planned
Work by the Company for 2008
 
 The
Company has been presented with a budget of $76,000 (excluding property option
payments) for the 2008 exploration program.  The proposed program will
include 400 meters (1,312 feet) of diamond drilling as well as soil collection,
rock sampling, and prospecting. The Board of Directors has not formally approved
the 2008 budget but the property owner has applied for a drilling permit in
anticipation of the Company proceeding with the proposed program.
  
 MARGARITA
PROPERTY
 
 Acquisition
of Interest
 
 On July
14, 2006 the Company executed a Property Option Agreement with James Sorrell
granting the Company the right to acquire a 100% undivided interest in a mineral
exploration property covering mining interests in Arizona currently issued to
Mr. Sorrell.  The property, known as the Margarita Property,
originally consisted of 39 unpatented claims covering approximately 640 acres in
the Oro Blanco Mining District of Santa Cruz County, Arizona.
 
 Also on
July 14, 2006 in relation to the Company entering into the Margarita Property
Option Agreement, the Company entered into a Finder’s Fee Agreement with Fred
Brost.  The Company has agreed to pay a fee equal to 10% of the
Property Option Payments made to James Sorrell during the first three years of
the Margarita Property Option Agreement.  It is estimated that if the
Company makes all of the scheduled property option payments to Mr. Sorrell, the
amount paid under the Finder’s Fee Agreement to Mr. Brost will be CDN $30,730
(USD $31,000).  If the Company terminates the Margarita Property
Option Agreement, the Company will not owe any further payments under the
Finder’s Fee Agreement.  If it has not been terminated earlier, the
Finder’s Fee Agreement will terminate automatically on July 14,
2009.
 
 The
Company may exercise the option by making cash payments totaling CDN $862,208
(USD $860,000) by May 31, 2012 and incurring net expenditures on the Property of
at least CDN $675,405 (USD $675,000) by May 31, 2009.  Minimum
payments and expenditures due under the Agreement are summarized as
follows:
  26
  
 Property
              
              ExplorationDate
              Payments
              
              ExpendituresUpon
      execution of the agreement *
              USD
      $35,000
              
              -By
      May 31, 2007 *
              USD
      $50,000
              
              USD
      $75,000By
      May 31, 2008 *
              USD
      $100,000
              
              USD
      $300,000By
      May 31, 2009 *
              USD
      $125,000
              
              USD
      $300,000By
      May 31, 2010
              USD
      $150,000
              
              -By
      May 31, 2011
              USD
      $200,000
              
              -By
      May 31, 2012
              USD
      $200,000
              
              -Total
              USD
      $860,000
              
              USD
      $675,000
  
  * In
addition to payments due under the Margarita Property Option Agreement, finder’s
fee payments of USD $3,500, USD $5,000, USD $10,000, and USD $12,500 are due
upon the execution of the agreement, May 31, 2007, 2008, and 2009 respectively
if the Company makes the respective option payment.
  Simultaneous
with the execution and delivery of the Margarita Property Option Agreement, the
Company paid James Sorrell CDN $39,300 (USD $35,000) and Mr. Brost CDN $3,930
(USD $3,500).  On May 31, 2007 the Company made the property option
payment of CDN $54,650 (USD $50,000) and the related finders’ fee payment of CDN
$5,465 (USD $5,000) and also met its obligations with respect to the minimum
exploration expenditures for 2007.
  Since our
payment obligations are non-refundable, if we do not make any payments, we will
lose any payments made and all our rights to the Margarita Property. If all said
payments are made, then we will acquire all mining interests in the Property
subject to a 2% Net Smelter Royalty (“NSR”) retained by the
Optionor.  Within 90 days of completion of a bankable feasibility
study, the Company may purchase the NSR from the Optionor for CDN $495,650 (USD
$500,000) for each 1% of the NSR purchased (CDN $991,300 (USD $1,000,000) for
the Optionor’s entire 2% NSR).  If the Company fails to make any
payment when due, the Margarita Property Option Agreement gives the Company a
60-day grace period to pay the amount of the deficiency.
  Furthermore,
both the Company and Mr. Sorrell have the right to assign, sell, mortgage or
pledge their rights in the Margarita Property Option Agreement or on the
Margarita Property. In addition, any mineral interests staked, located, granted
or acquired by either party which are located within 5 miles of the Margarita
Property boundary will be included in the option granted to the
Company.
 
 The
Agreement will terminate if the Company fails to comply with any of its
obligations in the Agreement and fails to cure such alleged breach. The Company
also has the right to terminate the Agreement by giving notice to the
Optionor.
 
 On
January 29, 2008, the Company entered into an Assignment and Assumption
Agreement (the “Agreement”) with Patriot Gold Corp. (“Patriot”) to assign the
Company’s rights and obligations under the Margarita Property Option Agreement
to Patriot.  Pursuant to the Agreement, Patriot assumed the rights,
and agreed to perform all of the duties and obligations, of the Company arising
under the Margarita Property Option Agreement. Simultaneous with the execution
and delivery of the Agreement, Patriot paid the Company CDN $201,600 (USD
$200,000) which amount represents the full payment and satisfaction for the
assignment to Patriot by the Company.  Included in the assignment to
Patriot were, without limitation, all sums incurred by the Company in connection
with its exploration of the Margarita Property which includes the refunding of
the reclamation bond previously paid by the Company to the Forest Service in
Arizona, all expenditure credits incurred by the Company prior to the execution
of the Agreement and all property option payments made to the Margarita
Property. In addition, as the Company also assigned all of its rights and
obligations under the Finders’ Fee Agreement to Patriot, it is no longer
required to make further payments.  Subsequent to the execution of the
Agreement, the Company did not retain any interest in the Margarita
Property.
 
  27
  Location
 
 
 
  28
  The
original Margarita Property consisted of 39 unpatented claims covering
approximately 640 acres in the Oro Blanco Mining District of Santa Cruz County,
Arizona.  In the first quarter of 2007, the Company staked an
additional 30 claims covering 540 acres that became part of the ground covered
by the Margarita Property Option Agreement.  The claims are within the
Coronado National Forest, and are approximately 10 miles north of the Mexican
border.  The Margarita Property is best reached by traveling south
from Tucson on I-19 to the Arivaca Road and following the paved road to Arivaca,
thence about 11 miles over the gravel-surfaced Ruby Road to the project
area.
 
 Claim
Status
 
 The
Margarita Property consists of 69 unpatented claims covering approximately 1,180
acres in the Oro Blanco Mining District of Santa Cruz County,
Arizona.  The claims are within the Coronado National Forest, and are
approximately 10 miles north of the Mexican border.
 
 Property
Geology
 
 The gold
mineralization at the Margarita Property and related diggings in the area occurs
as disseminations within limonite stained tuffaceous rocks exhibiting intense
silicification.  There are five such zones within the claim group with
Margarita being the largest.  Other similar zones have been identified
outside of the claim boundary.   Where exposed at the surface,
the silicified rocks occur as low hills or modest, irregular hills of limonite
stained tuff.  They appear as tabular or manto like zones within
tuffaceous beds in the subsurface.  Prior drilling results show that
the silicification and associated gold mineralization has lateral continuity but
does not occupy the entire tuff bed, and no significant mineralization was
reported from the quartz monzonite although the monzonite is believed by some to
be the source of the mineralization.  In the subsurface, the tuff
occur as bands up to 50 feet or so in thickness alternating with parallel units
of quartz monzonite.  Extensive shallow drilling has shown that, in
addition to the surface occurrences, there are as many as three mantos within a
few hundred feet of the surface which are similar in character and
mineralization to those at the surface.
 
 The
Margarita Property is centrally located within a broad area of numerous old
mines and prospects dating back to early Spanish colonial times where gold,
silver, lead and copper were mined from Mesozoic and early Tertiary igneous rock
units.  Previous work on the property appears to demonstrate the
presence of a zone at the Margarita Property of over 4,000 feet by 1,500 feet
encompassing half a million tons of altered and mineralized tuff in a flat lying
zone exhibiting gold mineralization.  The mineralization averages
between 0.05 and 0.06 troy ounces of gold per ton associated with intense
silicification and clay pyrite alteration.
 
 The
accepted view of the intrusive relationship of the quartz monzonite with the
parallel zones of tuff and the monzonite’s relationship to the mineralizing
event could be subject to alternative interpretations leading to broader
potentials for bulk tonnage mineralization.
 
 Previous
Work
 
 The
Margarita Property is centrally located within a broad area of numerous old
mines and prospects dating back to early Spanish colonial times where gold,
silver, lead and copper were mined from Mesozoic and early Tertiary igneous rock
units.  Previous work on the property appears to demonstrate the
presence of a zone at the Margarita Property of over 4,000 feet by 1,500 feet
encompassing half a million tons of altered and mineralized tuff in a flat lying
zone exhibiting gold mineralization.  The mineralization averages
between 0.05 and 0.06 troy ounces of gold per ton associated with intense
silicification and clay pyrite alteration.
  29
  The
previous work undertaken by the various explorers of the Margarita Property had
not previously been collected in one location.  During 2006, the
Company expended most of its exploration activity collecting property data from
various sources, preparing maps, and visiting the property to match the data
with physical observation.  Based on a review of all of the data
available to the Company, several possible drill targets were identified
including targets that were not located on the existing boundary of the
Margarita Property.  As a result, the Company staked an additional 30
claims.
 
 The
Company formally approved a work plan for drilling on the Margarita
Property.  However, due to difficulties with locating a suitable
contractor to undertake the drilling and due to insufficient funds available to
the Company, the Company decided to assign its rights and obligations to the
property to Patriot Gold Corp.  Pursuant to the assignment, Patriot
assumed the rights, and agreed to perform all of the duties and obligations, of
the Company arising under the Margarita Property Option Agreement. Simultaneous
with the execution and delivery of the Agreement, Patriot paid the Company CDN
$201,600 (USD $200,000) which amount represents the full payment and
satisfaction for the assignment to Patriot by the Company.  Included
in the assignment to Patriot were, without limitation, all sums incurred by the
Company in connection with its exploration of the Margarita Property which
includes the refunding of the reclamation bond previously paid by the Company to
the Forest Service in Arizona, all expenditure credits incurred by the Company
prior to the execution of the Agreement and all property option payments made to
the Margarita Property. In addition, as the Company also assigned all of its
rights and obligations under the Finders’ Fee Agreement to Patriot, it is no
longer required to make further payments.  Subsequent to the execution
of the Agreement, the Company did not retain any interest in the Margarita
Property.
 
 Planned
Work by the Company for 2008
 
 The
Company does not currently have any interest in the Margarita
Property.
 
 ITEM
4A.  UNRESOLVED STAFF COMMENTS
 
 Not
applicable.
 
 ITEM 5.  OPERATING
AND FINANCIAL REVIEW AND PROSPECTS
 
 The
following discussion for the fiscal years ended December 31, 2007, 2006 and 2005
should be read in conjunction with the financial statements of the Company and
the notes thereto.
 
 Certain
statements contained in the foregoing MD&A and elsewhere in this 20-F
constitute forward-looking statements.  Such forward-looking
statements involve a number of known and unknown risks, uncertainties and other
factors which may cause actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements.  Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of the
financial statements were made, and readers are advised to consider such
forward-looking statements in light of the risks set forth in section 3.D.
above.
 
  30
   OVERALL
PERFORMANCE
 
 The
following table sets forth the audited statement of operations data for American
Goldrush Corp. for the fiscal years indicated:
 
 Table
No. 3
 
 American
      Goldrush Corp.Periods
      Ended December 312007
              
              
              2006
              
              
              2005
              
              
              2004
              
              
              2003Revenue
              
              $Nil
              
              
              $Nil
              
              
              $Nil
              
              
              $Nil
              
              
              $NilExpenses
              
              $
              351,943
              
              
              $
              1,945,540
              
              
              $
              101,396
              
              
              $
              88,541
              
              
              $
              14,261Loss
      from operations
              
              $
              (351,943
              )
              
              $
              (1,945,540
              )
              
              $
              (101,396
              )
              
              $
              (88,541
              )
              
              $
              (14,261
              )Net
      loss and Other Comprehensive Loss
              
              $
              (346,255
              )
              
              $
              (1,946,089
              )
              
              $
              (102,926
              )
              
              $
              (88,541
              )
              
              $
              (14,261
              )Net
      loss per share:Basic
      and diluted
              
              $
              0.01
              
              
              $
              0.05
              
              
              $
              0.00
              
              
              $
              0.00
              
              
              $
              0.00Weighted
      average number of  common shares outstanding
              
              
              41,613,920
              
              
              
              40,997,133
              
              
              
              39,557,350
              
              
              
              39,552,951
              
              
              
              23,096,552
 
 Results
of Operations of Fiscal 2007 vs. Fiscal 2006
 
 We are a
natural resource exploration company in the exploration stage with an objective
of acquiring, exploring, and, if warranted and feasible, developing natural
resource properties.  Natural resource exploration and development
requires significant capital and our assets and resources are limited.
Therefore, we participate in the natural resource industry through the optioning
of natural resource exploration and development projects.
 
 Revenue
- Cost of Revenue
 
 We did
not earn any revenues during the years ended December 31, 2007 or
2006.  We do not anticipate earning revenues until such time as we
have entered into commercial production of our mineral properties. We can
provide no assurance that we will discover commercially exploitable levels of
mineral resources on our properties, or if such resources are discovered, that
we will enter into commercial production of our mineral properties.
 
 General
and Administrative Expenses
 
 The net
loss in 2007 was $346,255 compared to $1,946,089 in 2006.  The
decrease in the loss of $1,599,834 in 2007 compared to 2006 is primarily related
to shared-based compensation expense of $1,500,000 that was recognized in 2006
but not in 2007.  The share-based compensation was recognized as a
result of one of the Company’s founders resigning and gifting his shares to our
other founder.  The gifting of the shares was not undertaken at fair
value and as a result the transaction has been recognized by the Company as a
compensation expenses.  Another factor leading to the decreased loss
was a reduction in stock-based compensation to $41,107 in 2007 from $144,478 in
2006.  No options were granted in either 2007 or 2006 but the expense
decreased due to the amortization of the expense for options granted in
2005.  The other item leading to the decreased loss in 2007 compared
to 2006 is a result of a $51,210 loss recognized by the Company as a result on
the settlement of bridge loans in January 2006.  The bridge loans were
settled with units of the Company which included common shares and
warrants.  The aggregate fair value of the units exceeded the fair
value of the loan at the time of settlement which resulted in a loss for
2006.  No such item occurred in 2007.  Additionally,
professional fees were $28,405 in 2007 compared to $56,053 in 2006. The higher
professional fees relates to the Company updating its registration statement in
2006 while the statement was not updated in 2007.
  31
  
 Partially
offsetting the effects of a decrease in share-based compensation, stock-based
compensation, the loss on the settlement of the bridge loans, and a reduction in
professional fees was an increase in mineral property acquisition and
exploration expenditures to $251,693 in 2007 from $163,474 in
2006.  In 2007 the Company made property option payments of $5,870
(2006 - $5,850) for the South Vulture Property, $10,000 (2006 – Nil) for the GQ
Property, and a total of $60,115 (2006 - $43,230) in relation to the Margarita
Property including the Finder’s Fee Agreement.  On the South Vulture,
the Company completed exploration programs in 2007 and 2006 with the costs being
consistent year-to-year.  For the GQ Property, exploration programs
were also completed in 2007 and 2006.  However, the 2007 GQ budget was
significantly higher than the 2006 budget.  In 2006 the Company
completed an initial evaluation of the Margarita Property while in 2007 the
Company incurred the costs for the preparation for the planned drill
program.  The Company formally approved a 2007 work plan for drilling
on the Margarita Property.  However, due to difficulties with locating
a suitable contractor to undertake the drilling and due to insufficient funds
available to the Company, the Company decided to assign its rights and
obligations to the property to Patriot Gold Corp in January 2008.
 
 Results
of Operations of Fiscal 2006 vs. Fiscal 2005
 
 We are a
natural resource exploration company in the exploration stage with an objective
of acquiring, exploring, and, if warranted and feasible, developing natural
resource properties.  Natural resource exploration and development
requires significant capital and our assets and resources are limited.
Therefore, we participate in the natural resource industry through the optioning
of natural resource exploration and development projects.
 
 Revenue
- Cost of Revenue
 
 We did
not earn any revenues during the years ended December 31, 2006 or
2005.  We do not anticipate earning revenues until such time as we
have entered into commercial production of our mineral properties. We can
provide no assurance that we will discover commercially exploitable levels of
mineral resources on our properties, or if such resources are discovered, that
we will enter into commercial production of our mineral properties.
 
 General
and Administrative Expenses
 
 The net
loss in 2006 was $1,946,089 compared to $102,926 in 2005.  The
increase of in the loss of $1,843,163 in 2006 compared to 2005 is primarily
related to shared-based compensation expense of $1,500,000 that was recognized
in 2006 but not in 2005.  The share-based compensation was recognized
as a result of one of the Company’s founders resigning and gifting his shares to
our other founder.  The gifting of the shares was not undertaken at
fair value and as a result the transaction has been recognized by the Company as
a compensation expenses.  Another factor leading to the increased loss
was a significant increase in mineral property acquisition and exploration
expenditures from $1,947 in 2005 to $163,474 in 2006.  In 2006, the
Company entered into three new property option agreements and completed two
initial exploration programs on two of the new properties while in 2005, the
only mineral property acquisition and exploration expenditures related to annual
claim filing fees on the Company’s now abandoned Polischuk
Property.  Stock-based compensation increased to $144,478 in 2006
compared to $35,075 recognized in 2005.  No options were granted in
2006 but the expense increased due to the amortization of the expense for
options granted in 2005. The other item leading to the increased loss in 2006
compared to 2005 is a result of a $51,210 loss recognized by the Company as a
result on the settlement of bridge loans in January 2006.  The bridge
loans were settled with units of the Company which included common shares and
warrants.  The aggregate fair value of the units exceeded the fair
value of the loan at the time of settlement which has resulted in a loss for
2006.
 
  32
  5.B.  Liquidity
and capital resources
 
 Liquidity
 
 The
funding of our operations since inception has come from the following
sources.  On October 30, 2003, we closed a private placement with six
investors for the sale of 9,500,000 units, which generated gross proceeds to us
of CDN $95,000. On January 28, 2004, we closed a private placement with
thirty-eight Canadian investors for the sale of 57,350 Common shares, for total
gross proceeds of CDN $5,735. Between March and August 2005 we received a total
of $71,139 in proceeds from three separate bridge loans from three minority
shareholders.   On June 16, 2006 we completed a sale of units of
the Company for total proceeds of CDN $550,000 and during 2006 we received CDN
$56,250 from the exercise of 225,000 stock options.
 
 On
January 29, 2008, the Company entered into an Assignment and Assumption
Agreement (the “Agreement”) with Patriot Gold Corp. (“Patriot”) to assign the
Company’s rights and obligations under the Margarita Property Option Agreement
to Patriot.  Pursuant to the Agreement, Patriot assumed the rights,
and agreed to perform all of the duties and obligations, of the Company arising
under the Margarita Property Option Agreement. Simultaneous with the execution
and delivery of the Agreement, Patriot paid the Company CDN $201,600 (USD
$200,000) which amount represents the full payment and satisfaction for the
assignment to Patriot by the Company.  Included in the assignment to
Patriot were, without limitation, all sums incurred by the Company in connection
with its exploration of the Margarita Property which includes the refunding of
the reclamation bond previously paid by the Company to the Forest Service in
Arizona, all expenditure credits incurred by the Company prior to the execution
of the Agreement and all property option payments made to the Margarita
Property. In addition, as the Company also assigned all of its rights and
obligations under the Finders’ Fee Agreement to Patriot, it is no longer
required to make further payments.  Subsequent to the execution of the
Agreement, the Company did not retain any interest in the Margarita
Property.
 
 We are a
natural resource exploration company with an objective of acquiring, exploring,
and if warranted and feasible, developing natural resource
properties.  Our primary focus in the natural resource sector is
gold.
 
 We have
members on our board of directors who have extensive experience in the natural
resource industry. However, exploration activities of properties without any
proven reserves require a considerable amount of time and money, and the
subsequent return on investment for our shareholders would be very long term
indeed.  Should we make a finding of minerals on any of our properties
we would consider our alternatives to such finding, including the possibility of
selling any findings to a major mining company. By selling its findings to
another mining company, it would provide an immediate return to our shareholders
without the long time frame and cost of putting a mine into operation ourselves,
and it would also provide future capital for the company to continue
operations.
 
 During
2007 and 2006 our operations were funded from the proceeds of CDN $550,000 from
a private placement completed in June 2006 and from CDN $56,250 from the
exercise of 225,000 stock options in 2006. Cash was saved due to the settlement
of the bridge loans with units of the Company.  On January 27, 2006,
pursuant to three separate Loan Conversion Agreements the Company and each of
the three individual lenders agreed to convert the three bridge loans into units
of the Company at a conversion rate of CDN$0.10 per Unit.  Each Unit
consists of one common share, one Class A warrant giving the holder the right to
purchase one common share at CDN$0.25, which is exercisable from January 27,
2009 until January 27, 2011, and one Class B warrant giving the holder the right
to purchase one common share at CDN$0.50, which is exercisable from January 27,
2009 until January 27, 2012.  As a result of such loan conversions,
the Company has issued a total of 731,570 restricted shares of common stock,
731,570 Class A warrants, and 731,570 Class B warrants representing a grand
total of principal and accrued interest at January 27, 2006 of
$73,157.
 
  33
  On
January 29, 2008 we assigned our interest in the Margarita Property to Patriot
Gold Corp. for total proceeds of CDN $201,600 (USD $200,000).  The
receipt of these funds along with the resulting reduction in cash commitments
related to the Margarita Property will allow us to fund our minimum obligations
for the next twelve months.  However, if we were to expand our
operations, additional funding would be required.
 
 During
2007 we used $335,103 in operations compared to $215,234 in 2006, an increase of
$119,869.  While our loss was significantly lower in 2007 ($346,255)
compared to 2006 ($1,946,089) we had two non-cash items in 2006 that we did not
incur in 2007.  In 2006 we had $1,500,000 in share-based compensation
relating to the gifting of shares between the founders of the Company upon the
resignation of our then President.  We also recognized a $51,210 loss
in relation to the settlement of the bridge loans.  The other non-cash
effect was that stock-based compensation decreased to $41,107 in 2007 from
$144,478 in 2006.  Also, in 2007 we had a cash outflow from accounts
payable and accrued liabilities of ($28,767) compared to a cash inflow of
$38,371 in 2006.
 
 In 2007
and 2006 we used $17,894 and $3,367 respectively for
investing.  Investing activities in both years related to the payment
of reclamation deposits on the Margarita (2007) and the South Vulture (2006)
Properties.  There were no financing activities in 2007 while $606,250
received in 2006 included $550,000 in proceeds received from a private placement
and $56,250 from the exercise of stock options.
 
 During
2006 we used $215,234 in operations compared to $77,569, an increase of
$137,665.  While our loss was significantly higher in 2006
($1,946,089) compared to 2005 ($102,926) we had two non-cash items in 2006 that
we did not incur in 2005.  In 2006 we had $1,500,000 in share-based
compensation relating to the gifting of shares between the founders of the
Company upon the resignation of our President.  We also recognized a
$51,210 loss in relation to the settlement of the bridge loans.  The
other non-cash effect was that stock-based compensation increased to $144,478 in
2006 from $35,075 in 2005.  Also, in 2006 we had a cash inflow from
accounts payable and accrued liabilities of $38,371 compared to a cash outflow
of $10,526 in 2005.
 
 In 2006
we used $3,367 for investing relating the payment of a reclamation deposit on
our South Vulture Property.  No investing activities took place in
2005.  Financing activity of $606,250 in 2006 included $550,000 in
proceeds received from a private placement and $56,250 from the exercise of
stock options.  Financing in 2005 related to $71,139 received from the
proceeds from three bridge loans.
 
 We had
cash and cash equivalents of $54,659 as of December 31, 2007. We anticipate that
we will incur through the end of our next fiscal year:
 
 ·
              $40,000
      in connection with exploration expenditures and $25,000 for property
      option payments for the South Vulture, Margarita and GQ
      Properties;
 
 ·
              $96,000
      for operating expenses, including working capital and general,
      administrative and professional legal and accounting expenses associated
      with being a reporting issuer under the Securities Exchange Act of
      1934.
 
 At
December 31, 2007 we had working capital of $32,679.  On January 29,
2008 we assigned our interest in the Margarita Property to Patriot Gold Corp.
for total proceeds of CDN $201,600 (USD $200,000).  The receipt of
these funds along with the resulting reduction in cash commitments related to
the Margarita Property will allow us to fund a minimum level of operations for
the next twelve months.
 
 We
anticipate that our cash requirements to carry out planned exploration of our
properties and to cover administrative costs will be approximately $161,000
through December 31, 2008. Although current cash on hand is sufficient to fund
our minimum obligations under existing property agreements, we shall require
additional funding in order to expand our operations and we anticipate that such
funding will be in the form of equity financing from the sale of our common
stock.  However, we cannot provide investors with any assurance that
we will be able to raise sufficient funding from the sale of our common stock to
fund additional phases of the exploration programs, should we decide to
proceed.  We believe that debt financing will not be an alternative
for funding any further phases in our exploration program.  The
risky
  34
  nature of
this enterprise and lack of tangible assets places debt financing beyond the
credit-worthiness required by most banks or typical investors of corporate debt
until such time as an economically viable mine can be
demonstrated.  We do not have any arrangements in place for any future
equity financing.
 
 Critical
accounting estimates
 
 The
preparation of the Company's financial statements requires management to make
estimates and assumptions regarding future events. These estimates and
assumptions affect the reported amounts of certain assets and liabilities, and
disclosure of contingent liabilities.
 
 Significant
areas requiring the use of management estimates include the variables used in
determining stock-based compensation and the loss on the settlement of the
bridge loans. These estimates are based on management's best judgment. Factors
that could affect these estimates include option term and expected
volatility.
 
 Management
has made significant assumptions and estimates determining the fair market value
of stock-based compensation granted to employees and non-employees as well as
determining the fair market value of the share purchase warrants issued upon the
settlement of the bridge loans.  These estimates have an effect on the
stock-based compensation and the loss on bridge loan conversion expenses
recognized and the contributed surplus and share capital balances on the
Company’s Balance Sheet.  The value of each option award is estimated
on the date of grant using the Black-Scholes option-pricing model. In addition,
the Company uses the Black-Scholes model to value the warrants issued as part of
the bridge loan conversion at each reporting period.  The
Black-Scholes option-pricing model requires the input of subjective assumptions,
including the expected term of the option award and stock price volatility. The
expected term of options granted for the purposes of the Black-Scholes
calculation is the term of the award since all grants are to non-employees.
Because our common stock does not yet trade in a public market, the expected
volatility is based on comparable junior mining companies who granted similar
term options.  In addition, determining the fair value of our shares
requires management to consider factors that require other than share price
since a public quotation of our shares is not available.  These
estimates involve inherent uncertainties and the application of management
judgment. An expected forfeiture rate of nil was used in the recognition of the
compensation and loss expenses for those options and warrants not yet vested at
December 31, 2007.
 
 5.C.  Research and
development, patents and licenses etc.
 
 ---
Not applicable ---
 
 5.D.  Trends.
 
 ---
No Disclosure Necessary ---
 
 5.E.  Off-Balance
Sheet Arrangements.
 
 We do not
have any off balance sheet arrangements as of December 31, 2007 and December 31,
2006 or of the date of this report.
 
  35
  5.F.  Contractual
Obligations.
 
 We have
the following contractual obligations at December 31, 2007 as expressed in CDN
dollars:
 
 Contractual
      Obligations
              
              Payments
      Due By PeriodTotal
              Less
      than 1 Year
              1 –
      3 Years
              3 –
      5 Years
              More
      than 5 yearsProperty
      payments
              $105,574(1)
              $25,660
              $79,914
              -
              -Property
      expenditures
              $209,043(1)
              $39,826
              $169,217
              -
              -$314,617
              $65,486
              $249,131
              -
              -
 
 (1) The
Company’s property option agreement for the South Vulture is denominated in
USD.   Cash payments totaling CDN $15,574 (USD $15,000) and net
expenditures on the property of at least CDN $109,043 (USD $110,000) are due by
March 24, 2010.
 
 At
December 31, 2007 the Company also had $30,394 in trade accounts
payable.  The balance is unsecured.
 
 Recent Accounting
Pronouncements Applicable to US
 
 Recently
issued United States accounting pronouncements have been outlined
below.
 
 SFAS 157
 
 In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 157, “Fair Value
Measurements” (“FAS 157”). FAS 157 defines fair value, establishes a framework
for measuring fair value in accordance with generally accepted accounting
principles, and expands disclosures about fair value measurements. The
provisions of FAS 157 are effective fiscal years beginning after November 15,
2007.
 
 SFAS 159
 
 In
February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial
Assets and Financial Liabilities - including an amendment of FASB Statement No.
115” (“SFAS No. 159”) which permits entities to choose to measure many financial
instruments and certain other items at fair value. This statement is effective
for fiscal periods beginning after November 15, 2007.
 
 SFAS
141(R)
 
 In
December 2007, the FASB issued SFAS 141(R) “Business Combinations” and SFAS 160
“Non-controlling Interests in Financial Statements”, which are both effective
for fiscal years beginning after December 15, 2008. SFAS 141(R), which will
replace FAS 141, is applicable to business combinations consummated after the
effective date of December 15, 2008.
 
 SFAS 161
 
 In March
2008, the FASB issued SFAS 161 “Disclosures about Derivative Instruments and
Hedging Activities – an amendment of SFAS 133.  This Statement
requires enhanced disclosures about an entity’s derivative and hedging
activities and thereby improves the transparency of financial reporting. This
Statement is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. This Statement encourages, but does not require, comparative
disclosures for earlier periods at initial adoption.
  36
  
 The
implementation of these new standards is not expected to have a material effect
on the Company’s financial statements.
 
 ITEM
6.  DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES
 
 6.A.  Directors
and Senior Management
 
 Table
No. 4
 Directors
and Senior Management
 May
22, 2008
 
 
 Name
              Position
              Age
              Date
      of
                First
      Election
                Or
      AppointmentAndrew
      Gourlay (1)
              Director,
      Chairman, President, Chief Executive and Operating Officer and
      Secretary
              53
              November
      28, 2005Scott
      Praill(1)
              Director
              42
              September
      30, 2003Robert
      Cann(1)
              Director
              53
              October
      14, 2004Richard
      Kehmeier
              Director
              59
              December
      1, 2005
 
 1. Member
of the Audit Committee.
 The
business address of our officers and directors is c/o American Goldrush
Corporation, 1155 West Pender, Suite 708, Vancouver, British Columbia, Canada,
V6E 2P4.
 
 Our
directors hold office until the next annual meeting of our shareholders or until
their successors are duly elected and qualified.  Set forth below is a
summary description of the principal occupation and business experience of each
of our directors and executive officers for at least the last five
years.
 
 Andrew Gourlay has been a
Director and our Chairman, President, Chief Executive and Operating Officer and
Secretary since November 2005.  He is also currently the President of
Sinchao Metals Corp., a publicly traded Canadian corporation.  He is a
mineral and precious metals geologist who has been working as a professional
geologist for nearly two decades.  From 2003 to 2005, he worked as the
Senior Exploration Geologist for Asia Gold Corp.  From 1994 to 2003
and presently, he is a consulting geologist to a variety of mineral exploration
companies.   He has been involved in the search for precious
metals in Mongolia, Southeast Asia, and South America.  Mr. Gourlay
graduated from the University of British Columbia with a Bachelor of Science
degree in geology and is a member of the Association of Professional Engineers,
Geologists, and Geophysicists of Alberta and is a Fellow of the Geological
Association of Canada.
 
 Scott Praill has served on our
Board of Directors since September 2003.  Since 2004 Mr. Praill has
been a self-employed financial consultant and since June 2007 he has served as
the Chief Financial Officer of Strata Oil & Gas Inc. which is a publicly
traded company listed on the OTC:BB.  From November 1999 to October
2003, he was the Director of Finance of Inflazyme
Pharmaceuticals.   Mr. Praill is a financial professional who has
been employed by leading companies such as Placer Dome (1999) and Westcoast
Energy (1998), and was a Senior Accountant for Price Waterhouse (1993 – 1996),
where his responsibilities included the planning of financial statement audits
and ensuring Canadian and U.S. GAAP compliance.   His duties have
also included assessment of adequate financial statement disclosure; preparing
and reviewing financial information including pro-forma financial statements for
prospectuses, information circulars and other offering documents related to
acquisitions, mergers and the issuance of debt and equity securities;
evaluating  public  company  operating  results  through
financial statement and financial  ratio  analysis; and
reviewing financial internal control systems and preparing  reports
for presentation to Audit Committees and Boards of Directors.  Mr.
Praill  has  extensive  experience  in
  37
  public  company
financial reporting including compliance with Canadian and U.S. securities
exchange requirements and
the  preparation  and  review  of  financial
statements.  Mr. Praill has earned the following
designations:  Chartered Accountant  (BC, 1996), Certified
Public Accountant  (Illinois, 2001), and a Bachelor of Science Degree
(Simon Fraser University, 1989).
 
 Robert Cann has served as
Director for American Goldrush since October 14, 2004. Mr. Cann is a
professional geologist with extensive experience in exploration project
management and geological consulting. Since graduating with his B.Sc. in Geology
and his M.Sc. in Economic Geology in 1979 (both from the University of British
Columbia), Mr. Cann has worked in a senior capacity for some of the world’s
leading mining companies, including Rio Algom and Cameco Corporation. From July
2002 to present, Mr. Cann has been employed by Entrée Gold Inc. where he is
currently the Vice President, Exploration.  Mr. Cann has acted as
project manager on multiple large-scale integrated exploration projects in
Canada, Central America and South America, and has acted as exploration manager
on exploration projects in diverse regions such as Mongolia, Honduras and
Mexico. Mr. Cann is fluent in English and Spanish, and is a member of the
Geological Association of Canada, the Association of Professional Engineers and
Geoscientists, the Canadian Institute of Mining and Metallurgy, and the Canadian
Information Processing Society. Mr. Cann has co-authored several scientific
articles for geological publications. Mr. Cann has worked as an independent
consulting geologist since 1988.
 
 Richard Kehmeier has served as
a Director of the Company since December 2005.  He is a certified
professional and registered exploration geologist with over thirty years of
international experience in all phases of resource development for the mining
industry.  Over the past five years, Mr. Kehmeier has been working as
a self-employed consultant.  During his career, he has held such
positions as Vice President at Gold Reserve Corp. and has worked for companies
such as Atlas, Union Carbide, and Anaconda.  Mr. Kehmeier graduated
from the Colorado School of Mines with a Bachelor of Science in Geological
Engineering and a Master of Science in Geology.
 
 We are
not aware of any material legal proceedings that have occurred within the past
five years concerning any director, director nominee, or control person which
involved a criminal conviction, a pending criminal proceeding, a pending or
concluded administrative or civil proceeding limiting one's participation in the
securities or banking industries, or a finding of securities or commodities law
violations.
 
 There are
no family relationships between any two or more Directors or Senior
Management.
 
 There are
no arrangements or understandings with major shareholders, customers, suppliers
or others, pursuant to which any person referred to above was selected as a
Director or member of senior management.
 
 6.B.  Compensation
 
 Cash
Compensation
 
 With the
exception of Richard Kehmeier, none of our officers or directors have received
or earned any compensation or bonus for services rendered in the 2007 or
2006.  Commencing December 2005, Mr. Kehmeier has received USD $500
per month to serve as a Director of the Company.  The monthly fees
owing to Mr. Kehmeier shall continue as long as he continues to serve as a
Director of the Company.  During the fiscal year ended December 31,
2007, such monthly payments made to Mr. Kehmeier totaled $6,472 (USD
$6,000).
 
 We do not
maintain key-man life insurance for any of our executive officers or
directors.
 
  38
  Table
No. 5
 Outstanding
Equity Awards as at December 31, 2007
 
 Name
              Number
      of Options Granted
              Exercise
      Price per Option
              Grant
      Date
              Expiration
      Date
              Mkt.
      Value of Securities Underlying Options on Date of Grant
              Number
      of Securities Underlying Unexercised Options, Exercisable
              Number
      of Securities Underlying Unexercised Options,
Unexercisable
              Grant
      Date Fair Value of Stock Options(1)Andrew
      Gourlay(2)
              200,000
              $0.25
              11/28/05
              11/28/15
              $0.10
              133,667
              66,333
              $14,200Scott
      Praill(3)
              100,000
              $0.25
              11/01/05
              11/01/15
              $0.10
              66,667
              33,333
              $7,100Robert
      Cann(3)
              100,000
              $0.25
              11/01/05
              11/01/15
              $0.10
              66,667
              33,333
              $7,100Richard
      Kehmeier
              Nil
              -
              -
              -
              -
              -
              -
              -
 
 (1) The
figures in this column represent the grant date fair value of stock option
grants as determined using the Black-Scholes model. For more information
regarding the assumptions used to value stock option grants, please refer to
note 7(b) of the Company’s audited financial statements for the fiscal year
ended December 31, 2007 filed with this Form 20-F.
 
 (2) Mr.
Gourlay was granted 200,000 options on November 28, 2005.  The options
vest in equal installments of 33,333 every six months commencing May 28, 2006
and ending November 28, 2008.
 
 (3) Mr.
Praill and Mr. Cann were granted 100,000 options each on November 1,
2005.  The options vest in equal installments of 16,667 every six
months commencing May 1, 2006 and ending November 1, 2008.
 
 No stock
options were granted to officers or directors in 2007 or 2006.  No
Officer or Director has ever exercised stock options granted to them by the
Company.
 
 Change of Control
Remuneration.
 
 The
Company had no plans or arrangements in respect of remuneration received or that
may be received by Executive Officers of the Company in Fiscal 2007 to
compensate such officers in the event of termination of employment (as a result
of resignation, retirement, change of control) or a change of responsibilities
following a change of control.
 
 6.C.  Board
Practices
 
 6.C.1.  Terms of
Office.
 
 Refer to
ITEM 6.A.1.
 6.C.2.  Directors’
Service Contracts.
 
 With the
exception of Richard Kehmeier, there are no Director Service
contracts.  Pursuant to an agreement dated December 2005, between the
Company and Mr. Kehmeier, commencing December 2005, Mr. Kehmeier has received
USD $500 per month to serve as a Director of the Company.  The monthly
fees owing to Mr. Kehmeier shall continue as long as he continues to serve as a
Director of the Company. Mr. Kehmeier’s service contract will terminate
upon his ceasing to serve as a Director of the Company.
 
 6.C.3.  Board of
Director Committees.
 
 The Audit
Committee oversees the accounting and financial reporting processes of the
Company and all audits and external reviews of the financial statements of the
Company on behalf of the Board, and has general responsibility for oversight of
internal controls, accounting and auditing activities of the Company. The
Committee reviews, on a continuous basis, any reports prepared by the Company's
external auditors
  39
  relating
to the Company's accounting policies and procedures, as well as internal control
procedures and systems. The Committee is also responsible for examining all
financial information, including annual financial statements, prepared for
securities commissions and similar regulatory bodies prior to filing or delivery
of the same. The Audit Committee also oversees the annual audit process, the
Company's internal accounting controls, any complaints and concerns regarding
accounting, internal controls or auditing matters and the resolution of issues
identified by the Company's external auditors. The Audit Committee recommends to
the Board the firm of independent auditors to be nominated for appointment by
the shareholders and the compensation of the auditors. The Audit Committee meets
on an as needed basis.
 
 The
Company’s Audit Committee consists of the following three directors, all of who
are financially literate and knowledgeable about the Company’s affairs: Mr.
Gourlay, Mr., Cann and Mr. Praill.  Mr. Scott Praill is the audit
committee’s financial expert member as a qualified accountant with 10 years
experience in the mining industry.
 
 6.D.  Employees
 
 We have no employees at this time. We
utilize outside contractors where possible, and rely on the industry expertise
of management and our Board of Directors. These contractors will be responsible
for surveying, geology, engineering, exploration, and excavation. The geologists
will evaluate the information derived from the exploration and excavation and
the engineers will advise us on the economic feasibility of removing the
mineralized material. No member of our management team is presently employed by
us.  We do not foresee any significant changes in the number of
employees or consultants we will have over the next twelve months, unless the
growth of our business demands it.
 
 6.E.  Share
Ownership
 
 Table No.
6 lists, as of May 22, 2008 Directors and Senior Management who beneficially own
the Company's voting securities, consisting solely of common shares and the
amount of the Company's voting securities owned by the Directors and Senior
Management as a group.
 
 Table
No. 6
 Shareholdings
of Directors and Senior Management
 
 
 Title
      of Class
              Name
      of Beneficial Owner
              
              Amount
      and Nature of Beneficial Ownership
              
              
              Percent
      of Class(3)Common
              Scott
      Praill          (1)
              
              
              30,083,333
              
              
              
              72.3
              %Common
              Andrew
      Gourlay        (2)
              
              
              166,667
              
              
              
              *Common
              Richard
      Kehmeier
              
              
              -
              
              
              
              *Common
              Robert
      Cann           (2)
              
              
              83,333
              
              
              
              *Total
      Directors / Senior Management
              
              
              30,333,333
              
              
              
              72.3
              %
 
 *
Represents less than 1%.
 
 (1)
              30,000,000
      of the shares owned by Mr. Praill are subject to our option to purchase
      all or any portion of these shares are a purchase price of CDN $0.01 per
      share.  The balance of 83,333 shares relate to stock options
      that are currently exercisable or exercisable within 60
    days.
 
 (2)
              These
      shares are represented by share purchase options that are currently
      exercisable or exercisable within 60
days.
 
 (3)
              Based
      on 41,613,920 shares outstanding as of May 22,
  2008.
 
  40
  Stock
Options.
 
 The terms
of options grantable by the Company are done at the discretion of the Option
Committee of the Board of Directors, including the number of common shares under
option, the exercise price and expiry date of such options and any amendments
thereto.  The Company adopted a formal written stock option plan (the
"Plan") on June 24, 2005.
 
 Such
“terms and conditions”, including the pricing of the options, expiry and the
eligibility of personnel for such stock options; and are described
below.
 
 The
principal purposes of the Company’s stock option program are to (a) promote a
proprietary interest in the Company among the officers, directors, employees and
consultants of the Company, (b) retain and attract the qualified officers,
directors, employees and consultants the Company requires, (c) provide a
long-term incentive element in overall compensation, and (d) promote the
long-term profitability of the Company.
 
 The Plan
provides that stock options may be granted to service providers for the
Company.  The term “service providers” means (a) any full or part-time
employee or Officer, or insider of the Company; (b) any other person employed by
a company or individual providing management services to the Company; (c) any
other person or company engaged to provide ongoing consulting services for the
Company (any person in (a), (b), or (c) hereinafter referred to as an “Eligible
Person”); and (e) any corporation controlled by such Eligible Person, the issued
and outstanding voting shares of which are, and will continue to be,
beneficially owned, directly or indirectly, by such Eligible Person and/or
spouse, children and/or grandchildren of such Eligible
Person.   Subject to the foregoing, the board of directors or
Committee, as applicable, shall have full and final authority to determine the
persons who are to be granted options under the Plan and the number of shares
subject to each option.
 
 The Plan
shall be administered by the board of directors of the Company or a committee
established by the board of directors for that purpose.  Subject to
approval of the granting of options by the board of directors or Committee, as
applicable, the Company shall grant options under the Plan.
 
 The Plan
provides that the aggregate number of shares of the Company, which may be issued
and sold under the Plan, will not exceed 5,000,000.  The Company shall
not, upon the exercise of any option, be required to issue or deliver any shares
prior to (a) the admission of such shares to listing on any stock exchange on
which the Company’s shares may them be listed, and (b) the completion of such
registration or other qualification of such shares under any law, rules or
regulation as the Company shall determine to be necessary or
advisable.  If any shares cannot be issued to any optionee for
whatever reason, the obligation of the Company to issue such shares shall
terminate and any option exercise price paid to the Company shall be returned to
the optionee.
 
 If a
stock option expires or otherwise terminates for any reason without having been
exercised in full, the number of common shares reserved for issuance under that
expired or terminated stock option shall again be available for the purposes of
the Plan.  The Plan provides that it is solely within the discretion
of the Board to determine who should receive stock options and in what amounts,
subject to the following conditions:
  (a)           options
will be non-assignable and non-transferable;
 (b)           options
may be exercisable for a maximum of ten years from grant date;
 (c)           options
to acquire no more than 5% of the issued shares of the Company under the Plan
together with any other options for services may be granted to any one
individual in any 12-month period;
 (d)           options
to acquire no more than 10% of the issued shares of the Company may be granted
to anyinsiders in any 12-month period;
 (e)           the
issuance of shares to insiders of the Company may not exceed 10% of the issued
and outstandingshares within a one year period
 (f)           the
issuance of shares to an insider of the Company and his or her associates under
the Plan and allother compensation arrangements, within a one year period, may
not exceed 5% of the issued andoutstanding shares.
 (g)           unless
otherwise determined by the Option Committee, all vested options expire 30 days
following thedate of resignation or termination of the option
holder;
  41
  (h)           in
the event of an option holder’s death, the option holder’s personal
representative may exercise anyportion of the option holder’s vested outstanding
options for a period of one year following the optionholder’s death, with the
consent of the board of directors.
 
 The Plan
provides that other terms and conditions may be attached to a particular stock
option, such terms and conditions to be referred to in a schedule attached to
the option certificate.  Stock options granted to directors, senior
officers, employees or consultants will vest over a three-year period unless
otherwise determined by the Board on a case by case basis.
 
 The price
at which an option holder may purchase a common share upon the exercise of a
stock option will be as set forth in the option certificate issued in respect of
such option and in any event will not be less than the market price of the
Company’s common shares as of the date of the grant of the stock option (the
“Award Date”).  The market price of the Company’s common shares for a
particular Award Date will typically be the closing trading price of the
Company’s common shares on the day immediately preceding the Award Date, or
otherwise in accordance with the terms of the Plan.  Where there is no
such closing price or trade on the prior trading day “market price” shall mean
the average of the most recent bid and ask of the shares of the Company on any
stock exchange on which the shares are listed or dealing network on which the
shares of the Company trade.
 
 In no
case will a stock option be exercisable at a price less than the minimum
prescribed by each of the organized trading facilities or the applicable
regulatory authorities that would apply to the award of the stock option in
question.
 
 Common
shares will not be issued pursuant to stock options granted under the Plan until
they have been fully paid for by the option holder.
 
 The names
and titles of the Directors/Executive Officers of the Company to whom
outstanding stock options have been granted and the number of common shares
subject to such options are set forth in Table No. 5 as of December 31,
2007.
 
 ITEM 7.  MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 
 7.A.  Major
Shareholders.
 
 7.A.1.a.  Holdings
By Major Shareholders.
 
 The
Company has one Shareholder who owns more than 5% of the issued
shares.  As at May 22, 2008 Scott Praill has beneficial ownership of
30,083,333 shares, or 72.3% of the common shares.
 
 7.A.1.b.  Significant
Changes in Major Shareholders’ Holdings.
 
 On
January 23, 2006, 15,000,000 shares of the common stock of the Company held by
Ronald C. Blomkamp were gifted by Mr. Blomkamp to Scott Praill, pursuant to an
assignment, dated January 23, 2006, among Mr. Blomkamp, Mr. Praill, and the
Company.  No consideration was paid by Mr. Praill for the gifting
of such shares. Such assignment was made subsequent to Mr. Blomkamp resigning as
President and terminating his relationship with the Company.
 
 7.A.1.c.  Different
Voting Rights.
 
 The
Company’s major shareholders do not have different voting rights.
 
 7.A.2.  Canadian
Share Ownership.
 
 As of May
22, 2008, the Company’s shareholders’ list showed 41,613,920 common shares
outstanding and 53 shareholders.  The Company’s shares have not yet
traded on a public exchange and as such all shareholders of the Company are
resident in Canada.
 
  42
  7.A.4.  Change of
Control of Company Arrangements.
 
 There are
no arrangements, known to the Company, the operation of which may at a
subsequent date result in a change in control of the Company.
 
 7.B.  Related
Party Transactions
 
 In September 2003, pursuant to an
agreement, we issued 15,000,000 common shares to Ronald Blomkamp, one of our
founders.  Such shares are restricted and the certificates
representing such shares contain a restrictive legend.  In September
2003, we also issued an additional 15,000,000 common shares to one of our
directors and founder, Scott Praill.  On January 23, 2006, 15,000,000
shares of the common stock of the Company held by Ronald C. Blomkamp were gifted
by Mr. Blomkamp to Mr. Praill, pursuant to an assignment, dated January 23,
2006, among Mr. Blomkamp, Mr. Praill and the Company.  No
consideration was paid by Mr. Praill for the gifting of such shares. Such
assignment was made subsequent to Mr. Blomkamp resigning as President and
terminating his relationship with the Company.
 
 The
common shares issued to Mr. Praill are subject to our right, exercisable at any
time, to purchase any or all of these shares from Mr. Praill at a purchase price
of CDN$0.01 per share.  We have this right until we, in our sole
discretion, decide to terminate the agreement.
 
 Shareholder
Loans
 
 There are
no loans to shareholders.
 
 Amounts Owing to Senior
Management/Directors
 
 At
December 31, 2007 and 2006 no amounts were owed to senior management or
directors.  There have been no transactions since inception, or
proposed transactions, which have materially affected or will materially affect
the Company in which any director, executive officer, or beneficial holder of
more than 5% of the outstanding common shares, or any of their respective
relatives, spouses, associates or affiliates has had or will have any direct or
material indirect interest.  Management believes the transactions
referenced above were on terms at least as favorable to the Company as the
Company could have obtained from unaffiliated parties.
 
 7.C.  Interests of
Experts and Counsel
 
 --- Not
applicable ---
 
 ITEM 8.  FINANCIAL
INFORMATION
 
 8.A.  Statements
and Other Financial Information
 
 The
Company's financial statements are stated in Canadian Dollars (CDN$) and are
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP), the application of which, in the case of the Company, conforms in all
material respects for the periods presented with United States GAAP, except as
discussed in footnotes to the financial statements.
 
 The
financial statements as required under ITEM #17 are attached hereto and found
immediately following the text of this Annual Report.  The audit
reports of BDO Dunwoody LLP are included herein immediately preceding the
financial statements.
 
 Audited Financial
Statements:
 
 Fiscal
years ended December 31, 2007, 2006, and 2005.
 
  43
  8.A.7.  Legal/Arbitration
Proceedings
 
 The
Directors and the management of the Company do not know of any material, active
or pending, legal proceedings against them; nor is the Company involved as a
plaintiff in any material proceeding or pending litigation.
 
 The
Directors and the management of the Company know of no active or pending
proceedings against anyone that might materially adversely affect an interest of
the Company.
 
 8.A.8.  Policy on
dividend distributions
 
 The
Company has never declared or paid a dividend to its
shareholders.  The Company does not have any policy on dividend
distributions.
 
 8.B.  Significant
Changes
 
 On
January 27, 2006, pursuant to three separate Loan Conversion Agreements the
Company and each of the three individual lenders agreed to convert the three
bridge loans into units of the Company at a conversion rate of CDN$0.10 per
Unit.  Each Unit consists of one common share, one Class A warrant
giving the holder the right to purchase one common share at CDN$0.25, which is
exercisable from January 27, 2009 until January 27, 2011, and one Class B
warrant giving the holder the right to purchase one common share at CDN$0.50,
which is exercisable from January 27, 2009 until January 27, 2012.  As
a result of such loan conversions, the Company has issued a total of 731,570
restricted shares of common stock, 731,570 Class A warrants, and 731,570 Class B
warrants representing a grand total of principal and accrued interest at January
27, 2006 of $73,157.
 
 On March
24, 2006, the Company entered into a Property Option Agreement giving the
Company the exclusive right and option to acquire a 100% interest in a mineral
exploration permit covering the South Vulture property located in Maricopa
County, Arizona.  The Company may exercise the option by making cash
payments totaling CDN $27,294 (USD $25,000) and incurring net expenditures on
the property of at least CDN $119,793 (USD $120,000) by March 24,
2010.  The Company paid the initial CDN $5,850 (USD $5,000) upon
executing the agreement as required under the initial Property Option Agreement
and made the annual payments of CDN $5,660 (USD $5,000) and CDN $5,870 (USD
$5,000) due March 24, 2008 and 2007 respectively. The Company also met its
obligation with respect to minimum exploration expenditures for
2007.
 
 On June
1, 2006 we entered into a property option agreement with Warner Gruenwald to
acquire a 100% interest in a property in the Province of British Columbia known
as the GQ Property.  We may exercise our option by making cash
payments totalling CDN $100,000 and incurring net expenditures of CDN $110,000
by June 1, 2010.  The Company made the $10,000 payment on June 1, 2007
and also met its obligations with respect to the minimum exploration
expenditures for 2007.
 
 On July
14, 2006 we entered into a property option agreement with James Sorrell to
acquire a 100% interest in a property in Santa Cruz County, Arizona known as the
Margarita Property.  We made an initial payment of CDN $39,300 (USD
$35,000) upon signing the agreement and we may exercise our option by making
further cash payments totalling CDN $822,908 (USD $825,000) by May 31, 2012 and
incurring net expenditures of CDN $675,405 (USD $675,000) by May 31,
2009.  Also on July 14, 2006 in relation to the Company entering into
the Margarita Property Option Agreement, the Company entered into a Finder’s Fee
Agreement with Fred Brost.  The Company has agreed to pay a fee equal
to 10% of the Property Option Payments made to James Sorrell during the first
three years of the Margarita Property Option Agreement.  It is
estimated that if the Company makes all of the scheduled property option
payments to Mr. Sorrell, the amount paid under the Finder’s Fee Agreement to Mr.
Brost will be CDN $30,730 (USD $31,000).  If the Company terminates
the Margarita Property Option Agreement, the Company will not owe any further
payments under the Finder’s Fee Agreement.  If it has not been
terminated earlier, the Finder’s Fee Agreement will terminate automatically on
July 14, 2009.  On May 31, 2007 the Company made the property option
payment of CDN $54,650 (USD $50,000) and the related finders’ fee payment of
CDN
  44
  $5,465
(USD $5,000) and also met its obligations with respect to the minimum
exploration expenditures for 2007.
 
 On
January 29, 2008, the Company entered into an Assignment and Assumption
Agreement (the “Agreement”) with Patriot Gold Corp. (“Patriot”) to assign the
Company’s rights and obligations under the Margarita Property Option Agreement
to Patriot.  Pursuant to the Agreement, Patriot assumed the rights,
and agreed to perform all of the duties and obligations, of the Company arising
under the Margarita Property Option Agreement. Simultaneous with the execution
and delivery of the Agreement, Patriot paid the Company CDN $201,600 (USD
$200,000) which amount represents the full payment and satisfaction for the
assignment to Patriot by the Company.  Included in the assignment to
Patriot were, without limitation, all sums incurred by the Company in connection
with its exploration of the Margarita Property which includes the refunding of
the reclamation bond previously paid by the Company to the Forest Service in
Arizona, all expenditure credits incurred by the Company prior to the execution
of the Agreement and all property option payments made to the Margarita
Property. In addition, as the Company also assigned all of its rights and
obligations under the Finders’ Fee Agreement to Patriot, it is no longer
required to make further payments.  Subsequent to the execution of the
Agreement, the Company did not retain any interest in the Margarita
Property.
 
 ITEM 9.  THE OFFER
AND LISTING
 
 9.C.  Markets
 
 Admission
to Quotation on the OTC Bulletin Board
 
 In April
2008 we applied to the NASD to have our common stock be quoted on the OTC
Bulletin Board but have not yet received approval for our shares to trade on the
OTC Bulletin Board.  As a result there currently isn’t a market for
our shares.  If a market is not created for our securities on the OTC
Bulletin Board, a security holder may find it more difficult to dispose of, or
to obtain accurate quotations as to the market value of our securities. The OTC
Bulletin Board differs from national and regional stock exchanges in that
it
 
 (1) is
not situated in a single location but operates through communication of bids,
offers andconfirmations  between broker-dealers, and
 
 (2)
securities admitted to quotation are offered by one or more Broker-dealers
rather than the"specialist" common to stock exchanges.
 
 To
qualify for quotation on the OTC Bulletin Board, an equity security must have
one registered broker-dealer, known as the market maker, willing to list bid or
sale quotations and to sponsor the company listing. If it meets the
qualifications for trading securities on the OTC Bulletin Board our securities
will trade on the OTC Bulletin Board until a future time, if at all, that we
apply and qualify for admission to quotation on the Nasdaq Small Cap
Market.  We may not now and it may never qualify for quotation on the
OTC Bulletin Board or be accepted for listing of our securities on the Nasdaq
Small Cap Market.
 
 ITEM
10.  ADDITIONAL INFORMATION
 
 10.A.  Share
Capital
 
 --- Not
applicable ---
 
  45
  10.B.  Memorandum
and Articles of Association
 
 The
Company’s Articles of Incorporation were filed with the Director under the
Canada Business Corporations Act on August 12, 2003. The Company, having a
primary place of business in the Province of British Columbia, was also issued a
Certificate of Registration as an extra-provincial company under the Company
Act, British Columbia on November 7, 2003.  Pursuant to Section 4 of
the Statement on Registration Extra-provincial Company filed on November 7,
2003, the Company’s objects and purposes was described as “mineral exploration
and development.”
 
 The
directors of the Company are empowered under Schedule C to the Articles of
Incorporation to (1) borrow money upon the credit of the Company; (2) issue,
reissue, sell or pledge the debt obligations of the Company; (3) give a
guarantee on behalf of the Company to secure performance of an obligation of any
person; and (4) charge, mortgage, hypothecate, pledge or otherwise create a
security interest in all or any of the currently owned or subsequently acquired
property and assets of the Company, including, without limitation, real and
personal property, movable and immovable property, tangible and intangible
assets, book debts, right, powers, franchises and undertakings, to secure any
obligation of the Company.  The Company’s Articles of Incorporation
and By-Laws do not place any restrictions on the voting powers of interested
directors.  With respect to the directors of the Company, section 3 of
the By-Laws of the Company provides that, as long as an interested director has
complied with the applicable provisions of the Canada Business Corporations Act,
any director shall not be disqualified by his office from contracting with the
Company, nor shall any contract or arrangement entered into by or on behalf of
the Company with any director or in which any director is in any way interested
be liable to be voided, nor shall any director so contracting or interested be
liable to account to the Company for any profit realized from such contract or
arrangement by reason of that director or officer holding that office or of the
fiduciary relationship thereby established provided that such officer or
director shall have complied with the provisions of the Canada Business
Corporations Act
 
 The
holders of the Company’s Common shares are entitled to receive notice of, and
attend and vote at all, meetings of shareholders.   Currently,
there are no specific rights, preferences and restrictions attaching to each of
the Company’s Preferred shares.  The Company may issue Preferred
shares in one or more series and, pursuant to Schedule A to the Company’s
Articles of Incorporation, the directors may, by majority resolution, alter the
Articles of Incorporation to create, define and attach rights and restrictions
to the shares of each series.
 
 Pursuant
to section 12 of the Company’s By-Laws, the quorum at meetings of the Company’s
shareholders shall be constituted by the presence of two shareholders entitled
to vote at any such meeting holding or representing by proxy not less than
one-twentieth of the shares entitled to be voted at such meeting.
 
 There are
no limitations on the rights of non-resident or foreign shareholders to hold or
exercise voting rights on the securities of the Company imposed by foreign law
or by the Articles of Incorporation or any other constituent document of the
Company.
 
 10.C.  Material
Contracts
 
 Since
inception (August 8, 2003), the Company has entered into the material contracts
listed below:
 
 1.
              Share
      Purchase Option Agreement with Scott Praill, one of our Directors, which
      allows us at any time to send a notice to Mr. Praill that we are
      purchasing all or any portion of his 30,000,000 shares. The irrevocable
      option which he granted us is exercisable at any time at an exercise price
      of CDN $0.01 per share. If we elect to exercise our option to purchase his
      shares, we shall pay the applicable purchase price thereof no later than
      10 business days after the delivery of a
notice.
  46
  2.
              Property
      Agreement between the Company and Randy Polischuk dated February 18, 2004,
      as amended on November 29, 2004.  On November 23, 2005, the
      Company terminated the Option
Agreement.
 
 3.
              On
      March 22, 2005 the Company entered into a Bridge Loan with Igman
      Consulting Group in the principal amount of $15,000. The loan bore
      interest at the Bank of Canada Prime Rate + 1% and was
      unsecured.
 
 4.
              On
      July 8, 2005 the Company entered into a Bridge Loan with Trevor Newton in
      the principal amount of USD $5,000 (CDN $6,139).  The loan bore
      interest at the Bank of Canada Prime Rate + 1% and was
      unsecured.
 
 5.
              On
      August 29, 2005 the Company entered into a Bridge Loan with Fred Coombes
      in the principal amount of $50,000.  The loan bore interest at
      the Bank of Canada Prime Rate + 1% and was
  unsecured.
 
 6.
              On
      January 27, 2006, the Company retired the following three loans, whose
      aggregate outstanding amounts totaled CDN $73,157, by converting them into
      731,570 units of the Company’s securities (the “Units”): loan made on
      August 29, 2005 by Fred Coombes, in the principal amount of CDN $50,000;
      loan made on March 22, 2005 by Igman Consulting Group, in the principal
      amount of CDN $15,000; and loan made on July 8, 2005 by Trevor Newton, in
      the principal amount of USD $5,000.  All three loans bore
      interest at the Bank of Canada Prime Rate + 1%.  Pursuant to a
      Conversion Agreement, dated January 27, 2006, entered into between the
      Company and each of the above lenders, each loan was converted at CDN$0.10
      per Unit.
 
 7.
              On
      March 24, 2006, the Company entered into a Property Option Agreement
      giving the Company the exclusive right and option to acquire a 100%
      interest in a mineral exploration permit covering the South Vulture
      property located in Maricopa County, Arizona.  The Company may
      exercise the option by making cash payments totalling CDN $27,294 (USD
      $25,000) and incurring net expenditures on the property of at least CDN
      $119,793 (USD $120,000) by March 24, 2010.  The Company paid the
      initial CDN $5,850 (USD $5,000) upon executing the agreement as required
      under the initial Property Option Agreement and made the annual payments
      of CDN $5,660 (USD $5,000) and CDN $5,870 (USD $5,000) due March 24, 2008
      and 2007 respectively. The Company also met its obligation with respect to
      minimum exploration expenditures for
2007.
 
 8.
              On
      June 1, 2006 we entered into a property option agreement with Warner
      Gruenwald to acquire a 100% interest in a property in the Province of
      British Columbia known as the GQ Property.  We may exercise our
      option by making cash payments totaling CDN $100,000 and incurring net
      expenditures of CDN $110,000 by June 1, 2010.  The Company made
      the $10,000 payment on June 1, 2007 and also met its obligations with
      respect to the minimum exploration expenditures for
  2007.
 
 9.
              On
      July 14, 2006 we entered into a property option agreement with James
      Sorrell to acquire a 100% interest in a property in Santa Cruz County,
      Arizona known as the Margarita Property.  We made an initial
      payment of CDN $39,300 (USD $35,000) upon signing the agreement and we may
      exercise our option by making further cash payments totaling CDN $822,908
      (USD $825,000) by May 31, 2012 and incurring net expenditures of CDN
      $675,405 (USD $675,000) by May 31, 2009.  Also on July 14, 2006
      in relation to the Company entering into the Margarita Property Option
      Agreement, the Company entered into a Finder’s Fee Agreement with Fred
      Brost under which it is estimated that if the Company makes all of the
      scheduled property option payments to Mr. Sorrell, the amount paid under
      the Finder’s Fee Agreement to Mr. Brost will be CDN $30,730 (USD
      $31,000).  On May 31, 2007 the Company made the property option
      payment of CDN $54,650 (USD $50,000) and the related finders’ fee payment
      of CDN $5,465 (USD $5,000) and also met its obligations with respect to
      the minimum exploration expenditures for
2007.
 
  47
  10.
      On January 29, 2008, the Company entered into an Assignment and Assumption
      Agreement (the “Agreement”) with Patriot Gold Corp. (“Patriot”) to assign
      the Company’s rights and obligations under the Margarita Property Option
      Agreement to Patriot.  Pursuant to the Agreement, Patriot
      assumed the rights, and agreed to perform all of the duties and
      obligations, of the Company arising under the Margarita Property Option
      Agreement. Simultaneous with the execution and delivery of the Agreement,
      Patriot paid the Company CDN $201,600 (USD $200,000) which amount
      represents the full payment and satisfaction for the assignment to Patriot
      by the Company.  Included in the assignment to Patriot were,
      without limitation, all sums incurred by the Company in connection with
      its exploration of the Margarita Property which includes the refunding of
      the reclamation bond previously paid by the Company to the Forest Service
      in Arizona, all expenditure credits incurred by the Company prior to the
      execution of the Agreement and all property option payments made to the
      Margarita Property. In addition, as the Company also assigned all of its
      rights and obligations under the Finders’ Fee Agreement to Patriot, it is
      no longer required to make further payments.  Subsequent to the
      execution of the Agreement, the Company did not retain any interest in the
      Margarita Property.
 
 10.D.  Exchange
Controls
  There are
no government laws, decrees or regulations in Canada which restrict the export
or import of capital or, subject to the following sentence, which affect the
remittance of dividends or other payments to nonresident holders of our common
shares. However, any such remittance to a resident of the United States is
generally subject to non-resident tax pursuant to Article X of the 1980
Canada-United States Income Tax Convention. See “Material Income Tax
Considerations” above for additional discussion on tax matters.
  There are
currently no limitations of general application imposed by Canadian federal or
provincial laws on the rights of non-residents of Canada to hold or vote our
common shares. There are also no such limitations imposed by the articles of
incorporation with respect to our common shares. There are, however, certain
requirements on the acquisition of control of our securities by non-residents of
Canada. The Investment Canada Act requires notification to and, in certain
cases, advance review and approval by, the Government of Canada, of the
acquisition by a “non-Canadian” of “control” of a “Canadian business”, all as
defined in the Investment Canada Act. Generally speaking, in order for an
acquisition to be subject to advance review and approval, the asset value of the
Canadian business being acquired must meet or exceed certain monetary
thresholds.
 
 10.E.  Taxation
 
 Canadian Federal Income Tax
Considerations
 
 The
following is a brief summary of some of the principal Canadian federal income
tax consequences to a holder of common shares of the Company (a "U.S. Holder")
who deals at arm's length with the Company, holds the shares as capital property
and who, for the purposes of the Income Tax Act (Canada) (the "Act") and the
Canada – United States Income Tax Convention (the "Treaty"), is at all relevant
times resident in the United States, is not and is not deemed to be resident in
Canada and does not use or hold and is not deemed to use or hold the shares in
carrying on a business in Canada. Special rules, which are not discussed below,
may apply to a U.S. Holder that is an insurer that carries on business in Canada
and elsewhere.
 
 Under the
Act and the Treaty, a U.S. Holder of common shares will generally be subject to
a 15% withholding tax on dividends paid or credited or deemed by the Act to have
been paid or credited on such shares. The withholding tax rate is 5% where the
U.S. Holder is a corporation that beneficially owns at least 10% of the voting
shares of the Company and the dividends may be exempt from such withholding in
the case of some U.S. Holders such as qualifying pension funds and
charities.
 
  48
  In
general, a U.S. Holder will not be subject to Canadian income tax on capital
gains arising on the disposition of shares of the Company unless (i) at any time
in the five-year period immediately preceding the disposition, 25% or more of
the shares of any class or series of the capital stock of the Company was owned
by (or was under option of or subject to an interest of) the U.S. holder,
persons with whom the U.S. holder did not deal at arm's length, or the U.S
holder, together with such persons and (ii) the value of the common shares of
the Company at the time of the disposition derives principally from real
property (as defined in the Treaty) situated in Canada. For this purpose, the
Treaty defines real property situated in Canada to include rights to explore for
or exploit mineral deposits and other natural resources situated in Canada,
rights to amounts computed by reference to the amount or value of production
from such resources, certain other rights in respect of natural resources
situated in Canada and shares of a corporation the value of whose shares is
derived principally from real property situated in Canada.
 
 A U.S.
Holder who is subject to Canadian income tax in respect of a capital gain
realized on a disposition of a common share must include one-half of the capital
gain (taxable capital gain) in computing the Holder's taxable income earned in
Canada.  The Holder may, subject to certain limitations, deduct
one-half of any capital loss (allowable capital loss) arising on a disposition
of taxable Canadian property from taxable capital gains realized in the year of
disposition in respect of taxable Canadian property and, to the extent not so
deductible, from such taxable capital gains realized in any of the three
preceding years or any subsequent year.
 
 United States
Taxation
 
 For
federal income tax purposes, an individual who is a citizen or resident of the
United States or a domestic corporation ("U.S. Taxpayer") will recognize a gain
or loss on the sale of the Company's common shares equal to the difference
between the proceeds from such sale and the adjusted tax basis of the common
shares.  The gain or loss will be a capital gain or capital loss if
the Company's common shares are a capital asset in U.S. Taxpayer's
hands.
 
 For
federal income tax purposes, a U.S. Taxpayer will be required to include in
gross income dividends received on the Company's common shares.  A
U.S. Taxpayer who pays Canadian tax on a dividend on common shares will be
entitled, subject to certain limitations, to a credit (or alternatively, a
deduction) against federal income tax liability.  A domestic
corporation that owns at least 10% of the voting shares should consult its tax
advisor as to applicability of the deemed paid foreign tax credit with respect
to dividends paid on the Company's common shares.
 
 Under a
number of circumstances, United States Investor acquiring shares of the Company
may be required to file an information return with the Internal Revenue Service
Center where they are required to file their tax returns with a duplicate copy
to the Internal Revenue Service Center, Philadelphia, PA 19255.  In
particular, any United States Investor who becomes the owner, directly or
indirectly, of 10% or more of the shares of the Company will be required to file
such a return.  Other filing requirements may apply, and United States
Investors should consult their own tax advisors concerning these
requirements.
 
 The US
Internal Revenue Code provides special anti-deferral rules regarding certain
distributions received by US persons with respect to, and sales and other
dispositions (including pledges) of stock of, a passive foreign investment
company.  A foreign corporation, such as the Company, will be treated
as a passive foreign investment company if 75% or more of its gross income is
passive income for a taxable year or if the average percentage of its assets (by
value) that produce, or are held for the production of, passive income is at
least 50% for a taxable year.  The Company believes that it may be a
passive foreign investment company for the taxable year ended December 31,
2005.  Individual investors should consult with there own tax advisors
regarding the tax implications in their own situation.
 
 10.F.  Dividends
and Paying Agents
 
 --- Not
applicable ---
 
  49
  10.G.  Statement
by Experts
 
 --- Not
applicable ---
 
 ITEM
11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
  FOREIGN
CURRENCY EXCHANGE RATE SENSITIVITY
  The
Company's operating expenses and liabilities are primarily incurred in Canadian
dollars.
  To the
extent the Company engages in transactions in US dollars, the results of the
Company’s operations are subject to currency transaction risk and currency
translation risk. The operating results and financial position of the Company
are reported in Canadian dollars in the Company’s financial statements. The
fluctuation of the US dollar in relation to the Canadian dollar will
consequently have an impact upon the operations of the Company and may also
affect the value of the Company’s assets and the amount of shareholders’
equity.
  The
Company’s functional currency is the Canadian dollar and its expenses are
predominantly incurred in Canadian dollars. The Company incurs a relatively
small portion of its expenses in U.S. dollars.
  The
Company has not entered into any agreements or purchased any instruments to
hedge possible currency risks at this time.
 
 INTEREST RATE
SENSITIVITY
 
 The
Company currently has no significant long-term or short-term debt requiring
interest payments. Thus, the Company has not entered into any agreement or
purchased any instrument to hedge against possible interest rate risks at this
time.
 
 The
Company's interest earning investments are primarily short-term, or can be held
to maturity, and thus, any reductions in carrying values due to future interest
rate declines are believed to be immaterial. However, as the Company has a
significant cash or near-cash position, which is invested in such instruments,
reductions in interest rates will reduce the interest income from these
investments.
 
 PART
II
 
 ITEM
13.  DEFAULTS, DIVIDEND ARREARAGES AND
DELINQUENCIES
 
 There
have been no defaults, dividend arrearages or delinquencies.
 
 ITEM
14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE
OF PROCEEDS
 
 There
have been no modifications to securities of any class of the
Company.
 
 ITEM 15.  CONTROLS
AND PROCEDURES
 
 Evaluation of Disclosure
Controls and Procedures
 
 As
required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange
Act”), the Company’s management carried out an evaluation of the effectiveness
of the design and operation of its disclosure controls and procedures as of
December 31, 2007, being the date of the Company’s most recently completed
fiscal year end. This evaluation was carried out under the supervision and with
the participation of our Principal Executive Officer and Principal Financial
Officer, Mr. Andrew Gourlay.  Based upon that evaluation, our
principal executive officer and principal financial officer concluded that our
disclosure controls and procedures are effective.
  50
  
 Internal Controls over
Financial Reporting
 
 The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. Under the supervision of the Company’s
Principal Executive Officer, the Company’s internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles (“GAAP”). The Company’s controls include policies and procedures
that:
 
  ̈
              pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;
  ̈
              provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with GAAP;
      and
  ̈
              provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company’s assets that
      could have a material effect on the annual financial statements or interim
      financial statements.
 
 Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
 
 Management
conducted an evaluation of the design and operation of the Company’s internal
control over financial reporting as of December 31, 2007, based on the criteria
set forth in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. This evaluation included
review of the documentation of controls, evaluation of the design effectiveness
of controls, testing of the operating effectiveness of controls and a conclusion
on this evaluation. Based on this evaluation, management has concluded that the
Company’s internal control over financial reporting was effective as of December
31, 2007 and no material weaknesses were discovered.
 
 Limitations of Controls and
Procedures
 
 The
Company’s management, including the Principal Executive Officer and Principal
Financial Officer, believe that any disclosure controls and procedures or
internal controls over financial reporting, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, they cannot provide absolute
assurance that all control issues and instances of fraud, if any, within the
Company have been prevented or detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns
can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by unauthorized override of the control. The design of any systems of
controls also is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions. Accordingly,
because of the inherent limitations in a cost effective control system,
misstatements due to error or fraud may occur and not be detected.
 
 Attestation Report of
Registered Public Accounting Firm
 
 This
annual report does not include an attestation report of the Company’s
independent registered public accounting firm regarding internal control over
financial reporting. Management’s report was not subject to attestation by the
Company’s independent registered public accounting firm pursuant to temporary
rules of the SEC that permit the Company to provide only management’s report in
this annual report.
 
  51
  Changes in Internal Controls
over Financial Reporting
 
 During
the most recently completed fiscal year ended December 31, 2007, there were no
changes in the Company’s internal control over financial reporting that have
materially affected, or are reasonably likely to affect, the Company’s internal
control over financial reporting.
 
 ITEM
16.  RESERVED
 
 ITEM 16A.  AUDIT
COMMITTEE FINANCIAL EXPERT
 
 The
Company’s Audit Committee consists of three directors, all of whom are
financially literate and knowledgeable about the Company’s
affairs.  Mr. Scott Praill is the audit committee’s financial expert
member as a qualified accountant with 10 years experience in the mining
industry.
 
 ITEM 16B.  CODE OF
ETHICS
 
 The
Company has adopted a code of ethics that applies to the Company's principal
executive officer, principal financial officer, principal accounting officer or
controller, persons performing similar functions and other officers of the
Company. This code of ethics is filed as an exhibit to this Form
20-F.  A copy of the code of ethics can be obtained from the Company
by making a request in writing addressed to the Corporate Secretary and mailing
such request to 1155 West Pender, Suite 708, Vancouver, British
Columbia V6E 2P4.
 
 The code
of ethics was adopted on March 6, 2006.
 
 Item 16C. PRINCIPAL
ACCOUNTING FEES AND SERVICES
 
 The audit
committee is directly responsible for the appointment, compensation and
oversight of auditors; the audit committee has in place procedures for receiving
complaints and concerns about accounting and auditing matters; and has the
authority and the funding to engage independent counsel and other outside
advisors.
 
 The Audit
Committee may delegate to one or more designated members of the Audit Committee
the authority to grant pre-approvals required by this policy /
procedure.  The decisions of any Audit Committee member to whom
authority is delegated to pre-approve a service shall be presented to the full
Audit Committee at its next scheduled meeting.
 
 Fees,
including reimbursements for expenses, for professional services rendered by BDO
Dunwoody LLP in 2007 and 2006 were:
 
 Fiscal
      Year ended December 31
              
              Fiscal
      year
              
              
              Fiscal
      yearPrincipal
      Accountant Fees and Services
              
              2007
              
              
              2006Audit
      Fees
              
              $
              18,000
              
              
              $
              32,740Audit
      related fees
              
              $Nil
              
              
              $NilTax
      Fees
              
              $Nil
              
              
              $NilAll
      other fees
              
              $Nil
              
              
              $NilTotal
              
              $
              18,000
              
              
              $
              32,740
 
 Audit
related fees relate to services provided to review the Company’s annual
financial statements and related disclosures.
 
  52
  ITEM
16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES
 
 --- Not
applicable ---
 
 ITEM
16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
 
 There
have been no purchases of the Company's common shares by the Company or
affiliated purchasers during the period covered by this report.
 
 PART
III
 
 ITEM
17.  FINANCIAL STATEMENTS
 
 The
Company's financial statements are stated in Canadian Dollars (CDN$) and are
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP), the application of which, in the case of the Company, conforms in all
material respects for the periods presented with United States GAAP, except as
discussed in footnotes to the financial statements.
 
 The
financial statements as required under ITEM 17 are attached hereto and found
immediately following the text of this Annual Report.  The audit
report of BDO Dunwoody LLP, is included herein immediately preceding the audited
financial statements.
 
 ITEM
18.  FINANCIAL STATEMENTS
 
 The
Company has elected to provide financial statements pursuant to ITEM
17.
  53
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 American
Goldrush Corporation
 (An
Exploration Stage Company)
 Financial
Statements
 December
31, 2007 and 2006
 (Stated
in Canadian Dollars)
 
 
 
 
 
   54
  
 American
Goldrush Corporation
 (An
Exploration Stage Company)
 Financial
Statements
 December
31, 2007 and 2006
 
 
 Contents
 
 Report
      of Independent Registered Public Accounting Firm
                56Comments
      by Auditors for US Readers on Canada – US Reporting
      Differences
                57Financial
      StatementsBalance
      Sheets
                58Statements
      of Loss and Comprehensive Loss
                59Statements
      of Cash Flows
                60Statements
      of Changes in Stockholders’ Equity (Capital Deficit)
                61Notes
      to the Financial Statements
                62
  55
  
 BDO
      Dunwoody LLP
                600
      Cathedral PlaceChartered
      Accountants
                925
      West Georgia Streetancouver,
      BC, Canada V6C 3L2Telephone:  (604)
      688-5421Telefax:  (604)
      688-5132E-mail:  vancouver@bdo.cawww.bdo.ca
 
 
 Report
of Independent Registered Public Accounting Firm
 
 
 To
the Directors and Shareholders of
 American
Goldrush Corporation
 
 We have
audited the Balance Sheets of American Goldrush Corporation (an Exploration
Stage Company) as at December 31, 2007 and 2006 and the Statements of Loss and
Comprehensive Loss, Cash Flows and Changes in Stockholders’ Equity (Capital
Deficit) for the years ended December 31, 2007, 2006 and 2005 and the cumulative
period from August 8, 2003 (inception date) to December 31, 2007. These
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
 We
conducted our audits in accordance with Canadian generally accepted auditing
standards and the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.
 
 In our
opinion, these financial statements present fairly, in all material respects,
the financial position of the Company as at December 31, 2007 and 2006 and the
results of its operations and its cash flows for the years ended December 31,
2007, 2006 and 2005, and the cumulative period from August 8, 2003 (inception
date) to December 31, 2007 in accordance with Canadian generally accepted
accounting principles.
 
 
 /s/ BDO
Dunwoody LLP
 
 Chartered
Accountants
 
 Vancouver,
Canada
 May 6,
2008
  56
  
 BDO
      Dunwoody LLP
                600
      Cathedral PlaceChartered
      Accountants
                925
      West Georgia Streetancouver,
      BC, Canada V6C 3L2Telephone:  (604)
      688-5421Telefax:  (604)
      688-5132E-mail:  vancouver@bdo.cawww.bdo.ca
 
 
 Comments
by Auditors for U.S. Readers
 On
Canada-U.S. Reporting Differences
 
 In the
United States, reporting standards for auditors require the addition of an
explanatory paragraph (following the opinion paragraph) when the financial
statements are affected by conditions and events that cast substantial doubt on
the Company’s ability to continue as a going concern, such as those described in
Note 1 to the financial statements. Our report to the directors and shareholders
dated May 6, 2008 is expressed in accordance with Canadian reporting standards
which do not permit a reference to such events and conditions in the auditors’
report when these are adequately disclosed in the financial
statements.
  /s/ BDO
Dunwoody LLP
  Chartered
Accountants
  Vancouver,
Canada
 May 6,
2008
 
 
 
  57
 AMERICAN
GOLDRUSH COPORATION
 (An
Exploration Stage Company)
 
 BALANCE
SHEETS
 (Stated
in Canadian Dollars)
  
 
 
 
 December
      31
                
                2007
                
                
                2006ASSETSCurrentCash
      and cash equivalents
                
                $
                54,659
                
                
                $
                407,656Receivables
                
                
                7,714
                
                
                
                6,991Prepaid
      expenses
                
                
                700
                
                
                
                23563,073
                
                
                
                414,882Reclamation deposit(Note 4)
                
                
                21,261
                
                
                
                3,367$
                84,334
                
                
                $
                418,249LIABILITIESCurrentAccounts
      payable and accrued liabilities
                
                $
                30,394
                
                
                $
                59,161Stockholders’
      equityShare
      CapitalAuthorized:Unlimited
      common shares without par valueUnlimited preferred shares without par valueIssued:41,613,920
      (2006 – 41,613,920) common shares (Note 7)
                
                
                684,442
                
                
                
                684,442Contributed
      surplus
                
                
                1,867,570
                
                
                
                1,826,463Deficit
      accumulated during the exploration stage
                
                
                (2,498,072
                )
                
                
                (2,151,817
                )53,940
                
                
                
                359,088$
                84,334
                
                
                $
                418,249
 
 
 The
accompanying notes are an integral part of these financial
statements
 
 
  58
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 
 STATEMENTS
OF LOSS AND COMPREHENSIVE LOSS
 (Stated
in Canadian Dollars)
  
 AUGUST
      8, 2003YEARS
      ENDED DECEMBER 31,
                  
                  
                  (INCEPTION)TODecember
      31,2007
                  
                  
                  2006
                  
                  
                  2005
                  
                  
                  2007
      (cumulative)ExpensesMineral
      property acquisition andexploration
      expenditures (Note 3)
                  
                  $
                  251,693
                  
                  
                  $
                  163,474
                  
                  
                  $
                  1,947
                  
                  
                  $
                  427,114Office
      and sundry
                  
                  
                  21,042
                  
                  
                  
                  18,398
                  
                  
                  
                  12,351
                  
                  
                  
                  66,844Rent
                  
                  
                  2,640
                  
                  
                  
                  2,640
                  
                  
                  
                  2,640
                  
                  
                  
                  11,031Professional
      fees
                  
                  
                  28,405
                  
                  
                  
                  56,053
                  
                  
                  
                  48,787
                  
                  
                  
                  207,025Transfer
      agent fees
                  
                  
                  584
                  
                  
                  
                  2,396
                  
                  
                  
                  -
                  
                  
                  
                  3,838Directors’
      fees
                  
                  
                  6,472
                  
                  
                  
                  6,891
                  
                  
                  
                  596
                  
                  
                  
                  13,959Loss
      on bridge loan conversion (Note 5)
                  
                  
                  -
                  
                  
                  
                  51,210
                  
                  
                  
                  -
                  
                  
                  
                  51,210Share-based
      compensation (Note 6)
                  
                  
                  -
                  
                  
                  
                  1,500,000
                  
                  
                  
                  -
                  
                  
                  
                  1,500,000Stock-based
      compensation (Note 7)
                  
                  
                  41,107
                  
                  
                  
                  144,478
                  
                  
                  
                  35,075
                  
                  
                  
                  220,660Total
      expenses
                  
                  
                  (351,943
                  )
                  
                  
                  (1,945,540
                  )
                  
                  
                  (101,396
                  )
                  
                  
                  (2,501,681
                  )Interest
      income
                  
                  
                  7,077
                  
                  
                  
                  3,534
                  
                  
                  
                  -
                  
                  
                  
                  10,611Interest
      expense
                  
                  
                  -
                  
                  
                  
                  (281
                  )
                  
                  
                  (1,737
                  )
                  
                  
                  (2,018
                  )Foreign
      exchange gain (loss)
                  
                  
                  (1,389
                  )
                  
                  
                  (3,802
                  )
                  
                  
                  207
                  
                  
                  
                  (4,984
                  )Net
      loss and comprehensive loss for the period
                  
                  $
                  (346,255
                  )
                  
                  $
                  (1,946,089
                  )
                  
                  $
                  (102,926
                  )
                  
                  $
                  (2,498,072
                  )Loss
      per share – basic and diluted
                  
                  $
                  (
      0.01
                  )
                  
                  $
                  (0.05
                  )
                  
                  $
                  0.00Weighted
      average shares outstanding
                  
                  
                  41,613,920
                  
                  
                  
                  40,997,133
                  
                  
                  
                  39,557,350
 
 
 
 
 The
accompanying notes are an integral part of these financial
statements
 
 
 
  59
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 
 STATEMENTS
OF CASH FLOWS
 (Stated
in Canadian Dollars)
  
 
 
 AUGUST
      8, 2003YEARS
      ENDED DECEMBER 31,
                  
                  
                  (INCEPTION)TODECEMBER
      31,2007
                  
                  
                  2006
                  
                  
                  2005
                  
                  
                  2007
      (cumulative)Cash
      flows from operating activitiesNet
      loss for the period
                  
                  $
                  (346,255
                  )
                  
                  $
                  (1,946,089
                  )
                  
                  $
                  (102,926
                  )
                  
                  $
                  (2,498,072
                  )Adjustments
      to reconcile net loss to net cash used in operating
    activitiesLoss
      on bridge loan conversion (Note 5)
                  
                  
                  -
                  
                  
                  
                  51,210
                  
                  
                  
                  -
                  
                  
                  
                  51,210Share-based
      compensation (Note 6)
                  
                  
                  -
                  
                  
                  
                  1,500,000
                  
                  
                  
                  -
                  
                  
                  
                  1,500,000Stock-based
      compensation (Note 7)
                  
                  
                  41,107
                  
                  
                  
                  144,478
                  
                  
                  
                  35,075
                  
                  
                  
                  220,660Change
      in receivables
                  
                  
                  (723
                  )
                  
                  
                  (5,275
                  )
                  
                  
                  861
                  
                  
                  
                  (7,714
                  )Change
      in prepaid expenses
                  
                  
                  (465
                  )
                  
                  
                  1,790
                  
                  
                  
                  (1,790
                  )
                  
                  
                  (700
                  )Change
      in accounts payable and accrued liabilities
                  
                  
                  (28,767
                  )
                  
                  
                  38,371
                  
                  
                  
                  (10,526
                  )
                  
                  
                  30,394Change
      in accrued interest payable
                  
                  
                  -
                  
                  
                  
                  281
                  
                  
                  
                  1,737
                  
                  
                  
                  2,018Net
      cash used in operating activities
                  
                  
                  (335,103
                  )
                  
                  
                  (215,234
                  )
                  
                  
                  (77,569
                  )
                  
                  
                  (702,204
                  )Cash
      flows from investing activitiesReclamation
      deposit
                  
                  
                  (17,894
                  )
                  
                  
                  (3,367
                  )
                  
                  
                  -
                  
                  
                  
                  (21,261
                  )Net
      cash used in investing activities
                  
                  
                  (17,894
                  )
                  
                  
                  (3,367
                  )
                  
                  
                  -
                  
                  
                  
                  (21,261
                  )Cash
      flows from financing activitiesIssuances
      of common stock
                  
                  
                  -
                  
                  
                  
                  606,250
                  
                  
                  
                  -
                  
                  
                  
                  706,985Proceeds
      from bridge loans (Note 5)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  71,139
                  
                  
                  
                  71,139Net
      cash from financing activities
                  
                  
                  -
                  
                  
                  
                  606,250
                  
                  
                  
                  71,139
                  
                  
                  
                  778,124Increase
      (decrease) in cash and cash equivalents
                  
                  
                  (352,997
                  )
                  
                  
                  387,649
                  
                  
                  
                  (6,430
                  )
                  
                  
                  54,659Cash
      and cash equivalents, beginning of period
                  
                  
                  407,656
                  
                  
                  
                  20,007
                  
                  
                  
                  26,437
                  
                  
                  
                  -Cash
      and cash equivalents, end of period
                  
                  $
                  54,659
                  
                  
                  $
                  407,656
                  
                  
                  $
                  20,007
                  
                  
                  $
                  54,659
 
 Supplemental
      informationInterest
      paid
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Income
      taxes paid
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Non-cash
      investing and financing activitiesConversion
      of bridge loan principal and interest to equity (Note 5)
                
                $
                -
                
                
                $
                73,157
                
                
                $
                -
                
                
                $
                73,157
 
 
 The
accompanying notes are an integral part of these financial
statements
 
  60
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 
 STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY (CAPITAL DEFICIT)
 
 (Stated
in Canadian Dollars)
  
 
 
 
 DEFICITCOMMON
      STOCK
                  
                  
                  ACCUMULATEDNUMBER
      OF
                  
                  
                  
                  
                  
                  DURING
      THECOMMON
                  
                  
                  
                  
                  
                  EXPLORATION
                  
                  
                  CONTRIBUTEDSHARES
                  
                  
                  AMOUNT
                  
                  
                  STAGE
                  
                  
                  SURPLUS
                  
                  
                  TOTALShares
      issued to founders on inception
                  
                  
                  30,000,000
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Private
      placement, common share issuances for cash at $0.01 per share in October,
      2003 (Note 7)
                  
                  
                  9,500,000
                  
                  
                  
                  95,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  95,000Net
      loss for the period
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (14,261
                  )
                  
                  
                  -
                  
                  
                  
                  (14,261
                  )Balance,
      December 31, 2003
                  
                  
                  39,500,000
                  
                  
                  
                  95,000
                  
                  
                  
                  (14,261
                  )
                  
                  
                  -
                  
                  
                  
                  80,739Private
      placement, common share issuances for cash at $0.10 per share in January,
      2004 (Note 7)
                  
                  
                  57,350
                  
                  
                  
                  5,735
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  5,735Net
      loss for the year
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (88,541
                  )
                  
                  
                  -
                  
                  
                  
                  (88,541
                  )Balance,
      December 31, 2004
                  
                  
                  39,557,350
                  
                  
                  
                  100,735
                  
                  
                  
                  (102,802
                  )
                  
                  
                  -
                  
                  
                  
                  (2,067
                  )Stock-based
      compensation (Note 7)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  35,075
                  
                  
                  
                  35,075Net
      loss for the year
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (102,926
                  )
                  
                  
                  -
                  
                  
                  
                  (102,926
                  )Balance,
      December 31, 2005
                  
                  
                  39,557,350
                  
                  
                  
                  100,735
                  
                  
                  
                  (205,728
                  )
                  
                  
                  35,075
                  
                  
                  
                  (69,918
                  )Conversion
      of bridge loans to equity in January 2007 (Note 5)
                  
                  
                  731,570
                  
                  
                  
                  73,157
                  
                  
                  
                  -
                  
                  
                  
                  51,210
                  
                  
                  
                  124,367Private
      placement, common share issuances for cash at $0.50 per share in June,
      2006 (Note 7)
                  
                  
                  1,100,000
                  
                  
                  
                  454,300
                  
                  
                  
                  -
                  
                  
                  
                  95,700
                  
                  
                  
                  550,000Issuance
      of shares upon the exercise of stock options in February and June,
      2006
                  
                  
                  225,000
                  
                  
                  
                  56,250
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  56,250Stock-based
      compensation (Note 7)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  144,478
                  
                  
                  
                  144,478Share-based
      compensation (Note 6)
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,500,000
                  
                  
                  
                  1,500,000Net
      loss for the year
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,946,089
                  )
                  
                  
                  -
                  
                  
                  
                  (1,946,089
                  )Balance,
      December 31, 2006
                  
                  
                  41,613,920
                  
                  
                  
                  684,442
                  
                  
                  
                  (2,151,817
                  )
                  
                  
                  1,826,463
                  
                  
                  
                  359,088Stock-based
      compensation (Note 7)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  41,107
                  
                  
                  
                  41,107Net
      loss for the year
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (346,255
                  )
                  
                  
                  -
                  
                  
                  
                  (346,255
                  )Balance,
      December 31, 2007
                  
                  
                  41,613,920
                  
                  
                  $
                  684,442
                  
                  
                  $
                  (2,498,072
                  )
                  
                  $
                  1,867,570
                  
                  
                  $
                  53,940
 
 
 The
accompanying notes are an integral part of these financial
statements
 
  61
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  
 1.           OPERATIONS
 
 Organization
 
 The
Company was incorporated in Canada under the laws of the Canadian Business
Corporations Act on August 8, 2003.
 
 Exploration Stage
Activities
 
 The
Company has been in the exploration stage since its formation and has not yet
commenced its planned operations (mineral exploration).  The Company
is primarily engaged in the acquisition and exploration of mining properties in
North America.  In February, 2004, the Company entered into a Property
Option Agreement to acquire an option on a mineral exploration property in
British Columbia.  The Property Option Agreement was amended in
November, 2004, and on November 23, 2005 the Company terminated the Property
Option Agreement.  During 2006, the Company entered into three
separate Property Option Agreements to acquire an option on two properties in
Arizona and one in British Columbia, Canada.  Subsequent to December
31, 2007, one of the Arizona properties was assigned to a third party (Note
3).
 
 Ability to Continue as a
Going Concern
 
 The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern.  This contemplates that assets will be
realized and liabilities and commitments satisfied in the normal course of
business.
 
 As shown
in the accompanying financial statements, the Company has incurred cumulative
losses of $2,498,072 for the period from August 8, 2003 (inception) to December
31, 2007 and has no source of revenue.  The future of the Company is
dependent upon its ability to obtain financing and upon future acquisition,
exploration and development of profitable operations from mineral
properties.  Management has plans to seek additional capital through a
private placement and public offering of its common stock.  These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern.  Although there are no assurances that management’s
plans will be realized, management believes that the Company will be able to
continue operations in the future.  The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of liabilities that might
be necessary in the event the Company cannot continue in existence.
 
 2.           SIGNIFICANT
ACCOUNTING POLICIES
 
 The
financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in Canada. All figures are reported in
Canadian dollars. The significant accounting policies are summarized as
follows:
 
 a)  Change in
Accounting Policies
  Effective
January 1, 2007, the Company adopted the CICA guidelines of Section 3855,
“Financial Instruments – Recognition and Measurement”, Section 3861, “Financial
Instruments – Disclosure and Presentation” and Section 1530, “Comprehensive
Income”.
 
 Section
3861 establishes standards for the presentation and disclosure of financial
instruments. Section 3855 establishes standards for recognizing and measuring
financial assets, financial liabilities and non-financial derivatives. It
requires that financial assets and financial liabilities, including derivatives,
be measured at fair value on initial recognition and recorded on the balance
sheet. Measurement in subsequent periods depends on whether the financial
instrument has been classified as held-for-trading, available-for-sale,
held-to-maturity, loans and receivables or other financial liabilities.
Held-for-trading financial assets are measured at fair value with changes in
fair value recognized in net income; available-for-sale financial instruments
are measured at fair value with unrealized gains and losses recorded
in
  62
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  2.           SIGNIFICANT
ACCOUNTING POLICIES - Continued
 
 a)  Change in
Accounting Policies - continued
  other
comprehensive income; financial assets and financial liabilities considered
held-to-maturity, loans and receivables, and other financial liabilities are
measured at amortized cost using the effective interest method of
amortization.
 
 Section
1530 introduces comprehensive income, which consists of net income and other
comprehensive income. Other comprehensive income represents changes in
shareholders’ equity (Capital deficit) during a period arising from transactions
and other events and circumstances from non-owner sources and includes
unrealized gains and losses on financial assets classified as
available-for-sale.
 
 These
standards have been applied retrospectively with no restatement of comparative
amounts for prior periods.  The Company has evaluated and concluded
that there was no impact on the deficit accumulated during the exploration stage
as of January 1, 2007 and during the current fiscal year.
 
 b) Cash and Cash
Equivalents
 
 The
Company considers all highly liquid investments purchased with a maturity of 90
days or less to be cash equivalents.
 
 c) Mineral Property Payments
and Exploration Costs
 
 Exploration
costs are expensed as incurred. Development costs are to be expensed until it
has been established that a mineral deposit is commercially mineable and a
production decision has been made by the Company to formulate a mining plan and
develop a mine, at which point the costs subsequently incurred to develop the
mine on the property prior to the start of mining operations are
capitalized.
 
 Mineral
property acquisition costs are charged to expense until the viability of the
mineral interest is determined. Reductions in the carrying value of a property
would be recorded to the extent that the total carrying value of the mineral
property exceeds its estimated fair value.
 
 Where the
Company has entered into option agreements for the acquisition of an interest in
mineral properties which provides for periodic payments, amounts unpaid are not
recorded as a liability since they are paid entirely at the Company’s
option.
 
 To
December 31, 2007, all exploration and option payments have been charged to
expense.
 
 d) Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and the disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenues and expenses for the reporting
period.  Actual results could differ from these
estimates.
 
 e) Foreign Currency
Transactions
 
 The
Company’s functional currency is the Canadian dollar.  Transactions in
foreign currency are translated into Canadian dollars as follows:
 
 ·      Monetary
items at the rate prevailing at the balance sheet date;
 ·      Non-monetary
items at the historical exchange rate;
 ·      Revenue
and expenses at the historical exchange rate.
 
 Gains and
losses on foreign exchange are included in the Statements of
Loss.
  63
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  2.           SIGNIFICANT
ACCOUNTING POLICIES - Continued
 
 f) Stock-based
compensation
  The
Company grants stock options pursuant to a stock option plan described in Note
7.  Compensation expense is recorded for stock options granted using
the fair value method with a corresponding increase in contributed
surplus.  The Company estimates the fair value at the date of grant
using the Black-Scholes option pricing model.  Any consideration
received on exercise of stock options or the purchase of stock, plus the fair
value of options or stock, is credited to share capital.
 
 Under the
fair value based method, stock-based payments to non-employees are measured at
the fair value of the equity instrument issued.  The fair value of
stock-based payments to non-employees is periodically re-measured until the
earlier of:  completion of the services provided; a firm commitment to
complete the services; or the vesting date and any change therein is recognized
over the service period.
 
 g) Loss Per
Share
 
 The basic
loss per share is calculated by dividing income available to common stockholders
by the weighted average aggregate number of common shares outstanding during
each period. The Company follows the “Treasury Stock Method” in calculating the
diluted loss per common share.  Under this method, any proceeds from
the exercise of options and warrants are assumed to be used to purchase common
shares at the average market price during the period.  Common
equivalent shares (consisting of shares issuable on the exercise of common stock
options and warrants) totaling 32,813,140, 32,813,140, and 29,500,000 in 2007,
2006 and 2005 respectively were not included in the computation of diluted loss
per share because the effect was anti-dilutive.
 
 h) Income
Taxes
 
 Future
income taxes relate to the expected future tax consequences of differences
between the carrying amount of balance sheet items and their corresponding tax
values.  Future tax assets are recognized only to the extent that, in
the opinion of management, it is more likely than not that the net future income
tax assets will be realized.  Future income tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment or substantive enactment.
 
 j) Financial
Instruments
 
 The
Company's financial assets and liabilities consist of cash and cash equivalents,
receivables, accounts payable and accrued liabilities.  Except as
otherwise noted, it is management's opinion that the Company is not exposed to
significant interest or credit risks arising from these financial
instruments.  The fair values of these financial instruments
approximate their carrying values due to the demand or short-term maturities of
these instruments.
 
 k) Recently Released
Canadian Accounting Standards
 
 The CICA
has issued new accounting standards Section 3862, “Financial Instruments –
Disclosures” and Section 3863, “Financial Instruments – Presentation” which
replace Section 3861 “Financial Instruments–Disclosure and Presentation”. The
new disclosure standard increases the emphasis on the risks associated with both
recognized and unrecognized financial instruments and how those risks are
managed. The new presentation standard carries forward the existing presentation
requirements. These new standards are effective for the Company for periods
beginning on or after October 1, 2007. The Company is evaluating the impact that
the adoption of Section 3862 and Section 3863 will have on its financial
statements.
 
 Effective
January 1, 2008, the Company will adopt new accounting standard Section 1535,
“Capital Disclosures”, which requires companies to disclose their objectives,
policies and processes for managing capital. In addition, disclosures are to
include whether companies have complied with externally imposed capital
requirements and, if not in compliance, the consequences of such non-compliance.
The Company is evaluating the impact that the adoption of Section 1535 will have
on its financial statements.
 
  64
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  
 2.           SIGNIFICANT
ACCOUNTING POLICIES – Continued
 
 (l) International
      Financial Reporting Standards
(“IFRS”)
 
 In 2006,
the Canadian Accounting Standards Board (“AcSB”) published a new strategic plan
that will significantly affect financial reporting requirements for Canadian
companies.  The AcSB strategic plan outlines the convergence of Canadian
GAAP with IFRS over an expected five year transitional period.  In March
2008, the AcSB issued a report confirming the transition date will be on January
1, 2011 for the conversion to IFRS.  The proposed transition date of
January 1, 2011 will require the restatement for comparative purposes of amounts
reported by the Company for the year ended December 31, 2010.  While the
Company has begun assessing the adoption of IFRS for 2011, the financial
reporting impact of the transition to IFRS cannot be reasonably estimated at
this time.
 
 3.           MINERAL
PROPERTY INTERESTS
 
 The
following table lists mineral property acquisition and exploration expenditures
incurred on the Company’s properties to December 31, 2007.
  Margarita
                
                
                South
      Vulture
                
                
                GQ
                
                
                Other
                
                
                TotalBalance
      at December 31, 2005(1)
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                11,947
                
                
                $
                11,9472006 ExpendituresProperty
      acquisition and option payments
                
                
                70,966
                
                
                
                8,735
                
                
                
                -
                
                
                
                -
                
                
                
                79,701Geological
      and geophysical
                
                
                23,332
                
                
                
                16,173
                
                
                
                10,341
                
                
                
                -
                
                
                
                49,846Assaying
      and analysis
                
                
                1,135
                
                
                
                483
                
                
                
                2,282
                
                
                
                -
                
                
                
                3,900Camp
      and field supplies
                
                
                171
                
                
                
                205
                
                
                
                452
                
                
                
                -
                
                
                
                828Travel
      and accommodation
                
                
                6,407
                
                
                
                265
                
                
                
                205
                
                
                
                -
                
                
                
                6,877Consulting
                
                
                20,927
                
                
                
                1,395
                
                
                
                -
                
                
                
                -
                
                
                
                22,322Total
      2006 expenditures
                
                
                122,938
                
                
                
                27,256
                
                
                
                13,280
                
                
                
                -
                
                
                
                163,474
 
 Balance
      at December 31, 2006
                
                
                122,938
                
                
                
                27,256
                
                
                
                13,280
                
                
                
                11,947
                
                
                
                175,4212007 ExpendituresProperty
      acquisition and option payments
                
                
                89,255
                
                
                
                5,870
                
                
                
                10,615
                
                
                
                -
                
                
                
                105,740Geological
      and geophysical
                
                
                53,833
                
                
                
                7,475
                
                
                
                23,359
                
                
                
                -
                
                
                
                84,667Assaying
      and analysis
                
                
                -
                
                
                
                9,868
                
                
                
                6,756
                
                
                
                -
                
                
                
                16,624Camp
      and field supplies
                
                
                627
                
                
                
                1,987
                
                
                
                1,890
                
                
                
                -
                
                
                
                4,504Travel
      and accommodation
                
                
                2,885
                
                
                
                2,997
                
                
                
                2,444
                
                
                
                -
                
                
                
                8,326Consulting
                
                
                26,177
                
                
                
                5,655
                
                
                
                -
                
                
                
                -
                
                
                
                31,832Total
      2007 expenditures
                
                
                172,777
                
                
                
                33,852
                
                
                
                45,064
                
                
                
                -
                
                
                
                251,693Balance
      at December 31, 2007
                
                $
                295,715
                
                
                $
                61,108
                
                
                $
                58,344
                
                
                $
                11,947
                
                
                $
                427,114
 
 (1)The
only expenditures incurred in 2005 were $1,947 for claim staking costs and in
2004 the only expenditures related to $10,000 in property option
payments.  In 2005 and 2004, all expenditures related to the Company’s
now abandoned Taylor Claims.
 
  65
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  
 3.           MINERAL
PROPERTY INTERESTS - Continued
 
 South Vulture
Property
 
 On March
24, 2006, the Company entered into a Property Option Agreement giving the
Company the exclusive right and option to acquire a 100% interest in a mineral
exploration permit covering the South Vulture property located in Maricopa
County, Arizona.  The Company may exercise the option by making cash
payments and incurring net expenditures on the property (with estimated CDN$
equivalents provided) as follows:
 
 Date
                
                Cash
      Payments
                
                
                ExpendituresCDN
                
                
                USD
                
                
                CDN
                
                
                USDOn
      or before March 24, 2007
                
                $
                5,870
                
                
                $
                5,000
                
                
                $
                10,750
                
                
                $
                10,000On
      or before March 24, 2008
                
                $
                5,660
                
                
                $
                5,000
                
                
                $
                19,826
                
                
                $
                20,000On
      or before March 24, 2009
                
                $
                4,957
                
                
                $
                5,000
                
                
                $
                39,652
                
                
                $
                40,000On
      or before March 24, 2010
                
                $
                4,957
                
                
                $
                5,000
                
                
                $
                49,565
                
                
                $
                50,000
 
 The
Company paid the initial CDN $5,850 (USD $5,000) upon executing the agreement as
required under the initial Property Option Agreement and made the annual
payments of CDN $5,660 (USD $5,000) and CDN $5,870 (USD $5,000) due March 24,
2008 and 2007 respectively. The Company also met its obligation with respect to
minimum exploration expenditures for 2007.
 
 GQ
Property
 
 On June
1, 2006 the Company entered into a Property Option Agreement giving the Company
the exclusive right and option to acquire a 100% interest in a property known as
the GQ Property located in the Kamloops Mining District in the Province of
British Columbia.   The Company may exercise the option by making
cash payments and incurring net expenditures as follows:
 
 Date
                
                Cash
      Payments
                
                
                ExpendituresOn
      or before June 1, 2007
                
                $
                10,000
                
                
                $
                10,000On
      or before June 1, 2008
                
                $
                20,000
                
                
                $
                20,000On
      or before June 1, 2009
                
                $
                30,000
                
                
                $
                30,000On
      or before June 1, 2010
                
                $
                40,000
                
                
                $
                50,000
 
 In
addition, the Company is subject to a 2% net smelter return royalty to the
optionor upon production. The Company, upon the payment of $500,000, has the
option (exercisable for 90 days following completion of a bankable feasibility
study) to buy up to one-half (50%) of the optionor’s net smelter return interest
(1% net smelter return).  The Company made the $10,000 payment on June
1, 2007 and also met its obligations with respect to the minimum exploration
expenditures for 2007.
 
  66
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  
 3.           MINERAL
PROPERTY INTERESTS - Continued
 
 Margarita
Property
 
 On July
14, 2006 the Company entered into a Property Option Agreement giving the Company
the exclusive right and option to acquire a 100% interest in a property in Santa
Cruz County, Arizona known as the Margarita Property.  The Company
paid the initial payment of CDN $39,300 (USD $35,000) upon signing the agreement
and may exercise its option by making further cash payments and incurring net
expenditures (with estimated CDN$ equivalents provided) as follows:
 
 Date
                
                Cash
      Payments
                
                
                ExpendituresCDN
                
                
                USD
                
                
                CDN
                
                
                USDOn
      or before May 31, 2007
                
                $
                54,650
                
                
                $
                50,000
                
                
                $
                80,625
                
                
                $
                75,000On
      or before May 31, 2008
                
                $
                99,130
                
                
                $
                100,000
                
                
                $
                297,390
                
                
                $
                300,000On
      or before May 31, 2009
                
                $
                123,913
                
                
                $
                125,000
                
                
                $
                297,390
                
                
                $
                300,000On
      or before May 31, 2010
                
                $
                148,695
                
                
                $
                150,000
                
                
                
                -
                
                
                
                -On
      or before May 31, 2011
                
                $
                198,260
                
                
                $
                200,000
                
                
                
                -
                
                
                
                -On
      or before May 31, 2012
                
                $
                198,260
                
                
                $
                200,000
                
                
                
                -
                
                
                
                -
 
 In
addition, the Company is subject to a 2% net smelter return royalty to the
optionor upon production. The Company has the option (exercisable for 90 days
following completion of a bankable feasibility study) to buy the optionor’s net
smelter return interest for CDN $495,650 (USD $500,000) per 1% increment or CDN
$991,300 (USD $1,000,000) for the entire 2% net smelter return
interest.
 
 Also on
July 14, 2006 in relation to the Company entering into the Margarita Property
Option Agreement, the Company entered into a Finder’s Fee
Agreement.  The Company has agreed to pay a fee equal to 10% of the
Property Option Payments made during the first three years of the Margarita
Property Option Agreement.  Upon execution of the Margarita Property
Option Agreement the Company paid CDN $3,930 (USD $3,500) under the Finder’s Fee
Agreement.  It is estimated that if the Company makes all of the
scheduled property option payments, the amount paid under the Finder’s Fee
Agreement will be CDN $30,730 (USD $31,000).
 
 On May
31, 2007 the Company made the property option payment of CDN $54,650 (USD
$50,000) and the related finders’ fee payment of CDN $5,465 (USD $5,000) and
also met its obligations with respect to the minimum exploration expenditures
for 2007.
 
 On
January 29, 2008, the Company entered into an Assignment and Assumption
Agreement (the “Agreement”) with Patriot Gold Corp. (“Patriot”) to assign the
Company’s rights and obligations under the Margarita Property Option Agreement
to Patriot.  Pursuant to the Agreement, Patriot assumed the rights,
and agreed to perform all of the duties and obligations, of the Company arising
under the Margarita Property Option Agreement. Simultaneous with the execution
and delivery of the Agreement, Patriot paid the Company CDN $201,600 (USD
$200,000) which amount represents the full payment and satisfaction for the
assignment to Patriot by the Company.  Included in the assignment to
Patriot were, without limitation, all sums incurred by the Company in connection
with its exploration of the Margarita Property which includes the refunding of
the reclamation bond previously paid by the Company to the Forest Service in
Arizona, all expenditure credits incurred by the Company prior to the execution
of the Agreement and all property option payments made to the Margarita
Property. In addition, as the Company also assigned all of its rights and
obligations under the Finders’ Fee Agreement to Patriot, it is no longer
required to make further payments.  Subsequent to the execution of the
Agreement, the Company did not retain any interest in the Margarita
Property.
 
  67
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  4.           RECLAMATION
DEPOSIT
 
 The
Company has been granted exploration permits from the state of Arizona for the
Margarita and South Vulture Properties.  As part of the application
process, the Company paid a refundable deposit to the State for the estimated
reclamation costs associated with the planned exploration programs for the
respective properties.  Upon completion of any required reclamation,
the Company will receive a refund of the deposit.  Subsequent to
December 31, 2007 (note 3) the Company disposed of the Margarita Property and as
part of the disposition received a refund of CDN $17,894 (USD $17,000) relating
to its reclamation deposit on the Margarita (Note 3).  The remaining
balance related to the South Vulture Property is $3,367.
 
 5.           BRIDGE
LOANS
 
 During
2005, the Company entered into three bridge loans (the “Loans”) with minority
shareholders. All of the Loans bore interest at the Bank of Canada Prime Lending
Rate plus 1%.  The Loans were due one year from the date of the Loans
but the Company had the option to repay the Loans at any time prior to the due
date without penalty.  No security was provided for the
Loans.
 
 On
January 27, 2006, pursuant to three separate Loan Conversion Agreements the
Company and each of the three individual lenders agreed to convert the three
bridge loans into units of the Company at a conversion rate of $0.10 per
Unit.  Each Unit consists of one common share, one Class A warrant
giving the holder the right to purchase one common share at $0.25, which is
exercisable from January 27, 2009 until January 27, 2011, and one Class B
warrant giving the holder the right to purchase one common share at $0.50, which
is exercisable from January 27, 2009 until January 27, 2012.  As a
result of such loan conversions, the Company has issued a total of 731,570
restricted shares of common stock, 731,570 Class A warrants, and 731,570 Class B
warrants representing a grand total of principal and accrued interest at January
27, 2006 of $73,157.
 
 The
weighted average fair value on Class A and B warrants at the time of settlement
was $51,210 (approximately $0.34 per warrant) which was determined using the
Black-Scholes option pricing model with the following weighted average
assumptions:
 
 Risk-free
      interest rate
                4.10%Dividend
      yield
                NilExpected
      volatility
                75.8%Expected
      life of the warrants (in years)
                5.0
      to 6.0
 
 Together
with the estimated fair value of the common shares of $0.10 per share, the
aggregate fair value of the total consideration given on this conversion was
$124,367.   As a result, the Company recognized a loss of $51,210
on the Statements of Loss at December 31, 2006.
 
 6.           RELATED
PARTY TRANSACTIONS
 
 Except as
noted elsewhere in these financial statements, related party transactions are
disclosed as follows:
 
 On
January 23, 2006, the Company’s founding President resigned and terminated his
relationship with the Company.  On the same day 15,000,000 shares of
the common stock of the Company held by the former President were gifted by the
former President to the Company’s other founding Director, pursuant to an
assignment, dated January 23, 2006, among the former President, the other
founding Director and the Company.  No consideration was paid by the
Director for the gifting of such shares.  The gifted common shares are
subject to the Company’s right, exercisable at any time, to purchase any or all
of these shares at a purchase price of $0.01 per share.  The Company
has the right until, at its sole discretion, it decides to terminate the
agreement.  Due to this transaction having taken place between related
parties, it was not undertaken at market value.  As a result, at
December 31, 2006 the Company had recognized $1,500,000 in stock-based
compensation in respect of the estimated value of the common shares at the date
of the agreement.
 
 The
Company pays one of its Directors USD $500 per month for serving on its Board of
Directors.  Total fees of $6,472 (2006 - $6,891and 2005 - $596) were
paid in 2007.
  68
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  
 7.           SHARE
CAPITAL
 
 a) Common
Shares
 
 During
the period from inception (August 8, 2003) to December 31, 2007, the Company had
the following transactions:
 
 On
inception date, the Company issued 30 million common shares to the Company’s
founders for nil consideration.  The Company holds an irrevocable
right to repurchase all or a portion of these shares for a price of $0.01 per
share.
 
 In
October 2003, the Company issued 9.5 million units at $0.01 per
unit.  Each unit consisted of one common share, one Class A warrant
exercisable at $0.10 per share until October 30, 2008, one Class B warrant
exercisable at $1.46 per share until October 30, 2009 and one Class C warrant
exercisable at $1.52 per share until October 30, 2010.  Originally,
all of the warrants were to have vested on October 30, 2006.  By way
of letter agreements with each individual warrant holder the Company and each
respective warrant holder have agreed to extend the vesting dates of these
warrants.  The warrant vesting provisions have been extended from
October 30, 2006 to October 30, 2007 with respect to the Class A Warrants, to
April 30, 2008 with respect to the Class B Warrants and to October 30, 2008 with
respect to the Class C Warrants.  All other terms of the Warrant
agreements remained unchanged.
 
 Pursuant
to new letter agreements dated February 28, 2008 with to each respective warrant
holder, the Warrant vesting date was further extended from April 30, 2008 to
April 30, 2009 with respect to the Class B Warrants and from October 30, 2008 to
October 30, 2009 with respect to the Class C Warrants.  In addition,
the Warrant expiration date has been extended from October 30, 2009 to October
30, 2010 with respect to the Class B Warrants and from October 30, 2010 to
October 30, 2011 with respect to the Class C Warrants.  The terms of
the Class A Warrants have not been changed and all other terms of the Warrant
agreements remain unchanged.
 
 In
January 2004, the Company issued 57,350 common shares in a private placement for
gross proceeds of $5,735.
 
 In June
2006, the Company issued 1.1 million units at $0.50 per unit for a total
offering price of $550,000.  Each unit consisted of one common share,
one Class A warrant exercisable at $1.00 per share until June 16, 2011, and one
Class B Warrant exercisable at $1.50 per share until June 16,
2012.   All of the warrants vest June 16, 2008.  The
Company calculated and allocated the fair values of $40,370 and $55,330 to Class
A and Class B warrants respectively using the Black-Scholes option pricing model
with the following weighted average assumptions:
 
 Risk-free
      interest rate
                4.26
      to 4.29%Dividend
      yield
                NilExpected
      volatility
                95
      to 107%Expected
      life of the warrants (in years)
                5
      to 6
 
 b) Stock
Options
 
 On June
16, 2005, the stockholders of the Company approved the Company’s 2005 stock
option plan whereby the Company may grant options to its directors, consultants,
and employees for up to 5,000,000 shares of common stock.  The
exercise price of each option equals the market price of the Company’s stock on
the date of grant.  Options vest over a three-year period, unless
otherwise specified by the Board of Directors.  All options have a
10-year term.
 
 No
options were granted during 2007 or 2006 while 1,200,000 options were granted to
non-employees in 2005.  The Company revalues stock options until their
respective vesting dates.  The stock-based compensation expense is
amortized over the vesting period.  For the year ended December 31,
2007, the Company has recognized $41,107 (2006 - $144,478, 2005 -$35,075) in
stock-based compensation for stock options granted
  69
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  
 7.           SHARE
CAPITAL - Continued
 b) Stock
Options - continued
 
 in
2005.  The fair value of each option granted is estimated as at the
date of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions:
 
 2005Risk-free
      interest rate
                
                
                4.06
                %Dividend
      yield
                
                NilExpected
      volatility
                
                
                75.8
                %Expected
      average option term (years)
                
                
                10.0
 
 Because
our common stock does not yet trade in a public market, the expected volatility
is based on comparable junior mining companies who granted similar term
options.  No options were granted in 2007 or 2006 and the weighted
average fair value of options granted during 2005 was $0.07 per
option.
 
 The
following table sets forth a summary of options granted:
 
 Options
      Outstanding
                
                
                Weighted
      Average Exercise PriceBalance,
      August 8, 2003 (inception) to December 31, 2004
                
                
                -
                
                
                $
                -Options
      granted
                
                
                1,200,000
                
                
                $
                0.25Options
      cancelled
                
                
                (200,000
                )
                
                $
                0.25Balance,
      December 31, 2005
                
                
                1,000,000
                
                
                $
                0.25Options
      exercised
                
                
                (225,000
                )
                
                $
                0.25Options
      cancelled
                
                
                (125,000
                )
                
                $
                0.25Balance,
      December 31, 2006 and 2007
                
                
                650,000
                
                
                $
                0.25
 
 The
following table summarizes information concerning outstanding and exercisable
common stock options under the 2005 Plan at December 31, 2007:
 
 Exercise
      Price
                Options
      Outstanding
                Remaining
      Contractual Life (in years)
                Weighted
      Average Exercise Price
                Number
      of Options Exercisable
                Weighted
      Average Exercise Price$
      0.25
                650,000
                7.86
                $
      0.25
                516,667
                $
      0.25
 
  70
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  7.           SHARE
CAPITAL - Continued
 
 c)
Warrants
 
 Warrants
                
                
                Weighted
      Average Exercise PriceBalance,
      December 31, 2004 and 2005
                
                
                28,500,000
                
                
                $
                1.03Warrants
      issued
                
                
                3,663,140
                
                
                $
                0.90Balance,
      December 31, 2006 and 2007
                
                
                32,163,140
                
                
                $
                1.02
 
 The
following table lists the warrants outstanding at December 31,
2007.  Each warrant is exchangeable for one common share.
 
 Number
      Outstanding
                Number
      Vested
                Exercise
      Price
                Expiry
      date9,500,000
                9,500,000
                $0.10
                October
      30, 20089,500,000
                -
                $1.46
                October
      30, 20109,500,000
                -
                $1.52
                October
      30, 2011731,570
                -
                $0.25
                January
      27, 2011731,570
                -
                $0.50
                January
      27, 20121,100,000
                -
                $1.00
                June
      16, 20111,100,000
                -
                $1.50
                June
      16, 201232,163,140
                9,500,000
 
  71
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  8.           INCOME
TAXES
 
 The tax
effects of temporary differences that give rise to the Company’s future income
tax assets are as follows:
 
 December
      31,2007
                      
                      
                      2006Tax
      loss carry-forwards
                      
                      $
                      78,000
                      
                      
                      $
                      87,084Exploration
      expenditures
                      
                      
                      104,000
                      
                      
                      
                      51,324Share
      issue costs
                      
                      
                      2,000
                      
                      
                      
                      5,203Valuation
      allowance
                      
                      
                      (184,000
                      )
                      
                      
                      (143,611
                      )Future
      income tax asset (liability)
                      
                      $
                      -
                      
                      
                      $
                      -
 
 The
provision for income taxes differs from the amount estimated using the Canadian
federal and provincial statutory income tax rates as follows:
 
 December
      31,2007
                
                
                2006
                
                
                2005Benefit
      at Canadian statutory rates
                
                $
                (118,000
                )
                
                
                (664,006
                )
                
                $
                (36,662
                )Permanent
      difference
                
                
                -
                
                
                
                17,463
                
                
                
                -Effect
      of reduction in rate
                
                
                62,000
                
                
                
                2,558
                
                
                
                -Non-deductible
      stock option compensation
                
                
                14,000
                
                
                
                561,096
                
                
                
                12,528Increase
      in valuation allowance
                
                
                42,000
                
                
                
                82,879
                
                
                
                24,134$
                -
                
                
                $
                -
                
                
                $
                -
 
 The
Company’s future tax assets include the tax effect relating to approximately
$9,000 (2006 - $15,000) of future tax deductions for share issue
costs.  If and when the valuation allowance related to the tax effect
of these amounts is reversed the Company will recognize this benefit as an
adjustment to share capital as opposed to income tax expense in the Statement of
Loss.
 
 The
Company evaluates its valuation allowance requirements based on projected future
operations.  When circumstances change and this causes a change in
management’s judgment about the recoverability of deferred tax assets, the
impact of the change on the valuation allowance is reflected in current
income.
 
 The
Company has non-capital losses of approximately $301,000 expiring in various
amounts from 2010 to 2027.  The Company also has cumulative deferred
exploration expenses of approximately $402,000 (2006 – $150,000) to offset
future taxable income.
 
  72
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  9.           UNITED
STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
 
 (a)
                The
      financial statements of the Company have been prepared in accordance with
      Canadian generally accepted accounting principles ("Canadian
      GAAP").  There are no material differences between these
      principles and United States generally accepted accounting principles ("US
      GAAP").
 
 (b)
                Prior
      to 2006, under US GAAP, the Company applied SFAS No. 123, “Accounting for
      Stock-Based Compensation” ("SFAS 123") and SFAS 148 “Accounting for
      Stock-Based Compensation – Transition and Disclosure, an amendment to SFAS
      No. 123” to account for all stock based compensation arrangements granted
      using the fair value based method prescribed in SFAS 123. Stock-based
      compensation for non-employees was re-measured on each balance sheet date
      until such options vest. Compensation expense was recognized immediately
      for past services and pro-rata for future services over the option-vesting
      period.
 
 Beginning
January 1, 2006, the Company adopted the recommendations of the Statement of
Financial Accounting Standards No. 123R, "Accounting for Stock-based
Compensation" (“SFAS 123(R)”), and has applied the recommendations of this
standard using the modified prospective method. Under this application, the
Company is required to record compensation expense for all awards granted after
the date of adoption and for the unvested portion of previously granted awards
that remain outstanding at the date of adoption. Prior to the adoption of SFAS
123(R), the Company followed SFAS 123 “Accounting for Stock-Based Compensation”
to account for all stock-based compensation. Accordingly, no prior periods were
restated or cumulative adjustments recorded upon the adoption of this standard.
Since the Company had previously been using the fair value based method in
accounting for all stock-based compensation, the adoption of the new standard
did not have a material effect on the consolidated financial statements, nor
yield any differences between Canadian GAAP and US GAAP.
 
 (c)
                Recently
      issued US accounting
pronouncements:
 
 SFAS 157
 
 In
September 2006, FASB issued Statement of Financial Accounting Standard No. 157,
“Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes
a framework for measuring fair value in accordance with GAAP, and expands
disclosures about fair value measurements. The provisions of SFAS 157 are
effective for fiscal years beginning after November 15, 2007.
 
 SFAS 159
 
 In
February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial
Assets and Financial Liabilities - including an amendment of FASB Statement No.
115” (“SFAS No. 159”) which permits entities to choose to measure many financial
instruments and certain other items at fair value. This statement is effective
for fiscal periods beginning after November 15, 2007.
 
 SFAS
141R
 
 In
December 2007, the FASB issued SFAS 141R “Business Combinations” and SFAS 160
“Non-controlling Interests in Consolidated Financial Statements”, which are both
effective for fiscal years beginning after December 15, 2008. SFAS 141R, which
will replace FAS 141, is applicable to business combinations consummated after
the effective date of December 15, 2008.
 
  73
 AMERICAN
GOLDRUSH CORPORATION
 (An
Exploration Stage Company)
 Notes
to the Financial Statements
  
 9.           UNITED
STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES - continued
 
 (c)                 Recently
issued US accounting pronouncements - continued:
 
 SFAS 161
 
 In March
2008, the FASB issued SFAS 161 “Disclosures about Derivative Instruments and
Hedging Activities – an amendment of SFAS 133.  This Statement
requires enhanced disclosures about an entity’s derivative and hedging
activities and thereby improves the transparency of financial reporting. This
Statement is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. This Statement encourages, but does not require, comparative
disclosures for earlier periods at initial adoption.
 
 The
implementation of these new standards is not expected to have a material effect
on the Company’s financial statements.
 74
  ITEM
19.  EXHIBITS
 
 Exhibit Numbers
              Description of Document1.1(1)
              Articles
      of  Incorporation of  the Company1.2(1)
              Articles
      of Amendment1.3(1)
              By-Laws  of  the  Company2.1(1)
              Specimen  Common  Stock  Certificate2.2(1)
              Form
      of Class A Warrant – October 20032.3(1)
              Form
      of Class B Warrant – October 20032.4(1)
              Form
      of Class C Warrant – October 20032.5(2)
              Form
      of Class A Warrant – January 20062.6(2)
              Form
      of Class B Warrant – January 20062.7(3)
              Form
      of Subscription Agreement – June 20062.8(3)
              Form
      of Class A Warrant – June 20062.9(3)
              Form
      of Class B Warrant – June 20064.1(1)
              Agreement
      between the Company and Ronald Blomkamp dated September 30,
      20034.2(1)
              Agreement
      between the Company and Scott Praill dated September 30,
    20034.3(1)
              Property
      Option Agreement with Randy Polischuk4.4(4)
              Amendment
      No. 1 to the Polischuk Property Option Agreement4.5(5)
              Assignment
      Agreement dated January 23, 2006, among the Company, Scott Praill, and
      Ronald C. Blomkamp4.6(6)
              Bridge
      Loan Conversion Agreement dated January 27, 2006 between the Company and
      Igman Consulting4.6(6)
              Bridge
      Loan Conversion Agreement dated January 27, 2006 between the Company and
      Fred Coombes4.6(6)
              Bridge
      Loan Conversion Agreement dated January 27, 2006 between the Company and
      Trevor Newton4.7(7)
              Property
      Option Agreement dated March 24, 2006, between the Company and Fred
      Brost4.8(8)
              Property
      Option Agreement dated as of June 1, 2006, between the Company and Warner
      Gruenwald4.9(9)
              Property
      Option Agreement dated as of July 14, 2006, between the Company and James
      Sorrell4.10(9)
              Finder’s
      Fee Agreement dated July 14, 2006 between the Company and Fred
      Brost4.11(11)
              Assignment
      and Assumption Agreements, dated January 29, 2008, by and between American
      Goldrush Corp. and Patriot Gold Corp.11.1(10)
              Code
      of Ethics12.1*
              Certification
      of Principal Executive and Financial Officer13.1*
              Section
      1350 Certification
 
 1. Previously
filed with the Company’s registration statement on Form F-1, Registration No.
333-120722, submitted to the SEC on November 22, 2004.
 2.
Previously filed with the Company’s form 6-K submitted to the SEC on January 27,
2006.
 3.
Previously filed with the Company’s form 6-K submitted to the SEC on June 16,
2006.
 4.
Previously filed with the Company’s amendment to the registration statement on
Form F-1, Registration No. 333-120722, submitted to the SEC on January 25,
2005.
 5.
Previously filed with Mr. Praill’s Schedule 13D submitted to the SEC on January
23, 2006.
 6.
Previously filed with the Company’s form 6-K submitted to the SEC on January 27,
2006.
 7.
Previously filed with the Company’s form 6-K submitted to the SEC on March 24,
2006.
 8.
Previously filed with the Company’s form 6-K submitted to the SEC on June 1,
2006.
 9.
Previously filed with the Company’s form 6-K submitted to the SEC on July 14,
2006.
 10.
Previously filed with the Company’s form 20-F submitted to the SEC on May 25,
2006.
 11.
Previously filed with the Company’s form 6-K submitted to the SEC on February 1,
2008.
 
 * Filed
herewith.
  75
  
 Signature
Page
 
 Pursuant
to the requirements of Section 12g of the Securities Exchange Act of 1934, the
Registrant certifies that it meets all of the requirements for filing on Form
20-F and has duly caused this Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
 
 
 American
Goldrush Corp. SEC File No. 000-51337 Registrant
 
 Dated:
      May 22, 2008
              Signed: /s/  Andrew
      GourlayAndrew
      GourlayDirector,
      Chairman, President, Chief Executive and Operating Officer and
      SecretaryDated:
      May 22, 2008
              Signed: /s/  Scott
      PraillScott
      PraillDirectorDated:
      May 22, 2008
              Signed: /s/  Robert
      CannRobert
      CannDirectorDated:
      May 22, 2008
              Signed: /s/  Richard
      KehmeierRichard
      KehmeierDirector