UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 FORM 10-KSB/A
                                Amendment No. 3

(MARK ONE)

[X]     ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
        ACT OF 1934

               FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
        ACT

               FOR THE TRANSITION PERIOD FROM           TO
                                              ---------    -----------

                       COMMISSION FILE NUMBER 000-50399

                     BATTLE MOUNTAIN GOLD EXPLORATION CORP.
         ----------------------------------------------------------------
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

             NEVADA                                   86-1066675
(STATE OR OTHER JURISDICTION OF            (IRS EMPLOYER IDENTIFICATION NO.)
 INCORPORATION OR ORGANIZATION)

         ONE EAST LIBERTY STREET, 6TH FLOOR, SUITE 9 RENO, NEVADA 89504
         --------------------------------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (775) 686-6081
                                 --------------
                        (REGISTRANT'S TELEPHONE NUMBER)

                                      N/A
                                      ---
                            (FORMER NAME AND ADDRESS)

     CHECK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED
BY  SECTION  13  OR  15(D) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR
SUCH  SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND
(2)  HAS  BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO  [ ]

     AS  OF  DECEMBER 31, 2005, THE ISSUER HAD 42,530,000 SHARES OF COMMON
STOCK, PAR VALUE $.001 PER SHARE, OUTSTANDING, ALL OF WHICH HAVE BEEN ISSUED.

<PAGE>

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

                                      NONE

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

                    COMMON STOCK, $.001 PAR VALUE PER SHARE

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

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation  S-B  not  contained in this form, and no disclosure will be
contained,  to  the  best  of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or  any  amendment  to  this  Form  10-KSB.  [ ]

     The  issuer's  revenues  for the most recent fiscal year ended December 31,
2005  were  $0.

     The  aggregate  market  value  of the issuer's voting and non-voting common
equity  held  by non-affiliates computed by reference to the average bid and ask
price of such common equity as of March 17, 2006, was approximately $10,005,000.

Documents Incorporated by Reference: Reports on Form 8-K filed 1/07/05; 1/11/05;
2/11/05; 2/18/05; 2/28/05; 3/30/05; 4/14/05; 4/22/05 and 12/01/05.

Transitional Small Business Disclosure Format: Yes [ ] No [ ]

<PAGE>

                                TABLE OF CONTENTS

ITEM 1.     DESCRIPTION OF BUSINESS                                         4
ITEM 2.     DESCRIPTION OF PROPERTY                                         9
ITEM 3.     LEGAL PROCEEDINGS.                                             10
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.           10
ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.      11
ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.     14
ITEM 7.     FINANCIAL STATEMENTS.                                          21
ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
              ACCOUNTING AND FINANCIAL DISCLOSURE.                         22
ITEM 8A.    CONTROLS AND PROCEDURES.                                       22
ITEM 8B.    OTHER INFORMATION.                                             23
ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
              COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.           24
ITEM 10.    EXECUTIVE COMPENSATION.                                        27
ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
               AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.             30
ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                31
ITEM 13.    EXHIBITS.                                                      32
ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.                        33
SIGNATURES                                                                 34

<PAGE>

                                     PART I

ITEM  1.  DESCRIPTION OF BUSINESS

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

     This report contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company's actual results could
differ materially from those set forth on the forward looking statements as a
result of the risks set forth in the Company's filings with the Securities and
Exchange Commission, general economic conditions, and changes in the assumptions
used in making such forward looking statements. These forward-looking statements
include, without limitation, statements relating to our company's operations,
economic performance, financial condition, growth, investments, and operation
plans. Any such statements that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the generality of the
foregoing, words such as "believe", "expect", "intend", "anticipate", "may",
"should", "expects", "plans", "anticipates", "estimates", "predicts",
"potential", "continue", "projects" or the negative or other variations or
comparable terminology or derivatives thereof denote forward-looking statements.
These statements are only predictions and by their nature involve substantial
risks and uncertainties, many of which are beyond our control. Thus, actual
results may differ materially from those expressed in or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially include, but are not limited to, those discussed in "Item 6.
Management's Discussion and Analysis or Plan of Operation," under the heading
"Risk Factors." Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. We are under no obligation to
publicly update any of the forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

OVERVIEW

     Since the Company's inception in January 2004 the focus has been on mineral
exploration, with an emphasis on gold discovery in the State of Nevada.  The
gold exploration efforts primarily consist of the application of our proprietary
hydro-geochemical testing program which allows us to detect the presence of gold
and associated minerals in parts per trillion in ground water.  This program
allows us to test gravel-covered pediment locations that have mostly been
untested due to the substantial costs associated with older testing methods.

     The Company has found ground water chemistry can provide a direct
indication of the presence of a gravel-covered, gold bearing system in a
powerful, simple, and cost-effective way.  While the Company has no proven or
probable reserves, our current exploration activities have identified anomalous
mineral concentrations in subsurface groundwater in over thirty different
locations.

     On January 7, 2004 Battle Mountain Gold Exploration, Incorporated (a Nevada
Corporation) was formed as a private company in the business of minerals
exploration, with an emphasis on gold discovery in Nevada.

     In April 2004, the Company completed a 10 for 1 forward stock split, the
effects of which have been retroactively reflected in this report.

                                        4
<PAGE>

     On June 8, 2004, Battle Mountain entered into a joint venture (the "Joint
Venture")  with Nevada Gold Exploration Solutions, L.L.C., a Nevada limited
liability company ("NGXS") and related party to form Pediment Gold LLC, a Nevada
limited liability company, to explore the Nevada great basin physiographic area
using a proprietary water chemistry database.  As of December 31, 2005 the
Company paid an aggregate of $1,055,794 towards the initial contribution of
$3,250,000 in Pediment as called for by the original agreements, as amended (SEE
8-K filed December 1, 2005 for full terms of the agreement).

     On September 9, 2004, the Company completed a reverse merger transaction
with Hudson Ventures, Inc., a publicly traded company originally incorporated in
the State of Nevada on November 30, 2001.  Prior to the completion of the
transaction, Hudson Ventures, Inc. terminated all activities and agreements
related to certain properties located in the Yukon Territories in Canada.
Pursuant to the Acquisition, the Company acquired 11,640,000 shares of common
stock (or 100%) of Hudson Ventures, Inc. in exchange for an aggregate of
11,640,000 newly issued treasury shares common stock.  As part of the
acquisition the Company changed its name to Battle Mountain Gold Exploration
Corporation.

     On November 28, 2005, Battle Mountain Gold Exploration Corp. announced an
agreement to  acquire two (2) wholly-owned subsidiaries of IAMGOLD Corporation
(TSE/AMEX: IMG/IAG), which hold title to a portfolio of gold royalty assets,
consisting of eleven net smelter gold royalty interests. The transaction
expected to close by the end of the first quarter of 2006. A net smelter royalty
is the right to receive a percentage of the gross revenue from a resource
extraction operation. There is no assurance that these proposed transactions
will occur.

     The purchase price for the transaction is $21,850,000, consisting of
$15,850,000 in cash and 12,000,000 shares of Battle Mountain Gold. Funding of
the cash portion is expected to be from a combination of a gold loan,
subordinated debt and equity. The gold loan is being sought from a commercial
bank.The Company believes this acquisition and its subsequent cash flow will
complement its own exploration program and leverage its intellectual capital
using the royalty model. There is no assurance that these proposed transactions
will occur.

     On December 9, 2005, the Company announced the signing of a letter of
intent to acquire the balance of its joint venture company, Pediment Gold LLC,
from its joint venture partner, Nevada Gold Exploration Solutions, LLC.

BUSINESS DEVELOPMENT

     The Company is an exploration stage company in search of mineral deposits
with an emphasis on gold exploration in the State of Nevada and the Company has
no proven or  probable reserves.  Since commencement of exploration activities
in 2004, application of the proprietary ground water geo-chemistry methodology
has identified over thirty gold exploration targets in Nevada and the
acquisition of two properties, the Hot Pot and the Fletcher Junction project
areas.

     Ground Water Chemistry
     ----------------------

     The primary gold exploration efforts are driven by the application of a
hydro-geochemical  testing  program  to evaluate ground water chemistry that can
identify  the  presence  of  gold  and  associated  minerals  and  elements  in
gravel-covered  pediment  locations, most of which have not been tested. Testing
in this manner can measure the presence of gold and its associated minerals down
to parts per trillion. Pediment will conduct this testing as part of the program
initially targeting Nevada's gravel-covered  pediments.

                                        5
<PAGE>

     As ground water interacts with rock, it picks up a "scent" or geochemical
signature of the rocks the water passes through. If the ground water encounters
gold ore or geochemically altered rocks associated with gold, distinctive water
chemical signatures result.  These  "signatures"  form  plumes  considerably
larger  than  the gold deposits themselves, and present a down-slope deposit
"footprint" that indicates mineralization  is  nearby. Once recognized, this
water chemistry "scent" can be used to back track to the source gold deposit,
especially when the deposit is hidden by gravels and not exposed at the surface.
Ground Water Chemistry can provide a direct indication of the presence of a
gravel-covered, gold-bearing system.  The  Company  believes  that  Ground
Water  Chemistry  will  provide a powerful,  simple  and  direct exploration
methodology within Nevada's basin and range.

     Pediment Gold LLC
     -----------------

     On June 8, 2004, Battle Mountain entered into a joint venture(the  "Joint
Venture")  with  Nevada  Gold  Exploration Solutions, L.L.C., a Nevada limited
liability company ("NGXS") and related party.  As of December 31, 2005 the
Company paid an aggregate of $1,055,794, including a $630,794 contribution for
the twelve months then ended, towards the initial contribution of $3,250,000 in
Pediment as called for by the original agreements, as amended.

     Kenneth Tullar, president and 20% owner of NGXS and 5.1% beneficial of the
Company's common stock; and Wade Hodges, a 40% owner of NGXS and 5.1% beneficial
owner of the Company's common stock and Director of the Company are responsible
for the majority Pediment's operations.  Mr. Tullar and Mr. Hodges each receive
a flat rate of $8,000 per month on a contract basis, reimbursement of field
expenses, and a per diem of $125 per fieldwork day for services provided to
Pediment (For additional information see discussion under "Related Party
Transactions" in Item 8B).

     The Joint Venture was formed for the purpose of exploring the Nevada great
basin physiographic area using proprietary water chemistry database developed by
NGXS.  To date Pediment's operations have been focused on northern and central
Nevada and have identified over thirty areas of gold exploration potential and
land positions have been established in  two specific areas known as the
Fletcher Junction Project Area located in Mineral County, Nevada and the Hot
Pots Project Area located in Humboldt County, Nevada.

     Included in the Hot Pots Project Area is approximately 2,225 acres of land
in Humboldt County, Nevada which Pediment has leased for mining for a ten year
period.  The Company entered into the lease on September 16, 2004 with Julian
Tomera Ranches, Inc. - Battle Mountain Division ("Tomera Lease").  Pursuant to
the lease terms, Pediment made an initial contribution of $25,000 in 2004 and a
$15,000 payment for the year ended December 31, 2005.  Additional $15,000
payments are required in 2006 and 2007.  In 2008, through the remainder of the
lease, the annual payments will be $20,000.  The agreement also calls for
Pediment to pay Tomera a royalty of 3% of Net Smelter Returns from production,
if any, on the land covered by the Tomera Lease.

     On October 20, 2004 Pediment entered into a cancelable binding letter
agreement (the "Letter Agreement") with Placer Dome U.S. Inc. ("Placer Dome")
for exploration and development during a three-year period beginning on October
21, 2004 (the "Earn-In Period") on unpatented mining claims owned by Placer
Dome, located in Humboldt County, Nevada adjacent to the Tomera lease, and
considered part of the Hot Pots Project Area (the "Placer Dome Claims").
Pediment may acquire an undivided 70% interest in the Placer Dome Claims after
incurring the full amount of the $1,000,000 work obligations required by the
letter agreement. If the 70% interest is acquired, Pediment may be obligated to
enter into a joint venture agreement with Placer Dome covering future activities
on the Placer Dome Claims. Additionally, Pediment's interest in the Placer Dome
Claims will be subject to Placer Dome's right to earn an additional 40% interest
upon the payment of $3 million to Pediment or to convert its 30% interest into
an interest in 5% of net returns. During September, 2005 Placer Dome agreed to
defer Pediment's aggregate $300,000 work obligation to October 21, 2006. As of
December 31, 2005 Pediment made no work obligation on the Placer Dome Claims.

                                        6
<PAGE>

     On November 26, 2005 we entered into a letter of intent with NGXS to obtain
100% ownership of Pediment.  In accordance with the terms of the agreement, the
Company funded an additional $150,000 for the continued exploration of the field
reconnaissance program related to the Fletcher Junction and Hot Pots Project
Areas.  Additionally, the Company agreed to transfer, into escrow, 3,000,000
shares of its common stock for distribution to NGXS contingent upon the
Company's completion of its proposed purchase of IAMGold's royalty assets.  The
Completion of the acquisition of Pediment is expected to be no later than March
31, 2006.  By completing the acquisition of Pediment, the Company will obtain
all mineral prospects identified or acquired in Nevada as part of the 2004 and
2005 field reconnaissance programs performed at the Hot Pots and Fletcher
Junction Project Areas. Furthermore, the Company will have the exclusive rights
to NGXS's proprietary water chemistry database, GIS database, and water sampling
protocol and vapor phase geochemistry in the State of Nevada. There is no
assurance that these proposed transactions will occur.

     The Hot Pots Project
     --------------------

     Battle Mountain's Joint Venture company, Pediment Gold LLC Identified the
"Hot Pots" project area as a direct result of the successful application of the
company's proprietary ground water geochemical exploration methodology and the
hydrogeochemical exploration concept that large gold deposits affect the
chemistry of the surrounding ground water.  The "Hot Pots" gold project is a
five square mile gravel-covered pediment area located in within the Battle
Mountain - Eureka Gold Trend. Ground water samples collected to date from
accessible sources report highly-anomalous distributions of gold and trace
element chemistry.

     The gravel-covered pediment "Hot Pots" project area is located between
areas of past intense exploration interest, but the gravel-covered pediment area
remains unexplored to date. Altered and mineralized carbonate host rocks are
exposed along nearby range fronts and have been encountered by previous
drilling, both north and south of gravel-covered pediment.  The project area
land position consists of a contiguous block of 48 unpatented lode claims (920
acres or 1.4 square miles)and 2,200 acres (3.4 square miles) of private mineral
rights.  The unpatented lode claims are held through Placer Dome Exploration by
the exploration and development mining joint venture agreement as reported to
shareholders in Battle Mountain's news release of 6 December 2004.  And private
mineral rights on 2,200 acres of private ranchlands have been leased from the
Julian Tomera Ranches,
Inc.

     In April, 2005 the first phase of exploration drilling on the "Hot Pots"
gold project was completed and has extended the identified gold water anomaly
over 10,000 feet to the southwest. Nine vertical, reverse circulation drill
holes were completed for a total of almost 4,000 feet of drilling, with hole
depth ranging between 300 and 620 feet. Analyses of the water samples from the
first five holes are anomalous in gold and other trace-elements, reporting up to
267 parts per trillion gold. These values significantly extend the area of
initial anomalous water chemistry southwestward, by almost two miles. Bedrock is
oxidized and displays weak to strong hydrothermal alteration. This initial drill
program was specifically designed to intersect bedrock and to collect additional
water samples over the several-square-mile project area. The objectives of the
drilling was to 1) test the depth to bedrock; 2) determine the bedrock's
lithologic and alteration characteristics; and 3) enlarge the extent of
anomalous subsurface water chemistry. All drill holes intersected bedrock at
significantly shallower depths than initially anticipated. Bedrock ranges in
depth from only 110 feet to no more than 390 feet, averaging 265 feet over a
four-square-mile area. The abrupt changes in bedrock relief suggest the presence
of major faults. Bedrock lithology consists of thick shale and siltstone
sequences with quartzite and greenstone, likely of the Ordovician Valmy
Formation. The program's objectives have been accomplished with positive
results, and additional follow-up drilling will be scheduled.

                                        7
<PAGE>

     The Fletcher Junction Project
     -----------------------------

     In February 2005, Battle Mountain's Joint Venture company, Pediment Gold
LLC ("Pediment Gold"), established the "Fletcher Junction" gold project, an 11
square mile basalt-covered target located within the Walker Lane Gold Trend, a
regional geological alignment of major gold deposits. The Fletcher Junction
project is the second property to be identified as a direct result of the
successful application of the company's proprietary ground water geochemical
exploration methodology. Groundwater samples collected to date from near-surface
spring sources report highly anomalous distributions of gold and trace element
chemistry. The waters have been sampled twice under a program of rigorous
quality control and confirm the presence of gold (thousands of parts per
trillion) similar to concentration levels found in the groundwater associated
with known gold mines elsewhere in Nevada. The project area is surrounded by
areas of past intense exploration interest and scattered drilling by several
companies, but the Fletcher Junction Target Area has not been explored to date
because the area is covered by 50' to 100' of post-mineral basalt cover, which
effectively precluded the application of conventional exploration techniques
short of very expensive blind drilling.

     The Target Area was completely open for staking. The project area land
position now consists of a contiguous block of 342 unpatented lode claims (7,067
acres or 11.0 square miles) owned by Battle Mountain Gold Exploration's Joint
Venture Company, Pediment Gold LLC.

     Additional water sampling in April 2005 has confirmed the presence of
highly anomalous gold in spring water (up to 4,802 parts per trillion gold)
discharging from beneath a thin cover of a very young basalt volcanic flow.
Unique structural patterns known to control hydrothermal alteration and
mineralization associated with known gold mines in the region can be projected
into the Project Area beneath the thin cover of basalt and strongly suggest a
shallow, potentially high-grade, gold-in-bedrock source. In September, 2005
additional geologic work identified quartz-carbonate vein material believed to
be derived from source areas beneath the adjacent basalt cover. Samples of this
vein material have reported values up to 2.9 ounces per ton.

     In May 2005, permitting with the U.S. Forest Service was initiated for
twenty, shallow, vertical and angle drill holes to test a four mile long Target
Structural Zone. Subsequently, in January 2006 the permit application was
approved by the U.S. Forest Service, pending bond placement of $25,000.

                                        8
<PAGE>

     The Acquisition of Gold Royalty Assets from IAMGOLD Corporation
     ---------------------------------------------------------------

     On November 28, 2005, Battle Mountain Gold Exploration Corp. announced an
agreement to acquire two (2) wholly-owned subsidiaries of IAMGOLD Corporation
(TSE/AMEX: IMG/IAG), which hold title to a portfolio of gold royalty assets,
consisting of eleven net smelter gold royalty interests. The transaction
expected to close by the end of the first quarter of 2006. A net smelter royalty
is the right to receive a percentage of the gross revenue from a resource
extraction operation. There is no assurance that these proposed transactions
will occur.

     The purchase price for the transaction is $21,850,000, consisting of
$15,850,000 in cash and 12,000,000 shares of Battle Mountain Gold. Funding of
the cash portion is expected to be from a combination of a gold loan,
subordinated debt and equity. The gold loan is being sought from a commercial
bank.The Company believes this proposed acquisition and its anticipated
subsequent cash flow will complement its own proposed operations. There is no
assurance that these proposed transactions will occur.

The proposed transaction consists of the following royalty interests:

ITEM  2.  DESCRIPTION OF PROPERTIES

CORPORATE HEADQUARTERS

     The Company leases, on a monthly basis, approximately 165 square feet
office space and pays $960 per month, consisting of monthly base rent of $850
and a monthly charge for telephones and DSL Internet service of $110.

EXPLORATION AND MINING PROPERTIES

     The Hot Pot Project and the Fletcher Junction Project are both in the
exploration stage as they are without known reserves and the proposed program is
exploratory in nature. The work to date has included surface field examination
and surface and subsurface (from water wells) water sampling. The program
includes soil sampling and geophysical surveys. Exploration drilling began on
the Hot Pots Project in March 2005. There has not been, and there are no plant,
equipment or surface disturbances on the Fletcher Junction Project. The
exploration planning and current exploration efforts are based on the earlier
identification of anomalous mineral concentrations in the subsurface ground
water. There are no known preexisting reports concerning either the Hot Pot or
the Fletcher Junction project areas.

     The Hot Pot Project consists of two adjacent properties held by Pediment
under the  Tomera Lease and the Placer Dome Letter Agreement. The Hot Pots
Project is located in Humboldt County, in north-central Nevada. The properties
are accessible by  dirt  roads.  The Company is not aware of any history of
previous mining operations or exploration activities on the property covered by
the Tomera Lease.  While there has been some limited exploration drilling, there
is no history of previous mining operations on the property covered by the
Letter Agreement.  The Tomera Ranch property is an active, operating cattle
ranch.  The property covered by the Letter Agreement is unimproved, natural
range land.  The entire area of the Hot Pots Project is overlain by geologically
recent gravels, believed to be several hundred feet thick.  Pediment is
presently negotiating for additional properties which are adjacent to the Hot
Pots Project.

     The Fletcher Junction Project consists of 342 unpatented mining claims in
Mineral  County, west-central Nevada.  The area is accessible by improved,
county-maintained dirt  road.  Field observation indicates that there have been
no recent or historical mining operations in the area.  The Company is not aware

                                        9
<PAGE>

of any history of previous exploration  activity.  The area is natural,
unimproved open range and hilly land.   The area is overlain by geologically
recent gravels and volcanic basalt flows.

ITEM  3.  LEGAL PROCEEDINGS

     The Company is not a party to, and its property is not the subject of, any
pending legal proceeding.

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

     At the Company's Annual Shareholders Meeting held on December 9, 2005 the
following 14 proposals were submitted to a vote of security holders:

1.   Re-Election of Directors (A. Crews, W. Hodges, M. Kucher, B. Labadie,
     and J. McKay).
     All were re-elected.
2.   Ratification of the 2004-2005 Non-Qualified Stock Option Plan.
     Ratified.
3.   Ratification of the Amendment of the Articles of Incorporation to
     change the Company's name from Hudson Ventures, Inc. to Battle Mountain
     Gold Exploration Corp.
     Ratified.
4.   Ratification of the Amendment of the Articles of Incorporation to
     increase the number of shares of the Company's common stock from 20,000,000
     to 200,000,000 shares.
     Ratified.
5.   Ratification of the appointment of Chisholm, Bierwolf & Nilson, LLC as
     the Company's independent auditors.
     Ratified.
6.   Approval of the purchase of the IAMGold royalty assets for $15,850,000
     cash and approximately 12,000,000 shares of the Company's common stock.
     Approved.
7.   Approval of a 17,000 ounce gold loan from Macquarie Bank to finance
     the purchase of the IAMGold royalty assets.
     Approved.
8.   Approval to increase the gold loan to 20,000 ounces if required.
     Approved.
9.   Approval of the issuance of approximately 12,000,000 shares of the
     Company's common stock to IAMGold for the purchase of the IAMGold royalty
     assets.
     Approved.
10.  Approval of the private placement of approximately 22,223,000 units
     (each unit is 1 share of the Company's common stock plus one warrant for
     one-half of a share of the Company's common stock) to raise $10,000,000 to
     finance the purchase of the IAMGold royalty assets.
     Approved.
11.  Approval to increase the size of the Board of Directors from five to
     seven.
     Approved.
12.  Approval to affect a reverse stock split to meet the American Stock
     Exchange (AMEX) listing requirements.
     Approved.
13.  Approval to issue up to an additional 50,000,000 shares of the
     Company's common stock from treasury as required. Approved.
14.  Approval to increase the gold loan by an additional 3,000 ounces as
     required.
     Approved.

                                       10
<PAGE>

                                     PART II

ITEM  5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     "Bid"  and  "asked"  offers  for  our  common  stock  are  listed  on  the
over-the-counter  Bulletin  Board  (the  "OTCBB").  The  trading  symbol for our
common  stock  is  "BMGX."  The Company's common stock  was  first  traded  on
October  7,  2004.

     The  following  table sets forth the high and low bid prices for our common
stock for the period indicated as reported on the OTCBB.  The quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent  actual  transactions.

2005                               HIGH BID      LOW BID
                                   --------      --------
January 1--March 31                  $.73           $0.16
April 1 - June 30                    $.83           $.25
July 1- September 30                 $.52           $.16
October 1 - December 31              $.60           $.27

     As  of  March 17, 2006, the Company had 68 holders of record of the common
stock.  The  number  of holders of the common stock includes nominees of various
depository  trust  accounts  for  an  undeterminable  number  of  individual
stockholders.

DIVIDEND POLICY

     We  have not declared or paid dividends on our common stock in the last two
fiscal  years.  We do not anticipate paying dividends on our common stock in the
foreseeable  future.  We intend to reinvest in our business operations any funds
that  could  be  used  to  pay  dividends.

PENNY STOCK

     The Company's common stock is considered a "penny stock" as defined in
certain rules under the Securities Exchange Act of 1934 (the "Exchange Act"). In
general, a security which is not quoted on NASDAQ or has a market price of less
than $5 per share where the issuer does not have in excess of $2,000,000 in net
tangible assets is considered a penny stock. The Commission's Rule 15g-9
regarding penny stocks imposes additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally persons with net worth in excess
of $1,000,000 or an annual income exceeding $200,000 or $300,000 jointly with
their spouse). For transactions covered by the rules, the broker-dealer must
make a special suitability determination for the purchaser and receive the
purchaser's written agreement to the transaction prior to the sale. Thus, the
rules affect the ability of broker-dealers to sell our common stock should they
wish to do so because of the adverse effect that the rules have upon liquidity
of penny stocks. Unless the transaction is exempt under the rules, under the
Securities Enforcement Remedies and Penny Stock Reform Act of 1990,
broker-dealers effecting customer transactions in penny stocks are required to
provide their customers with (i) a risk disclosure document; (ii) disclosure of
current bid and ask quotations if any; (iii) disclosure of the compensation of
the broker-dealer and its sales personnel in the transaction; and (iv) monthly
account statements showing the market value of each penny stock held in the
customer's account. In addition, various state securities laws impose
restrictions on transferring "penny stocks".

                                       11
<PAGE>

EQUITY COMPENSATION PLAN

<TABLE>
<CAPTION>
                      EQUITY COMPENSATION PLAN INFORMATION
                      ------------------------------------

                                                                         Number of securities remaining
                                                                         available for future issuance
                            Number  of  securities   Weighted-average    under equity compensation plans
                            to be issued upon        exercise price of   (excluding securities to be
                            exercise  of             outstanding          issued upon exercise of
                            outstanding options,     options, warrants    outstanding options, warrants
Plan Category               warrants and rights      and rights           and rights)
--------------              -------------------     ------------------   ------------------------
<S>                              <C>                      <C>                     <C>
2004-2005 Non-Qualified
Stock Option Plan             3,200,000(1)              $0.40(2)                 300,000
<FN>
(1)  Includes  options  granted  as  of  December  31,  2004,  to management and
     employees,  including  James  E.  McKay  and  Mark  D.  Kucher.
(2)  In  April  2005,  the  Company  re-priced  the securities to provide for an
     exercise  price  of  $0.40  per  share.
</TABLE>

RECENT SALES OF UNREGISTERED SECURITIES

     The  Company has issued the following securities without registration under
the Securities Act of 1933 (the "Act" or the "Securities Act") during the period
covered  by  this  report:

     In September 2004, the Company entered into an Exchange with the former
shareholders of Battle Mountain pursuant to which Battle Mountain became a
wholly-owned subsidiary of the Company. The Company issued an aggregate of
11,640,000 shares of common stock to the former shareholders of Battle Mountain.
The Exchange was one share of the Company for each share of Battle Mountain.
Prior to the Exchange, Battle Mountain had sold an aggregate of 11,640,000
shares consisting of sales of an aggregate of 7,000,000 shares for $122,000 and
an aggregate of 4,640,000 shares for $358,000 in January 2004 and May 2004,
respectively. Battle Mountain sold the 7,000,000 shares to six (6) individuals,
three of whom became executive officers and/or directors of the Company, and
three (3) entities, all of which are affiliates of Mark Kucher, our Chief
Financial Officer and a Director. Battle Mountain sold the 4,640,000 shares to
two (2) individuals and three (3) entities, one (1) of which is an affiliate of
Mr. Kucher. The Company claims the exemption from registration afforded by Rule
506 of Regulation D under the Securities Act. The Company also claims an
exemption from registration afforded by Regulation S under the Securities Act
for some of the issuances. No underwriters or agents were involved in the
foregoing issuances and no underwriting discounts or commissions were paid by
the Company.

     In October 2004, the Company sold an aggregate of 900,000 shares of common
stock to an unaffiliated entity for an aggregate of $425,000 (or $0.4722 per
share). The Company claims an exemption from registration afforded by Section
4(2) of the Act since the foregoing issuance did not involve a public offering,
the recipient had access to information that would be included in a registration
statement, took the shares for investment and not resale and the Company took

                                       12
<PAGE>

appropriate  measures to restrict transfer. The Company also claims an exemption
from  registration  afforded  by  Regulation  S  under  the  Securities  Act. No
underwriters  or  agents  were  involved  in  the  foregoing  issuance  and  no
underwriting  discounts  or  commissions  were  paid  by  the  Company.

     In November 2004, the Company sold an aggregate of 450,000 shares of common
stock to four (4) individual investors for an aggregate of $450,000 (or $1.00
per share). In February 2005, the Company changed the terms of the sale to
provide for 900,000 shares for an aggregate of $450,004 (or approximately $0.50
per share). In April 2005, the Company agreed to accept $100,000 less of an
investment from one of the investors. As a result of these changes in the
original terms of the sale, the Company received $350,004 for an aggregate of
700,000 shares. The spouse of Mark Kucher, the Company's Chief Financial Officer
and a Director of the Company, purchased 40,000 of these shares. The Company
claims an exemption from registration afforded by Section 4(2) of the Act since
the foregoing issuances did not involve a public offering, the recipients had
access to information that would be included in a registration statement, took
the shares for investment and not resale and the Company took appropriate
measures to restrict transfer. The Company also claims an exemption from
registration afforded by Regulation S under the Act. No underwriters or agents
were involved in the foregoing issuance and no underwriting discounts or
commissions were paid by the Company.

     In December 2004, the Company granted options to James E. McKay and Mark D.
Kucher pursuant to their employment agreements to purchase 500,000 shares of the
Company's common stock with an exercise price of $0.99 per share and a vesting
date of May 31, 2005. Mr. McKay serves as the Company's President pursuant to
his employment agreement. Mr. Kucher serves as the Company's Chief Executive
Officer and Chairman of the Company's board of directors pursuant to his
employment agreement. In April 2005, the Company's board of directors amended
the terms of their options to vest in their entirety on April 15, 2005, at an
amended exercise price of $0.40 per share. The Company also issued additional
options to other Directors in the aggregate of 1,500,000 shares at an exercise
price of $.40 per share, that fully vested on April 15, 2005. Additionally, on
December 8, 2005, Jim McKay, who was a director, was granted an additional
option to acquire 200,000 shares at an exercise price of $.40 per share, with a
vesting date of January 7, 2006. The Company claims an exemption from
registration afforded by Section 4(2) of the Act since the foregoing grants did
not involve a public offering, the recipients had access to information that
would be included in a registration statement, took the shares for investment
and not resale and the Company took appropriate measures to restrict transfer.

     In February 2005, we amended the terms of a sale of stock that we made in
November 2004. In November 2004, we sold an aggregate of 450,000 shares of
common stock to four individual investors for an aggregate of $450,000 (or $1.00
per share). In February 2005, we changed the terms of the sale to provide for
900,000 shares for an aggregate of $450,000 (or approximately $0.50 per share).
In April 2005, we agreed to accept $100,000 less of an investment from one of
the investors. As a result of these changes in the original terms of the sale,
we received $350,000 for an aggregate of 700,000 shares. The spouse of Mark
Kucher, the Company's Chief Financial Officer and a Director of the Company,
purchased 40,000 of these shares.

     This re-pricing of  the  private placement sale of shares of our Common
Stock was done to more accurately and consistently reflect actual market price
and  conditions  of  our common shares, maintain investors' interest in our
private placements  and to continue to offer investors what the Company believes
an equitable investment opportunity.

     In September 2005 the Company, by private placement, issued 1,500,000
restricted shares of our common stock at $0.25 per share for an aggregate total
subscription of $375,000.  Each share comes with a share purchase warrant,
exercisable at $0.25 for a period of two years.

                                       13
<PAGE>

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

     The following discussion contains certain statements that may constitute
forward-looking statements. Any statements that refer to expectations,
projections or other characterization of future events or circumstances, and
especially those which include variations of the words "believes," "intends,"
"estimates," "anticipates," "expects," "plans," or similar words or variations
thereof, are likely to be forward-looking statements, and as such, are likely to
concern matters involving risk, uncertainty, unpredictability and other factors
that could materially and adversely affect the outcome or results indicated by
or inferred from the statements themselves. Therefore, the reader is advised
that the following discussion should be considered in light of the discussion of
risks and other factors contained in this report and in the Company's other
filings with the Securities and Exchange Commission, and that no statements
contained in the following discussion or in this report should be construed as a
guarantee or assurance of future performance or future results.

OVERVIEW

     Since the Company's inception in January 2004 the focus has been on mineral
exploration, with an emphasis on gold discovery in the State of Nevada. The
primary gold exploration efforts are driven by the application of a
hydro-geochemical testing program to evaluate ground water chemistry that can
identify the presence of gold and associated minerals and elements in
gravel-covered pediment locations, most of which have not been tested due to the
substantial costs associated with older testing methods. As ground water
interacts with rock, it picks up a "scent" or geochemical signature of the rocks
the water passes through. If the ground water encounters gold ore or
geochemically altered rocks associated with gold, distinctive water chemical
signatures result. These "signatures" form plumes considerably larger than the
gold deposits themselves, and present a down-slope deposit "footprint" that
indicates mineralization is nearby. Once recognized, this water chemistry
"scent" can be used to back track to the source gold deposit, especially when
the deposit is hidden by gravels and not exposed at the surface. Ground Water
Chemistry can provide a direct indication of the presence of a gravel-covered,
gold-bearing system. The Company believes that Ground Water Chemistry will
provide a powerful, simple and direct exploration methodology within Nevada's
basin and range.

     The Company has found ground water chemistry can provide a direct
indication of the presence of a gravel-covered, gold bearing system in a
powerful, simple, and cost-effective way. While the Company has no proven or
probable reserves, our current exploration activities have identified anomalous
mineral concentrations in subsurface groundwater in over thirty different
locations.

The Company has achieved the following developmental successes during the year
preceding and the period covered by this report:

     On January 7, 2004 Battle Mountain Gold Exploration, Incorporated (a Nevada
Corporation) was formed as a private company in the business of minerals
exploration, with an emphasis on gold discovery in Nevada.

     In April 2004, the Company completed a 10 for 1 forward stock split, the
effects of which have been retroactively reflected in this report.

     On June 8, 2004, Battle Mountain entered into a joint venture (the "Joint
Venture")  with Nevada Gold Exploration Solutions, L.L.C., a Nevada limited
liability company ("NGXS") and related party to form Pediment Gold LLC, a Nevada
limited liability company, to explore the Nevada great basin physiographic area
using a proprietary water chemistry database.  The Joint Venture was formed for
the purpose of exploring the Nevada great basin physiographic area using
proprietary water chemistry database developed by NGXS.  To date Pediment's
operations have been focused in two areas known as the Fletcher Junction Project
Area located in Mineral County, Nevada and the Hot Pots Project Area located in
Humboldt County, Nevada.

                                       14
<PAGE>

     In the summer of 2004, Battle Mountain's Joint Venture company, Pediment
Gold LLC Identified the "Hot Pots" project area as a direct result of the
successful application of the company's proprietary ground water geochemical
exploration methodology and the hydrogeochemical exploration concept that large
gold deposits affect the chemistry of the surrounding ground water.  The "Hot
Pots" gold project is a five square mile gravel-covered pediment area located in
within the Battle Mountain - Eureka Gold Trend.

     On September 9, 2004, the Company completed a reverse merger transaction
with Hudson Ventures, Inc., a publicly traded company originally incorporated in
the State of Nevada on November 30, 2001.  Pursuant to the Acquisition, the
Company acquired 11,640,000 shares of common stock (or 100%) of Hudson Ventures,
Inc. in exchange for an aggregate of 11,640,000 newly issued treasury shares
common stock.  As part of the acquisition the Company changed its name to Battle
Mountain Gold Exploration Corporation.

     On September 16, 2004 as part of the Hot Pots Project, Battle Mountain's
Joint Venture company, Pediment Gold LLC entered into the lease with Julian
Tomera Ranches, Inc. - Battle Mountain Division ("Tomera Lease").

     On October 20, 2004 as part of the Hot Pots Project, Battle Mountain's
Joint Venture company, Pediment Gold LLC entered into a cancelable binding
letter agreement (the "Letter Agreement") with Placer Dome U.S. Inc. ("Placer
Dome") for exploration and development during a three-year period beginning on
October 21, 2004 (the "Earn-In Period") on unpatented mining claims owned by
Placer Dome, located in Humboldt County, Nevada adjacent to the Tomera lease,
and considered part of the Hot Pots Project Area (the "Placer Dome Claims").

     Exploration drilling began on the Hot Pots Project on March 21, 2005 and
was completed on April 15, 2005. Nine vertical, reverse circulation drill holes
were drilled over a 4 square mile area for a total of almost 4,000 feet of
drilling to depths ranging from 300 to 620 feet. Depth to bedrock was shallower
than anticipated with alluvial gravel thicknesses of less than 70 feet in all
holes except one. The playa sediments and gravels were found to overlay
volcanoclastic sediments overlaying Paleozoic bedrock. Depth to the Paleozoic
bedrock surface ranged from 110 to 390 feet and oxidation extends over 300 feet
into the bedrock. Water samples from all but one of the holes reported anomalous
gold and other trace-elements and one of the holes reported 267 parts per
trillion gold, values similar to the gold and water chemistry at the nearby Lone
Tree Mine. Bedrock samples from all of the holes reported gold, from strong to
weakly anomalous values, arsenic and associated anomalous trace elements in
seven of the nine holes. Hydrothermal alteration was identified in five of the
holes. These findings, when integrated with the existing project information has
identified a roughly north south trending geological uplift, bounded on the east
and west by two north-south trending structural trends that appear to reflect
the pattern of anomalous gold and associated trace elements reported from both
the water and bedrock sampling. A soil gas chemistry (Carbon Dioxide only)
orientation survey has been initiated and preliminary data from this in-progress
survey supports the drilling, water chemistry and geophysical data as to the
location and chemically anomalous nature of these two trends.

                                       15
<PAGE>

     In February 2005, Battle Mountain's Joint Venture company, Pediment Gold
LLC ("Pediment Gold"), Identified the "Fletcher Junction" project area as a
direct result of the successful application of the company's proprietary ground
water geochemical exploration methodology and the hydrogeochemical exploration
concept that large gold deposits affect the chemistry of the surrounding ground
water. The "Fletcher Junction" gold project area is an eleven square-mile area
located within the Walker Lane Gold Trend. The project land area is controlled
by Battle Mountain's Joint Venture company, Pediment Gold LLC ("Pediment Gold").
The waters have been sampled twice under a program of rigorous quality control
and confirm the presence of gold (thousands of parts per trillion). Additional
geologic work has identified quartz-carbonate vein material believed to be
derived from source areas beneath the adjacent basalt cover. Samples of this
vein material have reported values up to 2.9 ounces per ton of gold. Pediment's
Project Plan of Operations for drilling was approved by the U.S. Forest Service
in January, 2006.

     On November 28, 2005, Battle Mountain Gold Exploration Corp. announced an
agreement to acquire two (2) wholly-owned subsidiaries of IAMGOLD Corporation
(TSE/AMEX: IMG/IAG), which hold title to a portfolio of gold royalty assets,
consisting of eleven net smelter gold royalty interests. The transaction
expected to close by the end of the first quarter of 2006. A net smelter royalty
is the right to receive a percentage of the gross revenue from a resource
extraction operation. There is no assurance that these proposed transactions
will occur.

     The purchase price for the transaction is $21,850,000, consisting of
$15,850,000 in cash and 12,000,000 shares of Battle Mountain Gold. Funding of
the cash portion is expected to be from a combination of a gold loan,
subordinated debt and equity. The gold loan is being sought from a commercial
bank.The Company believes this acquisition and its subsequent cash flow will
complement its own exploration program and leverage its intellectual capital
using the royalty model. There is no assurance that these proposed transactions
will occur.

     On December 9, 2005, the Company announced the signing of a letter of
intent to acquire the balance of its joint venture company, Pediment Gold LLC,
from its joint venture partner, Nevada Gold Exploration Solutions, LLC.  In
accordance with the terms of the agreement, the Company funded an additional
$150,000 for completion of the 2005 field reconnaissance program and work
related to the Fletcher Junction and Hot Pots Project Areas.  Additionally, the
Company agreed to transfer, into escrow, 3,000,000 shares of its common stock
for distribution to NGXS contingent upon the Company's completion of its
$8,000,000 financing arrangement and the purchase of the IAMGold royalty assets.
The Completion of the acquisition of Pediment is expected to be in early 2006.
By completing the acquisition of Pediment, the Company will obtain all mineral
prospects identified or acquired in Nevada as part of the 2004 and 2005 field
reconnaissance programs and control of the Hot Pots and Fletcher Junction
Projects.  And the Company will have the exclusive rights to NGXS's proprietary
water chemistry database, GIS database, and water sampling protocol and vapor
phase geochemistry in the State of Nevada.

PLAN OF OPERATION

     The Company currently has cash available to satisfy its anticipated cash
requirements for the next twelve (12) months. The Company has raised
approximately $2,190,000 for its proposed gold exploration activities, which it

                                       16
<PAGE>

has used for payments toward the Initial Contribution in Pediment and for
expenses. During the next twelve months, the Company will need to spend
approximately $45,000 to retain the Fletcher Junction Claims, and to pay $15,000
on the Tomera Lease (pursuant to its agreement with Tomera Ranches to retain its
rights in the Tomera Lease. The Company is taking steps to raise equity capital
or to borrow additional funds, but there is no assurance it will be able to do
so.The Company has no agreements or arrangements in place to obtain the capital
or loans. There can be no assurance that any new capital will be available to
the Company or that such capital, if any, will be sufficient for the Company's
proposed operations, or that other arrangements will be available as and when
needed or on terms satisfactory to the Company. The Company does not have any
commitments from its officers, directors or affiliates to provide funding. The
failure of the Company to obtain adequate financing may result in the Company
having to delay, curtail, scale back or forgo its proposed operations.

     The Company does not expect to purchase any plant or significant equipment
during the next twelve months. The Company will heavily rely on contract labor
to conduct its operations and does not expect a significant change in the number
of employees during the next twelve months.

LIQUIDITY AND CAPITAL RESOURCES
--------------------------------

     Current and Expected Liquidity

     For the year ended December 31, 2005 our cash position increased from the
year ended December 31, 2004.  The increased cash outflows were primarily due to
the continued funding of our exploration activities through Pediment Gold LLC,
increased spending to generate worldwide interest in the Company, and the
repayment of short-term related party financing arrangements.

     Our current operations are not sufficient to cover our current and expected
obligations, however, we have historically been able to generate capital via
equity markets.  For the twelve months ended December 31, 2005, the Company
generated approximately $835,000 via private placements of our common stock.

     In order to meet our future obligations we expect to continue to raise
capital via equity markets.  As part of our September 2005 private placement, we
issued 1,500,000 warrants, exerciseable at $0.25, expiring December 2006, which
could generate approximately $350,000 for the Company, net of fees, if fully
exercised. There is no assurance that any of the warrants will be exercised or
that we will receive any monies from the warrants.

RESULTS OF OPERATIONS

     The Company has been in the exploration stage since its inception and has
not yet realized any revenues from its planned operations.

                                       17
<PAGE>

RISK FACTORS

Risks Relating to Our Business

OUR AUDITORS HAVE EXPRESSED AN OPINION THAT THERE IS SUBSTANTIAL DOUBT ABOUT OUR
--------------------------------------------------------------------------------
ABILITY TO CONTINUE AS A GOING CONCERN.
---------------------------------------

     In its reports dated March 11, 2006 and April 18, 2005, Chisholm,
Bierwolf & Nilson, LLC, Certified Public Accountants expressed an opinion that
there is substantial doubt about our ability to continue as a going concern
based on our history of operating losses since Inception, our lack of operating
revenues and our dependence on third party financing. Our financial statements
do not include any adjustments that might result from the outcome of that
uncertainty. The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from our inability
to continue as a going concern. Our continuation as a going concern is dependent
upon future events, including adequate financing to fully implement our business
plan. If we are unable to continue as a going concern, investors will lose your
entire investment.

WE HEAVILY DEPEND ON MARK KUCHER.
---------------------------------

     The success of the Company depends upon the personal efforts and abilities
of Mark Kucher. Mark Kucher serves as sole director and officer of the Company,
including the Company's Chief Financial Officer, pursuant to an employment
agreement. Mr. Kucher and the Company may voluntarily terminate the employment
agreement at any time. The loss of Mr. Kucher could have a material adverse
effect on our business, results of operations or financial condition. In
addition, the absence of Mr. Kucher will force us to seek a replacement who may
have less experience or who may not understand our business as well, or we may
not be able to find a suitable replacement.

WE ARE ENGAGED IN A BUSINESS THAT IS INHERENTLY SPECULATIVE AND RISKY.
----------------------------------------------------------------------

     Mineral exploration and mining is subject to risks related to a substantial
or extended decline in prices of mineral commodities, property acquisition
complexities, and restrictive and/or changing political, social and/or
environmental laws and regulations. Even if we can implement our business plan
and initiate exploration and development activities, of which there can be no
assurance, there can be no assurance that we will find commercial quantities of
minerals, or if we are able to find such minerals, that we can remove them in a
profitable manner. Because of the inherently speculative and risky nature of the
business in which we are engaged, our Company could fail to find commercial
quantities of minerals or perform poorly, and as a result investors could lose
their entire investment.

MARK KUCHER, WADE A HODGES AND KENNETH TULLAR CAN VOTE AN
---------------------------------------------------------
AGGREGATE OF 36% OF OUR COMMON STOCK AND CAN EXERCISE CONTROL OVER CORPORATE
----------------------------------------------------------------------------
DECISIONS.
----------

     Mark Kucher, Wade A Hodges, and Kenneth Tullar beneficially own or control
an aggregate of approximately 36% of the issued and outstanding shares of our
common stock. Accordingly, they will exercise significant influence in
determining the outcome of all corporate transactions or other matters,

                                       18
<PAGE>

including the election of directors, mergers, consolidations, the sale of all or
substantially all of our assets, and also the power to prevent or cause a change
in control. The interests of Messrs. Kucher, Hodges and Tullar may differ from
the interests of the other stockholders and thus result in corporate decisions
that are adverse to other shareholders.

Risks Relating to Our Common Stock
----------------------------------

THE MARKET PRICE OF OUR COMMON STOCK HISTORICALLY HAS BEEN VOLATILE.
--------------------------------------------------------------------

     The market price of our common stock historically has fluctuated
significantly based on, but not limited to, such factors as: general stock
market trends, announcements of developments related to our business, actual or
anticipated variations in our operating results, our inability to generate
revenues, and conditions and trends in the mineral exploration, development and
production industry.

     Our common stock is traded on the over-the-counter Bulletin Board. In
recent years the stock market in general has experienced extreme price
fluctuations that have often been unrelated to the operating performance of the
affected companies. Similarly, the market price of our common stock may
fluctuate significantly based upon factors unrelated or disproportionate to our
operating performance. These market fluctuations, as well as general economic,
political and market conditions, such as recessions or interest rates may
adversely affect the market price of our common stock.

OUR COMMON STOCK IS SUBJECT TO THE"PENNY STOCK" RULES OF THE SECURITIES AND
-----------------------------------------------------------------------------
EXCHANGE COMMISSION WHICH LIMITS THE TRADING MARKET IN OUR COMMON STOCK, MAKES
------------------------------------------------------------------------------
TRANSACTIONS IN OUR COMMON STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN
--------------------------------------------------------------------------
INVESTMENT IN OUR COMMON STOCK.
--------------------------------

     Our common stock is considered a "penny stock" as defined in Rule 3a51-1
promulgated by the Securities and Exchange Commission (the "Commission" or the
"SEC") under the Exchange Act. In general, a security which is not quoted on
NASDAQ or has a market price of less than $5 per share where the issuer does not
have in excess of $2,000,000 in net tangible assets is considered a penny stock.
The Commission's Rule 15g-9 regarding penny stocks impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally persons
with net worth in excess of $1,000,000 or an annual income exceeding $200,000 or
$300,000 jointly with their spouse). For transactions covered by the rules, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Thus, the rules affect the ability of broker-dealers to sell our common
stock should they wish to do so because of the adverse effect that the rules
have upon liquidity of penny stocks. Unless the transaction is exempt under the
rules, under the Securities Enforcement Remedies and Penny Stock Reform Act of
1990, broker-dealers effecting customer transactions in penny stocks are
required to provide their customers with (i) a risk disclosure document; (ii)
disclosure of current bid and ask quotations if any; (iii) disclosure of the
compensation of the broker-dealer and its sales personnel in the transaction;
and (iv) monthly account statements showing the market value of each penny stock
held in the customer's account. As a result of the penny stock rules the market
liquidity for our common stock may be adversely affected by limiting the ability
of broker-dealers to sell our common stock and the ability of purchasers to
resell our common stock.

                                       19
<PAGE>

     In  addition,  various  state  securities  laws  impose  restrictions  on
transferring  "penny  stocks" and as a result, investors in our common stock may
have  their  ability  to  sell  their  shares  of  the  common  stock  impaired.

THE COMPANY HAS NOT PAID ANY CASH DIVIDENDS.
--------------------------------------------

     The Company has paid no cash dividends on its common stock to date and it
is not anticipated that any cash dividends will be paid to holders of the
Company's common stock in the foreseeable future. While the Company's dividend
policy will be based on the operating results and capital needs of the business,
it is anticipated that any earnings will be retained to finance the future
expansion of the Company.

CRITICAL ACCOUNTING ESTIMATES

     Our discussion and analysis of our financial condition and results of
operations is based upon our financial statements, which have been prepared in
accordance with accounting principals generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues (if
any) and expenses, and related disclosure of any contingent assets and
liabilities. On an on-going basis, we evaluate our estimates. We base our
estimates on various assumptions that we believe to be reasonable under the
circumstances, the results of which form the basis for making judgments about
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.

     We estimated the financing fees related to the issuance of warrants and
options to purchase our common stock using a lattice pricing model using
various volatility assumptions.

Going Concern
-------------

     We have been in the exploration stage since our formation and have not yet
realized any revenues from our planned operations. The accompanying financial
statements have been prepared assuming we will continue as a going concern. As
shown in the accompanying financial statements, we have incurred a net loss of
$1,199,349 for the period from Inception through December 31, 2005 and have had
no sales. These conditions among others create an uncertainty as to our ability
to continue as a going concern, particularly in the event that we cannot obtain
additional financing to fully implement our business plan and to continue with
our current operations, of which there can be no assurance. Our future is
dependent upon our ability to obtain financing and upon future profitable
operations from the development of mineral properties, of which there can be no
assurance. 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 we cannot
continue in existence.

                                       20
<PAGE>

ITEM  7.  FINANCIAL STATEMENTS

                  BATTLE MOUNTAIN GOLD EXPLORATION CORPORATION

                         (AN EXPLORATION STAGE COMPANY)

                              FINANCIAL STATEMENTS

                               FOR THE YEAR ENDED

                                DECEMBER 31, 2005


                                      WITH

                           AUDIT REPORT OF INDEPENDENT

                       REGISTERED PUBLIC ACCOUNTING FIRM

                                       21

<PAGE>

                                TABLE OF CONTENTS

Report of Independent Registered Public Accounting Firm                  F-2

Balance Sheet                                                            F-3

Statements of Operations                                                 F-4

Statement of Changes in Stockholders' Equity                             F-5

Statements of Cash Flows                                                 F-6

Notes to Financial Statements                                            F-7

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------

Board of Directors and Stockholders
Battle Mountain Gold Exploration Corporation

We  have  audited  the  accompanying  balance  sheet  of  Battle  Mountain  Gold
Exploration  Corporation (an exploration stage company) as of December 31, 2005,
and  the  related  statements of operations, stockholders' equity and cash flows
for  the  years  ended  December  31, 2005 and 2004 and inception to date. 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 standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits  to  obtain  reasonable  assurance  about  whether the
financial  statements  are  free  of  material  misstatement.  The  Company  has
determined  that  it is not required to have, nor were we engaged to perform, an
audit  of  its  internal  control  over  financial reporting.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial  statement presentation. We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  financial  position  of  Battle  Mountain  Gold
Exploration Corporation (an exploration stage company), as of December 31, 2005,
and  the  results  of  its  operations  and  its  cash flows for the years ended
December  31, 2005 and 2004 and inception to date, in conformity with accounting
principles  generally  accepted  in  the  United  States.

The  accompanying  financial  statements have been prepared assuming that Battle
Mountain  Gold  Exploration  Corporation  (an  exploration  stage  company) will
continue  as  a  going  concern.  As  discussed  in  Note  15  to  the financial
statements,  Battle  Mountain  Gold  Exploration Corporation has suffered losses
during  the periods presented which raises substantial doubt about the company's
ability  to  continue  as a going concern. Management's plans in regard to these
matters  are  also described in Note 15. The financial statements do not include
any  adjustments  that  might  result  from  the  outcome  of  this uncertainty.

As discussed  in Note 2, during 2006, the Company determined that it should have
recognized compensation expense related to the issuance of stock options for the
year  ended  December  31,  2005.  As  a  result,  the Company has restated it's
previously  issued  financial  statements  for the year ended December 31, 2005.


Chisholm, Bierwolf & Nilson, LLC
Bountiful,  Utah
March 11, 2006 except for notes 2, 11, 12, 13 and 14 dated September 25, 2006

                                     F-2
<PAGE>

<TABLE>
<CAPTION>
                       BATTLE MOUNTAIN GOLD EXPLORATION CORPORATION
                           (A COMPANY IN THE EXPLORATION STAGE)
                                      BALANCE SHEET
                                      -------------

                                          ASSETS
                                          ------
                                                                            DECEMBER 31, 2005
                                                                                (RESTATED)
                                                                              ------------
<S>                                                                                 <C>
CURRENT ASSETS
--------------
   Cash                                                                       $   246,614
   Prepaid rent                                                                     1,188
                                                                              ------------

     Total current assets                                                         247,802
                                                                              ------------

PROPERTY AND EQUIPMENT
(NET OF ACCUMULATED DEPRECIATION OF $384)                                           2,404
                                                                              ------------

OTHER ASSETS
------------
Investment in joint venture                                                     1,159,901
Deposits                                                                              295
                                                                              ------------

     Total other assets                                                         1,160,196
                                                                              ------------

       Total assets                                                           $ 1,410,402
                                                                              ============

                          LIABILITIES AND STOCKHOLDERS' EQUITY
                          ------------------------------------

CURRENT LIABILITIES
-------------------
Accounts payable                                                              $    29,203
Related party payable                                                             167,328
                                                                              ------------

     Total current liabilities                                                    196,531
                                                                              ------------

COMMITMENTS AND CONTINGENCIES                                                           -
-----------------------------                                                 ------------

STOCKHOLDERS' EQUITY
--------------------
Preferred stock: 10,000,000 shares authorized ($0.001 par value)
 none issued                                                                            -
                                                                              ------------
Common stock, $.001 par value, 200,000,000 shares authorized
 42,530,000 shares issued and outstanding                                          42,530
Additional paid-in-capital (restated)                                           3,284,466
Deficit accumulated during the exploration stage (restated)                    (2,113,125)
                                                                              ------------

     Total stockholders' equity                                                 1,213,871
                                                                              ------------

       Total liabilities and stockholders' equity                             $ 1,410,402
                                                                              ============
</TABLE>

    The Accompanying Notes are an Integral Part of the Financial Statements

                                     F-3
<PAGE>

<TABLE>
<CAPTION>
                       BATTLE MOUNTAIN GOLD EXPLORATION CORPORATION
                           (A COMPANY IN THE EXPLORATION STAGE)
                                  STATEMENTS OF OPERATIONS
                                  ------------------------

                                                             FOR THE YEAR ENDED
                                                         RESTATED
                                                         DECEMBER 31,   DECEMBER 31,  INCEPTION
                                                            2005           2004        TO DATE
                                                       --------------  ------------  ------------
<S>                                                         <C>            <C>           <C>
REVENUE                                                $           -   $         -   $         -
-------

EXPENSES
--------

Depreciation                                                    (198)         (186)         (384)
Professional and consulting (restated)                    (1,245,706)     (202,643)   (1,448,349)
Travel and entertainment                                     (36,464)      (27,772)      (64,236)
Rent and office                                              (32,694)      (17,653)      (50,347)
General and administrative                                   (88,866)      (32,686)     (121,552)
                                                       --------------  ------------  ------------

     Total operating expenses                             (1,403,928)     (280,940)   (1,684,868)

Loss from operations                                      (1,403,928)     (280,940)   (1,684,868)
                                                       --------------  ------------  ------------

OTHER INCOME (EXPENSE)
----------------------

Interest expense                                                   -          (448)         (448)
Financing costs                                             (379,912)                   (379,912)
Unrealized loss                                                    -       (24,200)      (24,200)
Loss on sale of investments                                  (10,082)      (13,796)      (23,878)
Other income                                                       -           181           181
                                                       --------------  ------------  ------------

     Total other expense                                    (389,994)      (38,263)     (428,257)
                                                       --------------  ------------  ------------

        Loss before income taxes                          (1,793,922)     (319,203)   (2,113,125)

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

     Net loss                                          $  (1,793,922)  $  (319,203)  $(2,113,125)
                                                       ==============  ============  ============

Loss per share - basic and diluted                     $       (0.04)  $     (0.02)  $     (0.07)
                                                       ==============  ============  ============

Weighted average shares outstanding -
basic and diluted                                         41,530,000    19,391,667    30,460,833
                                                       ==============  ============  ============

                                                                 PRO FORMA INCOME DATA

Net loss as reported (restated)                           (1,793,922)     (319,203)   (2,113,125)
Effect of error not corrected (net of tax)                   913,776             -       913,776
                                                       --------------  ------------  ------------

Pro forma net loss previously reported                 $    (880,146)     (319,203)   (1,199,349)
                                                       ==============  ============  ============

Pro forma loss per share: basic and diluted            $       (0.02)  $     (0.02)  $     (0.04)
                                                       ==============  ============  ============

Weighted average shares outstanding -
basic and diluted                                         41,530,000    19,391,667    30,460,833
                                                       ==============  ============  ============
</TABLE>

    The Accompanying Notes are an Integral Part of the Financial Statements

                                     F-4
<PAGE>

<TABLE>
<CAPTION>
                       BATTLE MOUNTAIN GOLD EXPLORATION CORPORATION
                           (A COMPANY IN THE EXPLORATION STAGE)
                                  STATEMENTS OF CASH FLOWS
                                  ------------------------

                                                               YEAR ENDED
                                                                DECEMBER 31         INCEPTION
                                                           2005                      TO DATE
                                                         (RESTATED)      2004      ------------
                                                        ------------
<S>                                                         <C>           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
Net loss                                                $(1,793,922)  $ (319,203)  $(2,113,125)
Adjustments to reconcile net loss to cash used
  in operating activities:

  Depreciation                                                  198          186           384
  Non-cash compensation (restated)                          913,776                    913,776
  Issuance of stock warrants                                379,912            -       379,912
  Unrealized loss on investments                                  -       24,200        24,200
  Loss on sale of investments                                10,082       13,796        23,878
  (Increase) in deposits                                          -         (295)         (295)
  (Increase) in prepaid rent                                 (1,188)                    (1,188)
  Increase in related party payable                          41,632       75,696       117,328
  Increase in accounts payable                               17,448       11,756        29,204
                                                        ------------  -----------  ------------

     Net cash used in operating activities                 (432,062)    (193,864)     (625,926)

CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
  Purchase of property and equipment                           (264)      (2,524)       (2,788)
  Purchase of short term investments                              -     (114,000)     (114,000)
  Proceeds from sale of short term investments               25,718       40,203        65,921
  Investment in mining properties                          (734,901)    (425,000)   (1,159,901)
                                                        ------------  -----------  ------------

     Net cash used in investing activities                 (709,447)    (501,321)   (1,210,768)

CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
  Proceeds from issuance of related party notes payable           -       50,000        50,000
  Principal payments on related party notes payable        (150,000)           -      (150,000)
  Proceeds from short term notes                                  -      150,000       150,000
  Proceeds from issuance of common stock                    835,000    1,198,308     2,033,308
                                                        ------------  -----------  ------------

     Net cash provided by financing activities              685,000    1,398,308     2,083,308
                                                        ------------  -----------  ------------

Net increase (decrease) in cash and cash equivalents       (456,509)     703,123       246,614

Cash and cash equivalents at beginning of period            703,123            -             -
                                                        ------------  -----------  ------------

Cash and cash equivalents at end of period              $   246,614   $  703,123   $   246,614
                                                        ============  ===========  ============
</TABLE>

SUPPLEMENTAL INFORMATION AND NON CASH TRANSACTIONS
--------------------------------------------------
During the year ended December 31, 2005 the Company paid no interest.  In 2004
the Company paid $448 in interest.

The Company paid no income taxes during the year ended December 31, 2005, and
2004.

    The Accompanying Notes are an Integral Part of the Financial Statements

                                     F-5
<PAGE>

<TABLE>
<CAPTION>
                                           BATTLE MOUNTAIN GOLD EXPLORATION CORPORATION
                                               (A COMPANY IN THE EXPLORATION STAGE)
                                          STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                          --------------------------------------------
                                             FOR THE YEAR ENDED DECEMBER 31, 2005


                                                                                ADDITIONAL                   STOCK
                                         PREFERRED STOCK      COMMON STOCK       PAID-IN     ACCUMULATED  SUBSCRIPTIONS    TOTAL
                                         SHARES  AMOUNT     SHARES    AMOUNT     CAPITAL      DEFICIT      RECEIVABLE      EQUITY
                                         ------------------------------------------------------------------------------------------
<S>                                       <C>      <C>       <C>        <C>        <C>          <C>           <C>           <C>
Balance, inception                            -  $     -           -  $     -  $        -   $         -   $         -    $        -

January 2004 shares issued for cash
  at $0.02 per share                                       7,000,000    7,000     115,000                                   122,000

May 2004 shares issued for cash
  at $0.08 per share                                       4,640,000    4,640     353,360                                   358,000

September 2004 reverse merger
  adjustment                                              26,870,000   26,870     (83,562)                                  (56,692)

October 2004 shares issued for cash
  at $0.47                                                   900,000      900     424,100                                   425,000

November 2004 shares issued for cash
  at $0.50 per share                                         700,000      700     349,300                                   350,000

Net loss for the year
ended December 31, 2004                                                                        (319,203)                   (319,203)
                                         ------------------------------------------------------------------------------------------

Balance December 31, 2004                     -  $     -  40,110,000  $40,110  $1,158,198   $  (319,203)  $         -    $  879,105
                                         ==========================================================================================

January 2005 shares issued for cash
  at $0.50 per share                                         920,000      920     459,080                                   460,000

September 2005 issued shares for cash
  at $0.25 per share with attached
  warrants exercisable at $0.25 per share                  1,500,000    1,500     753,412                     (90,670)      664,242

Stock subscription received                                                                                    90,670        90,670

Net loss for the year
ended December 31, 2005                                                                        (880,146)                  (880,146)
                                         ------------------------------------------------------------------------------------------

Balance December 31, 2005 (as previously
    reported)                                 -  $     -  42,530,000  $42,530  $2,370,690   $(1,199,349)  $         -    $1,213,871
                                         ==========================================================================================

Net loss as previously reported                                                                (880,146)
Issuance of stock options in April, 2005                                          839,065      (839,065)                          -
Issuance of stock options in December, 2005                                        74,711       (74,711)                          -
                                         ------------------------------------------------------------------------------------------

Net loss (restated)                                                                          (1,793,922)                          -
                                         ------------------------------------------------------------------------------------------

Balance December 31, 2005 (restated)             $     -  42,530,000  $42,530  $3,284,466   $(2,113,125)  $         -    $1,213,871
                                         ==========================================================================================
</TABLE>

    The Accompanying Notes are an Integral Part of the Financial Statements

                                     F-6
<PAGE>

1.     ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
       ------------------------------------------------

BUSINESS
--------

     The Company is considered an exploration stage company in 2005, as defined
by Statement of Financial Accounting Standards (SFAS) No. 7 due to the Company's
primary focus of continuing to acquire and explore mining properties in the
State of Nevada. The Company has not yet realized any revenues from its planned
operations.

     The Company was incorporated under the laws of the State of Nevada on
January 7, 2004 to promote and carry on any lawful business for which a
corporation may be incorporated under the laws of the State of Nevada.

     On April 15, 2004, the Company reorganized as follows: i) changed its name
to Battle Mountain Gold Exploration Corp.; ii) affected a 10:1 forward stock
split; iii) increased its authorized shares to two hundred million (200,000,000)
shares of common stock; iv)reauthorized the par value of $0.001 per share of
common stock; v)reauthorized ten million (10,000,000) shares of preferred stock;
and vi) reauthorized the par value of $0.001 per shares of preferred stock. All
references in the accompanying financial statements to the number of common
shares and per-share amounts have been restated to reflect the forward stock
split.

USE  OF  ESTIMATES  IN  THE  PREPARATION  OF  FINANCIAL  STATEMENTS
-------------------------------------------------------------------

     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
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The markets
for the Company's products and services are characterized by competition, rapid
technological development, regulatory changes, and new product introductions,
all of which may impact the future value of the Company's assets.

CASH  AND  CASH  EQUIVALENTS
----------------------------

     For the purpose of the statements of cash flows, all highly liquid
investments with maturities of three months or less are considered to be cash
equivalents. There were no cash equivalents as of December 31, 2005. From time
to time the Company maintains amounts on deposit with financial institutions
which exceed federally insured limits. The Company has not experienced any
significant losses in such accounts, nor does management believe it is exposed
to any significant credit risk.

                                     F-7
<PAGE>

FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------

     The carrying amount of financial instruments held by the Company, which
include cash and cash equivalents, accounts receivable, accounts payable and
accrued liabilities, approximate fair value due to their short duration. The
carrying amount of the Company's notes payable approximate their fair value
based on incremental borrowing rates for similar types of borrowing
arrangements.

     MARKETABLE  SECURITIES
     ----------------------

     Pursuant to SFAS No. 115 "Accounting for Certain Investments in Debt and
Equity Securities" management determines the appropriate classification of
investment securities at the time they are acquired and evaluates the
appropriateness of such classification at each balance sheet date.

     The Company did not hold any investments in marketable securities as of
December 31, 2005.

PROPERTY  AND  EQUIPMENT
------------------------

     Property and equipment are recorded at cost, less accumulated depreciation.
In accordance with SFAS No. 144 "Accounting for Long-Lived Assets", the Company
reviews its long-lived assets for impairment. Whenever events or changes in
circumstances indicate that the carrying amount of the assets might not be
recovered through undiscounted future cash flows, such losses are recognized in
the statement of operations.

     The cost of property, plant, and equipment is depreciated over the
remaining estimated useful lives of the assets ranging from 3 to 5 years.
Depreciation is computed using the straight line method for both financial
reporting and income tax purposes. Expenditures for maintenance and repairs are
expensed when incurred, while betterments are capitalized. Gains and losses on
the sale of property and equipment are reflected in the statement of operations.

EXPLORATION  COSTS
------------------

     Exploration costs are charged against earnings as incurred. Significant
costs related to property acquisitions from joint venture agreements, including
allocations for undeveloped mineral interests, are capitalized until the
viability of the mineral interest is determined. Capitalized amounts may be
written down if future cash flows, including potential sales proceeds, related
to the property are projected to be less than the carrying value of the
property. If no mineable ore body is discovered, capitalized acquisition costs
are expensed in the period in which it is determined that the mineral property
has no future economic value.

                                     F-8
<PAGE>

INCOME  TAXES
-------------

     The Company provides for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109 "Accounting for Income Taxes".
SFAS No. 109 requires an asset and liability based approach in accounting for
income taxes.

     Deferred income tax assets and liabilities are recorded to reflect the tax
consequences in future years of temporary differences between revenue and
expense items for financial statement and income tax purposes. Valuation
allowances are provided against assets that are not likely to be realized.
Deferred tax assets and liabilities are measured using the enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

LOSS  PER  SHARE
----------------

     The computation of basic and diluted earnings per common share is based on
the weighted average number of shares outstanding during the year, plus the
common stock equivalents. Common stock equivalents are not included in the
diluted loss per share calculation when their effect is antidilutive.

REVENUE  RECOGNITION
--------------------

     In 2000 the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements." Pursuant to SAB No. 101 and the relevant generally accepted
accounting principles, the Company will recognize revenue upon the passage of
title, ownership and the risk of loss to the customer. The Company had no
revenue for the periods ended December 31, 2005 and 2004.

STOCK-BASED  COMPENSATION
-------------------------

     The Company has adopted the fair value recognition provisions of SFAS 123,
Accounting for Stock-Based Compensation. Under the fair value recognition
provisions of SFAS 123, stock-based compensation cost is measured at the grant
date based on the value of the award and is recognized as expense over the
vesting period.

                                     F-9
<PAGE>

     The estimated fair value of employee stock options was calculated using a
lattice pricing model. Option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options may have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models may not provide a reliable single measure of the
fair value of the Company's employee stock options.

     All options currently outstanding are fully vested with the related expense
classified as professional and consulting.

RECLASSIFICATIONS
-----------------

     Certain prior year amounts have been reclassified to conform to the current
year presentation. These reclassifications did not have an impact on previously
reported financial position, cash flows, or results of operations.

NEW  ACCOUNTING  PRONOUNCEMENTS
-------------------------------

     In April 2003 the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards ("SFAS") 149 "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities." This statement,
which amends and clarifies existing accounting pronouncements, addresses
financial accounting and reporting for derivative or other hybrid instruments.
This Statement requires that contracts with comparable characteristics be
accounted for similarly. It is effective for contracts entered into or modified
after September 30, 2003. The adoption of SFAS 149 did not have any impact on
the financial statements for the periods presented; however, the Company may
employ hedging activities in its future operations that may have a material
effect on its financial position, results of operations, or cash flows.

     In May 2003 the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity," which is
effective at the beginning of the first interim period beginning after March 15,
2003. This statement establishes standards for the Company's classification of
liabilities in the financial statements that have characteristics of both
liabilities and equity. The Company believes the adoption of SFAS 150 will have
no effect on the Company's financial position or results of operations.

     In December 2004 the FASB issued SFAS No. 123 (revised 2004, or "R"),
"Share-Based Payment - a revision of FASB Statement No. 123 Accounting for

                                      F-10
<PAGE>

Stock-Based Compensation". Statement No. 123 supersedes Accounting Principles
Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees", and
amends SFAS No. 95, "Statement of Cash Flows". Statement No. 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the income statement based on their fair values. Pro forma
disclosure is no longer an alternative. The new standard will be effective for
the Company's first quarter ended March 31, 2006.

     In December 2004 the FASB issued SFAS No. 153 "Exchanges of Nonmonetary
Assets - an Amendment of APB Opinion No. 29". Opinion No. 29 is based on the
principle that exchanges of nonmonetary assets should be based on the fair value
of the assets exchanged, with certain exceptions. Statement No. 153 eliminates
the exception for nonmonetary exchanges of similar productive assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial substance; where an exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. The statement is effective for fiscal periods beginning after
January 1, 2006 (transactions occurring in fiscal periods beginning after June
15, 2005). The Company currently does not expect the standard to have a material
effect on its future financial position, results of operations or cash flows.

     In March of 2005 the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 04-6, "Accounting for Stripping Costs Incurred during
Production in the Mining Industry." In the mining industry, companies may be
required to remove overburden and other mine waste materials to access mineral
deposits. The costs of removing overburden and waste materials are referred to
as "stripping costs." The EITF reached a consensus that stripping costs incurred
during the construction phase of a mine are variable production costs that
should be included in the costs of the inventory produced during the period that
the stripping costs are incurred. The new treatment will be effective for fiscal
years beginning after December 15, 2005. Adoption of the standard may have an
impact on the Company's future results of operations, the amount of which
management is unable to determine at this time.

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections". This Statement replaces APB Opinion No. 20 and SFAS No. 3. APB
Opinion No. 20 previously required that most voluntary changes in accounting
principle be recognized by including the cumulative effect of changing to the
new accounting principle in net income of the period of the change. SFAS No. 154
requires retrospective application to prior periods' financial statements of
changes in accounting principle, unless it is impracticable to determine either
the period-specific effects or the cumulative effect of the change. When it is
impracticable to determine the period-specific effects of an accounting change
on one or more individual prior periods presented, this Statement requires that
the new accounting principle be applied to the balances of assets and
liabilities as of the beginning of the earliest period for which retrospective
application is practicable and that a corresponding adjustment be made to the

                                      F-11
<PAGE>

opening balance of retained earnings for that period, rather than being reported
in an income statement. The new standard will be effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005. The Company believes the adoption of new standard will not have a
material effect on its financial position, results of operations, cash flows, or
previously issued financial reports.


2.     RESTATEMENT OFFINANCIAL STATEMENTS
       ----------------------------------

     During 2006 the Company determined that it should have recognized
compensation expense related to the issuance of stock options in the amount of
$913,776 for the year ended December 31, 2005 related to the Company's adoption
of SFAS No. 123 at its inception. The Company erroneously accounted for these
option issuances in 2005 under APB Opinion No. 25 in its previously issued
financial statements. As a result, the Company has restated it's previously
issued financial statements for the year ended December 31, 2005. The Company
previously reported a net loss of $880,146, or $(0.02) per share for the year
ended December 31, 2005. The restatement resulted in the Company reporting a net
loss of $1,793,922, or $(0.04) per share for the year ended December 31, 2005.


3.     PROPERTY  AND  EQUIPMENT
       ------------------------

     The following is a summary of property, plant, and equipment - at cost,
less accumulated depreciation and the estimated useful lives:

<TABLE>
<CAPTION>
                                  2005     2004
                                 -------  -------
<S>                              <C>      <C>
Equipment                        $  646   $  382
Office furniture                  2,142    2,142
                                 -------  -------
Total, at cost                    2,788    2,524
Less:  accumulated depreciation    (384)    (186)
                                 -------  -------
Total                            $2,404   $2,338
                                 =======  =======
</TABLE>

     Depreciation expense for the twelve months ended December 31, 2005 and 2004
was $198 and $186, respectively.

                                      F-12
<PAGE>

4.     INVESTMENT  IN  JOINT  VENTURE
       ------------------------------

     The Company has a joint venture agreement with Nevada Gold Exploration
Solutions LLC ("NGXS"), a related party; that formed Pediment Gold LLC
(Pediment) to engage in gold exploration in Nevada using a proprietary water
chemistry database developed by NGXS. Pediment's operations have been focused in
two areas known as the Fletcher Junction Project Area located in Mineral County,
Nevada and the Hot Pots Project Area located in Humboldt County, Nevada.
Included in the Hot Pots Project Area are approximately 2,225 acres that
Pediment leases on a ten year basis that began in September 2004. Pediment also
has a cancelable binding letter agreement with Placer Dome U.S. Inc. for
exploration and future development for a three year period that began in October
2004 related to the Hot Pots Project Area.

     The Company's joint venture investment in Pediment at December 31, 2005 and
2004 is as follows:

<TABLE>
<CAPTION>
                                     2005       2004
                                  ----------  --------
<S>                                  <C>         <C>
BALANCE, BEGINNING OF THE PERIOD  $  425,000  $      -
  Additions                          734,901   425,000
BALANCE, END OF THE PERIOD        $1,159,901  $425,000
</TABLE>

     At December 31, 2005 and 2004 the Company's management determined that
capitalized amounts related to the investment are fairly reflected based on its
expected future cash flows. If no mineable ore body is discovered, capitalized
acquisition costs are expensed in the period in which it is determined that the
mineral property has no future economic value.

     Pediment paid $55,894 in non-reimbursable operating expenses on behalf of
the Company for the year ended December 31, 2005, and are included in the
appropriate statement of operations classifications. For the year ended December
31, 2004 no Company expenses were paid by Pediment.

5.     MARKETABLE  SECURITIES
       ----------------------

     From time to time the Company invests in marketable securities. Pursuant to
SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities"
management determines the appropriate classification of investment securities at
the time they are acquired and evaluates the appropriateness of such
classification at each balance sheet date.

     During the twelve months ended December 31, 2005 the Company sold all of
its marketable securities, classified as available for sale, resulting in a loss
of $10,082.

6.     RELATED PARTY TRANSACTIONS
       --------------------------

     The Company pays its Chairman and Chief Executive Officer, Mark Kucher,
under an employment contract. Per the terms of the contract, for the years

                                      F-13
<PAGE>

ending December 31, 2005 and 2004, payments accrued at $7,500 per month. Mr.
Kucher also pays certain operating expenses of the Company personally, and
receives periodic reimbursements when the Company's operating capital is deemed
sufficient. At December 31, 2005 the outstanding payable due to Mr. Kucher
related to the employment contract and reimbursable expenses was $167,328.

     During the year ended December 31, 2005 the Company paid off the $50,000
promissory note to Mark Kucher, originally issued November 10, 2004.

     The Company paid its previous President and Chief Executive Officer, and
current Vice President of Corporate Development, James McKay under an employment
contract. Under the terms of the agreement, Mr. McKay received payments of
$7,500 per month through March 31, 2005. Effective April 1, 2005 the Company
entered into an agreement with its joint venture, Pediment Gold, for Pediment to
pay the monthly salary of Mr. McKay at a rate of $7,500 per month.

     The Company's joint venture, Pediment, paid $55,894 in non-reimbursable
operating expenses on behalf of the Company for the year ended December 31,
2005.

7.     OPERATING LEASE
       ---------------

     The Company leases office space in Reno, Nevada on an annual basis that
expires April 30, 2006. The lease calls for monthly payments of $960 per month
inclusive of $110 for telephone and internet service. Additional monthly
incidental expenses are charged when incurred.

     The Company leases office space in Vancouver, British Columbia on an annual
basis that expires on August 31, 2006. The lease calls for flat monthly payments
of $1,320.

     The remaining commitment on the leases at December 31, 2005 was $14,400.
Rent expense for the year ended December 31, 2005 and 2004 was $18,528 and
$10,440 respectively.

8.     COMMITMENTS AND CONTINGENCIES
       -----------------------------

     On September 29, 2005 the Company entered into a letter of offer with
Macquarie Bank Limited to obtain a 17,000 ounce gold loan facility in which the
Company agreed to make quarterly deliveries of gold to Macquarie bank totaling
20,800 ounces within 3 years of the date of execution of the final agreement.

                                      F-14
<PAGE>

     The Company entered into a share purchase agreement on November 28, 2005
with IAMGold corporation to purchase the royalty assets of two newly formed
Companies; Newco Canada, a company incorporated in the Province of Alberta,
Canada; and Newco Barbados, a company incorporated under the laws of Barbados.
The total consideration for the purchase of the assets is $21,850,000 of which
$15,850,000 is required to be delivered in cash. The Company will issue the
appropriate number of shares based on the market value of the shares on the date
of closing for the remaining $6,000,000. The completion of the share purchase is
set to take place in the first quarter of 2006.

     The following table sets forth the royalty assets the Company will receive
upon completion of the share purchase agreement (as a percentage of net smelter
royalties):

<TABLE>
<CAPTION>
                                           ROYALTY %
                                           ---------
<S>                                          <C>
HELD BY NEWCO CANADA:
---------------------
Williams Mine; Ontario, Canada                 0.72%
-----------------------------------------  ---------
Joe Mann Mine; Quebec, Canada                  1.00%
-----------------------------------------  ---------
El Limon Mine, Nicaragua                       3.00%
-----------------------------------------  ---------
Night Hawk Lake Property; Ontario, Canada      2.50%
-----------------------------------------  ---------
Seguenega Property, Burkina Faso               3.00%
-----------------------------------------  ---------

HELD BY NEWCO BARBADOS:
-----------------------
Don Mario Mine; Bolivia                        3.00%
-----------------------------------------  ---------
Dolores Deposit; Mexico                        1.25%
-----------------------------------------  ---------
Lluvio de Oro Mine; Mexico                     2.00%
-----------------------------------------  ---------
Marmato Property; Columbia                     5.00%
-----------------------------------------  ---------
Relief Canyon Mine; Nevada                     4.00%
-----------------------------------------  ---------
Vueltas del Rio Mine; Honduras                 2.00%
-----------------------------------------  ---------
</TABLE>

     On November 26, 2005 the Company entered into a letter of intent with
Nevada Gold Exploration Solutions to acquire a 100% interest in its joint
venture, Pediment Gold, LLC. The agreement is contingent upon the completion of
the purchase of Newco Canada and Newco Barbados royalty assets. In accordance
with the terms of the agreement the Company agreed to invest an additional
$150,000 in Pediment to fund the current field reconnaissance program.
Additionally, the Company agreed to deliver 3,000,000 shares of its common stock
to escrow by January 31, 2006 to be distributed to the owners of Nevada Gold
Exploration Solutions upon the completion of the Pediment Gold LLC acquisition.

9.     CAPITAL STOCK
       -------------

     In September 2005, 1,500,000 common shares of Company stock were issued at
$0.25 per share for cash of $375,000. Each share comes with a share purchase

                                      F-15
<PAGE>

warrant, exercisable at $0.25 for a period of two years. The estimated fair
market value of the attached warrants resulted in the Company recognizing
financing costs of $379,912 using a lattice pricing model.

     In January 2005, 920,000 common shares of Company stock were issued at
$0.50 per share for cash totaling $460,000.

     In November 2004, the Company sold an aggregate of 450,000 shares of common
stock to four (4) individual investors for an aggregate of $450,000 (or $1.00
per share). In February 2005, the Company changed the terms of the sale to
provide for 900,000 shares for an aggregate of $450,004 (or approximately $0.50
per share). In April 2005, the Company agreed to accept $100,000 less of an
investment from one of the investors. As a result of these changes in the
original terms of the sale, the Company received $350,004 for an aggregate of
700,000 shares.

     In October 2004, the Company issued 900,000 shares of common stock for cash
at $.47 per share totaling $425,000.

     In May 2004, the Company issued 4,640,000 shares of common stock for cash
at $.08 per share totaling $358,000.

     In January 2004, the Company issued 7,000,000 shares of common stock to
initial investors at $.02 per share totaling $122,000.

10.     WARRANTS
        --------

     Warrants were issued in conjunction with the issuance of common stock. To
estimate costs related to the issuance of warrants, we have used a lattice
pricing model using a life equal to the maximum contractual life. The warrants
expire on various dates during September 2007.

     The estimated fair value of warrants, using a lattice pricing model is
based on the following assumptions.

<TABLE>
<CAPTION>
                                    2005   2004
                                   ------  ----
<S>                                <C>     <C>
Expected Dividend yield            $ -0-   n/a
Expected stock price volatility       72%  n/a
Risk free interest rate             4.00%  n/a
Expected life of warrants (years)   1.75   n/a
</TABLE>

                                      F-16
<PAGE>

     At December 31, 2005 the fair value of these warrants was estimated to be
$379,912 and was included in additional paid in capital. The Company recognized
the costs of these warrants as financing costs, which is a component of other
expense.

     The following table illustrates the warrant activity as of December 31,
2005 and 2004:

<TABLE>
<CAPTION>
                                         2005              2004
                                             WEIGHTED           WEIGHTED
                                              AVERAGE           AVERAGE
                                             EXERCISE           EXERCISE
                                    WARRANTS   PRICE   WARRANTS  PRICE
                                    -----------------------------------
<S>                                   <C>       <C>     <C>       <C>
Outstanding, beginning of the year          -  $    -         -  $    -
                                    -----------------------------------
Issued                              1,500,000    0.25         -       -
Exercised                                   -       -         -       -
Expired                                     -       -         -       -
Outstanding, end of the period      1,500,000  $ 0.25         -  $    -
                                    -----------------------------------
Currently exercisable               1,500,000  $ 0.25         -  $    -
                                    ===================================
</TABLE>

     Stock warrants outstanding and exercisable as of December 31, 2005 are as
follows:

<TABLE>
<CAPTION>
                        Weighted     Average       Number of    Weighted
Range of    Number of    Average    Remaining      Warrants      Average
Exercise    Warrants    Exercise   Contractual      Vested      Exercise
Price      Outstanding    Price    Life (Years)  (Exercisable)    Price
-------------------------------------------------------------------------
<S>        <C>          <C>        <C>           <C>            <C>
0.25        1,500,000  $    0.25          1.75      1,500,000  $    0.25
-------------------------------------------------------------------------
</TABLE>

11.     STOCK OPTION PLAN
        -----------------

     The Company adopted the 2004-2005 Non-Qualified Stock Option Plan. The Plan
allows the Company to grant options for a maximum of 3,500,000 shares of common
stock. The Plan is effective for ten years.

     During April 2005 the Company's board of directors amended the terms of the
Plan. The exercise price of all previously granted options was reduced from
$0.99 to $0.40 and the vesting date was changed from May 31, 2005 to April 15,
2005. As part of the amendment, the previously issued options at $0.99 were
treated as cancelled and reissued at $0.40 in April, 2005. The amendment of the
Plan resulted in the Company recognizing an additional $280,000 of stock-based
compensation.

                                      F-17
<PAGE>

     The vesting date for all options granted under the Plan, as amended, was
April 15, 2005.

     The following table summarizes the activity of the Plan for the years ended
December 31, 2005 and 2004:

<TABLE>
<CAPTION>
                                  2005                          2004
                        ----------------------------  --------------------------
                                        Weighted                     Weighted
                                         Average                     Average
                          Shares     Exercise Price    Shares    Exercise Price
<S>                         <C>           <C>            <C>            <C>
Outstanding, beginning   1,000,000   $          0.40          -  $             -
                        -----------  ---------------  ---------  ---------------
Options cancelled       (1,000,000)             0.99          -                -
Options exercised                -                 -          -                -
Options forfeited                -              0.40          -                -
Option granted           3,200,000              0.40  1,000,000             0.99
Outstanding, ending      3,200,000   $          0.40  1,000,000  $          0.99
                        -----------  ---------------  ---------  ---------------
</TABLE>

The  fair value of each option granted is estimated at the date of grant using a
lattice  option-pricing  model  with  the  following  assumptions.

<TABLE>
<CAPTION>
                                   2005    2004
                                  ------  ------
<S>                                <C>     <C>
Expected Dividend yield           $ -0-   $ -0-
Expected stock price volatility      72%     60%
Risk free interest rate            4.00%   4.00%
Expected life of options (years)   4.18     .42
</TABLE>

     A summary of the outstanding and exercisable options at December 31, 2005,
is as follows:

<TABLE>
<CAPTION>
                        Weighted     Average       Number of    Weighted
Range of    Number of    Average    Remaining       Options      Average
Exercise     Options    Exercise   Contractual      Vested      Exercise
Price      Outstanding    Price    Life (Years)  (Exercisable)    Price
---------  -----------  ---------  ------------  -------------  ---------
<S>           <C>          <C>        <C>           <C>            <C>
0.40        3,200,000  $    0.40          4.18      3,200,000  $    0.40
---------  -----------  ---------  ------------  -------------  ---------
</TABLE>

     The Company recognized $913,776 of stock based compensation expense for the
period ended December 31, 2005. No stock based compensation expense was
recognized for the period ended December 31, 2004.

                                      F-18
<PAGE>

     As reported, the Company erroneously reported that it had 2,875,000 options
outstanding as of December 31, 2005, wherein it actually had 3,200,000
outstanding. The increased expense associated with the increased option total
has been recorded in our restated financial statements.

12.     INCOME TAXES
        ------------

     The significant components of the Company's deferred tax assets are as
follows:

<TABLE>
<CAPTION>
                                        2005         2004
                                     -----------------------
<S>                                     <C>          <C>
Deferred tax assets:
   Net operating loss carryforwards  $  299,250   $ 108,529
                                     -----------------------
Valuation allowance                   ( 299,250)   (108,529)
Net deferred tax assets              $        -   $       -
                                     =======================
</TABLE>

     For the year ended December 31, 2005, the valuation allowance was increased
by $299,250 due to the uncertainties surrounding the realization of the deferred
tax assets, resulting from the Company's net loss for tax purposes of $880,146
in fiscal 2005 and an accumulated tax deficit of $1,199,349 at December 31,
2005.

     The provision (benefit) for income taxes differs from the provision
(benefit) amount computed by applying the statutory federal tax rate (34%) to
the loss before taxes due to the following:

<TABLE>
<CAPTION>
                                         2005        2004
                                      ----------------------
<S>                                      <C>         <C>
Computed expected benefit             $(299,250)  $(108,529)
Nondeductible expenses                        -           -
Increase in valuation allowance         299,250     108,529
                                      ----------------------
Provision (benefit) for income taxes  $       -   $       -
                                      ======================
</TABLE>

     As of December 31, 2005, the Company had a net operating loss carryforward
for federal income tax purposes of $1,199,349. This net operating loss
carryforward will begin to expire in 2024. The valuation allowance has been
estimated in an amount equal to the projected future benefit of the loss
carryforward due to the current assumption the Company will not generate
sufficient income to utilize the future tax benefit.

                                      F-19
<PAGE>

13.     QUARTERLY  FINANCIAL  INFORMATION  (UNAUDITED)
        ----------------------------------------------

     Summarized unaudited quarterly financial information for the years ended
December 31, 2005 and 2004 are noted below (in thousands, except for per share
amounts):

<TABLE>
<CAPTION>
                                                                       2005
                                        ------------------------------------------------------------------
                                        Dec. 31, 2005    Sep. 30, 2005    Jun. 30, 2005    Mar. 31, 2005
                                        ------------------------------------------------------------------
<S>                                          <C>              <C>              <C>              <C>
Net revenues                            $            -   $            -   $            -   $            -

Gross profit                            $            -   $            -   $            -   $            -

Net loss as restated                    $         (167)  $         (446)  $       (1,009)  $         (172)

Net loss per share - basic and diluted  $        (0.00)  $        (0.01)  $        (0.01)  $        (0.01)
                                        ------------------------------------------------------------------
                                                                        2004
                                        ------------------------------------------------------------------
                                        Dec. 31, 2004    Sep. 30, 2004    Jun. 30, 2004    Mar. 31, 2004
                                        ------------------------------------------------------------------
Net revenues                            $            -   $            -   $            -   $            -

Gross profit                            $            -   $            -   $            -   $            -

Net loss                                $         (155)  $          (67)  $          (36)  $          (61)

Net loss per share - basic and diluted  $        (0.01)  $        (0.00)  $        (0.01)  $        (0.01)
</TABLE>

14.     LOSS  PER  SHARE
        ----------------

     The Company's loss per share of common stock is based on the weighted
average number of common shares outstanding at the financial statement date
consisting of the following:

<TABLE>
<CAPTION>
                                    2005          2004
                                ------------  ------------
<S>                                  <C>           <C>
BASIC LOSS PER SHARE:
       Net loss (as restated)   $(1,793,922)  $  (319,203)
       Shares outstanding        41,530,000    19,391,667
                                ------------  ------------
       Loss per basic share     $     (0.04)  $     (0.02)
                                ============  ============
FULLY DILUTED LOSS PER SHARE:
       Net loss (as restated)   $(1,793,922)  $  (319,203)
       Shares outstanding        41,530,000    19,391,667
                                ------------  ------------
       Loss per basic share     $     (0.04)  $     (0.02)
                                ============  ============
</TABLE>

                                      F-20
<PAGE>

15.     GOING  CONCERN
        --------------

     The report of independent auditors on the Company's December 31, 2005
financial statements includes an explanatory paragraph indicating there is
substantial doubt about the Company's ability to continue as a going concern.
Management has developed a plan to address these issues and allow the Company to
continue as a going concern through at least the end of 2006. This plan includes
sustaining revenues and reducing operating expenses as necessary. Although the
Company believes the plan will be realized, there is no assurance that these
events will occur. In the event the Company is unsuccessful, the Company may
pursue additional debt or equity financing. If the Company is unable or cannot
otherwise raise cash to finance operations, the Company could be forced to
significantly reduce its level of operations. The accompanying financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.

16.     SUBSEQUENT  EVENTS
        ------------------

     On December 8, 2005 the Company's Board of Directors approved an employment
agreement with Mark Kucher, the Company's Chairman and Chief Executive Officer
effective January 1, 2006 for a period of five years. The terms of the agreement
are for Mr. Kucher to receive an annual salary of $250,000 plus benefits. Mr.
Kucher is also entitled to receive annual bonuses based on 2.50% of the
Company's increase in total market capitalization.

                                      F-21
<PAGE>

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

     There were no disagreements or reportable events with accountants on
accounting and financial disclosure. And there were no disagreements or
reportable events with accountants in connection with the Company's change in
accountants from Morgan & Company, Chartered Accountants to Chisholm, Bierwolf &
Nilson, LLC, Certified Public Accountants, which change took effect on January
4, 2005. The Company disclosed the change in accountants on Form 8-K and Form
8-K/A filed with the Commission on January 7, 2005, and January 11, 2005,
respectively.

ITEM 8A.   CONTROLS AND PROCEDURES

     (a) Evaluation of disclosure controls and procedures. Our Chief Executive
Officer and Chief Financial Officer, after evaluating the effectiveness of the
Company's "disclosure controls and procedures" (as defined in the Securities
Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period
covered by this annual report (the "Evaluation Date"), has concluded that, as of
the Evaluation Date, our disclosure controls and procedures are adequately
designed and effective to ensure that material information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the Commission's applicable rules and forms, and such
controls and procedures were effective as of the end of the period covered by
this report. Our Chief Executive Officer and Chief Financial Officer has
concluded that the information required to be disclosed in the reports we file
under the Exchange Act is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, to allow
timely decisions regarding required disclosure.

     (b) Changes in internal control over financial reporting. There were no
changes in our internal control over financial reporting during our
most recent fiscal quarter that materially affected, or were reasonably likely
to materially affect, our internal control over financial reporting.

                                       22
<PAGE>

ITEM 8B.  OTHER INFORMATION

RELATED PARTY TRANSACTIONS

     Wade A. Hodges is a Director of the Company, the beneficial owner of 5.2%
of the Company's stock and owns a forty percent (40%) membership interest in
NGXS. As contemplated by the Joint Venture, Battle Mountain and NGXS formed
Pediment to explore the Nevada great basin physiographic area using a
proprietary water chemistry database developed by NGXS. Mr. Hodges provides
geological services to the Joint Venture on an as-needed consulting basis, and
receives $8,000.00 per month as and when he performs such services, as well as
reimbursement of his actual expenses, and, for each day that he works in the
field, an additional per diem of $125 per day. The Company and NGXS came to the
current terms regarding Mr. Hodges's payment as part of the Amended Operating
Agreement entered into in February 2005. Mr. Hodges received an aggregate of
$40,014.40 for services that he provided to the Joint Venture during the period
covered by this report. In April the Company's Board of Directors granted Mr.
Hodges an option to purchase 300,000 shares of the Company's common stock at an
                             -------
exercise price of $0.40 per share that vested in its entirety on April 15, 2005.

     Kenneth Tullar, the beneficial owner of 5.2% of the Company's common stock,
owns a twenty percent (20%) membership interest in NGXS. Mr. Tullar provides
geological services to the Joint Venture on an as-needed consulting basis, and
receives $8,000.00 per month as and when he performs such services, as well as
reimbursement of his actual expenses, and, for each day that he works in the
field, an additional per diem of $125 per day. The Company and NGXS came to the
current terms regarding Mr. Tullar's payment as part of the Amended Operating
Agreement entered into in February 2004. Mr. Tullar received an aggregate of
$29,730.62 for services that he provided to the Joint Venture during the period
covered by this report. In April the Company's Board of Directors granted Mr.
Tullar an option to purchase 200,000 shares of the Company's common stock at an
exercise price of $0.40 per share that vested in its entirety on April 15, 2005.

     The Company entered into an employment agreement with Mark Kucher pursuant
to which Mr. Kucher serves as the Company's Chief Financial Officer and as a
Director of the Company. Mr. Kucher also serves as President, Secretary and
Treasurer of the Company. The terms of the agreement provide that it is
retroactively effective on January 1, 2004. Mr. Kucher receives a base salary of
$7,500 per month, effective retroactively from January 2004 that is not payable
until the Company is fully vested in Pediment. Mr. Kucher has the option to
receive his salary in shares, at market value, at any time. Mr. Kucher also
receives three weeks of paid vacation. The agreement provides for the grant of
an option to Mr. Kucher to purchase 500,000 shares of the Company's common stock
that vests one year after commencement of Mr. Kucher's employment with the
Company, provided that if the Company terminates Mr. Kucher's employment prior
to such time, the option will automatically vest in its entirety on the date of
termination. On December 15, 2004, in satisfaction of the obligation to grant an
option to Mr. Kucher, the Company's Board of Directors granted Mark Kucher an
option to purchase 500,000 shares of the Company's common stock at an exercise
price of $0.99 per share, which option vested in its entirety on May 31,2005,
provided that if the Company terminates Mr. Kucher's employment prior to May 31,
2005,  the  option will  automatically  vest in its  entirety  on the date of

                                       23
<PAGE>

termination. Although Mr. Kucher's employment commenced on January 1, 2004,
under the terms of the employment agreement, Mr. Kucher agreed to receive the
option with the later vesting date of May 31, 2005.

     In December 2004, the Company granted options to James E. McKay and Mark D.
Kucher pursuant to their employment agreements to purchase 500,000 shares of the
Company's common stock with an exercise price of $0.99 per share and a vesting
date of May 31, 2005. Mr. McKay resigned his positions as an officer and
director, effective March 1, 2006. In April 2005, the Company's board of
directors amended the terms of the options to Mssrs. Kucher and McKay to vest in
their entirety on April 15, 2005, at an amended exercise price of $0.40 per
share. The Company also issued additional options to other Directors in the
aggregate of 1,500,000 shares at an exercise price of $.40 per share, that fully
vested on April 15, 2005. Additionally, on December 8, 2005, Jim McKay, who was
a director, was granted an additional option to acquire 200,000 shares at an
exercise price of $.40 per share, with a vesting date of January 7, 2006.The
Company claims an exemption from registration afforded by Section 4(2) of the
Act since the foregoing grants did not involve a public offering, the recipients
had access to information that would be included in a registration statement,
took the shares for investment and not resale and the Company took appropriate
measures to restrict transfer.

     In April 2005, the Company's board of directors approved the grant of
options to each of its directors to purchase 300,000 shares (or an aggregate of
1,500,000 shares) of the Company's common stock with an exercise price of $0.40
per share and a vesting date of April 15, 2005.

SUBSEQUENT EVENTS

     On February 13, 2006, James E. McKay submitted his resignation as an
officer and director, effective on March 1, 2006.

                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

The Directors and Executive Officers of the Company are as follows:

NAME                   AGE     POSITION                     SINCE
----                   ---     --------                     -----

Mark D. Kucher          46     Chief Financial Officer      April 2004
                               and Director,
                               Chief Executive              March 2006
                               Officer, President,
                               Secretary, Treasurer

Wade A. Hodges          54     Director                     September 2004

Brian M. Labadie        53     Director                     November 2004

Anthony E. W. Crews     54     Director                     November 2004

                                       24
<PAGE>

BIOGRAPHICAL  INFORMATION

     MARK D. KUCHER, has served as a Director of the Company and the Company's
Chief Financial Officer since April 2004, and as Chief Executive Officer,
President, and Secretary since March 2006. From April 2004 to September 2004, he
was also the Company's President, Chief Executive Officer, Secretary and
Treasurer. Mr. Kucher has served as a Director of British Swiss since January
1992, acting on behalf of Swiss pension funds in the disposition of various
resource investments in Canada, predominantly in oil and gas and gold mining
Mark has commercial, business development and corporate finance experience with
an emphasis in the mining industry. Mr. Kucher has also had various positions
with investment banks and brokerage firms. Mr. Kucher holds an MBA from the
University of Western Ontario and a Bachelor of Commerce degree from The
University of Manitoba.

     WADE A. HODGES, has served as a Director of the Company since September
2004. Mr. Hodges has worked as a self-employed Consulting Exploration Geologist
to the gold mining industry since December 1996. Mr. Hodges has twenty-six (26)
years of successful, educational and professional, field-oriented exploration
experience. During the twelve (12) years from 1984 through 1996, Mr. Hodges
worked for Santa Fe Pacific Gold Corporation ("Santa Fe") in a number of
challenging staff and management positions as a valued member of various
national and international exploration and development teams, which were largely
responsible for the resulting growth of Santa Fe. Mr. Hodges holds a Bachelor of
Science degree in Geology and a Master of Science degree in Economic Geology
from Oregon State University. He has also participated in numerous other courses
and seminars directed primarily toward the discovery and development of economic
hydrothermal gold deposits. Mr. Hodges is a member of the Geological Society of
America, the Society for Economic Geologists, the Society for Mining,
Metallurgy, and Exploration, Inc., the Geological Society of Nevada, and the
American Institute of professional Geologists.

     BRIAN M. LABADIE, has served as a Director of the Company since November
2004. Mr. Labadie currently serves as an Officer of Miramar Mining Corporation
("Miramar"), a foreign private issuer engaged in the exploration and development
of gold bearing mineral properties in northern Canada in the Northwest
Territories and Nunavut. Mr. Labadie has worked for Miramar since November 1997.
Mr. Labadie has over thirty years experience in the mining industry including
the last seven years with Miramar. Mr. Labadie is also a Director of Crown
Resources Corporation, a reporting company engaged in precious metals
exploration in the Western United States. Mr. Labadie holds a Bachelor of
Science degree in geological engineering from the University of Toronto.

     ANTHONY E. W. CREWS, has served as a Director of the Company since November
2004. Mr. Crews has owned and served as the Principal of both The Mines Group,
Inc. and Crews Engineering, Inc. since January 1997. Mr. Crews has over
twenty-nine (29) years of experience in Civil, Mining, and Environmental
Engineering. Mr. Crews holds a Bachelors degree in Civil Engineering from The
University of the Witwatersrand. Mr. Crews is a member of the following
organizations: Society of Mining and Metallurgical Engineers, USA; American
Society of Civil Engineers, USA; Aircraft Owners and Pilots Association, USA;
Royal Ocean Racing Club, London, UK; Nevada Mining Association; National Council
of Examiners for Engineering and Surveying. Mr. Crews is a Registered
Professional Engineer in California, Nevada, Arizona and Hawaii.

          There are no family relationships among our executive officers and
     directors.

     The Company is not aware of the occurrence during the last five years of
any events described in Item 401(d) (involvement in certain legal proceedings)
of Regulation S-B under the Securities Act regarding our executive officers and
directors.

                                       25
<PAGE>

     Employment  Agreements
     ---------------------

     Mark D. Kucher and the Company entered into an employment agreement
pursuant to which Mr. Kucher serves as the Company's Chief Financial Officer and
as a Director of the Company. The terms of the agreement provide that it is
retroactively effective on January 1, 2004. Mr. Kucher receives a base salary of
$7,500 per month, effective retroactively from January 2004 that is not payable
until the Company is fully vested in Pediment. Mr. Kucher has the option to
receive his salary in shares, at market value, at any time. Mr. Kucher also
receives three (3) weeks of paid vacation. Pursuant to the employment agreement,
Company's board of directors had also granted Mark Kucher an option to purchase
500,000 shares of the Company's common stock at an exercise price of $0.99 per
share that was to vest in its entirety on May 31, 2005, provided that if the
Company terminated Mr. Kucher's employment prior to May 31, 2005, the option was
to automatically vest in its entirety on the date of termination. In April 2005,
the Company's board of directors amended the terms of Mr. Kucher's option to
vest in its entirety on April 15, 2005, at an amended exercise price of $0.40
per share. Mr. Kucher and the Company may terminate the employment agreement at
will, provided, however, that if the Company terminates the employment agreement
for any reason, or if Mr. Kucher and the Company mutually decide to terminate
the agreement at any time before the third anniversary date of the agreement,
the Company will pay Mr. Kucher a severance at his then current salary through
the third anniversary date upon such termination.

     On December 8, 2005 the Company's Board of Directors approved an employment
agreement with Mark Kucher, the Company's Chairman and Chief Executive Officer
effective January 1, 2006 for a period of five years. The terms of the agreement
are for Mr. Kucher to receive an annual salary of $250,000 plus benefits. Mr.
Kucher is also entitled to receive annual bonuses based on 2.50% of the
Company's increase in total market capitalization.

DIRECTORS' COMPENSATION

     In April 2005, the Company's board of directors approved the grant of
options to each of its directors to purchase 300,000 shares (or an aggregate of
1,500,000 shares) of the Company's common stock with an exercise price of $0.40
per share and a vesting date of April 15, 2005.

TERM OF OFFICE

     The Directors of the Company are appointed for a period of one (1) year or
until such time as their replacements have been elected by the shareholders. The
officers of the Company are appointed by our board of directors and hold office
until they are removed by the Board.

                                       26
<PAGE>

AUDIT COMMITTEE

     The Company does not have a standing audit committee, an audit committee
financial expert, or any committee or person performing a similar function. The
Company currently has an accumulated deficit and no revenues. If the Company is
able to raise sufficient financing in the future, then the Company will likely
form an audit committee and other committees.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Exchange Act, as amended, requires the Company's
directors, executive officers and persons who own more than 10% of a class of
the Company's equity securities which are registered under the Exchange Act to
file with the Commission initial reports of ownership and reports of changes of
ownership of such registered securities. Such executive officers, directors and
greater than 10% beneficial owners are required by Commission regulation to
furnish the Company with copies of all Section 16(a) forms filed by such
reporting persons.

     To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and on representations that no other reports
were required, no person required to file such a report failed to file during
the fiscal year covered by this report. Based on stockholder filings with the
Commission, James E. McKay, Mark D. Kucher, Wade A. Hodges, Brian Labadie, and
Anthony E. W. Crews are subject to Section 16(a) filing requirements.

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, or persons performing similar functions. Persons wishing
to make such a request should contact the Company, at One East Liberty Street,
6th Floor, Reno, Nevada 89504, (775) 686-6081.

ITEM 10.  EXECUTIVE COMPENSATION

     The following table sets forth information concerning the compensation paid
by the Company to: (i) the Chief Executive Officer, and (ii) all persons serving
as the Company's Chief Executive Officer or acting in a similar capacity at any
time during the last completed fiscal year, except for the person serving in
such capacity prior to the Acquisition, which person did not receive any
compensation. The Company did not have any other "Named Executive Officers"
within the meaning of Item 402 of Regulation S-B under the Securities Act.

                                       27
<PAGE>

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

Name and Principal                                            Long Term Compensation
Position                          Annual Compensation(1)
                                                                      Awards
                                                             Restricted   Securities
                                                               Stock      Underlying
                              Year     Salary(2)    Bonus     award(s)  Options/SARs(5)
                                         ($)          ($)       ($)          (#)
<S>                           <C>        <C>          <C>       <C>         <C>
James E. McKay               2005     $90,000(3)      --         --         500,000
CEO, President
Secretary, Treasurer
and Director

Mark D. Kucher               2005     $90,000(4)      --         --         500,000
CFO, Director and former CEO
<FN>
(1)  The  Company  does  not provide any fringe benefits other than vacation pay
     and stock options pursuant to employment agreements with James E. McKay and
     Mark  D. Kucher.
(2)  Represents  yearly  salary  and  is  not  prorated.
(3)  Mr. McKay received $52,500 of cash compensation during 2004 pursuant to his
     employment  agreement  which  became  effective  on  June  1,  2004.
(4)  The Company accrued Mr. Kucher's salary pursuant to an employment agreement
     which  was  entered  into  in  January 2005, but which became retroactively
     effective  on  January  1,  2004.
(5)  Pursuant  to  their  employment  agreements,  Mr. McKay and Mr. Kucher each
     received an option to purchase 500,000 shares of the Company's common stock
     with  an  exercise  price  of $0.99 per share and a vesting date of May 31,
     2005.  In  April  2005,  the  Company  amended  the terms of the options to
     provide  for  an  amended  exercise price of $0.40 per share and an amended
     vesting  date  of  April  15,  2005.  In April 2005, the Company's board of
     directors  approved  the  grant  of options to each of its directors, which
     include  Mr.  McKay  and  Mr.  Kucher,  to  purchase  300,000 shares of the
     Company's  common  stock  with  an  exercise price of $0.40 per share and a
     vesting  date  of  April  15,  2005.
</TABLE>

                                       28
<PAGE>

<TABLE>
<CAPTION>
                      OPTION GRANTS IN LAST FISCAL YEAR(1)
                      ------------------------------------
                               (INDIVIDUAL GRANTS)
                               -------------------

                            Number of      Percent of
                            securities     total options
                            underlying     granted to      Exercise or
                            options        employees in    base price      Expiration
Name                        granted (#)    fiscal year     ($/Sh)          date(2)
-----                       -----------     -----------     -----------     ------------
<S>                             <C>           <C>             <C>              <C>
James E. McKay, CEO          1,000,000             55%     $     0.40      May 31, 2010

Mark D. Kucher, CFO,
and former CEO                 800,000             45%     $     0.40      May 31, 2010
<FN>
(1)  The  Company  did  not  have  any  stock appreciation rights ("SARs") as of
     December  31,  2005.
(2)  The terms of the grant provided for an exercise price of $0.99 per share, a
     vesting  date  of  May  31,  2005,  and an expiration date of May 31, 2010;
     provided that if the option recipient was terminated prior to May 31, 2005,
     the  option  would  automatically vest on the date of termination. In April
     2005, the Company amended the terms of the grant to provide for an exercise
     price  of  $0.40  per  share,  a  vesting  date  of  April 15, 2005, and an
     expiration  date of April 15, 2010. Mr. McKay and Mr. Kucher are allowed to
     exercise  the  options through the date of expiration in the event they are
     terminated  without cause. In the event of other termination of employment,
     the options are cancelled 60 days after date of termination. On December 8,
     2005,  the  Company granted Mr. McKay additional options to acquire 200,000
     shares  on  the  same  terms  and  conditions  as  his  current  options.
</TABLE>

                                       29
<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

     The  following  table  sets  forth  information  as of March 15, 2006, with
respect to the beneficial ownership of the common stock by (i) each director and
officer  of  the  Company,  (ii) all directors and officers as a group and (iii)
each  person  known  by the Company to own beneficially 5% or more of the common
stock:

Name and Address             Shares of Common Stock
of Beneficial Owners          Beneficially Owned(1)
---------------------
                                Number     Percent
                                ------     -------
Mark Kucher                   9,350,000 (2)  22.4%
1725 Knox Road
Vancouver, B.C. V6T 1S4

Wade A. Hodges               2,400,000  (4)   5.8%
14370 Riata Circle
Reno, Nevada 89521

Kenneth Tullar               2,300,000  (5)   5.6%
101 Brownstone Drive
Reno, Nevada 89512

Brian Labadie                  300,000  (6)     *%
24138 Fern Crescent
Maple Ridge, BC, Canada
V4R 2S1

Anthony E. W. Crews            300,000  (7)     *%
1325 Airmotive Way
Suite 175U
Reno, Nevada 89502

All officers and directors   12,350,000 (8)  27.8%
as a group (3 people)

*    Less than 1%.
(1)  The  number  of shares of common stock owned are those "beneficially owned"
     as  determined  under  the rules of the Commission, including any shares of
     common  stock  as to which a person has sole or shared voting or investment
     power  and  any  shares  of  common stock which the person has the right to
     acquire  within  60  days  through  the  exercise of any option, warrant or
     right.  As  of March 15, 2006, there were 42,530,000 shares of common stock
     outstanding.
(2)  Includes  3,160,000, 1,000,000, 1,000,000 and 40,000 shares of common stock
     owned  by  Bug  River,  British  Swiss  Investment Corp. ("British Swiss"),
     Warrior Resources Corp. ("Warrior"), and Mr. Kucher's spouse, respectively.
     Mark  Kucher is a director and shareholder of Bug River, British Swiss, and
     Warrior.  Also  includes  an option to purchase 800,000 shares at $0.40 per
     share  that  vested  on  April  15,  2005.
(3)  Includes  an  option  to  purchase  800,000  shares at $0.40 per share that
     vested  on  April  15,  2005.
(4)  Includes  an  option  to  purchase  300,000  shares at $0.40 per share that
     vested  on  April  15,  2005.
(5)  Includes  an  option  to  purchase  200,000  shares at $0.40 per share that
     vested  on  April  15,  2005.
(6)  Represents  an  option  to  purchase 300,000 shares at $0.40 per share that
     vested  on  April  15,  2005.
(7)  Represents  an  option  to  purchase 300,000 shares at $0.40 per share that
     vested  on  April  15,  2005.
(8)  Includes  options  described  in  footnotes  (2),  (3),  (4),  (6) and (7).

                                       30
<PAGE>

CHANGE IN CONTROL

     We  are  unaware  of  any  arrangement  or  understanding  that  may,  at a
subsequent  date,  result  in  a  change  of  control  of  our  Company.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Wade A. Hodges is a Director of the Company, the beneficial owner of 5.2%
of the Company's stock and owns a forty percent (40%) membership interest in
NGXS. As contemplated by the Joint Venture, Battle Mountain and NGXS formed
Pediment to explore the Nevada great basin physiographic area using a
proprietary water chemistry database developed by NGXS. Mr. Hodges provides
geological services to the Joint Venture on an as-needed consulting basis, and
receives $8,000.00 per month as and when he performs such services, as well as
reimbursement of his actual expenses, and, for each day that he works in the
field, an additional per diem of $125 per day. The Company and NGXS came to the
current terms regarding Mr. Hodges's payment as part of the Amended Operating
Agreement entered into in February 2005. Mr. Hodges received an aggregate of
$40,014.40 for services that he provided to the Joint Venture during the period
covered by this report. In April the Company's Board of Directors granted Mr.
Hodges an option to purchase 200,000 shares of the Company's common stock at an
exercise price of $0.40 per share that vested in its entirety on April 15, 2005.

     Kenneth Tullar, the beneficial owner of 5.2% of the Company's common stock,
owns a twenty percent (20%) membership interest in NGXS. Mr. Tullar provides
geological services to the Joint Venture on an as-needed consulting basis, and
receives $8,000.00 per month as and when he performs such services, as well as
reimbursement of his actual expenses, and, for each day that he works in the
field, an additional per diem of $125 per day. The Company and NGXS came to the
current terms regarding Mr. Tullar's payment as part of the Amended Operating
Agreement entered into in February 2004. Mr. Tullar received an aggregate of
$29,730.62 for services that he provided to the Joint Venture during the period
covered by this report. In April the Company's Board of Directors granted Mr.
Tullar an option to purchase 200,000 shares of the Company's common stock at an
exercise price of $0.40 per share that vested in its entirety on April 15, 2005.

     The Company entered into an employment agreement with Mark Kucher pursuant
to which Mr. Kucher serves as the Company's Chief Financial Officer and as a
Director of the Company. Mr. Kucher also serves as President, Secretary and
Treasurer of the Company. The terms of the agreement provide that it is
retroactively effective on January 1, 2004. Mr. Kucher receives a base salary of
$7,500 per month, effective retroactively from January 2004 that is not payable
until the Company is fully vested in Pediment. Mr. Kucher has the option to
receive his salary in shares, at market value, at any time. Mr. Kucher also
receives three weeks of paid vacation. The agreement provides for the grant of
an option to Mr. Kucher to purchase 800,000 shares of the Company's common stock
that vested April 15, 2005.

                                       31
<PAGE>

     The Company granted options to James E. McKay and Mark D.
Kucher pursuant to their employment agreements to purchase 800,000 shares of the
Company's common stock with an exercise price of $0.99 per share and a vesting
date of May 31, 2005. In April 2005, the Company's board of
directors amended the terms of the options to Mssrs. Kucher and McKay to vest in
their entirety on April 15, 2005, at an amended exercise price of $0.40 per
share. The Company claims an exemption from registration afforded by Section
4(2) of the Act since the foregoing grants did not involve a public offering,
the recipients had access to information that would be included in a
registration statement, took the shares for investment and not resale and the
Company took appropriate measures to restrict transfer.

     In April 2005, the Company's board of directors approved the grant of
options to each of its directors to purchase 300,000 shares (or an aggregate of
1,500,000 shares) of the Company's common stock with an exercise price of $0.40
per share and a vesting date of April 15, 2005.

     On December 8, 2005 the Company's Board of Directors approved an employment
agreement with Mark Kucher, the Company's Chairman and Chief Executive Officer
effective January 1, 2006 for a period of five years. The terms of the agreement
are for Mr. Kucher to receive an annual salary of $250,000 plus benefits. Mr.
Kucher is also entitled to receive annual bonuses based on 2.50% of the
Company's increase in total market capitalization.

     On December 8, 2005, the Company granted Mr. McKay additional options to
acquire 200,000 shares at an exercise price of $.40 per share. The options
vested 30 days from date of grant.

     On February 13, 2006, James E. McKay submitted his resignation as an
officer and director, effective on March 1, 2006.

ITEM 13.  EXHIBITS AND REPORTS

     a)     Exhibits

     Exhibit No.          Description

     3(i)*                 Articles of Incorporation

     3(i)(a)**             Amendment to Articles of Incorporation

     3(ii)*                Bylaws

     10.1***               Exchange Agreement, dated July 6, 2004

     31.1****              Certificate of the Chief Executive Officer pursuant
                           Section 302 of the Sarbanes-Oxley Act of 2002

     31.2****              Certificate of the Chief Financial Officer pursuant
                           Section 302 of the Sarbanes-Oxley Act of 2002

     32.1****              Certificate of the Chief Executive Officer pursuant
                           to Section 906 of the Sarbanes-Oxley Act of 2002

     32.2****              Certificate of the Chief Financial Officer pursuant
                           to Section 906 of the Sarbanes-Oxley Act of 2002

*     Filed as Exhibits 3.1 and 3.2, respectively, to the Company's Form SB-2/A
filed with the Commission on August 29, 2003, and incorporated herein by
reference.

**    Filed as Exhibit 3.1 to the Company's Form 8-K filed with the
Commission on April 29, 2004 (fka Hudson Ventures, Inc.), and incorporated
herein by reference.

***   Filed as Exhibit 10.1 to the Company's Form 8-K filed with the
Commission on November 19, 2004, and incorporated herein by reference.

**** Filed Herein.

     b)     Reports on Form 8-K

     c)     Reports on Form 10-KSB

                                       32
<PAGE>

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

     AUDIT FEES

     The aggregate fees billed for the period from January 1, 2005 to December
31, 2005, for professional services rendered by the principal accountant for
review of financial statements included in our Forms 10-QSB or services that are
normally provided by our principal accountant in connection with statutory and
regulatory filings or engagements for this period was $13,332.50. As of the
filing of this report we had not been billed for audit of our annual financial
statements for the period from January 1, 2005 to December 31, 2005.

AUDIT RELATED FEES

None.

TAX FEES

None.

ALL OTHER FEES

None.

                                       33
<PAGE>

                                   SIGNATURES

    In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   BATTLE  MOUNTAIN  GOLD  EXPLORATION  CORP.

DATE: October 3, 2006                 By: /s/Mark Kucher
                                      -------------------
                                      Mark Kucher
                                      Chief Executive Officer

                                       34

<PAGE>