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UNITED STATES
  SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

xANNUAL REPORT
  PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2003

 ̈TRANSITION REPORT
  UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______ to ______

Commission file number 333-84364

CARLETON VENTURES CORP.(Exact Name of Registrant as Specified in Its Charter)

|NEVADA                          | 98-0365605                          
|------------------------------- | ------------------------------------
|(State or Other Jurisdiction of | (I.R.S. Employer Identification No.)
|Incorporation or Organization)  |                                     

Suite 306 -1140 Homer Street, Vancouver, B.C. V6B 2X6(Address of Principal Executive Offices, Including Postal Code)

(604) 689-1659(Registrants Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

|Title of Each Class | Name of Exchange on Which Registered
|------------------- | ------------------------------------
|None                | None                                

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

Common Stock(Title of Each Class)

Check whether the Issuer (1) filed all reports required to
  be filed by Section 13 or 15(d) of the Securities 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
   ̈

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Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation S-B is not contained in this form, and no disclosure
  will be contained, to the best of 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. x

State issuers revenues for its most recent fiscal year. Nil

State the aggregate market value of the voting and non-voting
  common equity held by non-affiliates computed by reference to the price at which
  the common equity was sold, or the average bid and asked price of such common
  equity, as of a specified date within the past 60 days. (See definition of affiliate
  in Rule 12b-2 of the Exchange Act.)

$1,690,500

State the number of shares outstanding of each of the issuers
  classes of common equity, as of the latest practicable date.

5,640,500

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CARLETON VENTURES CORP.FORM 10-KSB
  TABLE OF CONTENTS

|Item 1.    | DESCRIPTION OF BUSINESS                                                                                              | 4  | 
|---------- | -------------------------------------------------------------------------------------------------------------------- | -- | 
|           |                                                                                                                      |    | 
|Item 2.    | DESCRIPTION OF PROPERTY                                                                                              | 10 | 
|           |                                                                                                                      |    | 
|Item 3.    | LEGAL PROCEEDINGS                                                                                                    | 11 | 
|           |                                                                                                                      |    | 
|Item 4.    | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                  | 11 | 
|           |                                                                                                                      |    | 
|Item 5.    | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                             | 11 | 
|           |                                                                                                                      |    | 
|Item 6.    | MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION                                                      | 13 | 
|           |                                                                                                                      |    | 
|Item 7.    | FINANCIAL STATEMENTS                                                                                                 | 14 | 
|           |                                                                                                                      |    | 
|Item 8.    | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE                           | 24 | 
|           |                                                                                                                      |    | 
|Item 8A    | CONTROLS AND PROCEDURES                                                                                              | 24 | 
|           |                                                                                                                      |    | 
|Item 9.    | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS;COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT | 24 | 
|           |                                                                                                                      |    | 
|Item 10.   | EXECUTIVE COMPENSATION                                                                                               | 26 | 
|           |                                                                                                                      |    | 
|Item 11.   | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT                                                 | 26 | 
|           |                                                                                                                      |    | 
|Item 12.   | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                       | 27 | 
|           |                                                                                                                      |    | 
|Item 13.   | EXHIBITS, AND REPORTS ON FORM 8-K                                                                                    | 29 | 
|           |                                                                                                                      |    | 
|Item 14.   | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                               | 29 | 
|           |                                                                                                                      |    | 
|SIGNATURES | 31                                                                                                                   |   

3

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Item 1.     DESCRIPTION OF BUSINESS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-KSB under Item 1.
  Business, Item 2. Properties, Item 3. Legal Proceedings,
  and Item 7. Managements Discussions and Analysis of Financial Condition
  and Results of Operations and elsewhere constitute forward-looking
  statements within the meaning of the Private Securities Litigation Reform
  Act of 1995 (the Reform Act). Such forward-looking statements involve
  known and unknown risks, uncertainties and other factors which may cause the
  actual results, performance or achievements of Carleton Ventures Corp., a company
  organized under the laws of Nevada (the Company) to be materially
  different from any future results, performance or achievements expressed or
  implied by such forward-looking statements. Such factors include, among others,
  the following: general economic and business conditions; competition; success
  of operating initiatives; the success (or lack thereof) with respect to the
  Companys exploration and development operations on its properties; the
  Companys ability to raise capital and the terms thereof; the acquisition
  of additional properties; changes in business strategy or development plans;
  future rental revenues; exploration and other property write-downs as hereinafter
  defined; the continuity, experience and quality of the Companys management;
  changes in or failure to comply with government regulations or the lack of government
  authorization to continue the Companys projects; and other factors referenced
  in the Form 10-KSB. The use in this Form 10-KSB of such words as believes,
  plans, anticipates, expects, intends,
  and similar expressions are intended to identify forward-looking statements,
  but are not the exclusive means of identifying such statements. The success
  of the Company is dependent on the efforts of the Company, its employees and
  many other factors including, primarily, its ability to raise additional capital
  and establishing the economic viability of any of its exploration properties.

General Information

The Company is an exploration stage company engaged in the
  acquisition, exploration and development of mineral properties. The Company
  has an interest in the properties described below under the heading "Acquisition
  of Mineral Claims" and the Burner Hills Property. The Company intends
  to carry out exploration work on the Burner Hills Property in order to ascertain
  whether the Burner Hills Property possesses commercially developable quantities
  of gold and other precious minerals. There can be no assurance that a commercially
  viable mineral deposit, or reserve, exists on the Burner Hills Property until
  appropriate exploratory work is done and a comprehensive evaluation based on
  such work concludes legal and economic feasibility.

History and Development of the Company

Carleton Ventures Corp. (the Company) purchased
  a 100% interest in fourteen unpatented mineral claims located in Elko County
  in the State of Nevada from Senate Capital Group Inc. in March 2001. Carleton
  paid a purchase price of $10,051.88 and issued 1,500,000 shares of common stock
  to Senate Capital Group in consideration for these mineral claims.

The Burner Hills mineral claims were recorded on November
  19, 2000 by Mr. John A. Rice. The Burner Hills mineral claims were subsequently
  sold to Senate Capital Group, a private company controlled by Mr. Dennis Higgs,
  in December 2000 for a purchase price of $10,051.88. This amount was comprised
  of Mr. Rices costs in acquiring the mineral claims, plus a finders fee
  of $6,000.

Mr. Rice prepared a geological report on the Burner Hills
  mineral claims in December 2000 for Mr. Higgs on behalf of Senate Capital Group.
  This initial geological report summarized the information from previous exploration
  of the mineral claims and recommended exploration procedures on the mineral
  claims.

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Carleton entered into the mineral property purchase agreement
  with Senate Capital Group on March 14, 2001. Under the terms of this agreement,
  Carleton acquired title to the Burner Hills mineral claims and the December
  2000 geological report prepared by Mr. Rice in a non-arms-length transaction.
  Carleton paid to Senate Capital Group the amount of $10,051.88 and issued to
  Senate Capital Group a total of 1,500,000 shares of common stock in consideration
  for this acquisition. The total consideration issued to Senate Capital Group
  was based on the determination of the value of the Burner Hills mineral claims
  as being equal to $25,051.88 as of March 14, 2001. This determination was a
  subjective determination made by the board of directors based on several factors,
  including the cost to acquire the mineral claims, the subjective assessment
  by the board of directors of the results of the December 2000 geological report
  received from Mr. Rice and the subjective assessment by the board of directors
  of the market for prospective gold exploration properties of similar merit in
  the region of the Burner Hills minerals claims. The board of directors did not
  obtain or consider any evaluation of the Burner Hills mineral claims made by
  any arms-length party in making this subjective determination. Accordingly,
  we can give investors no assurance that the value of the Burner Hills mineral
  claims arrived at by the board of directors is representative of the fair market
  value of the Burner Hills mineral claims. The cash consideration of $10,051.88
  paid to Senate Capital Group was based on the cost paid by Senate Capital Group
  to acquire the mineral claims from Mr. Rice. The share consideration issued
  was based on the last sales price of Carletons common stock of $0.01 per
  share, for total share consideration of $15,000.

Geological Report

Carleton received an initial geological evaluation report
  on the Burner Hills mineral claims prepared by Mr. John A. Rice and dated December
  2000. Mr. Rice is a graduate of the Colorado State University and holds a Bachelors
  of Science degree in Geology (1978) and a Masters of Science degree in Economic
  Geology (1984) from the Colorado State University. Mr. Rice is a member of the
  Geological Society of Nevada and the Society of Economic Geologists. Carleton
  received this December 2000 geological report upon the acquisition of the Burner
  Hills mineral claims. Carleton received updated reports from Mr. Rice dated
  August, 2002 outlining the results of Phase I and Phase II, and October, 2003
  incorporating the results of exploration work by Mr. Rice on phase three of
  the geological work program recommended by Mr. Rice.

The purpose of the initial geological report was to summarize
  the information from the previous exploration of the mineral claims and to recommend
  exploration procedures on the mineral claims. The initial geological report
  summarizes the results of the history of the exploration of the mineral claims,
  the regional and local geology of the mineral claims and the mineralization
  and the geological formations identified as a result of the prior exploration.

The Burner Hills Property is situated in northwestern Elko
  County, Nevada, on the northern extension of the Carlin Gold trend and its intersection
  with the northeast striking Getchell Gold trend. The Burner Hills Property is
  located 25 kilometers (16 miles) north-northeast of Midas. It is located in
  section 12 of unsurveyed T41N, R47E. The property is accessed via a two-track
  dirt road from County Road 18, a well maintained gravel road that provides access
  to Midas from either Winnemucca, 136 kilometers (85 miles) to the west, or Elko
  to the east.

History of the Property

The history of the exploration of the mineral claims is summarized
  in the geological report that we obtained from Mr. Rice. The following summary
  of the exploration history of the mineral claims is based on Mr. Rices
  description.

The earliest activity in the district began in the 1880's
  when miners extracted silver-lead ore from the Mint mine. In 1893 mining operations
  ceased and then a period of renewed activity took place in the 1930's and 1940's.
  More recent exploration activity by Placer Dome was conducted in 1987-1988.
  Due to

5

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the discovery of a new deposit in the historic mining district
  of Midas, companies began exploring the area in 1996 and 1997. Anomalous gold
  and silver assays from rock chips collected by the author encouraged Carleton
  Ventures to locate 14 lode mining claims in the district in November 2000.

Geology of the Burner Hills Property

In his geological report Mr. Rice concludes that there are
  three veins that have the potential of hosting economic gold and silver mineralization
  on the Burner Hills mineral claims. Economic mineralization is the presence
  of mineralization on our mineral claims in sufficient quantity and concentration
  and in an accessible location that would justify the commercial extraction of
  these minerals through an operating mine. Economic mineralization would be identified
  by delineation of a body of ore by drilling and/or underground sampling to demonstrate
  that the ore body has a sufficient tonnage and average grade of metals to justify
  commercial extraction.

The quartz veins identified on the Burner Hills mineral claims
  are present within volcanic and sedimentary rocks present on the Burner Hills
  mineral claims. A quartz vein is a body of quartz rock, frequently long and
  narrow, that may contain gold. Quartz veins that host gold, silver and base
  metal mineralization are typical of a low sulfidation, epithermal hot-springs
  gold system. A low sulfidation, epithermal hot-springs gold system is a gold
  deposit formed by hot-springs activity with low sulfur content.

The primary area of exploration interest on the Burner Hills
  mineral claims is the area of the Mint Mine, where historic production of silver
  and lead began in the 1880s. The Mint mine is an abandoned mine located
  on the Burner Hills mineral claims. The Mint mine is located on a quartz vein
  known as the Mint vein. The Mine vein refers to a quartz vein identified on
  the Burner Hills mineral claims. Prospect pits and quartz vein material associated
  with the Mint vein occur on the surface of the Burner Hills mineral claims over
  an extent of 450 meters (approximately 1500 feet). A parallel vein to the south
  of the Mint vein has also been identified on the Burner Hills mineral claims.
  Mineralization occurring at the junctions of the identified veins are primary
  exploration targets because of the possibility of locating high grade gold and
  silver deposits at these structurally prepared intersections.

Mr. Rice notes in his updated report that recent successes
  in Nevada have occurred in old mining districts with drilling below zones of
  historic production. The Burner Hills property has this type of potential, and
  thus, Mr. Rice concludes that it should be thoroughly explored.

Exploration Program

During the 2001 field season Phase I of the planned work on
  the property was completed. This consisted of geologic mapping and rock chip
  sampling. Phase II consisted of a soil orientation grid completed in the summer
  of 2002. A fill-in soil grid to compliment the soil orientation grid was completed
  in August of 2003; this was part of Phase III.

In his geological report dated October, 2003, Mr. Rice recommended
  the completion of an additional two phase geological work program on the Burner
  Hills mineral claims (Phase 1 and Phase II). Phase III of the work program consisted
  of soil geochemistry orientation survey. A soil geochemistry orientation survey
  involves the identification of elements or suite of elements present in soil
  sampled from the mineral claims with the objective of assessing the geology
  of the mineral claims. Carleton proceeded with a portion of this recommended
  third phase of the exploration program during the 2003 field season at a cost
  of $3,170. This work program was completed by Mr. Rice as our consulting geologist
  and included the soil geochemistry survey.

Conclusions and Recommendations of the Phase 1, Phase
  II, and Phase III Reports

Samples collected by Mr. Rice from the Burner Hills mineral
  claims during phase one of Carletons exploration program show that the
  area of the mineral claims is anomalous in gold and highly anomalous

6

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with silver, with the best results in the northeast striking
  veins, the Mint vein and the parallel vein to the south of the Mint vein. Assay
  results from these rock chip samples indicate that a mineralized system containing
  gold and silver is present. An assay is a chemical analysis of a rock sample
  to determine the amounts of metals in the rock sample and to test the rock sample
  for mineral composition, purity and weight. Anomalous concentrations of gold
  and silver are defined as concentrations of gold and silver that are statistically
  significantly greater than the base concentrations of gold and silver that would
  be expected to be found in the bedrock. The best assay results are from the
  Mint vein and the parallel vein identified to the south of the Mint claim. The
  assay results indicating a mineralized system containing gold and silver are
  important as we would not proceed to further stages of exploration on the Burner
  Hills property without assay results indicating mineralization in rock samples
  taken from the surface of the property.

Based on these assay results, Mr. Rice recommended a further
  three phase geological work program. This recommendation was based on the conclusion
  of Mr. Rice that the assay results were indicative of a gold and silver mineralized
  system below the surface of the Burner Hills mineral claims. The second and
  third phases of this exploration program were recommended in order to better
  identify exploration targets. The fourth phase would consist of a modest drilling
  program of a minimum of three holes.

Carleton accepted the recommendations of the phase one updated
  geological report and proceeded to complete the second phase of the recommended
  exploration program in the summer of 2002. Mr. Rice visited the site of the
  mineral claims and completed the gathering of samples for analysis as part of
  this phase of exploration. The second phase included the completion of a detailed
  orientation soil grid. Carleton received the geological report from Mr. John
  Rice summarizing the results of this second phase and giving further conclusions
  and recommendations in August 2002.

In his August 2002 geological report, Mr. Rice concluded that
  the results of the soil survey completed as part of the second phase show that
  there is a recognizable zone of mineralization present on the Burner Hills mineral
  claims. This zone is indicated by anomalous values of gold, silver and arsenic.
  Anomalous values of elements are concentrations that are statistically significantly
  greater than the base concentrations of elements that would be expected to be
  found in the bedrock. Mr. Rice concluded that these anomalies correlate with
  the Mint vein zone. Mr. Rice also concluded that the soil survey agrees with
  the geological map that the Mint vein is a discontinuous geological structure
  that trends from the old workings in the northeast to the southwestern edge
  of the property: a minimum distance of 900 metres (approximately 3000 feet).
  The gold soil map and silver soil map prepared by Mr. Rice as part of his August
  2002 report show that high values of gold and silver are confined to the Mint
  vein structure. Mr. Rice concluded that these results were encouraging and recommended
  proceeding to phase three of the recommended exploration program. Phase three
  involves completion of a soil survey and completion of an induced polarization
  geophysical survey. An induced polarization geophysical survey will involve
  the application of a current into the ground using a pair of electrodes and
  sampling of the results at various locations throughout the mineral claims.
  The results are then plotted on a map in order to map the lateral and vertical
  variations in electrical resistivity and chargeability of the minerals present
  on the claims. These results would then be interpreted by Mr. Rice. The data
  from this work would be used to define targeted locations for the drilling program
  to be completed as part of the fourth phase of exploration. The estimated cost
  of completion of this third phase is $13,000. This estimate includes the costs
  associated with a geologists review of the work conducted and interpretation
  of results.

If the Company proceeds to the fourth phase of the recommended
  exploration program, a modest drilling program consisting of a minimum of three
  drill holes is recommended. The estimated cost of completion of this fourth
  phase is $40,000. This estimate includes the costs associated with a geologists
  review of the work conducted and interpretation of results.

The total cost for these two additional phases of the exploration
  program is thus estimated to be $53,000. Carletons working capital deficit
  position as of December 31, 2003 was $37,629. While the working capital is not
  sufficient to enable us to complete the third and fourth stages of the exploration
  program,

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Carleton has received a commitment from Senate Capital Group,
  a related party, to loan the Company additional funds, to a maximum of $13,000,
  of which $3,000 has been advanced to date. Accordingly, Carleton will require
  additional financing in order to complete the full four stage exploration program.
  Carleton currently does not have any arrangements for additional financing and
  we can provide no assurance to investors that the Company will be able to obtain
  additional financing when required. Obtaining additional financing would be
  subject to a number of factors, including the market prices for silver and gold
  and the costs of mining these materials. These factors may make the timing,
  amount, terms or conditions of additional financing unavailable.

Carleton will make a determination whether to proceed with
  phase four upon completion of phase three and review of the results of this
  third phase. In making this determination, Carleton will assess whether the
  results of phase three are sufficiently positive to enable the Company to obtain
  the financing that will be needed to continue through phase four of the exploration
  program. Any conclusions and recommendations will be based on the professional
  opinion of Mr. Rice based on the results of this phase of exploration. Whether
  these conclusions and recommendations will warrant further investment will be
  based on many factors, including the price of gold, the market for shares of
  junior exploration companies, the market for financing of mineral exploration
  projects and the individual decisions of investors at the time of their evaluation
  of an investment. Given these factors, the Company can give investors no assurance
  as to what recommendations and conclusions arising from the results of phase
  three will be sufficiently positive for Carleton to obtain additional financing
  and proceed with further exploration.

If Carleton determines not to proceed with additional exploration
  on the Burner Hills mineral claims based on the results of phase three, then
  Carleton anticipates pursuing the acquisition of an interest in an additional
  mineral property. Carleton anticipates that any acquisition of an interest in
  an additional mineral property would be made by the acquisition of an option
  to acquire an interest in the mineral property that would be exercisable by
  completing exploration work on the property. Carleton anticipates that the acquisition
  of an option in a mineral property would be the only feasible plan of operations,
  as the Companys financial resources after completion of phase two will
  be insufficient to acquire a full ownership interest in a property of merit.
  There is no assurance that Carleton would be able to acquire an interest in
  any additional mineral property or achieve the additional financing necessary
  to proceed with exploration if an interest in an additional mineral property
  was acquired.

Each phase of the recommended work program would include a
  geological review and interpretation of the results of the phase. The geological
  review and interpretations required in each phase of the exploration program
  would be comprised of reviewing the data acquired and analyzing this data to
  assess the potential mineralization of the mineral claims. Geological review
  entails the geological study of an area to determine the geological characteristics,
  identification of rock types and any obvious indications of mineralization.
  The purpose of undertaking the geological review would be to determine if there
  is sufficient indication of mineralization to warrant additional exploration.
  Positive results at each stage of the exploration program would be required
  to justify continuing with the next phase. Such positive results would include
  the identification of the zones of mineralization.

If Carleton is not able to further proceed with phase four
  of the exploration of the Burner Hills mineral claims due to the inability to
  fund future exploration, then we plan to pursue the acquisition of another mineral
  property. Carleton anticipates that any future acquisition would involve the
  acquisition of an option to earn an interest in a mineral property as Carleton
  anticipates not having sufficient cash to purchase a mineral property of sufficient
  merit to warrant exploration. If Carleton is unable to secure a mineral or natural
  resource property for exploration, then Carleton would pursue the acquisition
  of another business or business asset. There is no assurance that Carleton would
  be able to acquire any interest in any other mineral or natural resource property
  or other business in view of the Companys limited financial resources.
  Further, Carleton anticipates having to secure further financing in order to
  conduct any exploration on any mineral or natural resource property or business
  acquired. There is no assurance that Carleton would be able to secure the required
  financing or that the Company would achieve profitability if financing was completed.

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The following table summarizes the costs of proceeding with
  the geological exploration program recommended by the geological report:

PROPOSED BUDGET: BURNER HILLS

|IP Survey | $US10,000.00 | 
|--------- | ------------ | 

Target definition and to explore for structures beneath volcanic rock cover
  east of the range front.

|TOTAL PHASE III | $US10,000.00 | 
|--------------- | ------------ | 

|PHASE IV - DRILLING                |              | 
|---------------------------------- | ------------ | 
|Preparation                        |              | 
|Permitting                         | $1000.00     | 
|Site prep and reclamation          | $1000.00     | 
|Drilling(2000 feet @ $10 per foot) | $20,000.00   | 
|mob/demob                          | $2,000.00    | 
|Assays(400 @ $15 per sample)       | $2,000.00    | 
|Geologist(7 days @325 per day)     | $2,275.00    | 
|Reporting                          | $1,200.00    | 
|Contingency                        | $6,525.00    | 
|                                   |              | 
|TOTAL PHASE IV                     | $US40,000.00 | 
|                                   |              | 
|TOTAL PHASE III and IV             | $US50,000.00 | 

Certain Risk Factors

Early Stage Exploration Company

The exploration for and development of mineral deposits involves
  significant financial risks over a significant period of time that even a combination
  of careful evaluations, experience and knowledge may not eliminate. While exploration
  for minerals may result in substantial rewards, few properties that are explored
  are ultimately developed into producing mines. Major expenses are required to
  establish reserves by drilling and to construct mining and processing facilities
  at a site. It is impossible to know whether the current exploration programs
  of the Company will ultimately result in a profitable commercial mining operation.

Financial Risk

Prior to completion of the Companys exploration programs,
  the Company anticipates that it will incur increased operating expenses without
  realizing any revenues. The Company expects to incur significant losses into
  the foreseeable future. If the Company is unable to generate significant revenues
  from exploration of its mineral claims and the production of minerals thereon,
  if any, the Company will not be able to earn profits or continue operations.
  There is no history upon which to base any assumption as to the likelihood that
  the Company will prove successful, and the Company can provide investors with
  no assurance that it will generate any operating revenues or ever achieve profitable
  operations.

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Competition

The business of mineral exploration and mining is competitive
  in all of its phases. In the search for and acquisition of prospective mineral
  properties, the Company competes with other companies and individuals, including
  competitors having financial and other resources equal to or greater than that
  of the Company. The Companys ultimate success will therefore depend on
  the extent to which its existing properties are developed, as well as its ability
  to compete for and acquire suitable producing properties or prospects for mineral
  exploration in the future, together with its ability to secure adequate financing.

Compliance With Government Regulations

All phases of the Companys operation are subject to
  environmental regulation. Environmental legislation is evolving toward stricter
  standards and more vigorous enforcement, including increased fines and penalties
  for non-compliance. Regulatory requirements encompass more stringent environmental
  assessment of project proposals, and impose greater responsibilities on corporations
  and their directors, officers and employees. Future changes in environmental
  regulatory requirements may result in more complex, costly and time-consuming
  procedures. The operations of the Company and the further exploration and the
  development of its properties require various licenses and permits and will
  be subject to ongoing regulation. There can be no guarantee that the Company
  will be able to obtain or maintain all permits and licenses that may be required
  for its activities. Currently, the Company does not have any properties on which
  commercial mining operations are carried out.

Risks Associated With Mining

The Companys operations are subject to all of the hazards
  and risks normally incident to the exploration for and development and production
  of precious minerals, any of which could result in damage for which the Company
  may be held responsible. Hazards such as unusual or unexpected rock formations,
  landslides, flooding or other adverse conditions may be encountered in the drilling
  and removal of material. While the Company may obtain insurance against certain
  risks in such amounts as it considers adequate, the nature of these risks is
  such that liabilities could exceed policy limits or could be excluded from coverage.
  There are also risks against which the Company cannot insure or against which
  it may decide not to insure. The potential costs which could be associated with
  any liabilities not covered by insurance or in excess of insurance coverage
  may cause substantial delays and require significant capital outlays, adversely
  affecting the Companys earnings and competitive position in the future
  and potentially, its financial position.

Item 2.     DESCRIPTION OF PROPERTY

Carleton purchased fourteen unpatented mineral claims located
  in Elko County in the State of Nevada from Senate Capital Group Inc. in March
  2001.

The Burner Hills mineral claims were recorded with the Bureau
  of Land Management of the United States Department of the Interior under the
  following names and claim numbers:

|Name of Mineral Claim | Claim Number
|--------------------- | ------------
|                      |             
|Pepper 1              | NMC#822713  
|Pepper 2              | NMC#822714  
|Pepper 3              | NMC#822715  
|Pepper 4              | NMC#822716  
|Pepper 5              | NMC#822717  
|Pepper 6              | NMC#822718  
|Pepper 7              | NMC#822719  
|Pepper 8              | NMC#822720  
|Pepper 9              | NMC#822721  

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|Pepper 10 | NMC#822722
|--------- | ----------
|Pepper 11 | NMC#822723
|Pepper 12 | NMC#822724
|Pepper 13 | NMC#822725
|Pepper 14 | NMC#822726

Mr. Rice recorded these claims in November 2000 to cover the
  main area of potential gold and silver mineralization. Carleton is the legal
  and beneficial owner of title to the mineral claims, and no other person or
  entity has any interest in the mineral claims. The mineral claims are unpatented
  mineral claims that give us a property right to the minerals in the claims and
  the right to use the surface to extract minerals. Title to the land comprising
  the mineral claims and the surface resources is owned by the United States.

In order to maintain the mineral claims in good standing,
  Carleton must pay maintenance fees in lieu of completing exploration work with
  the Bureau of Land Management of the United States Department of the Interior.
  Currently, a maintenance fee of $100 per mineral claim must be paid in each
  year to maintain the mineral claims for an additional year. In total, Carleton
  must pay $1,400 per year to maintain the Burner Hills mineral claims in good
  standing for each year. Maintenance of our claims is automatic upon payment
  of the required maintenance fees. If Carleton fails to pay the maintenance fees,
  then the mineral claims will lapse and Carleton will lose all interest in these
  mineral claims. The Company maintained the mineral claims to September 1, 2004
  by paying the required maintenance fees to the Bureau of Land Management in
  August, 2003.

Item 3.     LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the
  Company or any of its subsidiaries is a party or to which any of their property
  is subject.

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

During this period covered by the Form 10-KSB, the Company
  did not submit any matters to the Companys security holders to be voted
  upon.

Item 5.     MARKET FOR COMMON
  EQUITY AND RELATED STOCKHOLDER MATTERS

No Public Market for Common Stock

There is presently no public market for the Companys
  common stock. Carleton anticipates making an application for trading of its
  common stock on the NASD over the counter bulletin board. However, Carleton
  can provide no assurance that its shares will be traded on the bulletin board
  or, if traded, that a public market will materialize.

The Securities Exchange Commission has adopted rules that
  regulate broker-dealer practices in connection with transactions in penny stocks.
  Penny stocks are generally equity securities with a price of less than $5.00,
  other than securities registered on certain national securities exchanges or
  quoted on the Nasdaq system, provided that current price and volume information
  with respect to transactions in such securities is provided by the exchange
  or system. The penny stock rules require a broker-dealer, prior to a transaction
  in a penny stock, to deliver a standardized risk disclosure document prepared
  by the Commission, that: (a) contains a description of the nature and level
  of risk in the market for penny stocks in both public offerings and secondary
  trading; (b) contains a description of the broker's or dealer's duties to the
  customer and of the rights and remedies available to the customer with respect
  to a violation to such duties or other requirements of Securities' laws; (c)
  contains a brief, clear, narrative description of a dealer

11

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market, including bid and ask prices for penny stocks and
  the significance of the spread between the bid and ask price; (d) contains a
  toll-free telephone number for inquiries on disciplinary actions; (e) defines
  significant terms in the disclosure document or in the conduct of trading in
  penny stocks; and (f) contains such other information and is in such form, including
  language, type, size and format, as the Commission shall require by rule or
  regulation. The broker-dealer also must provide, prior to effecting any transaction
  in a penny stock, the customer with: (a) bid and offer quotations for the penny
  stock; (b) the compensation of the broker-dealer and its salesperson in the
  transaction; (c) the number of shares to which such bid and ask prices apply,
  or other comparable information relating to the depth and liquidity of the market
  for such stock; and (d) a monthly account statements showing the market value
  of each penny stock held in the customer's account. In addition, the penny stock
  rules require that prior to a transaction in a penny stock not otherwise exempt
  from those rules; the broker-dealer must make a special written determination
  that the penny stock is a suitable investment for the purchaser and receive
  the purchaser's written acknowledgment of the receipt of a risk disclosure statement,
  a written agreement to transactions involving penny stocks, and a signed and
  dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing
  the trading activity in the secondary market for our stock if it becomes subject
  to these penny stock rules. Therefore, if our common stock becomes subject to
  the penny stock rules, stockholders may have difficulty selling those securities.

Holders of Our Common Stock

As of the date of this Annual Report, there are forty-four
  (44) registered shareholders.

Rule 144 Shares

A total of 5,640,500 shares of common stock is available for
  resale to the public in accordance with the volume and trading limitations of
  Rule 144 of the Securities Act of 1933.

In general, under Rule 144 as currently in effect, a person
  who has beneficially owned shares of a company's common stock for at least one
  year is entitled to sell within any three month period a number of shares that
  does not exceed the greater of:

|1. | One percent of the number of shares
        of the company's common stock then outstanding, which, in our case, will
        equal approximately 56,405 shares as of the date of this Form 10-KSB;
        or
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                              
|2. | The average weekly trading volume of
        the company's common stock during the four calendar weeks preceding the
        filing of a notice on form 144 with respect to the sale.                        

Sales under Rule 144 are also subject to manner of sale provisions
  and notice requirements and to the availability of current public information
  about the company.

Under Rule 144(k), a person who is not one of the company's
  affiliates at any time during the three months preceding a sale, and who has
  beneficially owned the shares proposed to be sold for at least two years, is
  entitled to sell shares without complying with the manner of sale, public information,
  volume limitation or notice provisions of Rule 144.

As of the date of this Form, persons who are our affiliates
  hold 3,950,000 of the total shares that may be sold pursuant to Rule 144.

12

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Item 6.     MANAGEMENTS
  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Plan of Operations

The Company has completed Phase I and Phase II of the exploration
  program on the Burner Hills Property. The Company has commenced Phase III of
  the exploration program. The Company currently does not have sufficient funds
  to proceed with Phase IV of the exploration program.

The Company had cash on hand in the amount of $47 as of December
  31, 2003. The Company will require additional funding to enable the Company
  to incur exploration expenditures on the Burner Hills Property in the amount
  of $13,000 in order to complete Phase III of the recommended exploration program.

The Company will require additional funding in the event that
  the Company determines to proceed with Phase IV of the exploration program.
  The anticipated cost of the Phase Four exploration program is $40,000 which
  is in excess of the projected cash reserves of the Company upon completion of
  Phase III of the exploration program. The Company anticipates that additional
  funding will be in the form of equity financing from the sale of the Company's
  common stock. There is no assurance that the Company will be able to achieve
  additional sales of its common stock sufficient to fund Phase Four of the exploration
  program. The Company believes that debt financing will not be an alternative
  for funding Phase IV of the exploration program. The Company does not have any
  arrangements in place for future equity financing of the Company.

If the Company does not secure additional financing, the Company
  will not be able to complete Phase IV of the exploration program. In the event
  that the Company is unable to obtain sufficient financing in this regard, it
  may be required to abandon the Burner Hills property and lose all rights thereto.
  The Company may consider bringing in a joint venture partner to provide the
  required funding, if the Company is unable to obtain the funding by itself and
  does not want to abandon the Burner Hills Property. The Company has not undertaken
  any efforts to locate a joint venture partner for the Burner Hills Property.
  In addition, there is no assurance that the Company would be able to locate
  a joint venture partner for the Burner Hills Property who would assist the Company
  in funding the exploration of the Burner Hills Property. The Company may pursue
  acquiring interests in alternate mineral properties in the event of termination
  of the Burner Hills Property.

Results of Operations.

For the Year Ended December 31, 2003

The Company is in the exploration stage and has no revenues
  from operations in Fiscal 2003. None of its mineral properties have proven to
  be commercially developable and as a result, the Company has not generated any
  revenue from these activities. The Company capitalizes expenditures associated
  with the direct acquisition, evaluation and exploration of mineral properties.
  When an area is disproved or abandoned, the acquisition costs and related deferred
  expenditures are written-off.

The Companys general and administrative expenses were
  $26,916 for the period ending December, 2003 compared to $51,671 for the period
  ending December, 2002. This is the Companys third year of operations.
  The Company anticipates that general and administrative expenses will increase
  in Fiscal 2004 if the Company moves ahead with the further exploration of its
  mineral property.

Liquidity and Capital Resources.

The Company's primary source of funds since incorporation
  has been through the issue of its common stock. The Company has no revenue from
  mining to date and does not anticipate mining revenues in the foreseeable future.

The Company does not know of any trends, demands, commitments,
  events or uncertainties that will result in, or that are reasonably likely to
  result in, the Company's liquidity either materially increasing or decreasing
  at present or in the foreseeable future. Material increases or decreases in
  the Company's

13

---

liquidity are substantially determined by the success or failure
  of the Company's exploration programs or the future acquisition of projects.

The Companys cash position at December 31, 2003 was
  $47.

The Company has not recorded any write-offs as of December
  31, 2003.

At December 31, 2003, the Company had a working capital deficit
  of $37,629.

Senate Capital Group, a private company controlled by Mr.
  Dennis Higgs, one of our directors, has advanced to us the funds necessary to
  enable us to commence phase three of the exploration program to the extent that
  we have insufficient cash reserves necessary to pay for this expense. This commitment
  to advance funds is capped at a maximum of $13,000, being the budgeted cost
  of Phase III. Any funds would be advanced to us as a loan repayable on demand
  without interest. Senate Capital Group has advanced $3,000 and we anticipate
  that we will be required to borrow additional amounts from Senate Capital Group
  if we choose to complete Phase III of our exploration program.

The balance of the Companys cash needs through the second
  half of Fiscal 2004 are expected to come from an equity financing. The Company
  intends to raise any required additional funds by selling equity securities.

Item 7.     FINANCIAL STATEMENTS

The Financial Statements of Carleton Ventures Corp., the Notes
  to Financial Statements and the Auditor's Report of Morgan & Company, chartered
  accountants, required by this Item 7 are included herewith to this Form 10-KSB.

14

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CARLETON VENTURES CORP.
  (An Exploration Stage Company)

FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002
  (Stated in U.S. Dollars)





15

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INDEPENDENT AUDITORS' REPORT

To the Shareholders and Directors of 
  Carleton Ventures Corp. 
  (An exploration stage company)

We have audited the balance sheets of Carleton Ventures Corp.
  (an exploration stage company) as at December 31, 2003 and 2002, and the statements
  of loss and deficit accumulated during the exploration stage, cash flows, and
  stockholders equity for the years ended December 31, 2003 and 2002. 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 United States of
  America generally accepted auditing standards. Those standards require that
  we plan and perform an audit to obtain reasonable assurance whether the financial
  statements are free of material misstatement. An audit includes examining, on
  a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management, as well as evaluating the overall
  financial statement presentation. We believe that our audit provides a reasonable
  basis for our opinion.

In our opinion, these financial statements present fairly,
  in all material respects, the financial position of the Company as at December
  31, 2003 and 2002, and the results of its operations and cash flows for the
  years ended December 31, 2003 and 2002 in accordance with United States of America
  generally accepted accounting principles.

The accompanying financial statements have been prepared assuming
  the Company will continue as a going concern. As discussed in Note 1 to the
  financial statements, the Company has suffered a net loss since inception, has
  not attained profitable operations and is dependent upon obtaining adequate
  financing to fulfil its exploration activities. These factors raise substantial
  doubt that the Company will be able to continue as a going concern. Managements
  plans in regard to these matters are also discussed in Note 1. The financial
  statements do not include any adjustments that might result from the outcome
  of this uncertainty.

|Vancouver, B.C.  | Morgan & Company   
|---------------- | ---------------------
|                 |                      
|January 26, 2004 | Chartered Accountants

|Tel: (604) 687-5841 |                                     | P.O. Box 10007 Pacific Centre
|------------------- | ----------------------------------- | -----------------------------
|fax: (604) 687-0075 | Sute 1488 - 700 West Georgia Street
|www.morgan-cas.com  | Vancouver, B.C. V7Y 1A1            

16

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CARLETON VENTURES CORP.
  (An Exploration Stage Company)

BALANCE SHEETS
  (Stated in U.S. Dollars)

|                                                              | DECEMBER 31 |         
|------------------------------------------------------------- | ----------- | --------
|                                                              | 2003        |         
|                                                              |             |         
|ASSETS                                                        |             |         
|                                                              |             |         
|Current                                                       |             |         
|Cash                                                          | $           | 47      
|                                                              |             |         
|Mineral Property Interest(Note 3)                             |             | -       
|                                                              |             |         
|                                                              | $           | 47      
|                                                              |             |         
|LIABILITIES                                                   |             |         
|                                                              |             |         
|Current                                                       |             |         
|Accounts payable                                              | $           | 37,582  
|                                                              |             |         
|SHAREHOLDERS DEFICIENCY                                      |             |         
|                                                              |             |         
|Share Capital                                                 |             |         
|Authorized:                                                   |             |         
|100,000,000 Common
      shares, par value $0.001 per share   |             |         
|10,000,000
      Preferred shares, par value $0.001 per share |             |         
|                                                              |             |         
|Issued and outstanding:                                       |             |         
|5,640,500
      Common shares at December 31, 2003 and        |             |         
|2002                                                          |             | 5,641   
|Additional paid-in capital                                    |             | 85,034  
|                                                              |             |         
|Deficit Accumulated During The Exploration Stage              |             | (128,210
|                                                              |             | (37,535 
|                                                              |             |         
|                                                              | $           | 47      

17

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CARLETON VENTURES CORP.
  (An Exploration Stage Company)

STATEMENTS OF LOSS AND DEFICIT(Stated in U.S. Dollars)

|                                             |             |           |             |   | PERIOD    | 
|-------------------------------------------- | ----------- | --------- | ----------- | - | --------- | 
|                                             |             |           |             |   | FROM      | 
|                                             |             |           |             |   | INCEPTION | 
|                                             |             |           |             |   | MAY 26    | 
|                                             | YEARS ENDED |           | 1999 TO     |  
|                                             | DECEMBER 31 |           | DECEMBER 31 |  
|                                             | 2003        |           | 2002        |   | 2003      | 
|                                             |             |           |             |   |           | 
|Expenses                                     |             |           |             |   |           | 
|Professional fees                            | $           | 8,160     |             | $ | 33,666    | 
|Office and sundry                            |             | 3,586     |             |   | 400       | 
|Office facilities and services               |             | 12,000    |             |   | 12,000    | 
|Mineral property acquisition and exploration |             |           |             |   |           | 
|expenditures                                 |             | 3,170     |             |   | 5,605     | 
|                                             |             |           |             |   |           | 
|Net Loss For The Year                        |             | 26,916    |             |   | 51,671    | 
|                                             |             |           |             |   |           | 
|Deficit Accumulated During The Exploration   |             |           |             |   |           | 
|Stage, Beginning Of Year                     |             | 101,294   |             |   | 49,623    | 
|                                             |             |           |             |   |           | 
|Deficit Accumulated During The               |             |           |             |   |           | 
|Exploration Stage, End Of
      Year         | $           | 128,210   |             | $ | 101,294   | 
|                                             |             |           |             |   |           | 
|Basic And Diluted Loss Per Share             | $           | 0.01      |             | $ | 0.01      | 
|                                             |             |           |             |   |           | 
|Weighted Average Number Of Shares            |             |           |             |   |           | 
|Outstanding                                  |             | 5,640,500 |             |   | 5,616,527 | 

18

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CARLETON VENTURES CORP.
  (An Exploration Stage Company)

STATEMENTS OF CASH FLOWS(Stated in U.S. Dollars)

|                                         |             |         |             |   | PERIOD    |  
|---------------------------------------- | ----------- | ------- | ----------- | - | --------- | -
|                                         |             |         |             |   | FROM      |  
|                                         |             |         |             |   | INCEPTION |  
|                                         |             |         |             |   | MAY 26    |  
|                                         | YEARS ENDED |         | 1999 TO     |  
|                                         | DECEMBER 31 |         | DECEMBER 31 |  
|                                         | 2003        |         | 2002        |   | 2003      |  
|                                         |             |         |             |   |           |  
|Cash Flows From Operating Activity       |             |         |             |   |           |  
|Net loss for the year                    | $           | (26,916 | )           | $ | (51,671   | )
|                                         |             |         |             |   |           |  
|Adjustments To Reconcile Net Loss To Net |             |         |             |   |           |  
|Cash Used By Operating Activity          |             |         |             |   |           |  
|Stock issued for other than cash         |             | -       |             |   | -         |  
|Changes in accounts payable              |             | 19,149  |             |   | 11,409    |  
|                                         |             | (7,767  | )           |   | (40,262   | )
|                                         |             |         |             |   |           |  
|Cash Flows From Financing Activity       |             |         |             |   |           |  
|Share capital issued                     |             | -       |             |   | 17,500    |  
|                                         |             |         |             |   |           |  
|Increase (Decrease) In Cash              |             | (7,767  | )           |   | (22,762   | )
|                                         |             |         |             |   |           |  
|Cash, Beginning Of Year                  |             | 7,814   |             |   | 30,576    |  
|                                         |             |         |             |   |           |  
|Cash, End Of Year                        | $           | 47      |             | $ | 7,814     |  
|                                         |             |         |             |   |           |  
|Supplemental Disclosure Of Non-Cash      |             |         |             |   |           |  
|Financing And Investing Activities       |             |         |             |   |           |  
|Common shares issued to acquire mineral  |             |         |             |   |           |  
|property interest                        | $           | -       |             | $ | -         |  

19

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CARLETON VENTURES CORP.
  (An Exploration Stage Company)

STATEMENT OF STOCKHOLDERS DEFICIENCYDECEMBER 31, 2003
  (Stated in U.S. Dollars)

|                             |              |  |             |       |            |   | DEFICIT     |  |       |         
|---------------------------- | ------------ |  | ----------- | ----- | ---------- | - | ----------- |  | ----- | --------
|                             | COMMON STOCK |  | ACCUMULATED |       |            |  
|                             |              |  |             |       | ADDITIONAL |   | DURING THE  |  |       |         
|                             |              |  |             |       | PAID-IN    |   | EXPLORATION |  |       |         
|                             | SHARES       |  | AMOUNT      |       | CAPITAL    |   | STAGE       |  | TOTAL |         
|                             |              |  |             |       |            |   |             |  |       |         
|Net loss for the period      | -            |  | $           | -     |            | $ | -           |  | $     | (2,465  
|December 31, 1999            | -            |  |             | -     |            |   | -           |  |       | (2,465  
|Net loss for the year        | -            |  |             | -     |            |   | -           |  |       | -       
|Balance, December 31, 2000   | -            |  |             | -     |            |   | -           |  |       | (2,465  
|Shares issued for cash at    |              |  |             |       |            |   |             |  |       |         
|$0.001                       | 1,500,000    |  |             | 1,500 |            |   | -           |  |       | -       
|Shares issued for cash at    |              |  |             |       |            |   |             |  |       |         
|$0.01                        | 2,500,000    |  |             | 2,500 |            |   | 22,500      |  |       | -       
|Shares issued to acquire     |              |  |             |       |            |   |             |  |       |         
|mineral property interest at |              |  |             |       |            |   |             |  |       |         
|$0.01                        | 1,500,000    |  |             | 1,500 |            |   | 13,500      |  |       | -       
|Shares issued for cash at    |              |  |             |       |            |   |             |  |       |         
|$0.35                        | 90,500       |  |             | 91    |            |   | 31,584      |  |       | -       
|Net loss for the year        | -            |  |             | -     |            |   | -           |  |       | (47,158 
|Balance, December 31, 2001   | 5,590,500    |  |             | 5,591 |            |   | 67,584      |  |       | (49,623 
|Shares issued for cash at    |              |  |             |       |            |   |             |  |       |         
|$0.35                        | 50,000       |  |             | 50    |            |   | 17,450      |  |       | -       
|Net loss for the year        | -            |  |             | -     |            |   | -           |  |       | (51,671 
|Balance, December 31, 2002   | 5,640,500    |  |             | 5,641 |            |   | 85,034      |  |       | (101,294
|Net loss for the year        | -            |  |             | -     |            |   | -           |  |       | (26,916 
|Balance, December 31, 2003   | 5,640,500    |  | $           | 5,641 |            | $ | 85,034      |  | $     | (128,210

20

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CARLETON VENTURES CORP.
  (An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002
  (Stated in U.S. Dollars)

|1. | NATURE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | SIGNIFICANT ACCOUNTING POLICIES
      The financial statements of the Company have been prepared
        in accordance with generally accepted accounting principles in the United
        States of America. Because a precise determination of many assets and
        liabilities is dependent upon future events, the preparation of financial
        statements for a period necessarily involves the use of estimates which
        have been made using careful judgement.

21

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CARLETON VENTURES CORP.
  (An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002
  (Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING
        POLICIES(Continued)
      The financial statements have, in managements
        opinion, been properly prepared within reasonable limits of materiality
        and within the framework of the significant accounting policies summarized
        below:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | a)                                                                                                                                                                                                                                                                                       
|   | b)                                                                                                                                                                                                                                                                                       
|   | c)                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                          
|   | d)                                                                                                                                                                                                                                                                                       

22

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CARLETON VENTURES CORP.
  (An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003 AND 2002
  (Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | MINERAL PROPERTY INTEREST
      Pursuant to an agreement, dated March 14, 2001, the Company
        has acquired a 100% interest in fourteen mineral claims located in northwestern
        Elko County, Nevada, in consideration of the cash payment of $10,052,
        and the issuance of 1,500,000 common shares with a fair value of $15,000.
        Since the Company has not established the commercial feasibility of the
        mineral claims, the acquisition costs have been expensed.
|4. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

23

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

None.

Item 8A   CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act
  of 1934 (the Exchange Act), we carried out an evaluation of the
  effectiveness of the design and operation of our disclosure controls and procedures
  as of December 31, 2003, being the date of our most recently completed fiscal
  year. This evaluation was carried out under the supervision and with the participation
  of our Chief Executive Officer, Mr. Dennis Higgs and Ms. Aileen Lloyd, Chief
  Financial Officer. Based upon that evaluation, our Chief Executive Officer concluded
  that our disclosure controls and procedures are effective in timely alerting
  management to material information relating to us required to be included in
  our periodic SEC filings. There have been no significant changes in our internal
  controls or in other factors that could significantly affect internal controls
  subsequent to the date we carried out our evaluation.

Disclosure controls and procedures are controls and other
  procedures that are designed to ensure that information required to be disclosed
  in our reports filed or submitted under the Exchange Act is recorded, processed,
  summarized and reported, within the time periods specified in the Securities
  and Exchange Commission's rules and forms. Disclosure controls and procedures
  include, without limitation, controls and procedures designed to ensure that
  information required to be disclosed in our reports filed under the Exchange
  Act is accumulated and communicated to management, including our Chief Executive
  Officer and Chief Financial Officer, to allow timely decisions regarding required
  disclosure.

During our most recently completed fiscal year ended December
  31, 2003 there were no changes in our internal control over financial reporting
  that have materially affected, or are reasonably likely to affect, our internal
  control over financial reporting.

The term internal control over financial reporting
  is defined as a process designed by, or under the supervision of, the registrant's
  principal executive and principal financial officers, or persons performing
  similar functions, and effected by the registrant's board of directors, management
  and other personnel, to provide reasonable assurance regarding the reliability
  of financial reporting and the preparation of financial statements for external
  purposes in accordance with generally accepted accounting principles and includes
  those policies and procedures that:

Pertain to the maintenance of records
  that in reasonable detail accurately and fairly reflect the transactions and
  dispositions of the assets of the registrant;

Provide reasonable assurance that transactions
  are recorded as necessary to permit preparation of financial statements in accordance
  with generally accepted accounting principles, and that receipts and expenditures
  of the registrant are being made only in accordance with authorizations of management
  and directors of the registrant;and

Provide reasonable assurance regarding prevention or timely
  detection of unauthorized acquisition, use or disposition of the registrant's
  assets that could have a material effect on the financial statement.

24

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

The directors and officers of the Company as of March 15, 2004 are as follows:

|             | Position with           | Served as a Director
|------------ | ----------------------- | --------------------
|Name         | Registrant              | or Officer Since    
|             |                         |                     
|Dennis Higgs | President, Chief        | May 26, 1999        
|             | Executive Officer       |                     
|             |                         |                     
|Aileen Lloyd | Secretary, Treasurer    | May 26, 1999        
|             | Chief Financial Officer |                     

Mr. Dennis Higgs is the President and Chief Executive
  Officer and is a member of the board of directors. Mr. Higgs was appointed to
  the board of directors as President and Chief Executive Officer on May 26, 1999.

In 1981, Mr. Higgs graduated from the University of British
  Columbia, Vancouver, B.C. with a Bachelor of Commerce degree. He then completed
  the Canadian Securities Course conducted by the Canadian Securities Institute
  of Toronto, Canada. In 1982, Mr. Higgs completed The Registered Representatives
  Exam also conducted by the Canadian Securities Institute, Toronto, Canada. In
  1983, Mr. Higgs completed the Canadian Options Course offered by the Canadian
  Securities Institute, Canada.

Mr. Higgs also serves as a director and officer of Miranda
  Gold Corp., a Canadian public reporting gold exploration company, since May
  1993. In this position, Mr. Higgs provides management consulting services to
  Miranda Gold Corp.

Mr. Higgs is a director and officer of Senate Capital Group
  Inc., a British Columbia company since July 1990. In this position, Mr. Higgs
  provides management consulting and investor relations services.

Ms. Aileen Lloydis the Secretary, Treasurer and Chief
  Financial Officer and is a member of the board of directors. Ms. Lloyd was appointed
  to the board of directors and as secretary, treasurer and chief financial officer
  on May 26, 1999.

Ms. Lloyd has been an administrative assistant with Senate
  Capital Group Inc., a private venture capital and management consulting company,
  since October 1990. In this position she provides management services to publicly
  traded companies.

Ms. Lloyd is a director of Miranda Gold Corp. a Canadian public
  reporting gold exploration company since May 1993. In this position, Ms. Lloyd
  provides management services.

Certain Significant Employees or Consultants

The Company has consulting relationships with other geologists
  and persons that are included in its projects and properties from time to time.

Committees

Currently, the Board of Directors has no separate audit, nominating
  or compensation committees and acts as such as an entire Board.

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Code of Ethics

The Company has not adopted a code of ethics. The Company will
  pursue adopting a written code of ethics. To date, the Board of Directors have
  conducted the affairs of the Company consistent with the applicable laws and
  regulations of the United States and the states.

Item 10.     EXECUTIVE COMPENSATION

Officers and Directors

The Company did not pay any remuneration to its officers or
  directors during the period January 1, 2003 to December 31, 2003, the date of
  its annual financial statements. The Company does not presently pay any compensation
  to any of its officers and directors. The Company may during the course of the
  current year decide to compensate its officers and directors for their services.

Incentive Stock Options

The Company does not have any options to purchase securities
  of the Company outstanding. The Company may in the future establish an incentive
  stock option plan for its directors, officers, employees and consultants.

Directors

The Directors of the Company did not receive cash compensation
  by the Company for their service as directors during the most recently completed
  fiscal year.

Item 11.     SECURITY OWNERSHIP
  OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information concerning
  the number of shares of our common stock owned beneficially as of March 1, 2004
  by: (i) each person (including any group) known to us to own more than five
  percent (5%) of any class of our voting securities, (ii) each of our directors,
  (iii) each of our named executive officers; and (iv) officers and directors
  as a group. Unless otherwise indicated, the shareholders listed possess sole
  voting and investment power with respect to the shares shown.

|                                 | Name and address                                     | Number of Shares     | Percentage of
|-------------------------------- | ---------------------------------------------------- | -------------------- | -------------
|Title of class                   | of beneficial owner                                  | of Common Stock      | Common       
|                                 |                                                      |                      | Stock (1)    
|                                 |                                                      |                      |              
|                                 |                                                      |                      |              
|DIRECTORS AND EXECUTIVE OFFICERS |                                                      |                     
|                                 |                                                      |                      |              
|Common Stock                     | Dennis Higgs                                         | 2,250,000 shares (2) | 39.9%        
|                                 | Director, President and                              |                      |              
|                                 | Chief Executive Officer                              |                      |              
|                                 | Suite 306  1140 Homer Street                        |                      |              
|                                 | Vancouver, British Columbia                          |                      |              
|                                 | Canada V6B 2X6                                       |                      |              
|                                 |                                                      |                      |              
|Common Stock                     | Aileen Lloyd                                         | 1,000,000 shares (3) | 17.7%        
|                                 | Director, Secretary, Treasurer                       |                      |              
|                                 | and Chief Financial Officer                          |                      |              
|                                 | Suite 306  1140 Homer Street                        |                      |              
|                                 | Vancouver, British Columbia
      Canada V6B 2X6 (3) |                      |              

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|                |                            |                    |      
|--------------- | -------------------------- | ------------------ | -----
|Common Stock    | All Officers and Directors | 3,250,000 shares   | 57.6%
|                | as a Group (2 persons)     |                    |      
|                |                            |                    |      
|5% STOCKHOLDERS |                            |                   
|                |                            |                    |      
|Common Stock    | Eric G. Fergie             | 300,000 shares     | 5.3% 
|                | 2221 Venables St.          |                    |      
|                | Vancouver, BC              |                    |      
|                | Canada V5V 2J5             |                    |      
|                |                            |                    |      
|Common Stock    | Darcy Higgs                | 700,000 shares (4) | 12.4%
|                | 4756 Drummond Drive        |                    |      
|                | Vancouver, BC              |                    |      
|                | Canada V6R 1K8             |                    |      
|                |                            |                    |      
|Common Stock    | Carleen Higgs              | 700,000 shares (5) | 12.4%
|                | 4756 Drummond Drive        |                    |      
|                | Vancouver, BC              |                    |      
|                | Canada V6R 1K8             |                    |      

|(1) | The percent of class is based on 5,640,500 shares
          of common stock issued and outstanding as of March 1, 2004.                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Includes 375,000 shares in the name
        of Dennis Higgs, 375,000 shares held in the name of Senate Equities Corp.,
        which is wholly owned by Menace Capital Corp., which is in turn wholly
        owned by Dennis Higgs, and 1,500,000 shares were acquired in the name
        of Senate Capital Group Inc. in exchange for the assignment of the mineral
        claims. Senate Capital is wholly owned by Dennis Higgs.
|(3) | Includes 750,000 shares in the name
        of Aileen Lloyd and 250,000 in the name of her husband, Gordon Lloyd.                                                                                                                                                                                                                                                                                                                     
|(4) | Includes 350,000 shares in the name
        of Darcy Higgs and 350,000 shares in the name of Santorini Investment
        Corp., a private company controlled by Carleen Higgs, the wife of Darcy
        Higgs.                                                                                                                                                                                                                      
|(5) | Includes 350,000 shares in the name
        of Santorini Investment Corp., a private company controlled by Carleen
        Higgs, and 350,000 shares in the name of Darcy Higgs, the husband of Carleen
        Higgs.                                                                                                                                                                                                                

It is believed by us that all persons named have full voting
  and investment power with respect to the shares indicated, unless otherwise
  noted in the table. Under the rules of the Securities and Exchange Commission,
  a person (or group of persons) is deemed to be a "beneficial owner" of a security
  if he or she, directly or indirectly, has or shares the power to vote or to
  direct the voting of such security, or the power to dispose of or to direct
  the disposition of such security. Accordingly, more than one person may be deemed
  to be a beneficial owner of the same security. A person is also deemed to be
  a beneficial owner of any security, which that person has the right to acquire
  within 60 days, such as options or warrants to purchase our common stock.

Item 12.     CERTAIN RELATIONSHIPS
  AND RELATED TRANSACTIONS

None of the following parties has, since our date of incorporation,
  had any material interest, direct or indirect, in any transaction with us or
  in any presently proposed transaction that has or will materially affect us,
  other than noted in this section:

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- Any of our directors or officers;
- Any person proposed as a nominee for election as a director;
- Any person who beneficially owns, directly or indirectly, shares carrying
    more than 10% of the voting rights attached to our outstanding shares of common
    stock;
- Any of our promoters;
- Any relative or spouse of any of the foregoing persons who has the same house
    as such person.

Mr. Dennis Higgs, President, Chief Executive Officer, and
  director, acquired 375,000 shares of our common stock in his own name at a price
  of $0.001 US per share on February 26, 2001. Mr. Dennis Higgs paid a total purchase
  price of $375 for these shares. Senate Equities Corp., a company that is wholly
  owned and operated by Menace Capital Corp., acquired 375,000 shares of our common
  stock at a price of $0.001 US per share on February 26, 2001. Senate Equities
  Corp. paid a total purchase price of $375 for these shares. Mr. Dennis Higgs
  is the sole stockholder of Menace Capital Corp, and the sole shareholder of
  Senate Equities Corp .

In addition to this acquisition of stock, Mr. Dennis Higgs
  acquired a beneficial interest in 1,500,000 shares of the Companys common
  stock through the issuance of common stock to Senate Capital Group Inc. in exchange
  for its assignment of the Burner Hills mineral claims. Mr. Dennis Higgs owns
  all of the stock of Senate Capital Group. Senate Capital Group also received
  $10,051.88 as part of this transaction.

In addition, Senate Capital Group has entered into an office
  facilities and service contract with the Company in which it provides office
  space, services, phones and equipment usage in exchange for a payment of $1,000
  per month. Through December 31, 2003, $35,000 had been charged to the Company
  under this agreement, of which $20,500 has been accrued and $14,500 has been
  paid. Carleton entered into a legally binding agreement with Senate Capital
  Group effective September 30, 2002 whereby Senate Capital Group has agreed to
  defer payment of accrued liabilities in the amount of $20,500 and its monthly
  management fee of $1,000 per month until such time as the Company achieves sufficient
  additional financing that would enable us to pay these accrued liabilities without
  impeding its exploration plans.

Senate Capital Group has agreed to advance the funds necessary
  to enable Carleton to complete phase three of the exploration program to the
  extent that we have insufficient cash reserves necessary to pay for this expense.
  This commitment to advance funds is capped at a maximum of $13,000, being the
  budgeted cost of phase three. Any funds that would be advanced as a loan is
  repayable on demand without interest. Carleton anticipates that it will be required
  to borrow approximately $10,000 from Senate Capital Group under this commitment
  to complete phase three of the exploration program.

Ms. Lloyd, Secretary, Treasurer and Chief Financial Officer,
  acquired 750,000 shares of the Companys common stock at a price of $0.001
  US per share on February 26, 2001. Ms. Lloyd paid a total purchase price of
  $750 for these shares. Gordon Lloyd, the husband of Aileen Lloyd, acquired 250,000
  shares of the Companys common stock at a price of $0.01 per share for
  a total cash acquisition cost of $2,500 on March 12, 2001.

Mr. Darcy Higgs, a 5% shareholder, acquired 350,000 shares
  of the Companys common stock at a price of $0.01 per share for a total
  cash acquisition cost of $3,500 on March 12, 2001. Santorini Investment Corp.,
  a private company controlled by Carleen Higgs, the wife of Darcy Higgs, acquired
  350,000 shares of common stock at a price of $0.01 per share for a total cash
  acquisition cost of $3,500 on March 12, 2001.

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Mr. Eric Fergie, a 5% shareholders, acquired 300,000 shares
  of the Companys common stock at a price of $0.01 per share for a total
  cash acquisition cost of $3,000 on March 12, 2001.

Item 13.     EXHIBITS, AND REPORTS ON FORM 8-K.

Exhibits:

|     | Description of Exhibit                                                                                                                                                       
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                              
|1.0  | Updated Geological Report (1)                                                                                                                                                
|     |                                                                                                                                                                              
|31.1 | Sarbanes-Oxley Act Section 302 Certification
      of Chief Executive Officer (2)                                                                                            
|     |                                                                                                                                                                              
|31.2 | Sarbanes-Oxley Act Section 302 Certification
      of Chief Financial Officer (2)                                                                                            
|     |                                                                                                                                                                              
|32.1 | Certification of Chief Executive
      Officer pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002 (2)
|     |                                                                                                                                                                              
|32.2 | Certification of Chief Financial
      Officer pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002 (2)

(1)   Previously filed with the Securities and Exchange
  Commission as an exhibit to the Companys Form 10QSB originally filed November
  14, 2003.

(2)Filed as an exhibit to this Annual Report on
  Form 10-KSB.

Financials:

The Companys audited Financial Statements, as described
  below, are incorporated as Item 7 of this Form 10-KSB filing

Auditors Report of Morgan & Company dated January 26,
  2004.

Consolidated Balance Sheet for the period ended December 31,
  2003 and 2002.

Statement of Loss and Deficit for the period ended December
  31, 2003 and 2002.

Consolidated Statement of Cash Flows for the period ended December
  31, 2003 and 2002.

Notes to Consolidated Financial Statements

Item 14.     PRINCIPAL ACCOUNTANT
  FEES AND SERVICES

Audit Fees

The aggregate fees billed for each of the fiscal years ended
  December 31, 2002 and 2003 for professional services rendered by the principal
  accountant for the audit of Carletons annual financial statements and
  review of the financial statements included in this Form 10-KSB or services
  that are normally provided by the accountant in connection with statutory and
  regulatory filings or engagements for those fiscal years were estimated at $2,480
  and $2,673 respectively.

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Audit Related Fees

None

Tax Fees

None

All Other Fees

None

30

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
  Securities Exchange Act of 1934, the registrant has duly caused this report
  to be signed on its behalf by the undersigned, thereunto duly authorized.

CARLETON VENTURES CORP.

|By: | /s/Aileen Lloyd        
|--- | -----------------------
|    | Aileen Lloyd, Director,
|    | Chief Financial Officer
|    | Date: March 15, 2004   

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