U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-KSB

Mark One
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the fiscal year ended June 30, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the transition period from ____________ to ____________

                         Commission File No. 333-144493

                            Sterling Exploration Inc.
                 (Name of small business issuer in its charter)

            Nevada                                               98-0441019
  (State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                                1400 Begin Street
                                Montreal, Quebec
                                 Canada H3B 4R4
                    (Address of principal executive offices)

                                 (514) 334-3131
                           (Issuer's telephone number)

Securities registered pursuant to Section                  Name of each exchange
           12(b) of the Act:                                on which registered:
                                      None

          Securities registered pursuant to Section 12(g) of the Act:
                              Common Stock, $0.001
                                (Title of Class)

Check whether the issuer is not required to file reports  pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B 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 ]

Indicate by checkmark  whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

State issuers revenues for its most recent fiscal year $ -0-.

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. September 24, 2008: $ -0-.

     ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

                                       N/A

Check  whether the issuer has filed all  documents  and  reports  required to be
filed by Section 12, 13 and 15(d) of the  Securities  Exchange Act of 1934 after
the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

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

      Class                                 Outstanding as of September 24, 2008
      -----                                 ------------------------------------
Common Stock, $0.001                                     8,055,000

                       DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,  briefly describe them
and  identify  the part of the Form 10-KSB  (e.g.,  Part I, Part II,  etc.) into
which the document is incorporated:  (i) any annual report to security  holders;
(ii) any proxy or information statement; and (iii) any prospectus filed pursuant
to Rule 424(b) or (c) of the Securities Act of 1933 (the "Securities  Act"). The
listed documents should be clearly described for  identification  purposes (e.g.
annual reports to security holders for fiscal year ended December 24, 1990).

                                       N/A

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE>
                            STERLING EXPLORATION INC.

                                   FORM 10-KSB

Part I.

Item 1.     Description of Business                                            3

Item 2.     Description of Property                                           20

Item 3.     Legal Proceedings                                                 20

Item 4.     Submission of Matters to a Vote of Security Holders               20

Part II.

Item 5.     Market for Common Equity and Related Stockholder Matters and
            Small  Business Issuer Purchases of Equity Securities             20

Item 6.     Management's Discussion and Analysis and Plan of Operation        21

Item 7.     Financial Statements                                              27

Item 8.     Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure                                          37

Item 8A.    Controls and Procedures                                           37

Item 8A(T). Controls and Procedures                                           38

Item 8B.    Other Information                                                 38

Part III

Item 9.     Directors, Executive Officers, Promoters, Control Persons and
            Corporate Governance; Compliance With Section 16(a) of the
            Exchange Act                                                      38

Item 10.    Executive Compensation                                            39

Item 11.    Security Ownership of Certain Beneficial Owners and Management
            and Related Stockholder Matters                                   41

Item 12.    Certain Relationships and Related Transactions and Director
            Independence                                                      43

Item 13.    Exhibits                                                          43

Item 14.    Principal Accountant Fees and Services                            43

                                       2
<PAGE>
Statements made in this Form 10-KSB that are not historical or current facts are
"forward-looking  statements"  made  pursuant to the safe harbor  provisions  of
Section  27A of the  Securities  Act of 1933 (the  "Act") and Section 21E of the
Securities Exchange Act of 1934. These statements often can be identified by the
use  of  terms  such  as  "may,"  "will,"  "expect,"  "believe,"   "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. We intend that
such  forward-looking  statements  be  subject  to the  safe  harbors  for  such
statements.  We wish to caution  readers not to place undue reliance on any such
forward-looking  statements,   which  speak  only  as  of  the  date  made.  Any
forward-looking  statements represent  management's best judgment as to what may
occur in the future. However,  forward-looking  statements are subject to risks,
uncertainties  and important  factors beyond our control that could cause actual
results and events to differ  materially from  historical  results of operations
and events  and those  presently  anticipated  or  projected.  We  disclaim  any
obligation  subsequently  to revise any  forward-looking  statements  to reflect
events or  circumstances  after the date of such  statement  or to  reflect  the
occurrence of anticipated or unanticipated events.

AVAILABLE INFORMATION

Sterling  Exploration  Inc.  files annual,  quarterly,  current  reports,  proxy
statements,  and other  information with the Securities and Exchange  Commission
(the  "Commission").  You may read and copy documents referred to in this Annual
Report  on  Form  10-KSB  that  have  been  filed  with  the  Commission  at the
Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. You
may obtain  information on the operation of the Public Reference Room by calling
the Commission at  1-800-SEC-0330.  You can also obtain copies of our Commission
filings by going to the Commission's website at http://www.sec.gov.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

GLOSSARY

Dike: A long mass of minerals, usually an intrusion of igneous rocks, filling up
rents or fissures in the original strata

Fault: Planar rock fractures which show evidence of relative movement.

Gabbro: a dark, coarse-grained,  intrusive igneous rock chemically equivalent to
basalt.  It is a plutonic  rock formed when molten magma is trapped  beneath the
Earth's surface and cools into a crystalline mass

Instusive:  A body of igneous  rock that has  crystallized  from a molten  magma
below the surface of the Earth

Sedimentary  Rock:  Sedimentary  rocks  include  common  types  such  as  chalk,
limestone,  sandstone  and  shale.  Four basic  processes  are  involved  in the
formation of a sedimentary rock:  weathering (erosion) caused mainly by friction
of waves,  transportation  where the  sediment  is  carried  along by a current,
deposition and compaction where the sediment is squashed together to form a rock
of this kind

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<PAGE>
Sill: a tabular mass of igneous rock that has been  intruded  laterally  between
layers of older rock

BUSINESS DEVELOPMENT

Sterling  Exploration  Inc.  was  incorporated  in Nevada on August 18,  2003 to
engage in the business of  acquisition,  exploration  and development of natural
resource  properties.  Our  shares  of common  stock  commenced  trading  on the
Over-the-Counter   Bulletin  Board  during   September  2008  under  the  symbol
"SRXP:BB".

At the time of  inception,  we began to seek  capital  and the  development  and
implementation  of  our  business  plan.  Subsequently,  we  identified  certain
potential  mineral  properties  for  acquisition.  As of the date of this Annual
Report,  we hold  title to one  mineral  claim,  known as the  Railway  Prospect
Property,  which may contain little or no economic  mineralization.  The Railway
Prospect Property is comprised of sixteen unpatented mining claim units covering
approximately 633 acres. The claim was originally  recorded on January 27, 2004.
On January 20, 2005,  we purchased  the claim from Pilgrim Creek Mining Ltd. for
$7,000.00.

Please note that throughout this Annual Report,  and unless otherwise noted, the
words "we," "our," "us," the  "Company,"  or  "Sterling  Exploration"  refers to
Sterling Exploration Inc.

TRANSFER AGENT

Our transfer agent is Pacific Stock Transfer Company,  500 E. Warm Springs Road,
Suite 240 Las Vegas NV 89119.

CURRENT BUSINESS OPERATIONS

We are currently  engaged in the business of the  acquisition,  exploration  and
development  of  natural  resource  mineral  properties  with  a  focus  on  the
exploration and  development of deposits in North American and  internationally.
As of the date of this  Annual  Report,  our  mineral  interests  consist of the
Railway  Prospect as  discussed  below.  We have not  established  any proven or
probable reserves on the Railway Prospect.

MINERAL PROPERTIES

The one property in our portfolio is the Railway Prospect  property,  consisting
of 633 acres,  included within 16 unpatented  mining claim units.  The claim was
recorded on January 27,  2004.  On January 20, 2005,  we purchased  the property
from Pilgrim Creek Mining Ltd. for $7,000.

The  Railway  Prospect  property,  centered  at  approximately  46(Degree)38'  N
latitude and 80(Degree)40' W longitude or 524401m E and 5164264m N (NAD83,  Zone
17; NTS 41 l/10), is located in the lowermost  corner of the southwest  quadrant
of Scadding  Township,  at the boundary with MacLennan  Township to the west and
Street  township  to the south.  Access to the Railway  Property  can be made by
traveling  along the now abandoned  railway bed which can be accessed at various
points via municipal roadways such as the Kukagami Lake Road; the railway "road"

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<PAGE>
passes through the central portion of the mining claim.  The Railway Property is
proximal to the Sudbury  Mining Camp and the history of past mineral  production
in the region  provides all manner of  infrastructure  necessary  for the timely
exploration and development of mineral properties.

The land is dominated by a cover of mixed wood forest that includes sugar maple,
yellow birch,  poplar,  eastern  hemlock,  eastern white pine and red pine.  The
region is considered to have a humid, high cool temperate  eco-climate.  Average
daily  temperature  range in the summer is from 53 to 73 degrees while in winter
the average range is from 62 to 20 degrees.  Average annual  precipitation  is 3
feet and snow cover is deepest in January and February, with an average depth of
1.3 feet.

The claim has had no known  mineral  exploration.  We have not  carried  out any
exploration work on the claim and have incurred no exploration  costs. As of the
date of this Annual Report,  we have  re-staked the claim,  which is now in good
standing until February  2010. We have not carried out any  exploration  work on
the  claim  nor have we  incurred  any  exploration  costs.  Our  geologist  has
concluded  that the Railway  Prospect  Property claim is a good prospect for the
discovery  of  gold  mineralization.  He  has  recommended  a  two-base  surface
exploration program to further examine the property. Management anticipates that
the cost of the proposed program is  approximately  $6,000 for the initial phase
of exploration and  approximately  $10,000 for the second phase. We believe that
the initial  exploration  phase will be supported by generators.  Water required
for exploration and development is available in the area. Management anticipates
that commencement of phase I of the exploration  program is in the spring/summer
of 2008. On May 5, 2008, our then President/Chief  Executive Officer, Lynn Wigen
loaned $10,000 to us so that sufficient  funds are available for commencement of
phase I of the exploration program.

 In the event our claim does not  contain any  reserves,  all funds that we have
spent on exploration  will be lost. Even if we complete our current  exploration
program and are successful in identifying a mineral deposit, we will be required
to expend  substantial funds on further drilling and engineering  studies before
we will know if we have a commercially viable mineral deposit or reserve.

There is not a plant or any equipment  currently located on the property.  It is
expected  that the initial  exploration  phase will be supported by  generators.
Water required for  exploration and development of the claim is available in the
area.

The future cost of  exploration  work on the  property is disclosed in detail in
Item 6.  Management's  Discussion and Analysis and Plan of  Operation"-  Plan of
Operation."

ACQUISITION OF THE MINERAL CLAIM

The Railway Prospect  property consists of 633 acres within 16 unpatented mining
claim units. The claim was recorded on January 27, 2004. On January 20, 2005, we
purchased  the Railway  Prospect  property  from  Pilgrim  Creek Mining Ltd. for
$7,000. To satisfy government assessment regulations, and thus keep the claim in
good standing,  minimum eligible  exploration expenses of $400 per claim unit (a
total of $6,400 for the Railway  prospect)  must be incurred  and filed with the

                                       5
<PAGE>
Ministry of Northern  Development and Mines on or before the second  anniversary
date of the claim,  and on or before  every  anniversary  date  thereafter.  The
Railway prospect is in good standing until January 27, 2008.

LOCATION, ACCESS, CLIMATE, LOCAL RESOURCES AND INFRASTRUCTURE

The  Railway  Prospect  property,  centered  at  approximately  46(Degree)38'  N
latitude and 80(Degree)40' W longitude or 524401m E and 5164264m N (NAD83,  Zone
17; NTS 41 l/10), is located in the lowermost  corner of the southwest  quadrant
of Scadding  Township,  at the boundary with MacLennan  Township to the west and
Street township to the south.

Forestry,  mining and tourism are the most important land uses in the region and
a number of tourist  camps and cottages  are located in the area.  Low-intensity
farming,  including  subsidence crops and cattle and sheep grazing are scattered
throughout the area.

Access to the Railway  Prospect  property can be made by traveling along the now
abandoned  railway  bed which can be accessed  at various  points via  municipal
roadways such as the Kukagami Lake Road;  the railway  "road" passes through the
central portion of the mining claim. The Railway  Prospect  property is proximal
to the Sudbury  Mining Camp and the history of past  mineral  production  in the
region  provides  all  manner  of   infrastructure   necessary  for  the  timely
exploration and development of mineral properties.




                          [MAP SHOWING THE CLAIM AREA]




                                       6
<PAGE>




                        [MAP SHOWING THE CLAIM LOCATION]




HISTORY

There have been  numerous  exploration  programs in the general area and much of
this work has been  focused  toward  gold;  particularly  within the vicinity of
contacts between Nipissing Gabbro intrusions and Huronian Supergroup sediments.

REGIONAL, PROPERTY AND LOCAL GEOLOGY

Scadding township area is located within the Southern Geological Province of the
Canadian Shield.  This region is dominated by sedimentary  rocks of the Huronian
Supergroup   and  by   the   extensive   Nipissing   Gabbro   intrusive   suite.
Palaeoproterozic (~2.48 Ga) mafic layered intrusions of the East Bull Lake suite
are found in the  region  where  they  occur at or  proximal  to the base of the
Huronian Supergroup; this suite includes the East Bull Lake,  Shakespeare-Dunlop
or Agnew Lake, River Valley and Street Township intrusions.

Outcrop  exposure on the Railway  Prospect  property is limited to about  10-15%
with some of the best  exposure  along the  railway  cuts;  overburden  consists
mainly of sand-silt and organic and can be up to several metres thick. The claim
overlies several rock types including Nipissing Gabbro,  Sudbury Dyke Swarm, and
Huronian  Supergroup  sediments  (Bruce,  Espanola  and Serpent  formations  and
Mississagi Formation);  the Huronian sediments are folded.  Nipissing Gabbro are
intrusive  into the  Huronian  sediments,  and  parallel  (sills) and  cross-cut
(dikes) bedding planes. The youngest rocks in the area are the olivine-magnetite

                                       7
<PAGE>
bearing   Sudbury  Dykes  which  are   vertically   dipping  and  cross-cut  the
aforementioned  rock types;  a large dike of this type follows along the railway
line (Thomson 1961, Map 2009; Dressler, 1982, Map 2451).

Major structures in the area include a northwest-trending fault (un-named) which
cuts through the claim,  generally  following the abandoned  railway line; it is
the  geologist's  experience that these  northwest-trending  faults are commonly
associated with gold mineralization.

PROPOSED FUTURE BUSINESS OPERATIONS

Our current  strategy is to complete further  acquisition of additional  mineral
property  opportunities which fall within the criteria of providing a geological
basis for development of mining  initiatives  that can provide near term revenue
potential and production cash flows to create expanding reserves.  We anticipate
that our ongoing  efforts,  subject to adequate  funding being  available,  will
continue to be focused on successfully  concluding  negotiations  for additional
interests in mineral properties.  We plan to build a strategic base of producing
mineral properties.

Our ability to continue to complete  planned  exploration  activities and expand
acquisitions  and explore mining  opportunities is dependent on adequate capital
resources being available and further sources of debt and equity being obtained.

DEVELOPMENT OF MINERAL PROPERTIES

The requirement to raise further funding for mineral exploration and development
beyond  that  obtained  for the next six month  period may be  dependent  on the
outcome of geological  and  engineering  testing  occurring  over this interval.
Based  upon the  completion  of  current  property  evaluations  on the  Railway
Prospect property,  and if results provide the basis to continue development and
geological  studies indicate high probabilities of sufficient mineral production
quantities,  we will  attempt to raise  capital to further our  programs,  build
production   infrastructure,   and  raise   additional   capital   for   further
acquisitions. This includes the following activity:

     *    Review all available information and studies.

     *    Digitize all available factual information.

     *    Completion of a NI 43-101 Compliant Report with a qualified  geologist
          familiar with mineralization in the area.

     *    Determine feasibility and amenability of extracting the minerals.

     *    Create investor communications materials, corporate identity.

     *    Raise funding for mineral development.

     *    Target  further  leases for  exploration  potential and obtain further
          funding to acquire new development targets.

                                       8
<PAGE>
COMPETITION

We operate in a highly  competitive  industry,  competing  with other mining and
exploration  companies,  and institutional and individual  investors,  which are
actively seeking metal and mineral based exploration  properties  throughout the
world together with the equipment, labour and materials required to exploit such
properties.  Many  of  our  competitors  have  financial  resources,  staff  and
facilities substantially greater than ours. The principal area of competition is
encountered in the financial ability to cost effectively acquire prime metal and
minerals exploration prospects and then exploit such prospects.  Competition for
the acquisition of metal and minerals  exploration  properties is intense,  with
many properties  available in a competitive bidding process in which we may lack
technological information or expertise available to other bidders. Therefore, we
may not be successful in acquiring and developing  profitable  properties in the
face of this competition.  No assurance can be given that a sufficient number of
suitable  metal  and  minerals  exploration  properties  will be  available  for
acquisition and development.

MINERALS EXPLORATION REGULATION

Our  minerals  exploration  activities  are,  or will be,  subject to  extensive
foreign laws and regulations  governing  prospecting,  development,  production,
exports, taxes, labor standards, occupational health, waste disposal, protection
and  remediation  of the  environment,  protection of  endangered  and protected
species,  mine safety, toxic substances and other matters.  Minerals exploration
is also  subject  to risks and  liabilities  associated  with  pollution  of the
environment  and  disposal of waste  products  occurring  as a result of mineral
exploration  and  production.  Compliance  with these laws and  regulations  may
impose  substantial  costs on us and will  subject us to  significant  potential
liabilities. Changes in these regulations could require us to expend significant
resources  to  comply  with  new  laws or  regulations  or  changes  to  current
requirements   and  could  have  a  material  adverse  effect  on  our  business
operations.

Exploration  and  production  activities  are  subject to certain  environmental
regulations  which may prevent or delay the  commencement  or continuance of our
operations. In general, our exploration and production activities are subject to
certain  foreign  regulations  in Canada or  federal,  state and local  laws and
regulations,  relating to environmental quality and pollution control. Such laws
and regulations  increase the costs of these activities and may prevent or delay
the commencement or continuance of a given operation. Compliance with these laws
and  regulations  does  not  appear  to have a  future  material  effect  on our
operations or financial  condition to date.  Specifically,  we may be subject to
legislation  regarding  emissions  into the  environment,  water  discharges and
storage and disposition of hazardous wastes. However, such laws and regulations,
whether  foreign or local,  are frequently  changed and we are unable to predict
the ultimate cost of compliance.  Generally,  environmental  requirements do not
appear to affect us any  differently  or to any  greater or lesser  extent  than
other companies in the industry and our current  operations have not expanded to
a  point  where  either  compliance  or cost of  compliance  with  environmental
regulation is a  significant  issue for us. Costs have not been incurred to date
with  respect  to  compliance  with  environmental  laws but such  costs  may be
expected to increase with an increase in scale and scope of exploration.

Minerals  exploration  operations are subject to comprehensive  regulation which
may cause  substantial  delays or  require  capital  outlays  in excess of those
anticipated  causing  an adverse  effect on our  business  operations.  Minerals

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<PAGE>
exploration  operations are subject to foreign,  federal,  state, and local laws
relating to the protection of the environment, including laws regulating removal
of natural  resources  from the ground and the  discharge of materials  into the
environment. Minerals exploration operations are also subject to federal, state,
and  local  laws and  regulations  which  seek to  maintain  health  and  safety
standards by regulating  the design and use of drilling  methods and  equipment.
Various permits from government  bodies are required for drilling  operations to
be  conducted;  no  assurance  can be given that such  permits will be received.
Environmental  standards imposed by federal,  state, or local authorities may be
changed  and  any  such  changes  may  have  material  adverse  effects  on  our
activities.  Moreover, compliance with such laws may cause substantial delays or
require capital outlays in excess of those anticipated,  thus causing an adverse
effect on us.  Additionally,  we may be subject to  liability  for  pollution or
other  environmental  damages  which we may elect not to insure  against  due to
prohibitive  premium  costs and  other  reasons.  As of the date of this  Annual
Report,  we have not been  required to spend any material  amount on  compliance
with environmental  regulations.  However, we may be required to do so in future
and this may affect our ability to expand or maintain our operations.

RESEARCH AND DEVELOPMENT ACTIVITIES

No research  and  development  expenditures  have been  incurred,  either on our
account or sponsored by customers, during the past three years.

EMPLOYEES

We do not employ any persons on a full-time or on a part-time basis. Marc Gagnon
is our  President/Chief  Executive  Officer  and our  Treasurer/Chief  Financial
Officer.  This  individual  is  primarily  responsible  for all  our  day-to-day
operations. Other services are provided by outsourcing,  consultant, and special
purpose contracts.

RISK FACTORS

An investment in our common stock involves a number of very  significant  risks.
You should carefully  consider the following risks and uncertainties in addition
to  other  information  in  evaluating  our  company  and  its  business  before
purchasing  shares of our common  stock.  Our  business,  operating  results and
financial condition could be seriously harmed due to any of the following risks.
The risks  described  below are all of the material  risks that we are currently
aware of that are facing our company. Additional risks not presently known to us
may also  impair  our  business  operations.  You could lose all or part of your
investment due to any of these risks.

RISKS RELATED TO OUR BUSINESS

WE WILL NEED TO RAISE ADDITIONAL FINANCING TO COMPLETE FURTHER EXPLORATION.

We will  require  significant  additional  financing  in order to  continue  our
exploration  activities and our  assessment of the  commercial  viability of our
mineral  properties  in  Canada.  Furthermore,  if  the  costs  of  our  planned
exploration  programs  are  greater  than  anticipated,  we  may  have  to  seek
additional funds through public or private share offerings or arrangements  with
corporate partners.  There can be no assurance that we will be successful in our
efforts  to raise  these  require  funds,  or on terms  satisfactory  to us. The

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<PAGE>
continued   exploration  of  current  and  future  mineral  properties  and  the
development  of our  business  will  depend upon our  ability to  establish  the
commercial  viability  of our  precious  metal  and  mineral  properties  and to
ultimately develop cash flow from operations and reach profitable operations. We
currently are in the  exploration  stage and we have no revenue from  operations
and we are experiencing  significant negative cash flow.  Accordingly,  the only
other sources of funds presently available to us are through the sale of equity.
We presently believe that debt financing will not be an alternative to us as all
of our properties are in the exploration  stage.  Alternatively,  we may finance
our  business by offering  an  interest in any of our mineral  properties  to be
earned  by  another  party or  parties  carrying  out  further  exploration  and
development  thereof or to obtain project or operating  financing from financial
institutions, neither of which is presently intended. If we are unable to obtain
this  additional  financing,  we will not be able to  continue  our  exploration
activities and our assessment of the commercial  viability of our precious metal
and mineral properties. Further, if we are able to establish that development of
our precious metal and mineral properties is commercially  viable, our inability
to raise  additional  financing at this stage would  result in our  inability to
place our mineral properties into production and recover our investment.  We may
not discover commercially  exploitable quantities of precious metals or minerals
on our properties that would enable us to enter into commercial production,  and
achieve revenues and recover the money we spend on exploration.

Our  properties  do not contain  reserves  in  accordance  with the  definitions
adopted by the  Securities  and Exchange  Commission,  and there is no assurance
that any exploration  programs that we out will establish reserves.  Our mineral
property is in the exploration stage as opposed to the development stage and has
no known body of  economic  mineralization.  The known  mineralization  at these
projects  has  not yet  been  determined,  and may  never  be  determined  to be
economic.  We plan to conduct  further  exploration  activities  on our  mineral
property,  which future  exploration  may include the  completion of feasibility
studies  necessary to evaluate  whether a commercial  mineable mineral exists on
any of our  properties.  There is a  substantial  risk  that  these  exploration
activities will not result in discoveries of commercially recoverable quantities
of  minerals.   Any  determination  that  our  properties  contain  commercially
recoverable quantities of minerals may not be reached until such time that final
comprehensive  feasibility  studies have been  concluded  that  establish that a
potential  mine is likely to be economic.  There is a substantial  risk that any
preliminary or final feasibility  studies carried out by us will not result in a
positive   determination   that  our  mineral  properties  can  be  commercially
developed.

OUR  EXPLORATION  ACTIVITIES ON OUR MINERAL  PROPERTIES MAY NOT BE  COMMERCIALLY
SUCCESSFUL, WHICH COULD LEAD US TO ABANDON OUR PLANS TO DEVELOP THE PROPERTY AND
OUR INVESTMENTS IN EXPLORATION.

Our  long-term  success  depends  on  our  ability  to  establish   commercially
recoverable  quantities  of ore on our  mineral  properties  that  can  then  be
developed into commercially  viable mining  operations.  Mineral  exploration is
highly   speculative   in  nature,   involves   many  risks  and  is  frequently
non-productive.  These risks include unusual or unexpected geologic  formations,
and the inability to obtain suitable or adequate machinery,  equipment or labor.
The  success of  mineral  exploration  is  determined  in part by the  following
factors:

     *    identification  of  potential   mineralization  based  on  superficial
          analysis;

                                       11
<PAGE>
     *    availability of government-granted exploration permits;

     *    the quality of management and geological and technical expertise; and

     *    the capital available for exploration.

Substantial  expenditures are required to establish proven and probable reserves
through drilling and analysis, to develop processes to extract minerals,  and to
develop the mining and processing  facilities and  infrastructure  at any chosen
site. Whether a mineral deposit will be commercially  viable depends on a number
of factors, which include, without limitation,  the particular attributes of the
deposit,  such as size,  grade and  proximity to  infrastructure;  metal prices,
which  fluctuate09-8  widely;  and government  regulations,  including,  without
limitation,  regulations relating to prices, taxes, royalties, land tenure, land
use,  importing and exporting of minerals and environmental  protection.  We may
invest significant  capital and resources in exploration  activities and abandon
such investments if it is unable to identify  commercially  exploitable  mineral
reserves.  The decision to abandon a project may reduce the trading price of our
common stock and impair our ability to raise future financing. We cannot provide
any  assurance to  investors  that we will  discover or acquire any  mineralized
material in sufficient quantities on any of our properties to justify commercial
operations.  Further,  we will not be able to recover the funds that we spend on
exploration if we are not able to establish commercially  recoverable quantities
of precious metals or minerals on our properties.

OUR  BUSINESS  IS  DIFFICULT  TO  EVALUATE  BECAUSE WE HAVE A LIMITED  OPERATING
HISTORY.

In considering  whether to invest in our common stock,  you should consider that
our  inception  was  August 18,  2003 and,  as a result,  there is only  limited
historical financial and operating  information  available on which to base your
evaluation of our performance.  In addition,  we have only recently  acquired or
will acquire our primary minerals exploration  prospects with limited experience
in early stage exploration efforts.

WE HAVE A HISTORY OF OPERATING  LOSSES AND THERE CAN BE NO ASSURANCES WE WILL BE
PROFITABLE IN THE FUTURE.

We have a history of operating losses,  expect to continue to incur losses,  and
may never be  profitable,  and we must be  considered  to be in the  exploration
stage.  Further,  we have been  dependent on sales of our equity  securities and
debt financing to meet our cash  requirements.  We have incurred losses totaling
approximately  $52,523 from August 16, 2003  (inception) to June 30, 2008. As of
June 30, 2008, we had an accumulated  deficit of $52,523 and incurred  losses of
approximately $28,914 during fiscal year ended June 30, 2008. Further, we do not
expect  positive  cash  flow  from  operations  in the  near  term.  There is no
assurance  that  actual  cash  requirements  will not exceed our  estimates.  In
particular,  additional capital may be required in the event that: (i) the costs
to acquire  additional  mineral  exploration  claims are more than we  currently
anticipate; (ii) exploration and or future potential mining costs for additional
claims increase  beyond our  expectations;  or (iii) we encounter  greater costs
associated with general and administrative expenses or offering costs.

                                       12
<PAGE>
FUTURE  PARTICIPATION IN AN INCREASED NUMBER OF MINERALS  EXPLORATION  PROSPECTS
WILL REQUIRE SUBSTANTIAL CAPITAL EXPENDITURES.

The  uncertainty  and factors  described  throughout this section may impede our
ability to  economically  discover,  acquire,  develop  and/or  exploit  mineral
prospects.  As a result, we may not be able to achieve or sustain  profitability
or positive cash flows from operating activities in the future.

The financial  statements  for the fiscal years ended June 30, 2008 and June 30,
2007 have been  prepared  "assuming  that the Company  will  continue as a going
concern,"  which  contemplates  that we will  realize our assets and satisfy our
liabilities and  commitments in the ordinary course of business.  Our ability to
continue as a going concern is dependent on raising  additional  capital to fund
our operations and ultimately on generating future profitable operations.  There
can be no assurance that we will be able to raise sufficient  additional capital
or eventually have positive cash flow from operations to address all of our cash
flow needs. If we are not able to find  alternative  sources of cash or generate
positive  cash flow from  operations,  our  business  and  shareholders  will be
materially  and adversely  affected.  See "Item 6.  Management's  Discussion and
Analysis or Plan of Operation - Going Concern."

WE WILL REQUIRE ADDITIONAL FUNDING IN THE FUTURE.

Based upon our historical  losses from  operations,  we will require  additional
funding  in the  future.  If we cannot  obtain  capital  through  financings  or
otherwise,  our  ability to execute  our  exploration  programs  will be greatly
limited.  Our current  plans  require us to make  capital  expenditures  for the
exploration of our minerals exploration properties. Historically, we have funded
our  operations  through the issuance of equity and  short-term  debt  financing
arrangements.  We may not be able to obtain  additional  financing  on favorable
terms,  if at all. Our future cash flows and the  availability of financing will
be subject to a number of  variables,  including  potential  production  and the
market  prices of certain  minerals.  Further,  debt  financing  could lead to a
diversion  of  cash  flow  to  satisfy  debt-servicing  obligations  and  create
restrictions on business operations. If we are unable to raise additional funds,
it would have a material adverse effect upon our operations.

AS PART OF OUR  GROWTH  STRATEGY,  WE  INTEND  TO  ACQUIRE  ADDITIONAL  MINERALS
EXPLORATION PROPERTIES.

Such  acquisitions  may  pose  substantial  risks  to  our  business,  financial
condition, and results of operations. In pursuing acquisitions,  we will compete
with other companies,  many of which have greater  financial and other resources
to  acquire  attractive  properties.  Even  if we are  successful  in  acquiring
additional  properties,  some of the properties may not produce positive results
of  exploration,  or we may not complete  exploration of such  prospects  within
specified  time periods may cause the  forfeiture of the lease in that prospect.
There  can be no  assurance  that we will  be  able  to  successfully  integrate
acquired properties, which could result in substantial costs and delays or other
operational,  technical,  or financial  problems.  Further,  acquisitions  could
disrupt ongoing business operations. If any of these events occur, it would have
a material adverse effect upon our operations and results from operations.

                                       13
<PAGE>
WE ARE RELATIVELY A NEW ENTRANT INTO THE MINERALS  EXPLORATION  AND  DEVELOPMENT
INDUSTRY WITHOUT PROFITABLE OPERATING HISTORY.

Since  inception,  our activities have been limited to  organizational  efforts,
obtaining  working  capital and acquiring  and  developing  one  property.  As a
result, there is limited information regarding production or revenue generation.
As a result,  our future  revenues  may be  limited.  The  business  of minerals
exploration  and  development  is  subject  to many  risks  and if gold or other
precious metals or other minerals are found in economic  production  quantities,
the potential  profitability  of future possible  mining  ventures  depends upon
factors  beyond our  control.  The  potential  profitability  of mining  mineral
properties if economic  quantities of minerals are found is dependent  upon many
factors  and risks  beyond  our  control,  including,  but not  limited  to: (i)
unanticipated  ground and water  conditions  and adverse claims to water rights;
(ii) geological  problems;  (iii)  metallurgical and other processing  problems;
(iv) the occurrence of unusual  weather or operating  conditions and other force
majeure  events;  (v) lower than expected  grades of minerals;  (vi)  accidents;
(vii)  delays in the  receipt  of or failure  to  receive  necessary  government
permits;  (viii) delays in transportation;  (ix) labor disputes;  (x) government
permit  restrictions  and  regulation   restrictions;   (xi)  unavailability  of
materials  and  equipment;  and (xii) the failure of  equipment  or processes to
operate in accordance with specifications or expectations.

IF THERE IS A DEFECT WITH  RESPECT TO TITLE OF OUR MINERAL  CLAIM,  OUR BUSINESS
MAY FAIL .

We own a mineral  claim in Canada.  Although  we believe  that we have taken all
appropriate  steps to  determine  that we have title to this claim,  there is no
guarantee  that there are no defects with respect to title of the mineral claim.
The property  may be subject to prior  unregistered  agreements  or transfers or
native land claims,  and title may be affected by undetected  defects.  If we do
not have clear title to our mineral  claims,  our  business may fail and you may
lose your entire investment in our common stock.

THE RISKS ASSOCIATED WITH EXPLORATION AND DEVELOPMENT AND, IF APPLICABLE, MINING
COULD CAUSE PERSONAL INJURY OR DEATH,  ENVIRONMENTAL  DAMAGE,  DELAYS IN MINING,
MONETARY LOSSES AND POSSIBLE LEGAL LIABILITY.

We  are  not  currently  engaged  in  mining  operations  because  we are in the
exploration  phase  and have not yet any  proved  minerals  reserves.  We do not
presently  carry  property and liability  insurance.  Cost  effective  insurance
contains  exclusions and  limitations on coverage and may be unavailable in some
circumstances.

THE MINERAL  EXPLORATION AND MINING INDUSTRY IS HIGHLY  COMPETITIVE AND THERE IS
NO ASSURANCE THAT WE WILL BE SUCCESSFUL IN ACQUIRING THE LEASES.

The mineral  exploration  and mining industry is intensely  competitive,  and we
compete  with  other  companies  that  have  greater  resources.  Many of  these
companies  not only explore for and produce  certain  minerals,  but also market
certain minerals and other products on a regional,  national or worldwide basis.
These  companies may be able to pay more for productive  mineral  properties and
exploratory prospects or define, evaluate, bid for and purchase a greater number
of properties and prospects  than our financial or human  resources  permit.  In
addition,  these  companies may have a greater  ability to continue  exploration

                                       14
<PAGE>
activities during periods of low mineral market prices.  Our larger  competitors
may be able to absorb the burden of present and future foreign,  federal, state,
local and other  laws and  regulations  more  easily  than we can,  which  would
adversely  affect our competitive  position.  Our ability to acquire  additional
properties and to discover productive  prospects in the future will be dependent
upon our ability to evaluate and select  suitable  properties  and to consummate
transactions in a highly competitive environment.  In addition,  because we have
fewer financial and human resources than many companies in our industry,  we may
be at a disadvantage in bidding for exploratory  prospects and producing mineral
properties.

THE  MARKETABILITY  OF NATURAL  RESOURCES  WILL BE AFFECTED BY NUMEROUS  FACTORS
BEYOND OUR CONTROL  WHICH MAY RESULT IN US NOT  RECEIVING AN ADEQUATE  RETURN ON
INVESTED CAPITAL TO BE PROFITABLE OR VIABLE.

The marketability of natural resources which may be acquired or discovered by us
will be affected by numerous  factors beyond our control.  These factors include
macroeconomic factors,  market fluctuations in commodity pricing and demand, the
proximity and capacity of natural  resource  markets and  processing  equipment,
governmental  regulations,  land tenure,  land use,  regulation  concerning  the
importing  and  exporting  of  certain  minerals  and  environmental  protection
regulations.  The exact effect of these factors cannot be accurately  predicted,
but the  combination of these factors may result in us not receiving an adequate
return on invested capital to be profitable or viable.

MINERAL MINING  OPERATIONS ARE SUBJECT TO  COMPREHENSIVE  REGULATION,  WHICH MAY
CAUSE  SUBSTANTIAL  DELAYS  OR  REQUIRE  CAPITAL  OUTLAYS  IN  EXCESS  OF  THOSE
ANTICIPATED, CAUSING AN ADVERSE EFFECT ON OUR BUSINESS OPERATIONS.

If economic quantities of certain minerals are found on any lease owned by us in
sufficient  quantities to warrant mining operations,  such mining operations are
subject to foreign, federal, state, and local laws relating to the protection of
the environment, including laws regulating removal of natural resources from the
ground and the  discharge  of materials  into the  environment.  Mineral  mining
operations  are also  subject to  foreign,  federal,  state,  and local laws and
regulations which seek to maintain health and safety standards by regulating the
design and use of mining methods and equipment.  Various permits from government
bodies are required for mining  operations to be conducted;  no assurance can be
given that such  permits will be received.  Environmental  standards  imposed by
federal,  provincial,  or local  authorities may be changed and any such changes
may have material adverse effects on our activities.  Moreover,  compliance with
such laws may cause  substantial  delays or require capital outlays in excess of
those anticipated,  thus resulting in an adverse effect on us. Additionally,  we
may be subject to liability for pollution or other  environmental  damages which
we may elect not to insure  against due to  prohibitive  premium costs and other
reasons.  To date we have  not  been  required  to  spend  material  amounts  on
compliance with environmental regulations.  However, we may be required to do so
in future and this may affect our ability to expand or maintain our operations.

MINERALS  EXPLORATION  AND  DEVELOPMENT  AND MINING  ACTIVITIES  ARE  SUBJECT TO
CERTAIN ENVIRONMENTAL  REGULATIONS,  WHICH MAY PREVENT OR DELAY THE COMMENCEMENT
OR CONTINUANCE OF OUR OPERATIONS.

                                       15
<PAGE>
Minerals  exploration  and  development  and  future  potential  uranium  mining
operations are or will be subject to stringent federal, state,  provincial,  and
local laws and  regulations  relating to improving or maintaining  environmental
quality. Our global operations are also subject to many environmental protection
laws.  Environmental laws often require parties to pay for remedial action or to
pay damages regardless of fault.  Environmental laws also often impose liability
with respect to divested or terminated  operations,  even if the operations were
terminated or divested of many years ago.

Future potential  mineral mining operations and current  exploration  activities
are or will be subject to extensive laws and regulations governing  prospecting,
development,  production, exports, taxes, labor standards,  occupational health,
waste  disposal,  protection and remediation of the  environment,  protection of
endangered  and  protected  species,  mine safety,  toxic  substances  and other
matters. Mineral mining is also subject to risks and liabilities associated with
pollution  of the  environment  and  disposal of waste  products  occurring as a
result of mineral  exploration  and  production.  Compliance with these laws and
regulations  will  impose  substantial  costs  on  us  and  will  subject  us to
significant potential liabilities.

COSTS ASSOCIATED WITH ENVIRONMENTAL LIABILITIES AND COMPLIANCE MAY INCREASE WITH
AN INCREASE IN FUTURE SCALE AND SCOPE OF OPERATIONS.

We believe that our operations currently comply, in all material respects,  with
all applicable environmental  regulations.  However, we are not fully insured at
the current date against possible environmental risks.

ANY CHANGE IN GOVERNMENT REGULATION/ADMINISTRATIVE PRACTICES MAY HAVE A NEGATIVE
IMPACT ON OUR ABILITY TO OPERATE AND OUR PROFITABILITY.

The laws,  regulations,  policies  or current  administrative  practices  of any
government  body,  organization  or  regulatory  agency  in  Canada or any other
applicable  jurisdiction,  may be changed,  applied or  interpreted  in a manner
which will  fundamentally  alter our ability to carry on business.  The actions,
policies  or  regulations,  or  changes  thereto,  of  any  government  body  or
regulatory  agency,  or other special  interest  groups,  may have a detrimental
effect on us. Any or all of these  situations may have a negative  impact on our
ability to operate and/or our profitably.

WE MAY BE UNABLE TO RETAIN KEY EMPLOYEES OR  CONSULTANTS  OR RECRUIT  ADDITIONAL
QUALIFIED PERSONNEL.

Our  extremely  limited  personnel  means  that we  would be  required  to spend
significant  sums of money to locate and train new employees in the event any of
our employees resign or terminate their  employment with us for any reason.  Due
to our  limited  operating  history and  financial  resources,  we are  entirely
dependent on the continued service of Marc Gagnon, our President/Chief Executive
Officer and Treasurer/Chief Financial Officer and our sole director. Further, we
do not have  key man  life  insurance  on this  individual.  We may not have the
financial resources to hire a replacement if our officer was to die. The loss of
service of this employee could therefore  significantly and adversely affect our
operations.

                                       16
<PAGE>
OUR OFFICERS AND DIRECTORS MAY BE SUBJECT TO CONFLICTS OF INTEREST.

Our officers and directors  serve only part time and are subject to conflicts of
interest.  Our current executive officer and director serves only on a part time
basis.  He  devotes  part of his  working  time  to  other  business  endeavors,
including  consulting  relationships  with  other  corporate  entities,  and has
responsibilities  to these other entities.  Such conflicts  include deciding how
much time to  devote  to our  affairs,  as well as what  business  opportunities
should be  presented  to us.  Because of these  relationships,  our  officer and
director may be subject to conflicts of interest.

NEVADA LAW AND OUR  ARTICLES OF  INCORPORATION  MAY PROTECT OUR  DIRECTORS  FROM
CERTAIN TYPES OF LAWSUITS.

Nevada law provides that our officers and directors  will not be liable to us or
our  stockholders  for monetary  damages for all but certain types of conduct as
officers and directors. Our Bylaws permit us broad indemnification powers to all
persons  against all damages  incurred in  connection  with our  business to the
fullest extent provided or allowed by law. The  exculpation  provisions may have
the effect of  preventing  stockholders  from  recovering  damages  against  our
officers  and  directors  caused by their  negligence,  poor  judgment  or other
circumstances.  The indemnification provisions may require us to use our limited
assets to defend our officers and directors  against  claims,  including  claims
arising out of their negligence, poor judgment, or other circumstances.

RISKS RELATED TO OUR COMMON STOCK

Sales of a  substantial  number of shares of our  common  stock  into the public
market by certain  stockholders may result in significant  downward  pressure on
the price of our common  stock and could  affect  your  ability  to realize  the
current trading price of our common stock.

THERE IS NO ACTIVE TRADING MARKET FOR OUR COMMON STOCK,  AND IF A MARKET FOR OUR
COMMON  STOCK  DOES NOT  DEVELOP,  OUR  INVESTORS  WILL BE UNABLE TO SELL  THEIR
SHARES.

There is currently no active  trading  market for our common  stock,  and such a
market  may not  develop  or be  sustained.  Our  common  stock is quoted on the
Financial Industry  Regulatory  Authority's  (FINRA) OTC Bulletin Board upon the
effectiveness of our registration statement. A market maker was required to file
a Form  15c-211  to allow the  market  maker to make a market  in our  shares of
common  stock.  However,  our shares  have not  commenced  trading and we cannot
provide our investors with any assurance that a public market will  materialize.
Further,  the OTC Bulletin  Board is not a listing  service or exchange,  but is
instead a dealer quotation service for subscribing  members. If our common stock
is not  quoted on the OTC  Bulletin  Board or if a public  market for our common
stock does not develop,  then  investors may not be able to resell the shares of
our common stock that they have purchased and may lose all of their  investment.
If we establish a trading  market for our common stock,  the market price of our
common  stock  may be  significantly  affected  by  factors  such as  actual  or
anticipated fluctuations in our operation results, general market conditions and
other factors.  In addition,  the stock market has from time to time experienced
significant price and volume  fluctuations  that have particularly  affected the
market  prices  for  the  shares  of  exploration  stage  companies,  which  may
materially adversely affect the market price of our common stock.

                                       17
<PAGE>
SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK IN THE PUBLIC MARKET
BY CERTAIN  STOCKHOLDERS  COULD  CAUSE A  REDUCTION  IN THE MARKET  PRICE OF OUR
COMMON STOCK.

As of the date of this Annual Report,  we have 8,055,000  shares of common stock
issued and outstanding.  Of the total number of issued and outstanding shares of
common stock,  certain  stockholders  are able to resell  certain  shares of our
common stock pursuant to a SB-2  registration  statement  declared  effective on
November 13, 2007. As a result of this registration  statement,  an aggregate of
5,055,000 shares of our common stock were issued and are available for immediate
resale which could have an adverse effect on the price of our common stock.

As of the date of this Annual Report, there are 3,000,000  outstanding shares of
our common stock that are restricted  securities as that term is defined in Rule
144 under the  Securities  Act.  Although the  Securities Act and Rule 144 place
certain prohibitions on the sale of restricted securities, restricted securities
may be sold into the public market under certain conditions.

Any  significant  downward  pressure  on the  price of our  common  stock as the
selling stockholders sell their shares of our common stock could encourage short
sales by the selling  stockholders  or others.  Any such short sales could place
further downward pressure on the price of our common stock.

WHEN OUR COMMON STOCK COMMENCE  TRADING ON THE OTC BULLETIN  BOARD,  THE TRADING
PRICE MAY FLUCTUATE SIGNIFICANTLY AND STOCKHOLDERS MAY HAVE DIFFICULTY RESELLING
THEIR SHARES.

When our common stock actively  commences trading on the OTC Bulletin Board, the
trading price may fluctuate significantly.  In addition to volatility associated
with Bulletin Board  securities in general,  the value of your investment  could
decline due to the impact of any of the following  factors upon the market price
of our common stock: (i) disappointing results from our discovery or development
efforts;  (ii) failure to meet our revenue or profit goals or operating  budget;
(iii)  decline  in demand for our  common  stock;  (iv)  downward  revisions  in
securities  analysts'  estimates or changes in general  market  conditions;  (v)
technological innovations by competitors or in competing technologies; (vi) lack
of funding generated for operations;  (vii) investor  perception of our industry
or our prospects; and (viii) general economic trends.

In addition,  stock markets have experienced  price and volume  fluctuations and
the market prices of securities have been highly  volatile.  These  fluctuations
are often unrelated to operating performance and may adversely affect the market
price of our common  stock.  As a result,  investors may be unable to sell their
shares at a fair price and you may lose all or part of your investment.

ADDITIONAL ISSUANCES OF EQUITY SECURITIES MAY RESULT IN DILUTION TO OUR EXISTING
STOCKHOLDERS.

Our Articles of  Incorporation  authorize the issuance of  75,000,000  shares of
common  stock.  The Board of Directors  has the  authority  to issue  additional
shares of our capital  stock to provide  additional  financing in the future and
the  issuance of any such shares may result in a reduction  of the book value or
market price of the  outstanding  shares of our common stock. If we do issue any
such  additional  shares,  such  issuance  also will  cause a  reduction  in the
proportionate ownership and voting power of all other stockholders.  As a result

                                       18
<PAGE>
of such dilution,  if you acquire shares of our common stock, your proportionate
ownership  interest  and voting  power  could be  decreased.  Further,  any such
issuances could result in a change of control.

OUR COMMON STOCK IS  CLASSIFIED  AS A "PENNY STOCK" UNDER SEC RULES WHICH LIMITS
THE MARKET FOR OUR COMMON STOCK.

Because our stock is not traded on a stock  exchange  or on the NASDAQ  National
Market or the NASDAQ  Small Cap  Market,  and  because  the market  price of the
common  stock has  fluctuated  and may trade at times at less than $5 per share,
the common stock may be classified as a "penny  stock." SEC Rule 15g-9 under the
Exchange Act imposes  additional sales practice  requirements on  broker-dealers
that  recommend the purchase or sale of penny stocks to persons other than those
who qualify as an  "established  customer"  or an  "accredited  investor."  This
includes the  requirement  that a broker-dealer  must make a determination  that
investments  in penny stocks are suitable for the customer and must make special
disclosures  to  the  customers  concerning  the  risk  of  penny  stocks.  Many
broker-dealers decline to participate in penny stock transactions because of the
extra requirements imposed on penny stock transactions. Application of the penny
stock  rules to our common  stock  reduces the market  liquidity  of our shares,
which in turn  affects the ability of holders of our common  stock to resell the
shares they  purchase,  and they may not be able to resell at prices at or above
the prices they paid.

A DECLINE IN THE PRICE OF OUR COMMON  STOCK  COULD  AFFECT OUR  ABILITY TO RAISE
FURTHER WORKING CAPITAL AND ADVERSELY IMPACT OUR OPERATIONS.

A decline in the price of our common  stock could  result in a reduction  in the
liquidity of our common stock and a reduction in our ability to raise additional
capital for our operations.  Since our operations to date have been  principally
financed  through the sale of equity  securities,  a decline in the price of our
common stock could have an adverse  effect upon our  liquidity and our continued
operations.  A reduction  in our ability to raise  equity  capital in the future
would have a material  adverse  effect upon our  business  plan and  operations,
including  our ability to continue  our current  operations.  If our stock price
declines,  we may not be able to raise additional capital or generate funds from
operations sufficient to meet our obligations.

OUR  DIRECTOR  AND OFFICER is OUTSIDE THE UNITED  STATES WITH THE RESULT THAT IT
MAY BE DIFFICULT FOR INVESTORS TO ENFORCE WITHIN THE UNITED STATES ANY JUDGMENTS
OBTAINED AGAINST OUR DIRECTOR OR OFFICER.

Our officer and director is a national  and/or  resident of a country other than
the United States, and all or a substantial  portion of such person's assets are
located  outside  the  United  States.  As a  result,  it may be  difficult  for
investors to effect  service of process on our  director or officer,  or enforce
within the  United  States or Canada any  judgments  obtained  against us or our
officer or director,  including  judgments  predicated  upon the civil liability
provisions of the  securities  laws of the United  States or any state  thereof.
Consequently, you may be effectively prevented from pursuing remedies under U.S.
federal securities laws against them. In addition,  investors may not be able to
commence  an action in a  Canadian  court  predicated  upon the civil  liability
provisions of the securities laws of the United States.

                                       19
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTIES

We lease our  principal  office space  located at 1400 Begin  Street,  Montreal,
Quebec,  Canada  H3B 4R4.  The  office  space is for  corporate  identification,
mailing, and courier purposes only and costs us monthly nominal amount.

ITEM 3. LEGAL PROCEEDINGS

As of the date of this Annual Report, no director, officer or affiliate is (i) a
party adverse to us in any legal proceeding,  or (ii) has an adverse interest to
us in any legal  proceedings.  Management is not aware of any legal  proceedings
pending or that have been threatened against us or our properties.

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

During  fiscal  year  ended June 30,  2008,  no matters  were  submitted  to our
stockholders for approval.

                                     PART II

ITEM 5. MARKET FOR COMMON  EQUITY AND  RELATED  STOCKHOLDER  MATTERS  AND SMALL
        BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

MARKET FOR COMMON EQUITY

Shares of our common stock commenced trading on the OTC Bulletin Board under the
symbol "SRXP:OB" approximately September 2008. However, no market for our common
stock has been established.

As of  September  24, 2008,  we had 22  shareholders  of record,  which does not
include shareholders whose shares are held in street or nominee names.

DIVIDEND POLICY

No  dividends  have ever been  declared by the Board of  Directors on our common
stock.  Our  losses  do not  currently  indicate  the  ability  to pay any  cash
dividends,  and we do not indicate the intention of paying cash dividends either
on our common stock in the foreseeable future.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER COMPENSATION PLANS

We do not have any equity compensation plans.

                                       20
<PAGE>
EQUITY PLAN COMPENSATION INFORMATION

<TABLE>
<CAPTION>
                                                                     Weighted-Average       Number of Securities
                                        Number of Securities to     Exercise Price of     Remaining Available for
                                        be Issued Upon exercise        Outstanding         Future Issuance Under
                                        of Outstanding Options,     Options, warrants    Equity Compensation Plans
                                          warrants and Rights           and Rights         (excluding column (a))
Plan Category                                     (a)                      (b)                      (c)
-------------                             -------------------           ----------         ----------------------
<S>                                     <C>                           <C>                 <C>
Equity Compensation Plans
Approved by Security Holders                                          Not applicable

Equity Compensation Plans not
Approved by Security Holders                                          Not applicable
</TABLE>

RECENT SALES OF UNREGISTERED SECURITIES

As of the date of this Annual Report and during fiscal year ended June 30, 2008,
we did not issue any shares of our common stock in private placement offering or
in exchange for our debts or pursuant to contractual agreements.

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

The  summarized  financial data set forth in the table below is derived from and
should be read in  conjunction  with our audited  financial  statements  for the
period from inception  (August 18, 2003) to year ended June 30, 2008,  including
the notes to those  financial  statements  which  are  included  in this  Annual
Report. The following  discussion should be read in conjunction with our audited
financial  statements and the related notes that appear elsewhere in this Annual
Report.  The  following  discussion  contains  forward-looking  statements  that
reflect our plans,  estimates  and  beliefs.  Our actual  results  could  differ
materially from those discussed in the forward looking statements.  Factors that
could cause or contribute to such  differences  include,  but are not limited to
those discussed  below and elsewhere in this Annual Report,  particularly in the
section entitled "Risk Factors".  Our audited financial statements are stated in
United  States  Dollars  and are  prepared  in  accordance  with  United  States
Generally Accepted Accounting Principles.

We are an exploration  stage company and have not generated any revenue to date.
The following  table sets forth selected  financial  information for the periods
indicated.

                                       21
<PAGE>
RESULTS OF OPERATION

<TABLE>
<CAPTION>
                                                                                  For the period
                                           Fiscal Year        Fiscal Year         from inception
                                              Ended              Ended         (August 18, 2003) to
                                             June 30,           June 30,             June 30,
                                               2008               2007                 2008
                                             --------           --------             --------
<S>                                          <C>                <C>                  <C>
Revenue                                      $      0           $      0             $      0

General and Administrative Expenses
  Bank charges and interest                       135                128                  526
  Filing and transfer agent fees               16,761                  0               16,761
  Professional fees                            11,714              8,176               19,890
  Mineral properties                                0                  0               14,500
  Office expenses                                 304                105                  846
                                             --------           --------             --------

Net Income (Loss)                            $(28,914)          $ (8,409)            $(52,523)
                                             ========           ========             ========
</TABLE>

We have incurred  recurring  losses to date. Our financial  statements have been
prepared assuming that we will continue as a going concern and, accordingly,  do
not include adjustments relating to the recoverability and realization of assets
and classification of liabilities that might be necessary should we be unable to
continue in operation.

We expect we will  require  additional  capital to meet our long term  operating
requirements. We expect to raise additional capital through, among other things,
the sale of equity or debt securities.

FISCAL YEAR ENDED JUNE 30, 2008 COMPARED TO FISCAL YEAR ENDED JUNE 30, 2007.

Our net loss during fiscal year ended June 30, 2008 was approximately  ($28,914)
compared to a net loss of ($8,409) for fiscal year ended June 30, 2007.

During  fiscal years ended June 30, 2008 and June 30,  respectively,  we did not
generate  any  revenue.  During  fiscal  year ended June 30,  2008,  we incurred
general and administrative  expenses in the aggregate amount of $28,914 compared
to $8,409  incurred  during  fiscal  year ended June 30,  2007 (an  increase  of
$20,505).  The general and  administrative  expenses incurred during fiscal year
ended June 30, 2008  consisted  of: (i) bank charges and interest of $135 (2007:
$128);  (ii)  filing and  transfer  agent fees of $16,761  (2007:  $-0-);  (iii)
professional  fees of $11,714 (2007:  $8,176);  and (iv) office expenses of $304
(2007:  $105).  The increase in expenses  incurred during fiscal year ended June
30, 2008 compared to fiscal year ended June 30, 2007 resulted  primarily from an
overall  increase  in  professional  fees and  filing  and  transfer  agent fees
relating  to the  increased  scale  scope of  business  operations.  General and
administrative  expenses  generally  include corporate  overhead,  financial and
administrative contracted services, marketing and consulting costs.

                                       22
<PAGE>
Our net loss during fiscal year ended June 30, 2008 was ($28,914) or ($0.00) per
share  compared  to a net loss of  ($8,409) or ($0.00) per share for fiscal year
ended June 30,  2007.  The weighted  average  number of shares  outstanding  was
8,055,000 at June 30, 2008 and June 30, 2007, respectively. .

LIQUIDITY AND CAPITAL RESOURCES

FISCAL YEAR ENDED JUNE 30, 2008

Our financial  statements have been prepared assuming that we will continue as a
going  concern  and,  accordingly,  do not include  adjustments  relating to the
recoverability  and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation.

As at fiscal year ended June 30, 2008,  our current  assets were $10,616 and our
current  liabilities  were $36,139,  resulting in a working  capital  deficit of
$25,523.  As at fiscal year ended June 30,  2008,  our total assets were $10,616
consisting  of cash compared to total assets of $8,391 at fiscal year ended June
30, 2007. As at fiscal year ended June 30, 2008,  our current  liabilities  were
$36,139 compared to current  liabilities of $5,000 at fiscal year ended June 30,
2007. Our current  liabilities  consisted of: (i) $1,139 in accounts payable and
accrued  liabilities;  and (ii) $35,000 in loan from related party. The increase
in  current  liabilities  was  primarily  due to the  increase  in the loan from
related party.

Stockholders'  equity  (deficit)  decreased  from  $3,391 as at June 30, 2007 to
($25,523) as at June 30, 2008.

We have not generated positive cash flows from operating activities.  For fiscal
year  ended  June 30,  2008,  net cash flow  used in  operating  activities  was
($27,775) compared to net cash flow used in operating activities of ($8,409) for
fiscal  year ended June 30,  2007.  Net cash flow used in  operating  activities
during  fiscal  year  ended June 30,  2008  consisted  primarily  of net loss of
($28,914) with changes in operating assets and liabilities of $1,139 in accounts
payable.

During  fiscal year ended June 30,  2008,  net cash flow  provided by  financing
activities  was  $30,000  compared  to  net  cash  flow  provided  by  financing
activities of $5,000 for fiscal year ended June 30, 2007. Net cash flow provided
from  financing  activities  during fiscal year ended June 30, 2008 pertained to
$30,000 in loan from related party.

PLAN OF OPERATION

Advances and further private  placements are expected to be adequate to fund our
operations  over the next six months.  On May 5, 2008, our then  President/Chief
Executive Officer, Lynn Wigen, loaned us $10,000 for purposes of working capital
related to  commencement  of phase I  exploration  program.  We have no lines of
credit  or  other  bank  financing  arrangements.  Generally,  we have  financed
operations  to date through the proceeds of the private  placement of equity and

                                       23
<PAGE>
debt securities.  In connection with our business plan,  management  anticipates
that  administrative  expenses will increase over the next twelve months. We may
also encounter business  endeavors that require  significant cash commitments or
unanticipated  problems  or  expenses  that could  result in a  requirement  for
additional cash.

Additional  issuances of equity or convertible  debt  securities  will result in
dilution  to our  current  shareholders.  Further,  such  securities  might have
rights,  preferences  or  privileges  senior  to our  common  stock.  Additional
financing may not be available  upon  acceptable  terms,  or at all. If adequate
funds are not available or are not available on acceptable  terms, we may not be
able to take advantage of prospective new business  endeavors or  opportunities,
which could significantly and materially restrict our business operations.

Our  plan  of  operation  for  the  twelve  months  following  the  date of this
prospectus  is to  complete  the first phase of the  exploration  program on our
claim consisting of geological  mapping and sampling and geophysical  survey. In
addition  to the  $6,000  we  anticipate  spending  for the  first  phase of the
exploration  program as outlined  below,  we  anticipate  spending an additional
$5,000 on  professional  fees,  including  fees payable in  connection  with the
filing of this registration  statement and complying with reporting obligations,
and general administrative costs. Total expenditures over the next twelve months
are therefore expected to be approximately  $11,000. If we experience a shortage
of funds  prior to  funding  we may  utilize  funds  from our  officer/director,
however, he has no formal commitment, arrangement or legal obligation to advance
or loan funds to us.

Our  exploration  target is to find  exploitable  minerals on our property.  Our
success depends on achieving that target. There is the likelihood of our mineral
claim containing  little or no economic  mineralization or reserves of minerals.
There is the possibility  that our claim does not contain any reserves and funds
that we spend on  exploration  will be lost.  Even if we  complete  our  current
exploration  program and are successful in identifying a mineral deposit we will
be required to expend substantial funds to bring our claim to production. We are
unable to assure you we will be able to raise the additional  funds necessary to
implement any future exploration or extraction program even if mineralization is
found.

The following two phase  exploration  proposal and cost estimate is offered with
the   understanding   that  the  second  phase  is   contingent   upon  positive
(encouraging)  results being obtained from the first phase and are being able to
raise the funds to pay for the second phase:

                               EXPLORATION PROGRAM

PHASE 1                                                          $        US $
-------                                                        -----     ------
Geological Review                                                500
Geological Mapping and Sampling (GPS)                          3,500
Report Writing/Consulting                                      1,500
Operating Supplies                                               500
                                                  TOTAL        6,000      6,000
PHASE 2
Geophysical Survey (targets for drilling)                      7,000
Follow up Mapping and Sampling                                 1,000
Report Writing/Consulting                                      1,500
Operating Supplies                                               500
                                                  TOTAL       10,000     10,000

                                                  TOTAL                  16,000

                                       24
<PAGE>
We plan to commence Phase 1 of the exploration  program on the claim in the fall
of 2008.  We expect this phase to take seven days to complete and an  additional
one to two months for the  geologist  to receive the results  from the assay lab
and prepare his report.

The  above   program   costs  are   management's   estimates   based   upon  the
recommendations  of the professional  geologist's  report and the actual project
costs may exceed our estimates. To date, we have not commenced exploration.

Following  phase one of the  exploration  program,  if it proves  successful  in
identifying  mineral  deposits,  we  intend  to  proceed  with  phase two of our
exploration  program. The estimated this program will take approximately 14 days
to complete and an additional one to two months for the geologist to receive the
results  from the assay lab and prepare  his  report.  Subject to the results of
phase 1 and the receipt of additional funds, of which there is no guarantee,  we
anticipate  commencing  the second  phase of our  exploration  program in spring
2009.

We have a verbal agreement with Scott Jobin-Bevans,  the professional  geologist
who prepared the geology report on the Railway Prospect property,  to retain his
services for our planned exploration program. We will require additional funding
to proceed with any  subsequent  work on the claim;  we have no current plans on
how to raise the  additional  funding.  We cannot  provide any assurance that we
will be able to raise  sufficient funds to proceed with any work after the first
phase of the exploration program.

MATERIAL COMMITMENTS

As of the date of this Annual  Report,  we do not have any material  commitments
for fiscal year 2008/2009.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any  significant  equipment  during the next twelve
months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this  Annual  Report,  we do not have  any  off-balance  sheet
arrangements  that have or are  reasonably  likely  to have a current  or future
effect on our financial condition,  changes in financial condition,  revenues or
expenses,  results of operations,  liquidity,  capital  expenditures  or capital
resources that are material to investors.

GOING CONCERN

The independent  auditors'  report  accompanying  our June 30, 2008 and June 30,
2007  financial   statements  contains  an  explanatory   paragraph   expressing
substantial  doubt  about  our  ability  to  continue  as a going  concern.  The
financial  statements  have been prepared  "assuming  that we will continue as a
going concern," which  contemplates  that we will realize our assets and satisfy
our liabilities and commitments in the ordinary course of business.

                                       25
<PAGE>
RECENT ACCOUNTING PRONOUNCEMENTS

In February 2006, the FASB issued SFAS No. 155,  "Accounting  for Certain Hybrid
Financial  Instruments-an  amendment  of FASB  Statements  No. 133 and 140",  to
simplify  and  make  more  consistent  the  accounting  for  certain   financial
instruments.  SFAS No. 155  amends  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities", to permit fair value re-measurement for any
hybrid  financial  instrument  with an embedded  derivative that otherwise would
require  bifurcation,  provided that the whole  instrument is accounted for on a
fair  value  basis.  SFAS No.  155  amends  SFAS No.  140,  "Accounting  for the
Impairment   or  Disposal  of   Long-Lived   Assets",   to  allow  a  qualifying
special-purpose  entity to hold a derivative  financial instrument that pertains
to a beneficial  interest other than another  derivative  financial  instrument.
SFAS No. 155 applies to all financial  instruments  acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006,
with  earlier  application  allowed.  This  standard  is not  expected to have a
significant  effect on the  Company's  future  reported  financial  position  or
results of operations.

In March  2006,  the FASB  issued SFAS No. 156,  "Accounting  for  Servicing  of
Financial  Assets,  an  amendment  of FASB  Statement  No. 140,  Accounting  for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
This statement requires all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable, and permits for
subsequent  measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization  and impairment  requirements of
Statement No. 140. The subsequent measurement of separately recognized servicing
assets and  servicing  liabilities  at fair value  eliminates  the necessity for
entities  that  manage the risks  inherent  in  servicing  assets and  servicing
liabilities  with  derivatives  to qualify for hedge  accounting  treatment  and
eliminates  the  characterization  of declines in fair value as  impairments  or
direct write-downs.  SFAS No. 156 is effective for an entity's first fiscal year
beginning  after  September  15, 2006.  This  adoption of this  statement is not
expected to have a significant effect on the Company's future reported financial
position or results of operations.

                                       26
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

Report of Independent  Registered  Public  Accounting  Firm Dated  September 10,
2008.

Balance Sheets as at June 30, 2008 and June 30, 2007.

Statements of Operations  For Fiscal Years Ended June 30, 2008 and June 30, 2007
and for the Period From August 18, 2003 (Inception) to June 30, 2008.

Statement  of  Stockholders'   Equity  for  the  Period  From  August  18,  2003
(Inception) to June 30, 2008.

Statements  of Cash Flows for the Fiscal  Years Ended June 30, 2008 and June 30,
2007 and for the Period From August 18, 2003 (Inception) to June 30, 2008.

Notes to Financial Statements.

                                       27
<PAGE>
                            RONALD R. CHADWICK, P.C.
                           Certified Public Accountant
                        2851 South Parker Road, Suite 720
                             Aurora, Colorado 80014
                             Telephone (303)306-1967
                                Fax (303)306-1944


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Sterling Exploration, Inc.
Vancouver, British Columbia

I have audited the accompanying balance sheets of Sterling Exploration,  Inc. as
of  June  30,  2008  and  2007  and  the  related   statements  of   operations,
stockholders' equity and cash flows for the years then ended, and for the period
from  August  18,  2003  (inception)  through  June 30,  2008.  These  financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.

I conducted my audit in  accordance  with the  standards  of the Public  Company
Accounting Oversight Board (United States).  Those standards require that I plan
and perform the audit to obtain reasonable assurance about 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.  I believe that my audit provides a reasonable
basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects,  the financial position of Sterling  Exploration,  Inc. as of
June 30, 2008 and 2007 and the results of its  operations and its cash flows for
the years then  ended,  and for the period  from  August  18,  2003  (inception)
through  June  30,  2008 in  conformity  with  accounting  principles  generally
accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial  statements the Company has suffered  recurring losses from operations
that raise  substantial  doubt about its ability to continue as a going concern.
Management's  plans in regard to these matters are also described in Note 1. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


Aurora, Colorado                               /s/ Ronald R. Chadwick, P.C.
September 10, 2008                             ---------------------------------
                                               RONALD R. CHADWICK, P.C.

                                       28
<PAGE>
STERLING EXPLORATION INC.
Balance Sheets
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                              June 30,           June 30,
                                                                                2008               2007
                                                                              --------           --------
<S>                                                                           <C>                <C>
                                     ASSETS

CURRENT ASSETS
  Cash                                                                        $ 10,616           $  8,391
                                                                              --------           --------

      TOTAL ASSTS                                                             $ 10,616           $  8,391
                                                                              ========           ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                                    $  1,139           $     --
  Loans from related party                                                      35,000              5,000
                                                                              --------           --------

      TOTAL CURRENT LIABILITIES                                                 36,139              5,000
                                                                              --------           --------
STOCKHOLDERS' EQUITY
  Capital stock
    Authorized 75,000,000 ordinary voting shares at $0.001 per share
    Issued and outstanding:
      8,055,000 common shares at par  value                                      8,055              8,055
    Additional paid in capital                                                  18,945             18,945
                                                                              --------           --------
                                                                                27,000             27,000
    Deficit accumulated during the exploration stage                           (52,523)           (23,609)
                                                                              --------           --------

      TOTAL STOCKHOLDERS' EQUITY                                               (25,523)             3,391
                                                                              --------           --------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $ 10,616           $  8,391
                                                                              ========           ========
</TABLE>


Approved on behalf of the board

_______________________________, Director

_______________________________, Director

                                       29
<PAGE>
STERLING EXPLORATION INC.
Statements of Income
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                          Accumulated From
                                                                                         Date of Inception
                                                   Year Ended           Year Ended       August 18, 2003 to
                                                    June 30,             June 30,             June 30,
                                                      2008                 2007                 2008
                                                   ----------           ----------           ----------
<S>                                                <C>                  <C>                  <C>
GENERAL AND ADMINISTRATIVE EXPENSES
  Bank charges and interest                        $      135           $      128           $      526
  Filing and transfer agent fees                       16,761                   --               16,761
  Professional fees                                    11,714                8,176               19,890
  Mineral properties                                       --                   --               14,500
  Office expenses                                         304                  105                  846
                                                   ----------           ----------           ----------
Total general and administrative expenses              28,914                8,409               52,523
                                                   ----------           ----------           ----------

Net loss                                           $  (28,914)          $   (8,409)          $  (52,523)
                                                   ==========           ==========           ==========

EARNINGS PER SHARE - BASIC AND DILUTED             $    (0.00)          $    (0.00)
                                                   ==========           ==========

WEIGHTED AVERAGE OUTSTANDING SHARES                 8,055,000            8,055,000
                                                   ==========           ==========
</TABLE>

                                       30
<PAGE>
STERLING EXPLORATION INC.
Statement of Stockholders' Equity
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                 Deficit
                                                                                               Accumulated      Total
                               Price      Number of                  Additional      Total     During the       Stock-
                                Per        Common            Par      Paid-in       Capital    Exploration      holders'
                               Share       Shares           Value     Capital        Stock        Stage         Equity
                               -----       ------           -----     -------        -----        -----         ------
<S>                            <C>        <C>           <C>          <C>          <C>          <C>            <C>
Balance, August 18, 2003                         --     $     --     $     --      $     --     $      --      $     --
September 5, 2003
  Subscribed for cash          $0.001     2,000,000        2,000           --         2,000            --         2,000
October 30, 2003
  Subscribed for cash          $0.001     1,500,000        1,500           --         1,500                       1,500
Comprehensive loss for the
 period ended June 30, 2004                                                                           (80)          (80)
                                        -----------     --------     --------      --------     ---------      --------
Balance, June 30, 2004                    3,500,000        3,500           --         3,500           (80)        3,420

October 4, 2004
  Subscribed for cash          $0.001     3,000,000        3,000           --         3,000                       3,000
October 27, 2004
  Subscribed for cash          $0.01      1,050,000        1,050        9,450        10,500                      10,500
December 7, 2004
  Subscribed for cash          $0.01        450,000          450        4,050         4,500                       4,500
January 10, 2005
  Subscribed for cash          $0.1          15,000           15        1,485         1,500                       1,500
January 27, 2005
  Subscribed for cash          $0.1          40,000           40        3,960         4,000                       4,000
Net loss                                                                                           (7,547)       (7,547)
                                        -----------     --------     --------      --------     ---------      --------
Balance, June 30, 2005                    8,055,000        8,055       18,945        27,000        (7,627)       19,373
Net loss                                                                                           (7,573)       (7,573)
                                        -----------     --------     --------      --------     ---------      --------
Balance, June 30, 2006                    8,055,000        8,055       18,945        27,000       (15,200)       11,800
                                        -----------     --------     --------      --------     ---------      --------
Net loss                                                                                           (8,409)       (8,409)
                                        -----------     --------     --------      --------     ---------      --------
Balance, June 30, 2007                    8,055,000        8,055       18,945        27,000       (23,609)        3,391
Net loss                                                                                          (28,914)      (28,914)
                                        -----------     --------     --------      --------     ---------      --------

Balance, June 30, 2008                    8,055,000     $  8,055     $ 18,945      $ 27,000     $ (52,523)     $(25,523)
                                        ===========     ========     ========      ========     =========      ========
</TABLE>

                                       31
<PAGE>
STERLING EXPLORATION INC.
Statements of Cash Flows
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                             Accumulated From
                                                                                            Date of Inception
                                                          Year Ended         Year Ended     August 18, 2003 to
                                                           June 30,           June 30,           June 30,
                                                             2008               2007               2008
                                                           --------           --------           --------
<S>                                                      <C>                  <C>                <C>
CASH DERIVED FROM (USED FOR) OPERATING ACTIVITIES
  Net loss for the period                                  $(28,914)          $ (8,409)          $(52,523)
  Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities
  Changes in operating assets and liabilities
    Accounts payable                                          1,139                 --              1,139
                                                           --------           --------           --------
Net cash (used in) operating activities                     (27,775)            (8,409)           (51,384)
                                                           --------           --------           --------
FINANCING ACTIVITIES
  Loans from related party                                   30,000              5,000             35,000
  Shares subscribed for cash                                     --                 --             27,000
                                                           --------           --------           --------
Net cash provided by financing activities                    30,000              5,000             62,000
                                                           --------           --------           --------

INVESTING ACTIVITIES                                             --                 --                 --
                                                           --------           --------           --------
Net cash used for investing activities                           --                 --                 --
                                                           --------           --------           --------

Cash increase during the period                               2,225             (3,409)            10,616
Cash beginning of the period                                  8,391             11,800                 --
                                                           --------           --------           --------

Cash end of the period                                     $ 10,616           $  8,391           $ 10,616
                                                           ========           ========           ========
</TABLE>

                                       32
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
June 30, 2008
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

1. NATURE AND CONTINUANCE OF OPERATIONS

     Sterling  Exploration Inc. ("the Company") was incorporated  under the laws
     of State of Nevada,  U.S. on August 18, 2003, with an authorized capital of
     75,000,000 common shares with a par value of $0.001. The Company's year end
     is the end of June. The Company is in the exploration stage of its resource
     business.  During the  period  ended June 30,  2004 the  Company  commenced
     operations by issuing  shares and acquiring a mineral  property  located in
     the Province of Ontario, Canada. The Company has not yet determined whether
     this property  contains  reserves that are  economically  recoverable.  The
     recoverability  of costs incurred for  acquisition  and  exploration of the
     property will be dependent upon the discovery of  economically  recoverable
     reserves,   confirmation  of  the  Company's  interest  in  the  underlying
     property,  the  ability of the  Company to obtain  necessary  financing  to
     satisfy the expenditure  requirements  under the property  agreement and to
     complete  the  development  of the  property  and  upon  future  profitable
     production or proceeds for the sale thereof.

     These  financial  statements  have been  prepared on a going  concern basis
     which  assumes the Company will be able to realize its assets and discharge
     its  liabilities  in the  normal  course of  business  for the  foreseeable
     future.  The Company has incurred  losses since  inception  resulting in an
     accumulated  deficit of $52,523 as at June 30, 2008 and further  losses are
     anticipated in the development of its business  raising  substantial  doubt
     about the Company's ability to continue as a going concern.  The ability to
     continue  as a going  concern  is  dependent  upon the  Company  generating
     profitable  operations  in  the  future  and/or  to  obtain  the  necessary
     financing to meet its obligations  and repay its  liabilities  arising from
     normal  business  operations  when  they come due.  Management  intends  to
     finance  operating  costs over the next twelve months with existing cash on
     hand and loans from directors and or private placement of common stock.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION

     The  financial  statements  of the Company have been prepared in accordance
     with  generally  accepted  accounting  principles  in the United  States of
     America and are presented in US dollars.

     EXPLORATION STAGE COMPANY

     The  Company  complies  with  the  Financial   Accounting  Standards  Board
     Statement  No. 7, its  characterization  of the  Company as an  exploration
     stage enterprise.

     MINERAL INTERESTS

     Mineral  property  acquisition,   exploration  and  development  costs  are
     expensed as incurred until such time as economic  reserves are  quantified.
     To date the Company has not established any proven or probable  reserves on
     its mineral properties.  The Company has adopted the provisions of SFAS No.
     143  "Accounting  for  Asset  Retirement   Obligations"  which  establishes
     standards  for  the  initial  measurement  and  subsequent  accounting  for
     obligations  associated  with the sale,  abandonment,  or other disposal of
     long-lived  tangible assets arising from the  acquisition,  construction or
     development and for normal  operations of such assets. As at June 30, 2008,
     any potential  costs  relating to the  retirement of the Company's  mineral
     property interest has not yet been determined.

                                       33
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
June 30, 2008
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     USE OF ESTIMATES AND ASSUMPTIONS

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during the period. Actual results could differ from those estimates.

     The  carrying  value of cash and accounts  payable and accrued  liabilities
     approximates  their  fair  value  because  of the short  maturity  of these
     instruments. Unless otherwise noted, it is management's opinion the Company
     is not exposed to  significant  interest,  currency or credit risks arising
     from these financial instruments.

     ENVIRONMENTAL COSTS

     Environmental  expenditures that relate to current  operations are expensed
     or  capitalized  as  appropriate.  Expenditures  that relate to an existing
     condition caused by past operations, and which do not contribute to current
     or future revenue generation,  are expensed.  Liabilities are recorded when
     environmental  assessments  and/or remedial  efforts are probable,  and the
     cost can be reasonably estimated.  Generally,  the timing of these accruals
     coincides  with the earlier of  completion  of a  feasibility  study or the
     Company's commitments to plan of action based on the then known facts.

     INCOME TAXES

     The Company  follows the liability  method of accounting  for income taxes.
     Under  this  method,   deferred  income  tax  assets  and  liabilities  are
     recognized for the estimated tax  consequences  attributable to differences
     between the financial statement carrying values and their respective income
     tax basis (temporary differences). The effect on deferred income tax assets
     and  liabilities  of a change in tax rates is  recognized  in income in the
     period that includes the enactment date.

     At June 30, 2008, a full  deferred tax asset  valuation  allowance has been
     provided and no deferred tax asset has been recorded.

     BASIC AND DILUTED LOSS PER SHARE

     The  Company  computes  loss per share in  accordance  with  SFAS No.  128,
     "Earnings per Share" which requires  presentation of both basic and diluted
     earnings per share on the face of the statement of  operations.  Basic loss
     per share is computed by dividing net loss available to common shareholders
     by the weighted  average  number of  outstanding  common  shares during the
     period.  Diluted  loss per share  gives  effect to all  dilutive  potential
     common  shares  outstanding  during  the  period.  Dilutive  loss per share
     excludes all potential common shares if their effect is anti-dilutive.

     The Company has no potential  dilutive  instruments and  accordingly  basic
     loss and diluted loss per share are equal.

                                       34
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
June 30, 2008
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     STOCK-BASED COMPENSATION

     In December  2004,  the FASB issued SFAS No. 123R,  "Share-Based  Payment",
     which replaced SFAS No. 123, "Accounting for Stock-Based  Compensation" and
     superseded APB Opinion No. 25,  "Accounting for Stock Issued to Employees".
     In January 2005,  the  Securities  and Exchange  Commission  ("SEC") issued
     Staff Accounting  Bulletin ("SAB") No. 107,  "Share-Based  Payment",  which
     provides supplemental  implementation  guidance for SFAS No. 123R. SFAS No.
     123R requires all share-based  payments to employees,  including  grants of
     employee stock options, to be recognized in the financial  statements based
     on the  grant  date  fair  value  of the  award.  SFAS  No.  123R was to be
     effective  for interim or annual  reporting  periods  beginning on or after
     June 15,  2005,  but in April 2005 the SEC  issued a rule that will  permit
     most  registrants to implement SFAS No. 123R at the beginning of their next
     fiscal year,  instead of the next reporting  period as required by SFAS No.
     123R. The pro-forma disclosures  previously permitted under SFAS No. 123 no
     longer will be an alternative  to financial  statement  recognition.  Under
     SFAS No. 123R, the Company must determine the appropriate  fair value model
     to be used for valuing  share-based  payments,  the amortization method for
     compensation cost and the transition method to be used at date of adoption.

     The  transition  methods  include  prospective  and  retroactive   adoption
     options.  Under the  retroactive  options,  prior  periods  may be restated
     either  as of the  beginning  of the year of  adoption  or for all  periods
     presented.  The prospective  method requires that  compensation  expense be
     recorded  for all  unvested  stock  options  and  restricted  stock  at the
     beginning  of the first  quarter of  adoption of SFAS No.  123R,  while the
     retroactive  methods  would  record  compensation  expense for all unvested
     stock  options  and  restricted  stock  beginning  with  the  first  period
     restated. The Company adopted the modified prospective approach of SFAS No.
     123R for the quarter beginning December 1, 2005. The Company did not record
     any  compensation  expense for the period ended June 30, 2008 because there
     were no stock  options  outstanding  prior to the  adoption  or at June 30,
     2008.

     RECENT ACCOUNTING PRONOUNCEMENTS

     In February  2006,  the FASB issued SFAS No. 155,  "Accounting  for Certain
     Hybrid  Financial  Instruments-an  amendment of FASB Statements No. 133 and
     140",  to simplify  and make more  consistent  the  accounting  for certain
     financial  instruments.  SFAS No. 155 amends SFAS No. 133,  "Accounting for
     Derivative  Instruments  and  Hedging  Activities",  to permit  fair  value
     re-measurement  for  any  hybrid  financial  instrument  with  an  embedded
     derivative  that  otherwise  would require  bifurcation,  provided that the
     whole  instrument  is  accounted  for on a fair value  basis.  SFAS No. 155
     amends  SFAS  No.  140,  "Accounting  for the  Impairment  or  Disposal  of
     Long-Lived Assets", to allow a qualifying  special-purpose entity to hold a
     derivative  financial  instrument  that  pertains to a beneficial  interest
     other than another derivative financial instrument. SFAS No. 155 applies to
     all  financial  instruments  acquired or issued  after the  beginning of an
     entity's  first fiscal year that begins  after  September  15,  2006,  with
     earlier  application  allowed.  This  standard  is not  expected  to have a
     significant  effect on the Company's future reported  financial position or
     results of operations.

     In March 2006, the FASB issued SFAS No. 156,  "Accounting  for Servicing of
     Financial  Assets,  an amendment of FASB Statement No. 140,  Accounting for
     Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
     Liabilities".  This statement requires all separately  recognized servicing
     assets and servicing  liabilities be initially  measured at fair value,  if
     practicable, and permits for subsequent measurement using either fair value
     measurement  with  changes  in fair  value  reflected  in  earnings  or the
     amortization  and  impairment   requirements  of  Statement  No.  140.  The
     subsequent  measurement  of  separately  recognized  servicing  assets  and
     servicing  liabilities at fair value  eliminates the necessity for entities
     that  manage  the  risks   inherent  in  servicing   assets  and  servicing
     liabilities with derivatives to qualify for hedge accounting  treatment and
     eliminates the characterization of declines in fair value as impairments or
     direct write-downs.  SFAS No. 156 is effective for an entity's first fiscal
     year beginning after September 15, 2006. This adoption of this statement is
     not expected to have a significant  effect on the Company's future reported
     financial position or results of operations.

                                       35
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
June 30, 2008
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

3. MINERAL INTERESTS

     On January 20, 2005, the Company entered into a mineral  property  purchase
     agreement to acquire a 100%  interest in one mineral  claim  located in one
     mineral claim located in the Scadding  Township,  Sudbury Mining  Division,
     Ontario for total consideration of $7,000.

     The mineral  interest is held in trust for the Company by the vendor of the
     property.  Upon  request from the Company the title will be recorded in the
     name of the Company with the appropriate mining recorder.

     During  the year  ended  June 30,  2006,  exploration  cost of  $7,500  was
     incurred for the mineral property.

4. COMMON STOCK

     The  total  number of common  shares  authorized  that may be issued by the
     Company  is  75,000,000  shares  with a par  value of one tenth of one cent
     ($0.001) per share and no other class of shares is authorized.

     During the period ended June 30, 2005, the Company issued  8,055,000 shares
     of common  stock for total cash  proceeds of $27,000.  At June 30, 2008 and
     2007 there were no outstanding stock options or warrants.

5. INCOME TAXES

     As of June 30, 2008,  the Company had net operating  loss carry forwards of
     approximately $52,523 that may be available to reduce future years' taxable
     income  through  2027.  Future tax benefits  which may arise as a result of
     these losses have not been  recognized in these  financial  statements,  as
     their  realization is determined not likely to occur and  accordingly,  the
     Company  has  recorded a valuation  allowance  for the  deferred  tax asset
     relating to these tax loss carry-forwards.

                                       36
<PAGE>
ITEM 8. CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
        FINANCIAL DISCLOSURE

We  have  engaged  Ronald  R.  Chadwick,  P.C.  ("Chadwick")  as  our  principal
independent  registered  public  accounting firm. The reports of Chadwick on our
financial  statements  for each of the fiscal years ended June 30, 2008 and June
30, 2007 did not contain an adverse  opinion or disclaimer of opinion,  nor were
they modified as to  uncertainty,  audit scope or accounting  principles,  other
than to state that there is substantial doubt as to our ability to continue as a
going concern.  During our fiscal years ended June 30, 2008 and 2007, there were
no disagreements between us and Chadwick, whether or not resolved, on any matter
of accounting  principles  or  practices,  financial  statement  disclosure,  or
auditing  scope or  procedure,  which,  if not resolved to the  satisfaction  of
Chadwick,  would have caused Chadwick to make reference thereto in their reports
on our audited consolidated financial statements.

In  connection  with our  appointment  of Chadwick as our  principal  registered
accounting  firm,  we did not  consult  Chadwick  on any matter  relating to the
application of accounting principles to a specific transaction, either completed
or  contemplated,  or the type of audit  opinion  that might be  rendered on our
financial statements.

ITEM 8A. CONTROLS AND PROCEDURES

FINANCIAL DISCLOSURE CONTROLS AND PROCEDURES

An evaluation was conducted under the supervision and with the  participation of
our management,  including Lynn Wigen, our previous  President//Chief  Executive
Officer,  and Marc Gagnon,  our current  President/Chief  Executive  Officer and
Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure  controls  and  procedures  as  of  June  30,  2008.  Based  on  that
evaluation,  Mr. Gagnon and Ms. Wigen concluded that our disclosure controls and
procedures were effective as of such date to ensure that information required to
be disclosed  in the reports  that we file or submit under the Exchange  Act, is
recorded,  processed,  summarized and reported within the time periods specified
in SEC rules and forms. Such officers also confirmed that there was no change in
our internal control over financial  reporting during fiscal year ended June 30,
2008 that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.

We maintain  "disclosure  controls and  procedures,"  as such term is defined in
Rule 13a-15(e) under the Securities  Exchange Act of 1934 (the "Exchange  Act"),
that are  designed to ensure that  information  required to be  disclosed in our
Exchange Act reports is recorded, processed,  summarized and reported within the
time periods  specified in the  Securities  and  Exchange  Commission  rules and
forms,  and  that  such  information  is  accumulated  and  communicated  to our
management,  including our Chief Executive  Officer/Chief  Financial Officer, as
appropriate,  to  allow  timely  decisions  regarding  required  disclosure.  We
conducted an evaluation (the  "Evaluation"),  under the supervision and with the
participation  of our Chief  Executive  Officer/Chief  Financial  Officer of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  ("Disclosure  Controls") as of the end of the period covered by this
report  pursuant to Rule  13a-15 of the  Exchange  Act.  The  evaluation  of our
disclosure controls and procedures included a review of the disclosure controls'

                                       37
<PAGE>
and  procedures'  objectives,  design,  implementation  and  the  effect  of the
controls and procedures on the information  generated for use in this report. In
the  course of our  evaluation,  we  sought to  identify  data  errors,  control
problems or acts of fraud and to confirm the appropriate  corrective actions, if
any, including process improvements,  were being undertaken. Our Chief Executive
Officer/Chief  Financial  Officer  concluded  that,  as of the end of the period
covered by this report,  our disclosure  controls and procedures  were effective
and were operating at the reasonable assurance level.

AUDIT COMMITTEE

The Board of Directors has not established an audit committee.

ITEM 8A(T)

Not applicable.

ITEM 8B. OTHER INFORMATION

Not applicable.

                                    PART III

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

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

All of our directors  hold office until the next annual  general  meeting of the
shareholders or until their  successors are elected and qualified.  Our officers
are  appointed  by our board of directors  and hold office  until their  earlier
death, retirement, resignation or removal.

Our directors and executive officers, their ages, positions held are as follows:

   Name                 Age                 Position with the Company
   ----                 ---                 -------------------------

Marc Gagnon             44           President/Chief Executive Officer/Chief
                                     Financial Officer and a Director

BUSINESS EXPERIENCE

The following is a brief account of the education and business experience of our
director and executive  officer during at least the past five years,  indicating
his principal  occupation during the period, and the name and principal business
of the organization by which he was employed,  and including other directorships
held in reporting companies.

                                       38
<PAGE>
MARC GAGNON.  Marc Gagnon has been our President/Chief  Executive  Officer/Chief
Financial  Officer and a director  since  September  11, 2008.  Mr.  Gagnon is a
graduate from the Haute Etude Commercial (HEC) of the University of Montreal and
holds a Certified Management Accountant designation. Mr. Gagnon is currently the
chief financial  officer of Hilbroy Advisory Corp., a  Montreal-based  corporate
finance  advisory  firm, and serves on its board of directors as well as many of
the firm's  client's  board of directors.  Previously,  Mr. Gagnon worked in the
food and beverage  industry for over ten years,  where he supervised  buying and
finances  department for Weston Bakery.  As an entrepreneur,  he was involved in
the medical equipment  industry for fifteen years as a board member,  regulatory
affairs, administrative and finances.

FAMILY RELATIONSHIPS

There are no family relationships among our directors or officers.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

During the past five years, none of our directors, executive officers or persons
that may be deemed  promoters is or have been  involved in any legal  proceeding
concerning:  (i) any  bankruptcy  petition  filed by or against any  business of
which such person was a general partner or executive  officer either at the time
of the bankruptcy or within two years prior to that time; (ii) any conviction in
a  criminal  proceeding  or  being  subject  to a  pending  criminal  proceeding
(excluding traffic violations and other minor offenses);  (iii) being subject to
any order, judgment or decree, not subsequently reversed,  suspended or vacated,
of any court of competent  jurisdiction  permanently or  temporarily  enjoining,
barring,  suspending or otherwise limiting  involvement in any type of business,
securities or banking  activity;  or (iv) being found by a court, the Securities
and Exchange  Commission or the  Commodity  Futures  Trading  Commission to have
violated a federal or state  securities or commodities law (and the judgment has
not been reversed, suspended or vacated).

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act requires our  directors and officers,  and the
persons who  beneficially own more than ten percent of our common stock, to file
reports of ownership and changes in ownership  with the  Securities and Exchange
Commission.  Copies of all filed  reports  are  required to be  furnished  to us
pursuant to Rule 16a-3  promulgated  under the Exchange Act. Based solely on the
reports received by us and on the  representations of the reporting persons,  we
believe that these persons have complied with all applicable filing requirements
during the fiscal year ended June 30, 2008.

ITEM 10. EXECUTIVE COMPENSATION

The  following  table sets forth the  compensation  paid to our Chief  Executive
Officer and those  executive  officers that earned in excess of $100,000  during
fiscal year ended June 30, 2008 (the "Named Executive Officer").  However,  none
of our officers/directors  earned any compensation during fiscal year ended June
30, 2008.

                                       39
<PAGE>
SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                                     Non-Equity      Nonqualified
 Name and                                                            Incentive         Deferred
 Principal                                    Stock       Option        Plan         Compensation     All Other
 Position       Year   Salary($)  Bonus($)   Awards($)   Awards($)  Compensation($)   Earnings($)   Compensation($)  Totals($)
 --------       ----   ---------  --------   ---------   ---------  ---------------   -----------   ---------------  ---------
<S>             <C>    <C>        <C>         <C>        <C>        <C>               <C>           <C>              <C>
Lynn Wigen   2007/2008     0         0           0           0             0               0               0             0
prior
President,
CEO
</TABLE>

STOCK OPTIONS/SAW GRANTS IN FISCAL YEAR ENDED JUNE 30, 2008

The  following  table sets forth  information  as at June 30,  2008  relating to
options that have been granted to the Named Executive Officer:

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

<TABLE>
<CAPTION>
                                      Option Awards                                             Stock Awards
          -----------------------------------------------------------------   -------------------------------------------------
                                                                                                                        Equity
                                                                                                                       Incentive
                                                                                                           Equity        Plan
                                                                                                          Incentive     Awards:
                                                                                                            Plan       Market or
                                                                                                           Awards:      Payout
                                             Equity                                                       Number of    Value of
                                            Incentive                            Number                   Unearned     Unearned
                                           Plan Awards;                            of          Market      Shares,      Shares,
            Number of      Number of        Number of                            Shares       Value of    Units or     Units or
           Securities     Securities       Securities                           or Units     Shares or     Other         Other
           Underlying     Underlying       Underlying                           of Stock      Units of     Rights       Rights
           Unexercised    Unexercised      Unexercised    Option     Option       That       Stock That     That         That
            Options         Options         Unearned     Exercise  Expiration   Have Not      Have Not    Have Not     Have Not
Name      Exercisable(#) Unexercisable(#)   Options(#)    Price($)    Date      Vested(#)     Vested($)   Vested(#)    Vested(#)
----      -------------- ----------------  ----------     -----       ----      ---------     ---------   ---------    ---------
<S>        <C>            <C>            <C>         <C>         <C>         <C>          <C>         <C>         <C>
Lynn Wigen,    0                0               0           0          --           0             0           0            0
President/CEO
</TABLE>

                                       40
<PAGE>
The following table sets forth information  relating to compensation paid to our
directors during fiscal year ended June 30, 2008:

DIRECTOR COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                      Change in
                                                                       Pension
                                                                      Value and
                   Fees                              Non-Equity      Nonqualified
                  Earned                             Incentive         Deferred
                 Paid in      Stock      Option        Plan          Compensation      All Other
    Name         Cash($)     Awards($)  Awards($)  Compensation($)    Earnings($)    Compensation($)   Total($)
    ----         -------     ---------  ---------  ---------------    -----------    ---------------   --------
<S>             <C>       <C>        <C>           <C>             <C>            <C>              <C>
Lynn Wigen          0           0           0            0                 0               0              0
</TABLE>


EMPLOYMENT AND CONSULTING AGREEMENTS

As of the date of this Annual Report, we have not entered into any employment or
consulting agreements with our Named Executive Officers or directors.

COMPENSATION OF DIRECTORS

Generally,  our  directors  do not  receive  salaries  or fees  for  serving  as
directors,  nor do they receive any compensation  for attending  meetings of the
board of directors. Directors are entitled to reimbursement of expenses incurred
in attending meetings.

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

As of the date of this Annual  Report,  the  following  table sets forth certain
information with respect to the beneficial ownership of our common stock by each
stockholder known by us to be the beneficial owner of more than 5% of our common
stock and by each of our current directors and executive  officers.  Each person
has sole voting and investment power with respect to the shares of common stock,
except  as  otherwise  indicated.  Beneficial  ownership  consists  of a  direct
interest in the shares of common stock, except as otherwise indicated. As of the
date of this Annual  Report,  there are 8,055,000  shares of common stock issued
and outstanding.

                                       41
<PAGE>
   Name and Address
of Beneficial Owner(1)        Number of Shares Owned(1)   Percentage of Class(1)
----------------------        -------------------------   ----------------------

Directors and Officers:

Lynn Wigen                           3,000,000 (2)                 37.25%
388 Drake Street, #2703
Vancouver, British Columbia
Canada V6B 6A8

Marc Gagnon                                  0                         0
1400 Begin Street
Montreal, Quebec
Canada V6B 6A8

All executive officers and
 directors as a group (1 person)             0                         0

----------
1.   Under Rule 13d-3, a beneficial owner of a security includes any person who,
     directly or indirectly, through any contract,  arrangement,  understanding,
     relationship,  or otherwise has or shares: (i) voting power, which includes
     the power to vote, or to direct the voting of shares;  and (ii)  investment
     power,  which  includes the power to dispose or direct the  disposition  of
     shares.  Certain shares may be deemed to be beneficially owned by more than
     one person (if, for example,  persons  share the power to vote or the power
     to  dispose  of  the  shares).  In  addition,   shares  are  deemed  to  be
     beneficially  owned by a person if the person has the right to acquire  the
     shares (for example, upon exercise of an option) within 60 days of the date
     as of which the  information  is  provided.  In  computing  the  percentage
     ownership  of any  person,  the amount of shares  outstanding  is deemed to
     include  the amount of shares  beneficially  owned by such person (and only
     such  person)  by  reason of these  acquisition  rights.  As a result,  the
     percentage of outstanding  shares of any person as shown in this table does
     not necessarily  reflect the person's actual ownership or voting power with
     respect to the number of shares of common stock actually  outstanding as of
     the date of this Annual Report. As of the date of this Annual Report, there
     are 8,055,000 shares issued and outstanding

2.   This figure includes 3,000,000 shares of restricted common stock, which are
     held of record by Lynn Wigen, our prior President/Chief Executive Officer.

CHANGES IN CONTROL

We are unaware of any contract, or other arrangement or provision, the operation
of which may at a subsequent date result in a change of control of our company.

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<PAGE>
ITEM 12. CERTAIN   RELATIONSHIPS   AND  RELATED   TRANSACTIONS   AND  DIRECTOR
         INDEPENDENCE

Our director,  officer or principal stockholder,  nor any associate or affiliate
of the foregoing, has any interest, direct or indirect, in any transaction or in
any proposed  transactions,  which has  materially  affected or will  materially
affect us.

ITEM 13. EXHIBITS

The following exhibits are filed as part of this Annual Report.

Exhibit Number                        Description of Exhibit
--------------                        ----------------------

     3.1             Articles of Incorporation(1)

     3.2             Bylaws(1)

     31.1            Certification  of Chief Executive  Officer Pursuant to Rule
                     13a-14(a) or 15d-14(a) of the Securities Exchange Act.

     31.2            Certification  of the Chief Financial  Officer  Pursuant to
                     Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act

     32.1            Certification   of  Chief   Executive   Officer  and  Chief
                     Financial officer Under Section 1350 as Adopted Pursuant to
                     Section 906 of the Sarbane-Oxley Act.

----------
(1)  Filed as an Exhibit to the  Company's  Registration  Statement on Form SB-1
     filed with the SEC on  February  17, 2005 and  incorporated  herein by this
     reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

During fiscal year ended June 30, 2008, we incurred approximately $7,500 in fees
to our principal  independent  accountants for professional services rendered in
connection with the audit of our financial statements for fiscal year ended June
30, 2008 and for the review of our financial  statements  for the quarters ended
September 30, 2007, December 31, 2007 and March 31, 2008.

During fiscal year ended June 30, 2007, we incurred approximately $7,500 in fees
to our principal  independent  accountant for professional  services rendered in
connection with the audit of our financial statements for fiscal year ended June
30,  2007 and for the review of our  financial  statements  the  quarters  ended
September 30, 2006, December 31, 2006 and March 31, 2007.

During  fiscal  year  ended June 30,  2008,  we did not incur any other fees for
professional services rendered by our principal  independent  accountant for all
other non-audit  services which may include,  but is not limited to, tax-related
services, actuarial services or valuation services.

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<PAGE>
                                   SIGNATURES

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

                                                STERLING EXPLORATION INC.


Dated: September 29, 2008                       By: /s/  MARC GAGNON
                                                   -----------------------------
                                                   Marc Gagnon, President/
                                                   Chief Executive Officer


Dated: September 29, 2008                       By: /s/ MARC GAGNON
                                                   -----------------------------
                                                   Marc Gagnon, Treasurer/
                                                   Chief Financial Officer

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