**Table
            of Contents**
 **Index
            to Financial Statements**
 **UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
  **AMENDMENT
        NO. 1**
 **TO**
 **FORM
        10-KSB**
 
 x
              ANNUAL
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934
 For
        the fiscal year ended December 31,
        2004
 
 o
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934
 For
        the transition period from
        __________ to __________
 
 Commission
        file number: **0-27947**
 
 **AMERICAN
        SOUTHWEST HOLDINGS, INC.**
 (Name
        of
        small business issuer in its charter)
  **Delaware**
                  **86-0800964**(State
                      or other jurisdiction of
                  (IRS
                      Employer Identification No.)incorporation
                      or organization)**4225
                      N. Brown Ave., Scottsdale, Arizona**
                  **85251**(Address
                      of principal executive offices)
                  (ZIP
                      Code)
  Issuer’s
        telephone
        number: **(480) 946-4006**
 
 Securities
        registered under Section 12(b) of the Exchange Act:  
**None**
 
 Securities
        to be registered under Section 12(g) of the Act:
 
 **Common
        Stock, $.001 par value**
 (Title
        of
        Class)
 
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Securities Exchange Act during the past 12 months (or for such
        shorter period that the registrant was required to file such reports), and
        (2)
        has been subject to such filing requirements for the past 90 days.
        Yes x No o
 
 Check
        if
        there is no disclosure of delinquent filers in response to Item 405 of
        Regulation S-B is not contained in this form, and no disclosure will be
        contained, to the best of registrant’s knowledge, in definitive proxy or
        information statements incorporated by reference in Part III of this Form
        10-KSB
        or any amendment to this form 10-KSB o
 
 The
        aggregate market value of the voting and nonvoting common equity held by
        non-affiliates of the registrant was $4,136,140 based upon a market price
        of
        $.05 on April 7, 2005.
 
 The
        number of shares outstanding of the registrant’s common stock, $0.001 par value
        was 85,720,806 as of April 7, 2005.
 **Table
            of Contents**
 **Index
            to Financial
            Statements**
 **AMERICAN
        SOUTHWEST HOLDINGS, INC.**
 
 **TABLE
        OF CONTENTS**
  PagePart
                      IItem
                      1.
                  Business
                  3Item
                      2.
                  Properties
                  4Item
                      3.
                  Legal
                      Proceedings
                  8Item
                      4.
                  Submission
                      of Matters to a Vote of Security
                      Holders
                  8Part
                      IIItem
                      5.
                  Market
                      for the Company’s Common Equity and Related
                      Shareholder Matters
                  9Item
                      6.
                  Management’s
                      Discussion and Analysis or Plan of
                      Operation
                  10Item
                      7.
                  Financial
                      Statements
                  11Item
                      8.
                  Changes
                      in and Disagreements with Accountants on
                      Accounting and Financial Disclosure
                  11Item
                      8A.
                  Controls
                      and Procedures
                  12Part
                      IIIItem
                      9.
                  Directors,
                      Executive Officers, Promoters and
                      Control Persons; Compliance with Section 16(a) of the Exchange
                      Act
                  13Item
                      10.
                  Executive
                      Compensation
                  14Item
                      11.
                  Security
                      Ownership of Certain Beneficial Owners
                      and Management and Related Stockholder Matters
                  15Item
                      12.
                  Certain
                      Relationships and Related
                      Transactions
                  16Item
                      13.
                  Exhibits
                  17Item
                      14.
                  Principal
                      Accountant Fees and
                      Services
                  17Signatures
                  18
 
 2
 **Table
            of Contents**
 **Index
            to Financial
            Statements**
 
 **PART
        I**
 
 **ITEM
                  1.**
                **BUSINESS**
 
 American
        Southwest Holdings, Inc., formerly known as Ameriserv Financial
        Corporation (the “Company”), was incorporated in the State of Delaware on
        October 20, 1989, and on December 15, 1989 merged with Cordon Corporation,
        a
        Nevada corporation, with the Delaware entity being the surviving corporation.
        The Company was formed for the primary purpose of selling home warranty services
        pursuant to contracts with homeowners. In 1993 the Company filed for bankruptcy.
        On April 19, 1994, the U.S. Bankruptcy Court, Northern District of Texas,
        issued
        an order closing and finalizing the bankruptcy proceedings of the Company.
        Under
        the terms of the bankruptcy, the Company was forced to liquidate all of its
        assets. The proceeds were then distributed among the creditors, thereby
        satisfying all of the Company’s outstanding debts. The Company halted operations
        and ceased to do business at the conclusion of the bankruptcy proceedings.
        The
        Company utilized a “fresh-start” accounting method in its
        reorganization.
 
 On
        July 28, 1995, the name of the
        Company was changed from Ameriserv Financial Corporation to Namibian Copper
        Mines, Inc.
 
 On
        June 9, 2000, the name of the
        Company was changed from Namibian Copper Mines, Inc. to American Southwest
        Holdings, Inc.
 
 The
        Company entered into an agreement
        to acquire the Haib Copper Project’s mining claims owned by Haib Copper Co.
        (Pty) Limited. The total purchase consideration was $3,780,000, subject to
        CPI
        indexation and installments totaling $427,000 were paid to Haib Copper Co.
        (Pty)
        Limited. In 1998, due to the down turn in copper prices, the Company withdrew
        from the project. The Company lost its interest in the project at that
        time.
 
 On
        December 15, 2004, the Company
        completed its acquisition of Metal Sands Limited, an Australian company (“Metal
        Sands”), which as of the completion of the acquisition had six
        exploration licenses, and had filed 10 exploration license applications
        and
        11 prospecting license applications for mining properties throughout the
        Scott
        Coastal Plain in Western Australia. The Company issued 33,100,000 shares
        of its
        common stock to the shareholders of Metal Sands in exchange for all of the
        outstanding shares of Metal Sands.  The stock was valued at $0.001
        per
        share, based on the par value of the Company’s common stock.  Currently,
        the Company is in the exploration stage.
  **Employees**
 
 At
          April
          30, 2005, in addition to the Company’s President, the Company employed one
          person, who was an employee of the Company’s subsidiary, Metal Sands Limited.
          The Company and Metal Sands engage consultants from time to time. The Company
          presently estimates that one employee should be sufficient for the Company
          to
          complete its planned exploration of the Metal Sands properties. Additional
          employees will need to be hired if the Company moves into the mining stage
          of
          development.
 3
 **Table
            of Contents**
 **Index
          to Financial Statements**
  **ITEM
                    2.**
                  **PROPERTIES**
 
 The
          Company is provided an accounting
          office at 4225 N. Brown Avenue, Scottsdale, Arizona 85251 at no cost to
          the
          Company, although the accountant charges the Company for services
          provided.
 
 The
          Company’s Metal Sands subsidiary
          has offices located at 22 Oxford Close, Leederville, Western Australia,
          where it
          leases 1,300 square feet of space for a monthly rent of $1,075. This space
          is
          leased under a two-year lease which commenced in October 2003 and expires
          in
          September 2005.
  In
        November 2004, Metal Sands entered into a nine month lease of a house at
        4014
        Brockham Highway, Karridale, Western Australia, at a weekly rent of $128. 
        This property provides a field office for Metal Sands’ employees and consultants
        while working at the property sites in the Scott Coastal Plain.
  **Mining
        Properties**
 
 The
        Company’s subsidiary, Metal Sands,
        leases its mining properties from the Western Australian Department of Industry
        and Resources (the “DIR”). Mining claims are called “tenements” in Western
        Australia. The DIR issues tenement licenses for various purposes. For
        exploration and mining, the categories of mining tenure granted by the DIR
        include (in order from most developed to least developed): mining leases,
        exploration licenses, and prospecting licenses. The DIR license granting
        process
        for each category commences with the filing of a license application. After
        an
        application is filed, the DIR reviews the application and after a period
        of time
        grants the application, if no objections are made to the application. Any
        party
        may file an objection to a license application. When an objection is filed,
        a
        governmental agent called a “warden” conducts a hearing on the objection and
        makes a ruling in support of or against the objection. Generally, the DIR
        follows the warden’s ruling on the objection in granting the license
        application, or modifying the application. If the objection is upheld, the
        applying party may accept the modified license application or have its
        application rejected. A party holding any level of tenement license, such
        as a
        prospecting license on a property, preempts any other party from applying
        for a
        higher-level license on that property during the license term.
 
 As
        of April 1, 2005, the Company has
        been granted six exploration licenses and has filed another 11 exploration
        license applications and 11 prospecting license applications.
 
 **Governor
        Broome
        Tenement**
 
 At
        present the Company’s most promising
        mining property is the tenement known as the Governor Broome project. The
        Governor Broome project is located 21 kilometers east northeast of Augusta,
        Western Australia in the Scott Coastal Plain. Access to this property is
        from
        the Brockman Highway, which is fully paved, and then along Governor Broome
        Road.
        Power for future mining operations, if required, can be supplied through
        existing high-tension power lines, which pass within two kilometers of the
        tenement.
  The
        Governor Broome tenement has been
        leased as an exploration license from the DIR, for a term of five years
        commencing on January 9, 2002. The annual rent on this tenement is $3,663,
        and
        there is an annual expenditure requirement on this tenement as well. Parts
        of
        the Governor Broome tenement were previously leased by Kingstream Resources,
        Westralian Sands and Cable Sands, Australian mining companies. Three project
        reports on the Governor Broome tenement have been previously filed with the
        DIR.
  4
 **Table
            of Contents**
 **Index
            to Financial
            Statements**
 The
          Company’s subsidiary has performed ground geophysics, including radiometrics on
          this tenement, drilled over 200 core holes, made heavy mineral determinations,
          and performed grain counts and mineralogy. Laboratory testing of the drill
          samples leads the Company to believe, without assurance, that a commercial
          grade
          of titanium ore is present on this tenement. The Company has commenced
          preliminary engineering studies on the Governor Broome tenement. The Company
          expects to prepare a full feasibility study, including mapping, resource
          and
          reserve studies on this tenement over the next 18 months, at an estimated
          cost
          of $5,000,000, if such working capital can be obtained. Such work would
          satisfy
          the Company’s annual expenditure requirement on this tenement when
          completed.
 There
        is
        neither mining equipment nor a plant currently located on the Governor Broome
        tenement. A mine, if any, located on this property in the future would be
        an
        open pit mine. There are no known mining reserves on the Governor Broome
        tenement and the Company’s planned program for the tenement is exploratory in
        nature at the present time.
 
 **Five
        Other Granted Exploratory
        Tenements**
 
 The
        Company currently has been granted
        five other exploration licenses in the Scott Coastal Plain from the DIR.
        There
        is neither mining equipment nor a plant currently located on any of these
        five
        exploratory tenements. A mine, if any, located on these properties in the
        future
        would be an open pit mine. There are no known mining reserves on these five
        exploratory tenements and the Company’s planned program for these five licenses
        is exploratory in nature. The Company is hopeful, without assurance, of locating
        evidence of ores containing titanium minerals, garnet and zircon on these
        five
        exploratory tenements during its exploratory work.
 
 The
        location of each of these five
        exploratory tenements, license information, access and power information,
        prior
        ownership (if any), prior report information (if any) and planned exploration
        work is set forth below.
 
 The
        exploratory tenement called the
        Rover Range is located approximately 15 kilometers north of Augusta, Western
        Australia. This tenement has been leased for a term of five years, commencing
        on
        November 9, 2001. The annual rent on this tenement is $1,188, and there is
        an
        annual expenditure requirement on this tenement as well. Access to and power
        for
        mining this tenement would come from Glenarty Road. Some of the land covered
        by
        this tenement was previously leased by BHP Minerals and at least one mining
        report has been filed on this tenement with the DIR. Metal Sands has undertaken
        some field work on this tenement, and presently plans on commencing aircore
        drilling on this property in the next 12 months, at an estimated cost of
        $120,000, if such working capital can be obtained. Such work, when completed,
        would satisfy the Company’s annual expenditure requirement on this
        tenement.
 
 The
        exploratory tenement called Bullant
        is located approximately 20 kilometers north of Augusta, Western Australia.
        This
        tenement has been leased for a term of five years, commencing on January
        9,
        2002. The annual rent on this tenement is $2,772, and there is an annual
        expenditure requirement on this tenement as well. Access to and power for
        mining
        this tenement would come from McCloud Creek Road. Some of the ground covered
        by
        this tenement was previously leased by BHP Minerals and at least one mining
        report has been filed on this tenement with the DIR. Metal Sands has completed
        field work on this tenement, and presently plans on completing aircore drilling
        on this property in the next 12 months, at an estimated cost of $80,000,
        if such
        working capital can be obtained. Such work, when completed, would satisfy
        the
        Company’s annual expenditure requirement on this tenement.
  5
 **Table
            of Contents**
 **Index
          to Financial
          Statements**
 The
        exploratory tenement called Witchcliffe East is located approximately 38
        kilometers north of Augusta, Western Australia. This tenement has been leased
        for a term of five years, commencing on February 17, 2005. The annual rent
        on
        this tenement is $1,782, and there is an annual expenditure requirement on
        this
        tenement as well. Access to and power for mining this tenement would come
        from
        Brockman Highway, which is paved. The Company has no knowledge that this
        tenement was previously leased from the DIR, nor of any mining report being
        filed on this tenement with the DIR. Metal Sands presently plans on commencing
        field work on this property in the next 12 months, at an estimated cost of
        $50,000, if such working capital can be obtained. Such work, when completed,
        would satisfy the Company’s annual expenditure requirement on this
        tenement.
 
 The
        exploratory tenement called
        Witchcliffe South is located approximately 29 kilometers north of Augusta,
        Western Australia. This tenement has been leased for a term of five years,
        commencing on January 15, 2004. The annual rent on this tenement is $990,
        and
        there is an annual expenditure requirement on this tenement as well. Access
        to
        and power for mining this tenement would come from Warner Glen Road. The
        Company
        has no knowledge that this tenement was previously leased from the DIR, nor
        of
        any mining report being filed on this tenement with the DIR. Metal Sands
        presently plans on completing field work and aircore drilling on this property
        in the next 24 months, at an estimated cost of $200,000, if such working
        capital
        can be obtained. Such work, when completed, would satisfy the Company’s annual
        expenditure requirement on this tenement.
 
 The
        exploratory tenement called Regans
        Ford is located approximately 52 kilometers west northwest of Gin Gin, Western
        Australia. This tenement has been leased for a term of five years, commencing
        on
        January 9, 2005. The annual rent on this tenement is $1,584, and there is
        an
        annual expenditure requirement on this tenement as well. Access to and power
        for
        mining this tenement would come from Brand Highway, which is paved. Portions
        of
        the tenement were previously leased by Iluka. Metal Sands presently plans
        on
        completing field work and aircore drilling on this property in the next three
        years, at an estimated cost of $400,000, if such working capital can be
        obtained. Such work, when completed, would satisfy the Company’s annual
        expenditure requirement on this tenement.
 
 **11
        Exploration License
        Applications**
 
 The
        Company currently has filed with
        the DIR applications for leasing 11 additional exploration tenements in the
        Scott Coastal Plain and North Perth Basin of Western Australia and at Sea
        Elephant Bay in Tasmania, which are referred to herein as the “exploration
        license applications.” The Sea Elephant Bay application currently has an
        objection filed against it. The Company cannot currently predict when, if
        ever,
        these exploration licenses will be granted by the DIR.
  6
 **Table
            of Contents**
 **Index
          to Financial
          Statements**
 The
        tenements for these license applications are all located around Augusta,
        Gin Gin
        or Eneabba, in Western Australia and one license application is located at
        Sea
        Elephant Bay in Tasmania. Access to these 11 properties is from fully paved
        roads. Power for future mining operations, if any, on these properties would
        come from these roads. Portions of seven of these 11 exploration tenements
        have
        been leased previously. There is no mining equipment or a plant currently
        located on any of these exploration tenements. A mine, if any, located on
        these
        properties in the future would be an open pit mine. If these exploration
        licenses are granted, of which there is no assurance, the Company presently
        plans on completing field inspection and aircore drilling on these tenements
        over the next six years, at an estimated cost of $2,000,000, if such working
        capital can be obtained. Such work would satisfy the Company’s annual
        expenditure requirement on these tenements when completed. There are no known
        mining reserves on these 11 exploration tenements and the Company’s planned
        program for these exploration tenements is exploratory in nature.
 
 The
        Company is hopeful, without
        assurance, of locating evidence of ores containing titanium on these 11
        exploration tenements during its exploratory work.
 
 **11
        Prospecting License
        Applications**
 
 The
        Company currently has filed with
        the DIR applications for leasing 11 prospecting tenements in the Scott Coastal
        Plain region of Western Australia, which are referred to herein as the
“prospecting license applications.” All of these prospecting license
        applications currently have objections filed against them. The Company cannot
        currently predict when, if ever, prospecting licenses may be granted by the
        DIR
        on these prospecting tenements.
 
 The
        prospecting tenements for these
        license applications are all located within 32 to 36 kilometers north from
        Augusta, Western Australia. Access to these 11 properties is from Davis Road,
        which is only partially paved. Power for future mining operations, if any,
        on
        these properties would come from Davis Road.
 
 The
        Company is not aware that any of
        these 11 prospecting tenements has ever been leased previously. There is
        no
        mining equipment or a plant currently located on any of these 11 prospecting
        tenements. A mine, if any, located on these properties in the future would
        be an
        open pit mine.
 
 If
        these prospecting licenses are
        granted, of which there is no assurance, the Company presently plans on
        completing a field inspection and aircore drilling on these 11 prospecting
        tenements within three years of grant, at an estimated cost of $100,000,
        if such
        working capital can be obtained. Such work would satisfy the Company’s annual
        expenditure requirement on these tenements when completed. There are no known
        mining reserves on these 11 prospecting tenements and the Company’s planned
        program for these 11 prospecting tenements is exploratory in
        nature.
 
 The
        Company is hopeful, without
        assurance, of locating evidence of ores containing titanium on these 11
        prospecting tenements during its exploratory work.
  7
 **Table
            of Contents**
 **Index
          to Financial
          Statements**
 **ITEM
                    3.**
                  **LEGAL
                      PROCEEDINGS**
  The
          Company has had no legal
          proceedings during the past year.
 **ITEM
                4.**
              **SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY
                  HOLDERS**
 
 No
        matters were submitted to a vote of
        security holders during the fourth quarter of the Company’s 2004 fiscal
        year.
  On
        March 28, 2005, a majority of the Company’s
        shareholders approved an increase in the Company’s authorized common stock to
        300,000,000 shares.
  8
 **Table
            of Contents**
 **Index
          to Financial Statements**
  **PART
        II**
 
 **ITEM
                  5.**
                **MARKET
                    FOR THE COMPANY’S COMMON EQUITY AND RELATED STOCKHOLDER
                    MATTERS**
 
 **Market
        Information**
 
 There
        was no trading of the Common
        Stock of the Company or any other securities of the Company in a public market
        in 2003 or 2004. The Company’s Common Stock began trading again on the “Pink
        Sheets-OTC market” in January 2005 under the symbol “ASWT.PK.” The Company
        intends to file a Form 211 to reinstate the Common Stock of the Company for
        trading on the OTC Bulletin Board. However, there can be no assurance that
        such
        reinstatement can be accomplished or that a trading market will develop for
        the
        Common Stock of the Company in the future.
 
 **Recent
        Sales of Restricted Securities**
 
 All
        unregistered securities sold by the
        Company during the fourth quarter of fiscal year 2004 were reported previously
        in a filing by the Company.
 
 **Stockholders**
 
 The
        Company has approximately 430
        stockholders of record, including nominee firms for securities dealers as
        of
        April 7, 2005.
 
 **Dividends**
 
 The
        Company has not paid or declared
        any dividends upon its common shares since its inception and, by reason of
        its
        present financial status and its contemplated financial requirements, does
        not
        intend to pay or declare any dividends upon its common shares within the
        foreseeable future.
  9
 **Table
            of Contents**
 **Index
          to Financial
          Statements**
 **Common
        Stock**
 
 During
        2004 the authorized capital
        stock of the Company consisted of 100,000,000 shares of common stock, par
        value
        $0.001 per share. On March 28, 2005, the Company’s shareholders approved an
        increase in the Company’s authorized capital to 300,000,000 common stock shares,
        par value $0.001 per share.  As of April 7, 2005, there were 85,720,806
        shares of common stock issued and outstanding. Holders of common stock are
        entitled to one vote for each share held on each matter to be acted upon
        by
        stockholders of the Company. Stockholders do not have preemptive rights or
        the
        right to cumulate votes for the election of directors. Shares are not subject
        to
        redemption nor to any liability for further calls. All shares of common stock
        issued and outstanding are entitled to receive such dividends, if any, as
        may be
        declared by the Board of Directors in its discretion out of funds legally
        available for that purpose, and to participate pro rata in any distribution
        of
        the Company’s assets upon liquidation or dissolution.
 
 In
        the event of liquidation or
        dissolution of the Company, all assets available for distribution after
        satisfaction of all debts and other liabilities are distributable among the
        holders of the common stock.
 
 The
        transfer agent for the Company’s
        common stock is Holladay Stock Transfer, Inc., 2939 N. 67th Place, Suite
        C,
        Scottsdale, Arizona 85251.
 
 **ITEM
                  6.**
                **MANAGEMENT’S
                    DISCUSSION AND ANALYSIS OR PLAN OF
                    OPERATION**
  **Year
          Ending December 31, 2004**
 
 **Operations.**
  For
          the
          year ending December 31, 2004 the Company experienced a comprehensive loss
          of
          $1,014,429, which was comprised primarily of its other general and
          administrative costs of $446,324, costs related to the acquisition of mining
          rights of $61,275, costs related to the MSL acquisition of $300,000, exploration
          expenses of $210,015 and net foreign currency gain and adjustment of $3,235.
          In
          comparison, during the year ending December 31, 2003 the Company’s comprehensive
          loss was $137,386. The increase in the comprehensive loss in 2004 primarily
          resulted from the $240,000 fee due to Doyle Capital for services during
          the
          year,  $361,275 in costs related to the purchase of MSL and
          exploration costs of $210,015. The Company expects its management salaries
          to
          continue at the same level throughout the remainder of 2005. The Company
          expects
          its exploration expenses to increase throughout the remainder of 2005 as
          its
          exploration program on its properties continues. (See “Item 2.
          Properties.”)
  **Liquidity
          and Capital Resources.**
 
 The
          Company raised approximately $490,000 from foreign private placements throughout
          the year. The Company will need to continue substantial fund raising in
          2005 and
          2006, because the Company’s planned exploration program for its mining
          properties requires expenditures of approximately $8,000,000 over the next
          5
          years, with approximately $5,500,000 of exploration expenditures planned
          for the
          next two years. (See “Item 2. Properties.”)
  Since
          we
          have not generated any revenue, we have included a reference to our ability
          to
          continue as a going concern in connection with our financial statements
          for the
          year ended December 31, 2004. Our accumulated deficit at December 31, 2004
          was
          $13,655,871. All exploration costs are expensed as
          incurred.
  10
 **Table
            of Contents**
 **Index
          to Financial Statements**
  These
          financial statements have been prepared on the going concern basis, which
          assumes that adequate sources of financing will be obtained as required
          and that
          our assets will be realized, and liabilities settled in the ordinary course
          of
          business. Accordingly, these financial statements do not include any adjustments
          related to the recoverability of assets and classification of assets and
          liabilities that might be necessary should we be unable to continue as
          a going
          concern.
  In
          order
          to continue as a going concern, we require additional financing. There
          can be no
          assurance that additional financing will be available to us when needed
          or, if
          available, that it can be obtained on commercially reasonable terms. If
          we are
          not able to continue as a going concern, we would likely be unable to realize
          the carrying value of our assets reflected in the balances set out in the
          preparation of the financial statements.
  The
          Company currently has no commitment for funding all or a portion of its
          future
          exploration expenses. There is no assurance the Company will be able to
          obtain
          in the near future all or a portion of its future exploration
          expenses.
 
 In
          the
          future the Company may consider selling some of its properties or joint
          venturing the exploration and mining of some of its properties, if exploration
          capital cannot be readily obtained.
 
 **ITEM
                    7.**
                  **FINANCIAL
                      STATEMENTS**
 
 See
          Financial Statements starting at
          page F-1 for this information.
 **ITEM
                  8.**
                **CHANGES
                    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                    DISCLOSURES**
 
 On
        December 3, 2002 the Company’s Board
        of Directors approved the resignation of Ashworth, Mitchell Brazelton, PLLC
        (“AMB”) as the Company’s certifying accountant. On September 17, 2003, Company’s
        Board of Directors approved the engagement of Shelley International CPA
        (“Shelley”) as the Company’s certifying accountant.
 
 AMB
        had been the Company’s certifying
        accountant for the prior two years. During such two years AMB’s report on the
        Company’s financial statements contained no adverse opinion or disclaimer of
        opinion, nor was modified as to uncertainty, audit scope, or accounting
        principles, except for a fourth explanatory paragraph regarding Company’s
“ability to continue as a going concern.” The Company had no disagreements with
        AMB during such two years and any subsequent interim period preceding the
        date
        of dismissal on December 3, 2002 on any matter of accounting principles or
        practices, financial statement disclosure, or auditing scope or procedure,
        which
        disagreements, if not resolved to the satisfaction of AMB, would have caused
        it
        to make reference to the subject matter of the disagreements in connection
        with
        its reports.
 
 The
        Company made the contents of its
        May 3, 2004 Form 8-K filing with the SEC available to AMB and requested
        them to
        furnish a letter to the SEC as to whether AMB agreed or disagreed with, or
        wished to clarify the Company’s expression of their views. A copy of AMB’s
        letter to the SEC was included as an exhibit to that filing.
 
 The
        Company did not consult with
        Shelley prior to its engagement regarding the application of any accounting
        principles or any type of audit opinion that might be rendered by it. The
        Company made the contents of its Form 8-K filing available to Shelley and
        requested them to furnish a letter to the SEC as to whether Shelley agrees
        or
        disagrees with, or wishes to clarify Company’s expression of their
        views.
 
 11
 **Table
            of Contents**
 **Index
          to Financial Statements**
  On
          March
          28, 2005, the Board of Directors of the Company approved the dismissal
          of
          Shelley as the Company’s certifying accountant and approved the engagement of
          Semple & Cooper, LLP (“S&C”) as the Company’s certifying
          accountant.
 
 Shelley
          had been the Company’s
          certifying accountant for the three prior fiscal years. During the past
          three
          years Shelley’s report on the Company’s financial statements contained no
          adverse opinion or disclaimer of opinion, nor was modified as to uncertainty,
          audit scope, or accounting principles, except for a fourth explanatory
          paragraph
          regarding the Company’s ability “to continue as a going concern.” The Company
          had no disagreements with Shelley during the past three years and any subsequent
          interim periods preceding the date of dismissal on March 28, 2005 on any
          matter
          of accounting principles or practices, financial statement disclosure,
          or
          auditing scope or procedure, which disagreements, if not resolved to the
          satisfaction of Shelley, would have caused it to make reference to the
          subject
          matter of the disagreements in connection with its reports.
 
 The
          Company did not consult with
          S&C prior to its engagement regarding the application of any accounting
          principles or any type of audit opinion that might be rendered by
          it.
 The
        Company made the contents of its Form 8-K filed April 1, 2005 available to
        Shelley and requested them to furnish a letter to the SEC as to whether Shelley
        agreed or disagreed with, or wished to clarify the Company’s expression of their
        views.  Shelley provided its letter to the SEC indicating that it
        agreed
        with the Company’s expression of their views, which letter was filed with the
        SEC on April 7, 2005 as Exhibit 16 to Amendment No. 1 to such Form
        8-K.
  **ITEM
                  8A.**
                **CONTROLS
                    AND PROCEDURES**
 
 Our
        President (Chief Executive Officer)
        and Treasurer (Principal Financial Officer), based on the evaluation of our
        disclosure controls and procedures has concluded that, as of December 31,
        2004,
        our disclosure controls and procedures were ineffective to ensure that the
        information we are required to disclose in reports that we file or submit
        under
        the Securities and Exchange Act of 1934 is recorded, processed, summarized
        and
        reported within the time periods specified in Securities and Exchange Commission
        rules and forms. More specifically, the Company identified a material weakness
        due to a lack of sufficient personnel with appropriate knowledge in U.S.
        GAAP
        and lack of sufficient analysis and documentation of the application of U.S.
        GAAP to transactions, including but not limited to equity transactions. 
        Management plans to identify an appropriate service provider to eliminate
        this
        material weakness.  During the fiscal year ended December 31, 2004,
        there
        was no change in our internal control over financial reporting identified
        in
        connection with the evaluation that has materially affected, or is reasonably
        likely to materially affect, our internal control over financial
        reporting.
  12
 **Table
            of Contents**
 **Index
          to Financial Statements**
  **PART
        III**
 
 **ITEM
                  9.**
                **DIRECTORS,
                    EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
                    WITH SECTION
                    16(a) OF THE EXCHANGE
                    ACT**
 
 The
        directors and executive officers of
        the Company are as follows:
  **Name**
              
              **Age**
              
              **Position**Alan
                Doyle
              
              51
              
              President,
                Treasurer, Secretary & DirectorPeter
                Holsworth
              
              61
              
              Director
  **Alan
        Doyle** - Mr. Doyle
        is a 1978 Economic Geology graduate and received a post-Graduate diploma
        in
        Mineral Economics in 1979 from MacQuarie University, Sydney, Australia. He
        worked for and held senior positions with several large international resource
        companies prior to entering the financial services industries in the early
        1980s. Mr. Doyle then worked as a mining analyst and in the corporate division
        for two international stock brokers before setting up his own corporate advisory
        firm in 1990. In 1990 he formed the investment banking firm of Turnbull Doyle
        Resources Pty Ltd. of Sydney, Australia, which invested in various international
        mining projects. In 1996 Mr. Doyle formed Doyle Capital, Ltd. of Sydney,
        Australia as an investment banking firm. Mr. Doyle has been the President,
        Chief
        Executive Officer, Treasurer, Principal Financial Officer, Secretary and
        a
        director of the Company since July 1995.
 
 **Peter
        Holsworth** - Mr.
        Holsworth is a director of numerous private companies in Australia. They
        are
        involved in new product development, commodity trading, telecommunications
        and
        property development. During his business career Mr. Holsworth has owned
        and
        managed successful businesses both in Australia and overseas. He is a member
        of
        the Institute of Chartered Accountants of Australia. Mr. Holsworth has been
        a
        director of the Company since June 2000.
 
 **Committees;
        Code of Ethics**
 
 The
        Company does not currently have any
        standing committees. The Company’s Board of Directors serves as its Audit
        Committee because the Company is too small to have an Audit Committee at
        this
        time. The Company does not have an audit committee financial expert because
        no
        one on the Board of Directors is so qualified.
 
 The
        Company has not adopted a code of
        ethics for any of its officers, because the Company has been advised by counsel
        that any such code of ethics may be materially different than existing state
        and
        federal law, and, if so, may subject the Company’s officers to personal
        liability in addition to and different from liability under current state
        and
        federal law.
  13
 **Table
            of Contents**
 **Index
          to Financial Statements**
  **Section
        16(a) Beneficial Ownership Reporting Compliance**
 
 Section
        16(a) of the Securities
        Exchange Act of 1934, as amended requires our directors, executive officers
        and
        persons who own more than 10% of our Common Stock to file reports of ownership
        and changes in ownership of our Common Stock. Reporting persons are required
        by
        Securities and Exchange Commission regulations to furnish us with copies
        of all
        Section 16(a) reports they file. Alan Doyle and Peter Holsworth did not file
        the
        required Form 4s relating to changes in ownership of our Common Stock during
        2004 by December 31, 2004. These forms have been filed as of the date of
        this
        filing.
 
 **ITEM
                  10.**
                **EXECUTIVE
                    COMPENSATION**
 
 The
        following table sets forth for the
        fiscal years ended December 31, 2004, 2003 and 2002, compensation awarded
        or
        paid to the Company’s executive officers and directors. Other than as indicated
        in the table below, no executive officer or director of the Company received
        any
        annual compensation in the years ended December 31, 2004, 2003 or
        2002.
  **Annual
                    Compensation**
                ****
                **Long-Term
                    Compensation**
                ****
                ********
                ****
                ****
                ****
                ****
                ****
                ****
                ****
                ****
                ****
                ****
                ****
                **Securities**
                ****
                ****
                ****
                ****All
                    Other********
                ****
                ****
                ****
                
                
                
                
                **Other
                      Annual**
                
                **Restricted**
                
                **Underlying**
                
                
                
                **Annual****Name
                    and**
                
                
                
                
                
                
                
                **Compensation**
                
                **Stock**
                
                **Options/SARs**
                
                **LTIP**
                
                **Compensation****Principal
                    Position**
                ****
                **Year**
                
                **Salary
                    ($)**
                
                **Bonus
                    ($)**
                
                **($)**
                
                **Awards
                    ($)**
                
                **($)**
                
                **Payouts
                    ($)**
                
                **($)**Alan
                  Doyle
                
                2004
                
                0
                (1)
                0
                
                0
                
                0
                
                0
                
                0
                
                0President,
                  Secretary,
                
                2003
                
                0
                
                0
                
                0
                
                0
                
                0
                
                0
                
                0Treasurer,
                  Director
                
                2002
                
                0
                
                0
                
                15,000
                
                0
                
                0
                
                0
                
                0Peter
                  Holsworth
                
                2004
                
                0
                
                0
                
                0
                
                0
                
                0
                
                0
                
                0Director
                
                2003
                
                0
                
                0
                
                0
                
                0
                
                0
                
                0
                
                02002
                
                0
                
                0
                
                0
                
                0
                
                0
                
                0
                
                0
   (1)
              This
                  salary does not include $240,000 per annum due to Doyle Capital,
                  Ltd.
                  pursuant to a consulting agreement.  This amount was accrued
                  in 2004,
                  but not paid.  (See “Item 12. Certain Relationships and Related
                  Transactions,” below.)
  The
          following table sets forth certain
          information concerning the warrants (with stock appreciation rights) granted
          during the fiscal year to the Company’s chief executive officer and each other
          executive officer.
 **Number
                  of**
              ****
              **%
                  of Total**
              
              ****
              ****
              ********
              **Securities**
              ****
              **Options/SARs**
              ****
              ****
              ****
              ********
              ****
              **Underlying**
              ****
              **Granted
                  to**
              ****
              
              ****
              ********
              ****
              **Options/SARs**
              ****
              **Employees
                  in**
              ****
              **Exercise
                  or Base**
              ****
              **Expiration****Name**
              
              **Granted
                  (#)**
              
              **Fiscal
                  Year**
              
              **Price
                  ($/Sh)**
              
              **Date**Alan
                  Doyle
              
              15,000,000
                  (1)
              
              100%
              
              $0.04
              
              12/31/2007
 ______________
 
 (1)
                These
                    warrants were issued to Doyle Capital, Ltd., an Australian entity
                    of which
                    Mr. Doyle is an officer, director and principal shareholder,
                    as
                    compensation for Doyle Capital’s efforts in completing the Metals Sands
                    acquisition.
  14
 **Table
            of Contents**
 **Index
          to Financial
          Statements**
 The
        following table sets forth
        information concerning each exercise of stock options and the value of
        unexercised options (with stock appreciation rights) at December 31, 2004
        for
        the Company’s chief executive officer and each other officer.
  **Number
                  of Securities**
              
              **Value
                  of****Underlying
                  Unexercised**
              
              **Unexercised
                  In-the-Money****Shares
                  Acquired**
              
              
              
              **Options/SARs
                  At FY-End(#)**
              
              **Options/SARs
                  at FY-End($)****Name**
              
              **On
                  Exercise (#)**
              
              **Value
                  Realized ($)**
              
              **Exercisable/Unexercisable**
              
              **Exercisable/Unexercisable**Alan
                  Doyle
              
              –
              
              –
              
              15,000,000
                  / 0
              
              $0
                  / $0 (1)
 ______________
  (1)
                  Based
                      on a December 30, 2004 trading price of $.00 per
                      share.
 The
            Company currently has no pension,
            retirement, annuity, savings or similar benefit plan which provides compensation
            to its executive officers or directors.
 **ITEM
                11.**
              **SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS**
 
 The
        following table sets forth
        information regarding the beneficial ownership of the Company’s Common Stock as
        of April 7, 2005 by (i) all those known by the Company to be the beneficial
        owners of more than 5% of its Common Stock, (ii) each of the Company’s directors
        and officers, and (iii) all of the Company’s directors and executive officers as
        a group.
  **Name
                    of**
                
                **Amount
                    of**
                
                
                **Percent****Beneficial
                    Owner**
                
                **Beneficial
                    Ownership**
                
                
                **of
                    Class**Alan
                    Doyle, President and Director
                
                2,998,001
                    shares
                (1)
                
                3.5%Peter
                  Holsworth, Director
                
                0
                    shares
                
                
                0.0%All
                  officers and directors as a group
                
                2,998,001
                    shares
                (2)
                
                3.5%
 ______________
  (1)
                    This
                        number does not include warrants to purchase 15,000,000 shares
                        at $.04 per
                        share through December 31, 2007. If Mr. Doyle exercises these
                        warrants, he
                        would own 17.9% of the Company’s presently outstanding
                        shares.
 (2)
                        This
                            number does not includes warrants to purchase 15,000,000
                            shares at $.04
                            per share through December 31, 2007. If Mr. Doyle exercises
                            these
                            warrants, the officers and Directors of the Company,
                            as a group, would own
                            17.9% of the Company’s presently outstanding
                            shares.
 15
 **Table
            of Contents**
 **Index
          to Financial
          Statements**
 The
        following table sets forth certain
        information concerning equity compensation plans approved by the Company’s
        shareholders and not approved by the Company’s shareholders at December 31,
        2004.
  **Number
                    of**
                
                
                
                **Number
                    of****Shares
                    to be**
                
                **Weighted**
                
                **Shares
                    to be****Issued
                    for**
                
                **Average
                    Exercise**
                
                **Issued
                    for Other****Plan
                    Category**
                
                **Compensation**
                
                **Price**
                
                **Compensation**Approved
                    by Shareholders
                
                0
                
                0
                
                0Not
                  Approved by Shareholders
                
                15,000,000
                
                $0.04
                
                0
 
 **ITEM
                12.**
              **CERTAIN
                  RELATIONSHIPS AND RELATED
                  TRANSACTIONS**
 
 On
        September 25, 2000, Doyle Capital,
        Ltd., an Australian company (“DCL”), of which Mr. Alan Doyle, the Company’s
        President, is an officer, director and principal shareholder, acquired 700,000
        shares of the Company’s Common Stock and 700,000 warrants exercisable through
        June 30, 2004 at an exercise price of $.10 per share. The purchase price
        of such
        securities was $.10 per share. These securities were sold to DCL on the same
        terms as sold to other investors at that time.
 
 On
        September 25, 2000, Syntek
        International Pty Ltd., an Australian company (“Syntek”), of which Mr. Peter
        Holsworth, a director of the Company, is an officer, director and principal
        shareholder, acquired 500,000 shares of Company Common Stock and 500,000
        warrants exercisable through June 30, 2004 at an exercise price of $.10 per
        share. The purchase price of such securities was $.10 per share. These
        securities were sold to Syntek on the same terms as sold to other investors
        at
        that time.
 
 On
        September 29, 2000, 2,000,000
        warrants, exercisable through June 30, 2004 at an exercise price of $.10
        per
        share, were issued to Syntek as compensation for the services of Mr. Holsworth.
        The Company placed no value on these warrants for financial statement purposes
        since the Company’s last sale of Common Stock had been at $.10 per share, the
        same price as the exercise price of these warrants.
 
 On
        June 27, 2002, DCL acquired 400,000
        shares of Company Common Stock and 400,0000 warrants exercisable through
        June
        30, 2004 at an exercise price of $.10 per share. The purchase price of such
        securities was $.05 per share. These securities were sold to DCL on the same
        terms as sold to other investors at that time.
 
 On
        June 27, 2002, Mr. Doyle acquired
        1,000,000 shares of Company Common Stock and 1,000,0000 warrants exercisable
        through June 30, 2004 at an exercise price of $.10 per share. The purchase
        price
        of these securities was $.05 per share. These securities were sold to Mr.
        Doyle
        on the same terms as sold to other investors at that time.
  16
 **Table
            of Contents**
 **Index
            to Financial Statements**
  In
          September 2003, the Company entered into a
          consulting agreement with DCL which provided for a consulting fee of $15,000
          per
          month to be paid by the Company.  At December 31, 2003, $60,000
          of fees had
          been accrued but not paid by the Company.  In May 2005, this $60,000
          was
          forgiven and waived by DCL.
  Effective
          January 2004, the Company amended its
          consulting agreement with DCL to extend the expiration date to December
          31, 2007
          and to increase the monthly consulting fee to $20,000.  $240,000
          has been
          accrued as due to DCL at December 31, 2004 but is unpaid at May 25, 2005. 
          At December 31, 2004, DCL was owed a total of $251,209 from the consulting
          fees
          and working capital loans to the Company.  Also under this amended
          agreement, DCL was to receive a 6% commission on all gross proceeds from
          foreign
          private placements conducted by DCL on the Company’s behalf.  In May 2005,
          DCL waived its right to any commissions on amounts raised in 2004. 
          Additionally, pursuant to this agreement DCL was issued 15,000,000 warrants
          with
          an exercise price of $0.04 and an expiration date of December 31, 2007
          as
          compensation for the facilitation of the Metal Sands acquisition. 
          These
          warrants were issued to DCL in December 2004 and were valued at $300,000,
          based
          on the Black Scholes pricing model.
 On
        June
        30, 2004, as part of the acquisition of Metals Sands, the Company converted
        all
        of its outstanding warrants to common stock shares on the basis of six
        warrants becoming one common stock share. As part of this warrant
        conversion Mr. Doyle received 166,667 shares of Company common stock in
        conversion of 1,000,000 warrants. As part of this warrant conversion Doyle
        Resources Capital Pty, Ltd., an Australian entity of which Mr. Doyle is an
        officer, director and principal shareholder, received 116,667 shares of Company
        common stock in conversion of 700,000 warrants. As part of this warrant
        conversion P.S.G. Doyle Capital, Ltd., an Australian entity of which Mr.
        Doyle
        is an officer, director and principal shareholder, received 66,667 shares
        of
        Company common stock in conversion of 400,000 warrants. As part of this warrant
        conversion Syntek International Pty, Ltd., an Australian entity of which
        Mr.
        Holsworth was an officer, director and principal shareholder, received 416,667
        shares of Company common stock in conversion of 2,500,000 warrants. These
        common
        stock shares were issued to Mr. Doyle, Mr. Holsworth and their affiliates
        on the
        same terms as issued to other warrant holders at that time.
  At
          December 31, 2004, Alan Doyle was owed a total of
          $86,980 by the Company from various accounts payable and working capital
          loans.
 **ITEM
                    13.**
                **EXHIBITS**
  **Exhibit
                  No.**
              ****
              **Description**10.1
              
              Consulting
                  Agreement between the Company and Doyle Capital Limited,
                  dated August
                  18, 200310.2
              
              Update
                  to Consulting Agreement between the Company and Doyle Capital Limited,
                  dated March 1, 200431
              
              Certification
                  pursuant to Section 302 of the Sarbanes-Oxley Act of
                  200232
              
              Certification
                  pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002
 
 
 **ITEM
                  14.**
                **PRINCIPAL
                    ACCOUNTANT FEES AND
                    SERVICES**
 
 In
        the 2004 fiscal year the Company
        paid $10,000 to its auditor for auditing services, $0 for audit-related
        services, and $0 for tax services. In the 2003 fiscal year the Company paid
        $7,000 to its auditor for auditing services, $0 for audit-related services,
        and
        $0 for tax services.
  17
 **Table
            of Contents**
 **Index
          to Financial
          Statements**
 **SIGNATURES**
 
 Pursuant
        to the requirements of
        Sections 13 or 15(d) of the Securities and Exchange Act of 1934, the Company
        has
        duly caused this Report to be signed on its behalf by the undersigned, thereunto
        duly authorized.
 
 **AMERICAN
                  SOUTHWEST HOLDINGS, INC.**Date: 
                  November 29, 2005
                By:
                /s/ Alan
                  DoyleAlan
                  DoylePresident
                    (Chief Executive Officer), Treasurer
                  (Principal
                    Financial Officer) and
                    Director
  Date:  November
                  29, 2005
                By:
                /s/ Peter
                  HolsworthPeter
                  HolsworthDirector
   18
 **Table
            of Contents**
 **Index
            to Financial Statements**
  **AMERICAN
          SOUTHWEST HOLDINGS, INC.**
 
 **INDEX
          TO FINANCIAL STATEMENTS**
  PageReport
                      of Semple & Cooper, LLP, Independent
                      Registered Public Accounting Firm
                    F-2Report
                      of Shelley International CPA, Independent
                      Certified Public Accountant
                    F-3Consolidated
                          Balance
                          Sheets
                    F-4Consolidated
                          Statements of Operations and Comprehensive
                          Loss
                    F-5Consolidated
                      Statements of Stockholders’ Equity
                    F-6Consolidated
                      Statements of Cash
                      Flows
                    F-9Notes
                        to Consolidated Financial
                        Statements
                    F-10
 F-1
 **Table
            of Contents**
 **Index
          to Financial Statements**
 **Report
          of Independent Registered Public Accounting
          Firm**
 
 
 We
          have
          audited the accompanying consolidated balance sheet of American Southwest
          Holdings, Inc. as of December 31, 2004, and the related consolidated statements
          of operations and comprehensive loss, stockholders’ equity, and cash flows for
          the year then ended and the cumulative period from inception (October 20,
          1989)
          through December 31, 2004. These financial statements are the responsibility
          of
          the Company’s management. Our responsibility is to express an opinion on these
          financial statements based on our audits.
 
 We
          conducted our audit in accordance with the standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audit to obtain reasonable assurance about whether the
          financial
          statements are free of material misstatement. The Company is not required
          to
          have, nor were we engaged to perform, an audit of its internal control
          over
          financial reporting. Our audit included consideration of internal control
          over
          financial reporting as a basis for designing audit procedures that are
          appropriate in the circumstances, but not for the purpose of expressing
          an
          opinion on the effectiveness of the Company’s internal control over financial
          reporting. Accordingly, we express no such opinion. An audit includes examining,
          on a test basis, evidence supporting the amounts and disclosures in the
          financial statements. An audit also includes assessing the accounting principles
          used and significant estimates made by management, as well as evaluating
          the
          overall financial statement presentation. We believe that our audits provide
          a
          reasonable basis for our opinion.
 
 In
          our
          opinion, the consolidated statements referred to above present fairly,
          in all
          material respects, the consolidated financial position of the Company as
          of
          December 31, 2004, and the results of its operations and its cash flows
          for the
          year then ended and the cumulative period from inception (October 20, 1989)
          through December 31, 2004, in conformity with accounting principles generally
          accepted in the United States.
 
 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 is in the exploration stage, has incurred losses
          from
          operations, and requires additional funds for further exploratory activity
          prior
          to attaining a revenue generating status. In addition, the Company may
          not find
          sufficient ore reserves to be commercially mined. These conditions raise
          substantial doubt about its ability to continue as a going concern. The
          financial statements do not include any adjustments that might result from
          the
          outcome of these uncertainties.
 
 As
          discussed in Note 11 to the consolidated financial statements, the financial
          statements have been restated in relation to the correction of the application
          of an accounting principle.
 
 
 /s/
          Semple & Cooper, LLP
 Phoenix,
          Arizona
 June
          2,
          2005, except as to Note 11, as to which the date is November 1,
          2005
   
 F-2
 **Table
            of Contents**
 **Index
            to Financial Statements**
  **Report
          of Independent Certified Public
          Accountant**
 To
            the
            Board of Directors and Audit Committee
 American
            Southwest Holdings Inc.
 
 I
            have
            audited the accompanying balance sheet of American Southwest Holdings Inc.,
            (formerly Namibian Copper Mines, Inc.) (a Development Stage Company)
            as of December
            31, 2003, and 2002 and the related statements of operations, stockholders’
            equity (deficit), and cash flows for the years 2003, 2002 and 2001 and
            the period
            from October 10, 1989 (inception) to December 31, 2003. 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 auditing standards generally accepted
            in the
            United States of America. 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, financial position of American Southwest Holdings, Inc. as
            of December
            31, 2003, and 2002 and the related statements of operations, stockholders’
            equity, and cash flows for the years 2003, 2002 and 2001 and the period
            from October 10, 1989 (inception) to December 31, 2003 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 the notes to the financial
            statements, the Company has no established source of revenue and no operations.
            This raises substantial doubt about the Company’s ability to continue
            as a going concern. The financial statements do not include any adjustments
            that might result from this uncertainty.
 
 /s/
            Shelley International CPA
 January
            25, 2004
 Mesa
            Arizona
  F-3
 **Table
                of Contents**
 **Index
              to Financial Statements**
 **AMERICAN
                    SOUTHWEST HOLDINGS,
                    INC.****(An
                    Exploration Stage Company)****Consolidated
                    Balance Sheets****December
                    31,****2004**
                
                **2003****ASSETS**Cash
                    & cash equivalents
                
                $
                205,493
                
                $
                4,579Receivables
                
                
                3,065
                
                
                —Total
                    current assets
                
                
                208,558
                
                
                4,579Property
                    and equipment, net
                
                
                4,202
                
                
                —Mining
                    rights
                
                
                33,100
                
                
                —Total
                    assets
                
                $
                245,860
                
                $
                4,579**LIABILITIES
                    AND SHAREHOLDERS’ EQUITY**Accounts
                    payable and accrued liabilities
                
                $
                147,937
                
                $
                122,581Due
                    to related parties
                
                
                334,714
                
                
                —Loans
                    payable to related parties
                
                
                41,495
                
                
                36,980Total
                    current liabilities
                
                
                524,146
                
                
                159,561Common
                    stock$.001
                      par value, 100,000,000 shares authorized, 82,150,806 and 28,163,950
                      shares
                      issued and outstanding at December 31, 2004 and 2003,
                      respectively
                
                
                82,151
                
                
                28,164Paid
                    in capital
                
                
                13,234,217
                
                
                12,464,174Common
                    stock subscribed
                
                
                67,095
                
                
                —Deficit
                    accumulated during development stage
                
                
                (13,655,871
                )
                
                (12,647,320
                )Foreign
                    currency translation adjustment (Note 1)
                
                
                (5,878
                )
                
                —Total
                    shareholders’ deficit
                
                
                (278,286
                )
                
                (154,982
                )Total
                    liabilities and shareholders’ equity
                
                $
                245,860
                
                $
                4,579
 The
        accompanying notes are an integral part of the financial
        statements.
 
 F-4
 **Table
            of Contents**
 **Index
          to Financial Statements**
  **AMERICAN
                  SOUTHWEST HOLDINGS,
                  INC.****(An
                    Exploration Stage Company)****Statements
                  of Operations and Comprehensive Loss****Cumulative****For
                  the year ended December 31,**
              
              **During
                  Development****2004**
              
              **2003**
              
              **Stage**Revenue
                misc. (including interest)
              
              $
              —
              
              $
              —
              
              $
              83,938Other
                  general & administrative costs
              
              
              446,324
              
              
              137,386
              
              
              5,298,502Depreciation
              
              
              50
              
              
              —
              
              
              61,515Organizational
                  costs
              
              
              —
              
              
              —
              
              
              120,000Write
                  off of Hiab project
              
              
              —
              
              
              —
              
              
              7,697,615Exploration
                  expenses
              
              
              210,015
              
              
              —
              
              
              210,015Acquisition
                fee -
                related party
              
              
              300,000
              
              
              —
              
              
              300,000Costs
                for acquisition of mining rights
              
              
              61,275
              
              
              —
              
              
              61,275General
                  & administrative costs
              
              
              1,017,664
              
              
              137,386
              
              
              13,748,922Operating
                  loss
              
              
              (1,017,664
              )
              
              (137,386
              )
              
              (13,664,984
              )Other
                  income:Foreign
                  currency gain
              
              
              9,113
              
              
              —
              
              
              9,113Loss
                  before income taxes
              
              
              (1,008,551
              )
              
              (137,386
              )
              
              (13,655,871
              )Provision
                  for income taxes
              
              
              —
              
              
              —
              
              
              —Net
                  loss
              
              $
              (1,008,551
              )
              $
              (137,386
              )
              $
              (13,655,871
              )Foreign
                  currency translation adjustment
              
              
              (5,878
              )
              
              —
              
              
              (5,878
              )Comprehensive
                  loss
              
              $
              (1,014,429
              )
              $
              (137,386
              )
              $
              (13,661,749
              )Net
                  loss per share - basic & diluted
              
              $
              (0.03
              )
              $
              (0.01
              )Weighted
                  average shares outstanding
              
              
              37,585,590
              
              
              23,513,950
   The
        accompanying notes are an integral part of the financial
        statements.
 
 F-5
 **Table
            of Contents**
 **Index
            to Financial Statements**
 **AMERICAN
        SOUTHWEST HOLDINGS, INC.**
 **(An
            Exploration Stage Company)**
 **Consolidated
        Statements of Stockholders’ (Deficit)**
  **Accumulated**
                
                ********
                
                ****
                
                ****
                
                ****
                
                ****
                
                ****
                
                **Other**
                
                ******Common
                    Stock**
                
                **Paid
                    in**
                
                **Stock**
                
                **Accumulated**
                
                **Comprehensive**
                
                **Total******
                
                **Shares**
                
                **Amount**
                
                **Capital**
                
                **Subscribed**
                
                **Deficit**
                
                **Income**
                
                **Equity**Balance,
                    July 28, 1995
                
                
                30,367
                
                $
                30
                
                $
                —
                
                $
                —
                
                $
                —
                
                $
                —
                
                $
                30Shares
                    issued for services
                
                
                2,000,000
                
                
                2,000
                
                
                74,202
                
                
                —
                
                
                —
                
                
                —
                
                
                76,202Shares
                    issued for cash
                
                
                2,967,493
                
                
                2,967
                
                
                441,747
                
                
                —
                
                
                —
                
                
                —
                
                
                444,714Shares
                    subscribed,145,000
                    shares at $3.50 per share
                
                
                —
                
                
                —
                
                
                —
                
                
                507,500
                
                
                —
                
                
                —
                
                
                507,500Net
                    (Loss)
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                (879,868
                )
                
                —
                
                
                (879,868
                )Balance,
                    December 31, 1995
                
                
                4,997,860
                
                
                4,997
                
                
                515,949
                
                
                507,500
                
                
                (879,868
                )
                
                —
                
                
                148,578Issuance
                    of subscribed shares
                
                
                145,000
                
                
                145
                
                
                507,355
                
                
                (507,500
                )
                
                —
                
                
                —
                
                
                —Shares
                    issued for cash, $3.50 per share
                
                
                604,900
                
                
                605
                
                
                2,116,545
                
                
                —
                
                
                —
                
                
                —
                
                
                2,117,150Shares
                    issued for cash, $5.00 per share
                
                
                490,200
                
                
                491
                
                
                2,450,509
                
                
                —
                
                
                —
                
                
                —
                
                
                2,451,000Shares
                    subscribed,85,000
                    shares at $3.50 per share
                
                
                —
                
                
                —
                
                
                —
                
                
                297,500
                
                
                —
                
                
                —
                
                
                297,500Shares
                    issued for mining properties, 1,000,000 shares at $3.50 per
                    share
                
                
                —
                
                
                —
                
                
                —
                
                
                3,500,000
                
                
                —
                
                
                —
                
                
                3,500,000Net
                    (Loss)
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                (2,327,161
                )
                
                —
                
                
                (2,327,161
                )Balance,
                    December 31, 1996
                
                
                6,237,960
                
                
                6,238
                
                
                5,590,358
                
                
                3,797,500
                
                
                (3,207,029
                )
                
                —
                
                
                6,187,067Issuance
                    of subscribed shares
                
                
                1,085,000
                
                
                1,085
                
                
                3,796,415
                
                
                (3,797,500
                )
                
                —
                
                
                —
                
                
                —Shares
                    issued for cash, $2.50 per share
                
                
                370,000
                
                
                370
                
                
                924,630
                
                
                —
                
                
                —
                
                
                —
                
                
                925,000Shares
                    issued for services, $0.93 per share
                
                
                498,000
                
                
                498
                
                
                463,182
                
                
                —
                
                
                —
                
                
                —
                
                
                463,680Net
                    (Loss)
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                (6,391,554
                )
                
                —
                
                
                (6,391,554
                )Balance,
                    December 31, 1997
                
                
                8,190,960
                
                
                8,191
                
                
                10,774,585
                
                
                —
                
                
                (9,598,583
                )
                
                —
                
                
                1,184,193
 The
          accompanying notes are an integral part of the financial
          statements.
  F-6
 **Table
              of Contents**
 **Index
              to Financial Statements**
 **AMERICAN
            SOUTHWEST HOLDINGS, INC.**
 **(An
              Exploration Stage Company)**
 **Consolidated
          Statements of Stockholders’ (Deficit)**
 (Continued)
  **Accumulated**
                  
                  ********
                  
                  ****
                  
                  ****
                  
                  ****
                  
                  ****
                  
                  ****
                  
                  **Other**
                  
                  ******Common
                      Stock**
                  
                  **Paid
                      in**
                  
                  **Stock**
                  
                  **Accumulated**
                  
                  **Comprehensive**
                  
                  **Total******
                  
                  **Shares**
                  
                  **Amount**
                  
                  **Capital**
                  
                  **Subscribed**
                  
                  **Deficit**
                  
                  **Income**
                  
                  **Equity**Issuance
                      of shares for conversion of debt at $0.44 per share
                  
                  
                  1,072,990
                  
                  
                  1,073
                  
                  
                  468,897
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  469,970Net
                      (Loss)
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  (1,700,877
                  )
                  
                  —
                  
                  
                  (1,700,877
                  )Balance,
                      December 31, 1998
                  
                  
                  9,263,950
                  
                  
                  9,264
                  
                  
                  11,243,482
                  
                  
                  —
                  
                  
                  (11,299,460
                  )
                  
                  —
                  
                  
                  (46,714
                  )Shares
                      issued for cash, $0.02 per share
                  
                  
                  900,000
                  
                  
                  900
                  
                  
                  17,100
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  18,000Shares
                      issued for services, $0.02 per share
                  
                  
                  100,000
                  
                  
                  100
                  
                  
                  1,900
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  2,000Shares
                      issued for cash, $0.10 per share
                  
                  
                  680,000
                  
                  
                  680
                  
                  
                  67,320
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  68,000Net
                      (Loss)
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  (146,604
                  )
                  
                  —
                  
                  
                  (146,604
                  )Balance,
                    December 31, 1999
                  
                  
                  10,943,950
                  
                  
                  10,944
                  
                  
                  11,329,802
                  
                  
                  —
                  
                  
                  (11,446,064
                  )
                  
                  —
                  
                  
                  (105,318
                  )Shares
                      issued for services,900,000
                      shares at $0.10 per share
                  
                  
                  900,000
                  
                  
                  900
                  
                  
                  89,100
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  90,000Shares
                      issued for cash with warrants attached at $0.09 per share
                  
                  
                  2,400,000
                  
                  
                  2,400
                  
                  
                  213,600
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  216,000Warrants
                  
                  
                  —
                  
                  
                  —
                  
                  
                  24,000
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  24,000Shares
                      issued for services,1,500,000
                      shares at $0.15 per share
                  
                  
                  1,500,000
                  
                  
                  1,500
                  
                  
                  223,500
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  225,000Shares
                      issued for cash with warrants attached,1,600,000
                      shares at $0.09 per share
                  
                  
                  1,600,000
                  
                  
                  1,600
                  
                  
                  142,400
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  144,000Warrants
                  
                  
                  —
                  
                  
                  —
                  
                  
                  16,000
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  16,000Shares
                      issued for cash,1,520,000
                      shares at $0.10 per share
                  
                  
                  1,520,000
                  
                  
                  1,520
                  
                  
                  150,480
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  152,000Warrants
                      issued for services rendered,5,750,000
                      warrants with value of $0.01 per warrant
                  
                  
                  —
                  
                  
                  —
                  
                  
                  57,500
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  57,500Net
                      (Loss)
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  —
                  
                  
                  (945,964
                  )
                  
                  —
                  
                  
                  (945,964
                  )Balance,
                      December 31, 2000
                  
                  
                  18,863,950
                  
                  
                  18,864
                  
                  
                  12,246,382
                  
                  
                  —
                  
                  
                  (12,392,028
                  )
                  
                  —
                  
                  
                  (126,782
                  )
 The
            accompanying notes are an integral part of the financial
            statements.
  F-7
 **Table
                of Contents**
 **Index
                to Financial Statements**
 **AMERICAN
              SOUTHWEST HOLDINGS, INC.**
 **(An
                Exploration Stage Company)**
 **Consolidated
            Statements of Stockholders’ (Deficit)**
 (Continued)
  **Accumulated**
                    
                    ********
                    
                    ****
                    
                    ****
                    
                    ****
                    
                    ****
                    
                    ****
                    
                    **Other**
                    
                    ******Common
                        Stock**
                    
                    **Paid
                        in**
                    
                    **Stock**
                    
                    **Accumulated**
                    
                    **Comprehensive**
                    
                    **Total******
                    
                    **Shares**
                    
                    **Amount**
                    
                    **Capital**
                    
                    **Subscribed**
                    
                    **Deficit**
                    
                    **Income**
                    
                    **Equity**Net
                        (Loss)
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    (60,608
                    )
                    
                    —
                    
                    
                    (60,608
                    )Balance,
                      December 31, 2001
                    
                    
                    18,863,950
                    
                    
                    18,864
                    
                    
                    12,246,382
                    
                    
                    —
                    
                    
                    (12,452,636
                    )
                    
                    —
                    
                    
                    (187,390
                    )Shares
                        issued for cash.400,000
                        shares at $0.04 per share
                    
                    
                    400,000
                    
                    
                    400
                    
                    
                    15,600
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    16,000Warrants
                        issued with stock,400,000
                        warrants at $0.01 per warrant
                    
                    
                    —
                    
                    
                    —
                    
                    
                    4,000
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    4,000Shares
                        issued for debt at $0.04 per share
                    
                    
                    2,900,000
                    
                    
                    2,900
                    
                    
                    113,100
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    116,00029,000
                        warrants issued at $0.01 per warrant
                    
                    
                    —
                    
                    
                    —
                    
                    
                    29,000
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    29,000Net
                        (Loss)
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    (57,298
                    )
                    
                    —
                    
                    
                    (57,298
                    )Balance,
                        December 31, 2002
                    
                    
                    22,163,950
                    
                    
                    22,164
                    
                    
                    12,408,082
                    
                    
                    —
                    
                    
                    (12,509,934
                    )
                    
                    —
                    
                    
                    (79,688
                    )Shares
                        issued for services at $0.01 per share
                    
                    
                    6,000,000
                    
                    
                    6,000
                    
                    
                    56,092
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    62,092Net
                        (Loss)
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    (137,386
                    )
                    
                    —
                    
                    
                    (137,386
                    )Balance,
                        December 31, 2003
                    
                    
                    28,163,950
                    
                    
                    28,164
                    
                    
                    12,464,174
                    
                    
                    —
                    
                    
                    (12,647,320
                    )
                    
                    —
                    
                    
                    (154,982
                    )Shares
                        and warrants issued for cash, net of costs of $7,168
                    
                    
                    15,750,000
                    
                    
                    15,750
                    
                    
                    397,880
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    413,630Shares
                        issued for services
                    
                    
                    961,851
                    
                    
                    962
                    
                    
                    18,275
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    19,237Issuance
                        of stock for cancellation of warrants
                    
                    
                    2,175,005
                    
                    
                    2,175
                    
                    
                    35,888
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    38,063Shares
                        issued for debt at $0.01 per share
                    
                    
                    2,000,000
                    
                    
                    2,000
                    
                    
                    18,000
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    20,000Shares
                        issued in connection with acquisition of Metal Sands
                        Limited
                    
                    
                    33,100,000
                    
                    
                    33,100
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    33,100Warrants
                        issued to related party for facilitation of acquisition
                    
                    
                    —
                    
                    
                    —
                    
                    
                    300,000
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    300,000Common
                        stock subscribed
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    67,095
                    
                    
                    —
                    
                    
                    —
                    
                    
                    67,095Currency
                        translation
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    (5,878
                    )
                    
                    (5,878
                    )Net
                        (Loss)
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    —
                    
                    
                    (1,008,551
                    )
                    
                    —
                    
                    
                    (1,008,551
                    )Balance,
                        December 31, 2004
                    
                    
                    82,150,806
                    
                    $
                    82,151
                    
                    $
                    13,234,217
                    
                    $
                    67,095
                    
                    $
                    (13,655,871
                    )
                    $
                    (5,878
                    )
                    $
                    (278,286
                    )
 The
              accompanying notes are an integral part of the financial
              statements.
  F-8
 **Table
                  of
                  Contents**
 **Index
            to Financial
            Statements**
 **AMERICAN
                    SOUTHWEST HOLDINGS,
                    INC.****(An
                    Exploration Stage Company)****Consolidated
                  Statements of Cash Flows**For
                  the year ended December 31,
              
              Cumulative
                  since2004
              
              2003
              
              inception,
                  10/20/1989Cash
                  flows from operating activities:Reconciliation
                  of net loss to net cash used
                  by operating activities:Net
                  loss:
              
              $
              (1,008,551
              )
              $
              (137,386
              )
              $
              (13,655,871
              )Adjustments
                  to reconcile net loss to net cash used
                  by operating activities:Depreciation
              
              
              50
              
              
              —
              
              
              50Stock
                  and warrants issued in exchange for services
              
              
              361,275
              
              
              62,092
              
              
              707,867Stock
                  issued for cancellation of warrants
              
              
              38,063
              
              
              —
              
              
              38,063Changes
                  in Operating Assets and Liabilities:Accounts
                  receivable
              
              
              179
              
              
              —
              
              
              179Accounts
                  payable and accrued liabilities
              
              
              (16,294)
              
              
              42,893
              
              
              143,267Due
                  to related parties
              
              
              316,876
              
              
              —
              
              
              316,876Net
                  cash used by operating activities
              
              
              (308,402
              )
              
              (32,401
              )
              
              (12,449,569
              )Cash
                  flows from investing activities:Purchase
                  of property and equipment
              
              
              (172
              )
              
              —
              
              
              (172
              )Costs
                  related to acquisition of Metal Sands Limited
              
              
              (24,038
              )
              
              —
              
              
              (24,038
              )Cash
                  received from acquisition of Metal Sands
              
              
              169,601
              
              
              —
              
              
              169,601Amounts
                  lent to Metal Sands prior to acquisition
              
              
              (117,437
              )
              
              —
              
              
              (117,437
              )Net
                  cash provided (used) in investing activities
              
              
              27,954
              
              
              —
              
              
              27,954Cash
                  flows from financing activities:Sale
                  of stock and warrants
              
              
              420,828
              
              
              —
              
              
              12,566,574Net
                  borrowings from related parties
              
              
              4,515
              
              
              36,980
              
              
              4,515Stock
                  issue costs
              
              
              (5,198
              )
              
              —
              
              
              (5,198
              )Stock
                  subscription deposits
              
              
              67,095
              
              
              —
              
              
              67,095Net
                  cash provided by financing activities
              
              
              487,240
              
              
              36,980
              
              
              12,632,986Effect
                  of exchange rate on cash
              
              
              (5,878
              )
              
              —
              
              
              (5,878
              )Net
                  increase in cash
              
              
              200,914
              
              
              4,579
              
              
              205,493Cash
                  and cash equivalents at beginning of period
              
              
              4,579
              
              
              —
              
              
              —Cash
                  and cash equivalents at end of period
              
              $
              205,493
              
              $
              4,579
              
              $
              205,493
  The
        accompanying notes are an integral part of the financial
        statements.
 
 F-9
 **Table
            of Contents**
 **Index
          to Financial Statements**
 
 **AMERICAN
          SOUTHWEST HOLDINGS, INC.**
 (An
          Exploration Stage Company)
 **Notes
          to Consolidated Financial Statements**
 **1.**
              **Summary
                  of Significant Accounting Policies and Use of
                  Estimates:**
 
 *Nature
        of the Corporation:*
  American
        Southwest Holdings, Inc. (formerly Namibian Copper Mines, Inc.) is a mineral
        development company. It has previously investigated and initially invested
        in
        the Hiab Copper Project. The fund raising for this project was unsuccessful
        and
        all initial investment was lost and written off. Currently, the Company is
        investigating projects in Australia. In accordance with SFAS 7 the Company
        is
        considered an exploration stage company.
 
 The
        Company was incorporated in the state of Delaware on October 20, 1989, under
        the
        name of Cordon Corporation and subsequently changed its name to Ameriserv
        Financial Corporation (Ameriserv). On April 19, 1994, bankruptcy proceedings
        for
        Amerserv finalized in the US Bankruptcy Court, Northern District of Texas. 
        Under the terms of the bankruptcy, the Company was forced to liquidate all
        of
        its assets.  The proceeds were then distributed among the creditors,
        thereby satisfying all of the Company’s outstanding debts.  The Company
        halted operations and ceased to do business at the conclusion of the bankruptcy
        proceedings.  The Company utilized fresh-start accounting in
        its
        reorganization effective July 28, 1995.
 
 On
        July
        28, 1995 the name was changed to Namibian Copper Mines, Inc. and the Company
        invested in the feasibility study of the Haib Copper Project Namibia. Funds
        were
        raised through private placement and the Company earned an interest in this
        project. As a result of falling copper prices, the project became marginal
        and
        the Company made the decision to withdraw from the project.
  On
        June
        9, 2000 the name was changed to American Southwest Holdings, Inc.
 
 During
        the year ended December 31, 2004, the Company acquired Metal Sands Limited
        (“MSL”) (See Note 8). MSL is a mineral sands development company incorporated in
        Australia, with mineral sands tenements held in South West of Western Australia.
        MSL was incorporated in Australia on September, 8, 2000, as Rainbow Nominees
        Pty
        Ltd. MSL changed its name to Metal Sands Pty Limited on May 28, 2001, and
        to
        Metal Sands Pty Ltd on May 12, 2002. On June 21, 2002, MSL converted to an
        Australian public liability company, Metal Sands Limited. Metal Sands Limited
        had minimal operations from December 15, 2004, the date of acquisition, through
        December 31, 2004.
 
 *Basis
        of Presentation and Going Concern:*
  The
        accompanying statements have been prepared following accounting standards
        generally accepted in the United States of America. The statements have been
        prepared assuming that the Company will continue as a going concern. The
        financial statements do not include any adjustments relating to the
        recoverability and classification of recorded asset amounts or the amounts
        and
        classification of liabilities that might be necessary should the Company
        be
        unable to continue as a going concern. (See Note 3)
 
 In
        the
        opinion of management, the accompanying financial statements reflect all
        adjustments (which include only normal recurring adjustments) and
        reclassifications for comparability necessary to present fairly the financial
        position and results of operations of the Company. These statements are based
        upon information currently available to management.
  F-10
 **Table
            of Contents**
 **Index
          to Financial Statements**
 **AMERICAN
          SOUTHWEST HOLDINGS, INC.**
 (An
          Exploration Stage Company)
 **Notes
          to Consolidated Financial Statements (continued)**


**1.**
              **Summary
                  of Significant Accounting Policies and Use of Estimates (continued):**
 
 *Accounting
        Estimates:*
  The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates.
  *Principles
        of Consolidation:*
  The
        accompanying consolidated financial statements include the accounts of the
        Company and its wholly owned subsidiary MSL from the date of acquisition,
        December 15, 2004.. MSL has adopted the Australian dollar as its reporting
        currency for its financial statements as the Australian dollar is the primary
        economic environment in which the Company conducts its business and is
        considered the appropriate functional currency for its operations. For purposes
        of consolidation, all assets and liabilities figures for MSL have been converted
        to United States Currency with the exchange rate as of the end of the period.
        All equity figures are converted based on the historical conversion rates
        for
        the balance sheet date first report. All Statement of Operations figures
        have
        been converted using the average exchange rate for the period.
 
 Intercompany
        transactions and balances have been eliminated in consolidation.
 
 *Environmental
        and Reclamation Costs:*
  The
        operations of the Company have been and may in the future be affected from
        time
        to time in varying degrees by changes in environmental regulations, including
        those for future removal and site restoration costs. The likelihood of new
        regulations and their overall effect upon the Company are not predictable.
        The
        Company will provide for any reclamation costs in accordance with Financial
        Accounting Standard No. 143, “Accounting for Asset Retirement
        Obligations”.
  
 *Mineral
        Properties:*
  In
        accordance with U.S. GAAP, exploration, mineral property evaluation, holding
        costs, option payments and related acquisition costs for mineral properties
        acquired under an option agreement are expensed as incurred. When proven
        and
        probable reserves are determined for a property and a bankable feasibility
        study
        is completed, then subsequent exploration and development costs on the property
        would be capitalized. Total capitalized cost of such properties is measured
        for
        recoverability of carrying value under SFAS No. 144, “Accounting for the
        Impairment or Disposal of Long-Lived Assets.”
 
 *Cash
        and Cash Equivalents:*
  For
        purposes of balance sheet classification and the statements of cash flows,
        the
        Company considers all highly liquid investments purchased with an original
        maturity of three months or less to be cash equivalents.
  F-11
 **Table
            of Contents**
 **Index
          to Financial Statements**
 **AMERICAN
          SOUTHWEST HOLDINGS, INC.**
 (An
          Exploration Stage Company)
 **Notes
          to Consolidated Financial Statements (continued)**
 **1.**
                **Summary
                    of Significant Accounting Policies and Use of Estimates (continued):**
  *Accounts
            Receivable:*
  Included
            in accounts receivable are receivables that represent expense reimbursements
            due
            to MSL from third parties.  The Company does not have a formal
            policy to
            charge interest on late payments of receivable
            amounts.




*Property
      and Equipment:*




Property
      and equipment are stated at the lower of cost or net realizable value.
      Depreciation is provided by the straight-line method over the estimated service
      lives of the respective assets, which range from 5 to 15 years.




*Valuation
      of Long-lived Assets:*




In
      accordance with SFAS No. 144, long-lived assets such as property, plant and
      equipment are reviewed for impairment whenever events or changes in
      circumstances indicate that the carrying amount of an asset may not be
      recoverable. Recoverability of assets to be held and used is measured by a
      comparison of the carrying amount of an asset to estimated undiscounted future
      cash flows expected to be generated by the asset. If the carrying value of
      an
      asset exceeds its estimated future cash flows, an impairment charge is
      recognized for the amount by which the carrying amount of the asset
      exceeds
      the fair value of the asset. Assets to be disposed of would be separately
      presented in the balance sheet and reported at the lower of the carrying amount
      or fair value less costs to sell, and are no longer depreciated.





*Net
      Loss per Share:*




The
      Company computes and discloses earnings and loss per share in accordance with
      SFAS No 128, “Earnings Per Share”, which requires dual presentation of basic
      earnings per share and diluted earnings per share on the face of all income
      statements presented for all entities with complex capital structures. Basic
      earnings per share is computed as net income divided by weighted average number
      of ordinary shares outstanding for the period. Diluted earnings per share
      reflects the potential dilution that could occur from ordinary shares issuable
      through share options. Since all of the Company’s share options are antidilutive
      for all periods presented, there is no difference between basic earnings per
      share and diluted earnings per share. As of December 31, 2004 and 2003, the
      Company had potentially dilutive securities of 19,000,000 and 13,050,000,
      respectively.




*Fair
      Value of Financial Instruments:*




The
      carrying amount reported in the balance sheets for receivables, accounts payable
      and accrued expenses and notes payable approximate fair value because of the
      immediate or short term maturity of these financial instruments.




F-12
 **Table
          of Contents**


**Index
        to Financial Statements**
 **AMERICAN
        SOUTHWEST HOLDINGS, INC.**
 (An
        Exploration Stage Company)
 **Notes
        to Consolidated Financial Statements (continued)**


**1.**
              **Summary
                  of Significant Accounting Policies and Use of Estimates (continued):**
  *Stock
            Based Compensation:*
  The
            Company accounts for its stock based compensation based upon provisions
            in SFAS
            No. 123, Accounting
            for Stock-Based Compensation .
            In this
            statement stock based compensation is based on the fair value method
            for the
            valuation of its securities given as compensation to employees.
  SFAS
            123
            provides that stock compensation paid to non employees be recorded with
            a value
            which is based upon the fair value of the services rendered or the stock
            given,
            whichever is more reliable. The common stock paid to non-employees was
            valued at
            the value of the services rendered.
  *Mining
          Rights* :
  Mining
          Rights represents the Companuy’s purchase price of the mining rights held by
          MSL.  The Company has the right to mine various mineral sands tenements
          held in the South West territory of Western Australia.  The mining
          rights
          will be amortized on a units of production basis.  As of December
          31, 2004,
          the total units of production have not been determined and no amortization
          has
          been recorded.
 *Recent
          Accounting Pronouncements:*




Below
      is
      a listing of the most recent United States of America accounting standards
      and
      their affect on the Company.






*SFAS
      150 - Accounting for Certain Financial Instruments with Characteristics of
      both
      Liabilities and Equity* .
      SFAS
      150 establishes standards for how an issuer classifies and measures certain
      financial instruments with characteristics of both liabilities and equity.
      It
      requires that an issuer classify a financial instrument that is within its
      scope
      as a liability (or an asset in some circumstances). Many of those instruments
      were previously classified as equity. SFAS 150 is effective for financial
      instruments entered into or modified after May 31, 2003, and is otherwise
      effective at the beginning of the first interim period beginning after June
      15,
      2003, except for mandatorily redeemable financial instruments of nonpublic
      entities. It is to be implemented by reporting the cumulative effect of a change
      in an accounting principle for financial instruments created before the issuance
      date of the Statement and still existing at the beginning of the interim period
      of adoption. Restatement is not permitted. The Company’s adoption of this
      statement did not have a material financial affect.





*SFAS
      151 - Inventory Costs* .
      SFAS
      151 amends the guidance in APB No. 43, Chapter 4, “Inventory Pricing,” to
      clarify the accounting for abnormal amounts of idle facility expense, freight,
      handling costs, and wasted material (spoilage). SFAS 151 requires that those
      items be recognized as current period charges regardless of whether they meet
      the criteria of “so abnormal.” In addition, SFAS 151 requires that allocation of
      fixed production overheads to the costs of conversion be based on the normal
      capacity of the production facilities. SFAS 151 is effective for financial
      statements issued for fiscal years beginning after June 15, 2005. As the Company
      currently has no inventory, it does not anticipate any financial effect of
      adopting this statement.




F-13
 **Table
          of Contents**


**Index
        to Financial Statements**
 **AMERICAN
        SOUTHWEST HOLDINGS, INC.**
 (An
        Exploration Stage Company)
 **Notes
        to Consolidated Financial Statements (continued)**


**1.**
              **Summary
                  of Significant Accounting Policies and Use of Estimates (continued):**


*Recent
        Accounting Pronouncements (continued):*




*SFAS
        152 - Accounting for Real Estate Time-Sharing Transactions.* SFAS 152
        amends SFAS 66 and SFAS 67. The statement is effective for financial statements
        for fiscal years beginning after June 15, 2005. As the Company does not
        currently conduct any real estate time-sharing transactions, it does not
        anticipate any financial effect of adopting this statement.


*SFAS
        153 - Exchanges of Nonmonetary Assets.* This
        statement amends the guidance in APB No. 29, “Accounting for Nonmonetary
        Assets.” APB No.29 was based on the principle that exchanges of nonmonetary
        assets should be measured on the fair value of the assets exchanged. SFAS
        153
        amends APB No. 29 to eliminate the exception for nonmonetary exchanges of
        similar productive assets and replaces it with a general exception for exchanges
        of nonmonetary assets that do not have commercial substance if the future
        cash
        flows of the entity are expected to change significantly as a result of the
        exchange. SFAS 153 is effective for financial statements issued for fiscal
        years
        beginning after June 15, 2005. Management does not anticipate any financial
        effect of adopting this statement on the Company’s financial position or results
        of operations.
  *SFAS
            154 - Accounting Changes and Error Corrections.*  This statement is a
            replacement of APB Opinion No. 20, “Accounting Changes” and FASB Statement No.
            3, “Reporting Accounting Changes in Interim Financial Statements.”  SFAS
            154 applies to all voluntary changes in accounting principle and changes
            in the
            requirements for accounting for and reporting a change in accounting
            principle.  SFAS 154 requires the retrospective application to
            prior
            periods’ financial statements of the direct effect of a voluntary change in
            accounting principle unless it is impracticable.  APB No. 20 required
            that
            most voluntary changes in accounting principle be recognized by including
            in net
            income of the period of the change the cumulative effect of changing
            to the new
            accounting principle.  FASB stated that SFAS 154 improves financial
            reporting because its requirements enhance the consistency of financial
            information between periods.  The Company has elected early adoption
            of
            SFAS 154.


*SFAS
      123(R) - Accounting for Stock-Based Compensation.* This
      statement established standards for the accounting for transactions in which
      an
      entity exchanges its equity instruments for goods or services and focuses
      primarily on accounting for transactions in which an entity obtains employee
      services in share-based payment transactions. It does not change the accounting
      guidance for share-based payment transactions with parties other than employees.
      For public entities that file as small business issuers, the revisions to SFAS
      123(R) are effective as of the beginning of the first interim or annual
      reporting period that begins after December 15, 2005. For non-public entities,
      the revisions to SFAS 123 are effective as of the beginning of the first annual
      reporting period that begins after December 15, 2005. Management has not yet
      determined the effects of adopting the revisions to SFAS 123 on the Company’s
      financial position or results of operations.




F-14
 **Table
          of Contents**


**Index
        to Financial Statements**
 **AMERICAN
        SOUTHWEST HOLDINGS, INC.**
 (An
        Exploration Stage Company)
 **Notes
        to Consolidated Financial Statements (continued)**


**2.**
              **Financial
                  Condition and Ability to Continue as a Going
                  Concern:**
 
 The
        Company has had no revenues from operations since inception and has a deficit
        from expenditures since inception to December 31, 2004 in the amount of
        $13,655,871. The Company has relied to date, and will continue to rely on
        its
        ability to raise equity to fund working capital requirements and fund
        exploration expenditures. Management will continue to control expenditures
        in
        line with its ability to raise equity working capital.




The
      ability of the Company to obtain financing and adequately manage its expenses,
      and thus maintain solvency, is dependent on equity market conditions, the
      ability to find a joint venture partner, the market for precious metals, and
      the
      willingness of other parties to lend the Company money. While the Company has
      been successful at certain of these efforts in the past, there can be no
      assurance that current efforts will be successful. These financial statements
      do
      not reflect the outcome of these uncertainties.





**3.**
              **Property
                  & Equipment:**
 
 At
        December 31, 2004, property and equipment consists of:
 
 Sundry
                  equipment
              
              $
              2,514Furniture
                  & fittings
              
              
              3,404Property
                  & equipment
              
              
              5,918Less:
                  Accumulated depreciation
              
              
              (1,716
              )Property
                  & Equipment, net
              
              $
              4,202
 At
        December 31, 2003, the Company owned no property and
        equipment. Depreciation expense was $50 and $0, during the years ended December 31,
        2004
        and 2003, respectively.


**4.**
            **Income
                Taxes:**





The
      Company provides for income taxes under Statement of Financial Accounting
      Standards No. 109, *Accounting
      for Income Taxes* .
      SFAS
      No. 109 requires the use of an asset and liability approach in accounting for
      income taxes. Deferred tax assets and liabilities are recorded based on the
      differences between the financial statement and tax bases of assets and
      liabilities and the tax rates in effect when these differences are expected
      to
      reverse.





SFAS
      No.
      109 requires the reduction of deferred tax assets by a valuation allowance
      if,
      based on the weight of available evidence, it is more likely than not that
      some
      or all of the deferred tax assets will not be realized. In the Company’s
      opinion, it is uncertain whether they will generate sufficient taxable income
      in
      the future to fully utilize the net deferred tax asset. Accordingly, a valuation
      allowance equal to the deferred tax asset has been recorded.




F-15
 **Table
          of Contents**


**Index
        to Financial Statements**
 **AMERICAN
        SOUTHWEST HOLDINGS, INC.**
 (An
        Exploration Stage Company)
 **Notes
        to Consolidated Financial Statements
        (continued)**




**4.**
            **Income
                Taxes (continued):**


*Income
        taxes for American Southwest Holdings, Inc.:*
  The
          total
          deferred tax asset is approximately $1,756,000, which is calculated by
          multiplying a 15% estimated tax rate by the cumulative NOL of approximately
          $11,704,000. The total valuation allowance is a comparable
          $1,756,000.
  The
          provision for income taxes is comprised of the net change in deferred taxes
          less
          the valuation account plus the current taxes payable as shown in the chart
          below.
 
 **2004**
              ****
              **2003**Net
                  change in deferred taxes since inception
              
              
              1,756,000
              
              
              1,604,299Valuation
                  account by year
              
              
              (1,756,000
              )
              
              (1,604,299
              )Current
                  taxes payable
              
              
              —
              
              
              —Provision
                  for income taxes
              
              
              —
              
              
              —


Below
      is
      a chart showing the estimated United States federal net operating losses and
      the
      years in which they will expire.




**Year**
            ****
            **Amount**
            ****
            **Expiration**1996
            
            $
            2,327,161
            
            
            20161997
            
            
            6,286,760
            
            
            20171998
            
            
            1,700,877
            
            
            20181999
            
            
            237,400
            
            
            20192000
            
            
            1,201
            
            
            20202001
            
            
            0
            
            
            20212002
            
            
            4,540
            
            
            20222003
            
            
            137,386
            
            
            20232004
            
            
            1,008,551
            
            
            2024Total
                NOL
            
            $
            11,703,876


Major
      items causing the Company’s tax rate to differ from the statutory rate are as
      follows:





**12/31/2004**
            ****
            **12/31/2003**Income
                tax benefit at statutory rate
            
            $
            151,701
            
            $
            20,608Less
                change in valuation allowance
            
            
            (151,701
            )
            
            (20,608
            )Income
                tax expense
            
            $
            —
            
            $
            —


F-16
 **Table
          of Contents**


**Index
          to Financial Statements**
 **AMERICAN
          SOUTHWEST HOLDINGS, INC.**
 (An
          Exploration Stage Company)
 **Notes
          to Consolidated Financial Statements
          (continued)**


**4.**
              **Income
                  Taxes (continued):**


*Income
      taxes for MSL:*




For
      Australian tax reporting purposes, MSL reports on a June 30 fiscal year. MSL
      has
      future tax assets which have arisen principally from net operating loss carry
      forwards and exploration expenditures incurred and deductible for income tax
      purposes at an Australian tax rate of 30%. As management of the Company does
      not
      currently believe that it is more likely than not that the Company will receive
      the benefit of this asset, a valuation allowance equal to the future tax benefit
      has been established at the period end.





**6/30/04**Loss
                for tax purposes
            
            $
            148,575





As
      of
      June 30, 2004, the Company had net operating loss carry forwards available
      to
      reduce taxable income in future years in accordance with Australian income
      tax
      legislation amounting to $495,257. In accordance with Australian tax
      legislation, no expiration date attaches to carry forward losses, but the
      benefit of such issues will be obtained if:





(a)
            future
                assessable income is derived of a nature and of an amount sufficient
                to
                enable the benefits from the deduction for the losses to be
                realized.


(b)
            The
                conditions for deductibility imposed by tax legislation continue
                to be
                complied with


(c)
            No
                changes in tax legislation or future transactions adversely affect
                the
                company realizing the benefit from the deductions or
                losses.





Major
      items causing the Corporation’s tax rate to differ from the statutory rate are
      as follows:





**06/30/04**Income
                tax benefit at statutory rate
            
            $
            39,185Less:
                Non deductible items:– sundry
            
            
            (268
            )Less
                change in valuation allowance
            
            
            (38,917
            )Income
                tax expense
            
            $
            —






F-17


**Table
        of Contents**


**Index
        to Financial Statements**


**AMERICAN
      SOUTHWEST HOLDINGS, INC.**


(An
      Exploration Stage Company)


**Notes
      to Consolidated Financial Statements (continued)**







**5.**
            **Leases
                and Other Commitments:**





In
      connection with the acquisition of Metal Sands, the Company has been granted
      exploration licenses, exploration license applications, and prospecting license
      applications in conjunction with their mining venture in Southwestern
      Australia.





*Exploration:*




In
      order
      to maintain rights of tenure to mineral tenements MSL is required to pay holding
      costs and perform minimum exploration work to meet the minimum expenditure
      requirements specified by the WA Department of Industry and Resources. These
      obligations are subject to renegotiation and are not provided for in the
      financial report.





As
      of
      December 31, 2004, the total obligations assuming all applications are approved
      and no ground is relinquished:





Not
                later than one year
            
            $
            442,600Later
                than one year but not later than two years
            
            $
            464,700Later
                than two years but not later than five years
            
            $
            488,100





*Purchase
      of Interest in Tenement:*




In
      addition, royalty payments may be payable if certain conditions are met in
      the
      future. At this time, future royalty payments are uncertain and no accrual
      has been made in the financial statements.





*Native
      Title:*




MSL’s
      mining tenements may be subject to native title applications in the future.
      At
      this stage it is not possible to quantify the impact (if any) that native titles
      may have on the operations of MSL.





*Office
      Equipment Rental Agreement:*




Under
      the
      terms of a lease agreement, which has an effective date of January 1, 2004,
      MSL
      rents office equipment including furniture and business machines, from Elsinor
      Nominees Pty Ltd for $504 per month plus applicable taxes. The term of the
      agreement is 36 months with an option to purchase the equipment after 36
      installments. The total obligation under this rental agreement is
      $12,096.





*Consulting
      Agreement:*




During
      the year ended December 31, 2004, the Company entered into a consulting
      contract, commencing July 1, 2004 and ending upon the appointment of the
      consultant as chief executive officer of the Company.  The contract
      provides for monthly payments of AUD$10,000 or approximately US$7,800 at the
      foreign currency translation rate of .78 as of December 31, 2004.





F-18
 **Table
          of Contents**


**Index
        to Financial Statements**
 **AMERICAN
        SOUTHWEST HOLDINGS,
        INC.**
 (An
      Exploration Stage Company)


**Notes
      to Consolidated Financial Statements (continued)**





**6.**
            **Related
                Party Transactions:**





*Amounts
      Due to Related Parties:*




The
      Company has borrowed funds from an officer to pay general and administrative
      expenses. This is a short term non-interest bearing demand note.




As
      of
      December 31, 2004, the Company owes $246,694 to another company owned by the
      Company’s President and $50,000 to a director of the Company. These amounts are
      included in “Due to related parties” in the accompanying financial
      statements.





*Office
      Space:*




In
      September 2004, the Company entered into a License Agreement for the provision
      of office space with Cazaly Resources Ltd. The Agreement expires September
      30,
      2005, after which it can be renewed on the same terms and conditions. The total
      obligation under this license agreement is $14,227.





*Stock
      Warrants:*




During
      the year ended December 31, 2004, 15,000,000 warrants to purchase the Company’s
      common stock were issued to Doyle Capital Ltd. (DCL) for their part in securing
      and facilitating the MSL acquisition. DCL is principally owned by the President
      of the Company. The warrants are exercisable at $0.04 per warrant and expire
      December 31, 2007.





*Consulting
      Agreement:*




In
      September 2003, the Company entered into a consulting agreement with DCL. Under
      the terms of the agreement DCL will be paid a $15,000 monthly retainer.
      Effective January 2004, the agreement was amended, increasing the monthly
      retainer to $20,000. Additionally, DCL is to receive a 6% fee on all equity
      raised. DCL has waived this fee for 2004. The consulting agreement expires
      on
      December 31, 2007. As of December 31, 2004, no amounts have been paid to DCL
      in
      connection with this agreement and fees in the amount of $240,000 have been
      accrued in the accompanying financial statements.




F-19
 **Table
          of Contents**


**Index
        to Financial Statements**


**AMERICAN
      SOUTHWEST HOLDINGS, INC.**


(An
      Exploration Stage Company)


**Notes
      to Consolidated Financial Statements (continued)**





**7.**
            **Stockholders’
                Equity:**





*Common
      Stock:*




On
      July
      28, 1995 the shareholders agreed to a 50 to 1 reverse stock split. This stock
      split has been applied in the presentation of all issued and outstanding shares
      in the accompanying financial statements.





During
      the year ended December 31, 2004, the Company issued shares of its common stock
      as follows:




·
            15,750,000
                shares for cash in the amount of
                $420,798


·
            961,851
                shares valued $19,237, in exchange for
                services


·
            2,175,005
                shares valued at $38,063 in exchange for the cancellation of 13,050,000
                common stock warrants


·
            2,000,000
                shares valued at $20,000, in payment of
                debt


·
            33,100,000
                shares valued at $33,100 in connection with the acquisition of MSL
                (See
                Note 8)





The
      Company realized costs in the amount of $7,168 in connection with issuing these
      shares of common stock.





*Warrants:*




The
      following table summarizes the common stock warrant activity for the
      company.





**Options**
            ****
            **Weighted
                Average Exercise Price**Warrants
                outstanding at 12/31/2002
            
            
            13,050,000
            
            $
            0.115Granted
            
            
            —
            
            
            —Warrants
                outstanding at 12/31/2003
            
            
            13,050,000
            
            $
            0.115Cancelled
            
            
            (13,050,000
            )
            $
            0.115Granted
            
            
            19,000,000
            
            $
            0.04Warrants
                outstanding at 12/31/2004
            
            
            19,000,000
            
            $
            0.04





F-20
 **Table
          of Contents**


**Index
        to Financial Statements**


**AMERICAN
      SOUTHWEST HOLDINGS, INC.**


(An
      Exploration Stage Company)


**Notes
      to Consolidated Financial Statements (continued)**




**7.**
              **Stockholders’
                  Equity (continued):**
 Information
        relating to common stock warrants at December 31, 2004 summarized by exercise
        price is as follows:




**Outstanding**
              ****
              **Exercisable******
              ****
              ****
              ****
              **Remaining**
              ****
              **Weighted
                  Average**
              ****
              ****
              ****
              **Weighted
                  Average****Exercise
                  Price Per Share**
              ****
              **Shares**
              ****
              **Life
                  ( In Years)**
              ****
              **Exercise
                  Price**
              ****
              **Shares**
              ****
              **Exercise
                  Price**$0.04
              
              19,000,000
              
              3.0
              
              $
                  0.04
              
              19,000,000
              
              $
                  0.04
 During
        the year ended December 31, 2004, 4,000,000 warrants to purchase the Company’s
        common stock were issued in a private placement of 8,000,000 shares of common
        stock to sophisticated investors.  The warrants are exercisable at
        $0.04
        per warrant and expire December 31, 2007.





**8.**
            **Acquisition
                of Metal Sands Limited:**




During
      the year ended December 31, 2004, the Company purchased Metal Sands Limited
      in
      exchange for 33,100,000 shares of the Company’s common stock, valued at $33,100
      and incurred $61,275 in professional fees in connection with the acquisition.
      The Company assumed net liabilities relating to cash advances made to Metal
      Sands prior to the asset acquisition of $194,999 which were expensed
      as
      exploration costs and recorded Mining Rights in the amount of $33,100.




In
      addition, 15,000,000 warrants to purchase the Company’s common stock were issued
      to Doyle Capital Ltd. (DCL) for their part in securing and facilitating the
      MSL
      acquisition. DCL is principally owned by the President of the Company.
      The
      warrants are exercisable at $0.04 per warrant, expire December 31, 2007, and
      were valued at $300,000 using the Black Scholes option-pricing model with the
      following weighted average assumptions for all grants: expected life of options
      of three (3) years, risk free interest rate of five percent (5%), volatility
      of
      fifty-eight percent (58%) and a zero percent dividend yield.




**9.**
            **Statements
                of Cash Flows:**





During
      the years ended December 31, 2004 and 2003, and for the cumulative period from
      the Company’s inception on October 20, 1989 through December 31, 2004, the
      Company paid no income taxes. During these periods, the Company neither received
      nor paid any interest.





*Disclosure
      of non-cash activities:*




The
      Company recognized operating, investing and financing activities that affected
      assets, liabilities, and equity, but did not result in cash receipts or
      payments. These non-cash activities are as follows:




During
      the year ended December 31, 2004, the Company issued 961,851 shares of its
      common Stock in exchange for services in the amount of $19,237 and 2,000,000
      shares of its common stock for the payment of debt in the amount of
      $20,000.




F-21
 **Table
          of Contents**


**Index
            to Financial Statements**
 **AMERICAN
            SOUTHWEST HOLDINGS, INC.**
 (An
            Exploration Stage Company)
 **Notes
            to Consolidated Financial Statements
            (continued)**


**9.**
              **Statements
                  of Cash Flows (continued):**
 
 During
        the year ended December 31, 2004, the Company issued 33,100,000 shares of
        its
        Common Stock, valued at $33,100, 15,000,000 common stock warrants, valued
        at
        $300,000, in payment of fees related to the MSL acquisition and incurred
        $61,275 in professional fees in connection with the acquisition of Metal
        Sands
        Limited. In connection with this purchase, the Company assumed net
        liabilities relating to cash advances made to Metal Sands prior to the asset
        acquisition of $194,999 and Mining Rights valued at $33,100.
  During
        the year ended December 31, 2004, the Company issued 2,175,005 shares of
        its
        common stock, valued at $38,063, for the cancellation of 13,050,000 common
        stock
        warrants.
 
 In
        addition to the items listed above, during the cumulative period during
        development stage through December 31, 2004, the Company issued 10,500,000
        shares of its Common Stock in exchange for services valued at $455,294,
        1,000,000 Common Stock Subscriptions in exchange for mining properties valued
        at
        $3,500,000, 1,072,990 shares of its Common Stock in exchange for the
        cancellation of debt in the amount of $469,970 and 5,750,000 Common Stock
        warrants in exchange for services valued at $57,500.


**10.**
            **Subsequent
                Events:**




Subsequent
      to December 31, 2004, the Board of Directors voted to increase the authorized
      shares of the Company’s Common Stock to 300,000,000. The increase in authorized
      shares is subject to approval by the Company’s shareholders and will be included
      in the Company’s next proxy statement.




**11.**
              **Correction
                  of an Accounting
                  Principle:**
  The
        Company is restating its financial statement due to a change in accounting
        for
        the Metal Sands Limited transaction. The transaction has now been accounted
        for
        as an asset purchase rather than a merger. The mining rights acquired in
        the
        transaction have now been recorded at the par value ($.001) of the 33,100,000
        shares of common stock issued. In addition, all costs related to the acquisition
        have been expensed, and net liabilities of $194,999 assumed by the Company
        have
        been expensed as exploration costs. The effect of this change was to decrease
        mining rights reflected on the balance sheet by $1,847,174, decrease paid
        in
        capital by $1,290,900, and increase the loss in the current year and the
        deficit
        accumulated during development stage by $556,274. In addition, net loss per
        share changed from $(.01) as originally reported to $(.03) per
        share.




F-22