**Table of Contents**


**UNITED
STATES**


**SECURITIES
AND EXCHANGE COMMISSION**


**WASHINGTON,
D.C. 20549**





**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**




**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**








**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 $0.04 per
share.  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**




**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**


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**





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**





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**





**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**


****


**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.





Yahoo - Finance listed a high and low
trading price of $.10 and $.05, respectively, for the period from January 1,
2005 through April 7, 2005.





**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**





**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
$458,155, which was comprised primarily of its other general and administrative
costs of $446,324, exploration expenses of $15,016 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. 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
$13,099,597. All exploration costs are expensed as
incurred.




10
 **Table of Contents**




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**




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**




**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**





**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**





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**





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**


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**





**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: 
      June 3, 2005
    By:
    /s/ Alan
      DoyleAlan DoylePresident
      (Chief Executive Officer), Treasurer
      (Principal
      Financial Officer) and
Director





****Date:  June
      3, 2005
    By:
    /s/ Peter
      HolsworthPeter HolsworthDirector







18
 **Table of Contents**


****
 **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**


****


**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, stockholders’ equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
 
 We
conducted our audits in accordance with 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. 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, changes in stockholders’
equity, and its cash flows for the year then ended, in conformity with U.S.
generally accepted accounting principles.
 
 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.
 
 
 /s/
Semple & Cooper, LLP
 Phoenix,
Arizona
 June 2,
2005




F-2
  **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, 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**
 **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
    
    
    —Goodwill
      - mining rights
    
    
    1,880,274
    
    
    —Total
      assets
    
    $
    2,093,034
    
    $
    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 andoutstanding at December 31, 2004 and 2003,
      respectively
    
    
    82,151
    
    
    28,164Paid
      in capital
    
    
    14,525,117
    
    
    12,464,174Common
      stock subscribed
    
    
    67,095
    
    
    —Deficit
      accumulated during development stage
    
    
    (13,099,597
    )
    
    (12,647,320
    )Foreign
      currency translation adjustment (Note 1)
    
    
    (5,878
    )
    
    —Total
      shareholders' equity
    
    
    1,568,888
    
    
    (154,982
    )Total
      liabilities and shareholders' equity
    
    $
    2,093,034
    
    $
    4,579
 The
accompanying notes are an integral part of the financial
statements.
  F-4
 **Table of Contents**
 **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
    
    
    5,291,412Depreciation
    
    
    50
    
    
    —
    
    
    61,515Organizational
      costs
    
    
    —
    
    
    —
    
    
    120,000Write
      off of Hiab project
    
    
    —
    
    
    —
    
    
    7,697,615Exploration
      expenses
    
    
    15,016
    
    
    —
    
    
    15,016General
      & administrative costs
    
    
    461,390
    
    
    137,386
    
    
    13,185,558Operating
      loss
    
    
    (461,390
    )
    
    (137,386
    )
    
    (13,101,620
    )Other
      income:Foreign
      currency gain
    
    
    9,113
    
    
    —
    
    
    9,113Loss
      before income taxes
    
    
    (452,277
    )
    
    (137,386
    )
    
    (13,092,507
    )Provision
      for income taxes
    
    
    —
    
    
    —
    
    
    —Net
      loss
    
    $
    (452,277
    )
    $
    (137,386
    )
    $
    (13,092,507
    )Foreign
      currency translation adjustment
    
    
    (5,878
    )
    
    —
    
    
    (5,878
    )Comprehensive
      loss
    
    $
    (458,155
    )
    $
    (137,386
    )
    $
    (13,098,385
    )Net
      loss per share - basic & diluted
    
    $
    (0.01
    )
    $
    (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**
 **AMERICAN SOUTHWEST HOLDINGS, INC.**
 ******(An
Exploration Stage
Company)******
 **Consolidated
Statements of Stockholders' Equity**
 
 **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**
 **AMERICAN
SOUTHWEST HOLDINGS, INC.**
 ******(An
Exploration Stage
Company)******
 **Consolidated
Statements of Stockholders' Equity**
 (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**
 **AMERICAN
SOUTHWEST HOLDINGS, INC.**
 ******(An
Exploration Stage
Company)******
 **Consolidated
Statements of Stockholders' Equity**
 (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
    
    
    1,290,900
    
    
    —
    
    
    —
    
    
    —
    
    
    1,324,000Warrants
      issued to related party for facilitation of merger
    
    
    —
    
    
    —
    
    
    300,000
    
    
    —
    
    
    —
    
    
    —
    
    
    300,000Common
      stock subscribed
    
    
    —
    
    
    —
    
    
    —
    
    
    67,095
    
    
    —
    
    
    —
    
    
    67,095Currency
      translation
    
    
    —
    
    
    —
    
    
    —
    
    
    —
    
    
    —
    
    
    (5,878
    )
    
    (5,878
    )Net
      (Loss)
    
    
    —
    
    
    —
    
    
    —
    
    
    —
    
    
    (458,155
    )
    
    —
    
    
    (458,155
    )Balance,
      December 31, 2004
    
    
    82,150,806
    
    $
    82,151
    
    $
    14,525,117
    
    $
    67,095
    
    $
    (13,099,597
    )
    $
    (5,878
    )
    $
    1,568,888
 The
accompanying notes are an integral part of the financial
statements.
  F-8
 **Table of
Contents**
 
 **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:
    
    $
    (452,277
    )
    $
    (137,386
    )
    $
    (13,099,597
    )Adjustments
      to reconcile net loss to net cash used
      by operating activities:Depreciation
    
    
    50
    
    
    —
    
    
    50Stock
      issued in exchange for services
    
    
    —
    
    
    62,092
    
    
    346,592Stock
      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
    
    
    (113,403
    )
    
    (32,401
    )
    
    (12,254,570
    )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
    
    
    (312,436
    )
    
    —
    
    
    (312,436
    )Net
      cash used in investing activities
    
    
    (167,045
    )
    
    —
    
    
    (167,045
    )Cash
      flows from financing activities:Sale
      of stock and warrants
    
    
    420,828
    
    
    —
    
    
    12,566,544Net
      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**
 **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**
 **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.


**


:





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.





*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.


F-11
 **Table of Contents**


**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):**
  *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.





*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.





F-12
 **Table of Contents**


**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):**
  *Goodwill
- Mining Rights* :
 
 Goodwill
- Mining Rights represents the Company’s purchase price of MSL over the fair
value of the assets acquired. Through the acquisition of Metal Sands, the
Company has the right to mine various mineral sands tenements held in the South
West territory of Western Australia.  The goodwill 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.




*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.





F-13
 **Table of Contents**


**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
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.





**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
$13,099,597. 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.





F-14
 **Table of Contents**


**AMERICAN
SOUTHWEST HOLDINGS, INC.**


****(An
Exploration Stage Company)****


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








**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.





*Income
taxes for American Southwest Holdings, Inc.:*




The total
deferred tax asset is $1,672,200, which is calculated by multiplying a 15%
estimated tax rate by the cumulative NOL of $11,147,995. The total valuation
allowance is a comparable $1,672,200.





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
    
    
    1,672,200
    
    
    1,604,299Valuation
      account by year
    
    
    (1,672,200
    )
    
    (1,604,299
    )Current
      taxes payable
    
    
    —
    
    
    —Provision
      for income taxes
    
    
    —
    
    
    —








F-15
 **Table of Contents**


**AMERICAN
SOUTHWEST HOLDINGS, INC.**


****(An
Exploration Stage Company)****


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





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





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
    
    
    452,670
    
    
    2024Total
      NOL
    
    $
    11,147,995


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
    
    $
    50,921
    
    $
    20,608Less
      change in valuation allowance
    
    
    (50,921
    )
    
    (20,608
    )Income
      tax expense
    
    $
    —
    
    $
    —




F-16
 **Table of Contents**


**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**


**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**


**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**


**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 $1,324,000 in connection with the acquisition of MSL (See
      Note 7)





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**


**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
$1,324,000 and paid $38,937 in professional fees in connection with the
acquisition. The Company received net liabilities of $194,999 and recorded
goodwill related to Mining Rights in the amount of $1,561,936.




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**


**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 $1,324,000, 15,000,000 common stock warrants, valued at
$300,000, in payment of fees related to the MSL acquisition and paid $38,937 in
professional fees in connection with the acquisition of Metal Sands Limited. In
connection with this purchase, the Company received net assets of $194,999 and
Goodwill related to Mining Rights in the amount of $1,880,274.
 
 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.




F-22