UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549




FORM
10-Q




(Mark
One)




x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934




For the
quarterly period ended June 30,
2009




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




For the
transition period from 
to




Commission
File Number:  000-51203


Amazon Goldsands
Ltd.


(Exact
name of registrant as specified in its charter)




Nevada
              98-0425310(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)





Jiron Caracas 2226, Jesus Maria, Lima,
      Peru(Address
      of principal executive offices)(51 1) 989 184 706(Registrant’s
      telephone number, including area code)________________________________________________________________(Former
      name, former address and former fiscal year, if changed since last
      report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the issuer was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.  ý Yes ̈ No




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). ý Yes   ̈ No




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer,” “non-accelerated filer,” and “a smaller reporting company”
in Rule 12b-2 of the Exchange Act.




Large
accelerated filer  ̈                                                                                                    
 Accelerated filer  ̈


Non-accelerated
filer    ̈  (Do not
check if a smaller reporting
company)                    Smaller
reporting company ý




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  ̈  Yes   ý No




Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:




Class
                
                Outstanding
      at June 30, 2009Common
      Stock, $0.00001 par value
                
                13,103,585







Table of Contents










FORM
      10-Q
                      AMAZON
      GOLDSANDS LTD.
                      JUNE
      30, 2009
                      
                      TABLE OF CONTENTS
                    PagePART I – FINANCIAL INFORMATIONItem
      1.
                    Financial Statements.
                    3Item
      2.
                    Management’s Discussion and Analysis of Financial Condition and
      Results of Operations.
                    4Item
      3.
                    Quantitative and Qualitative Disclosures About Market
      Risk.
                    13Item
      4T.
                    Controls and Procedures.
                    13PART II – OTHER INFORMATIONItem
      1.
                    Legal Proceedings.
                    15Item
      1A.
                    Risk Factors.
                    15Item
      2.
                    Unregistered Sales of Equity Securities and Use of
      Proceeds.
                    15Item
      3.
                    Defaults Upon Senior Securities.
                    15Item
      4.
                    Submission of Matters to a Vote of Security
      Holders.
                    15Item
      5.
                    Other Information.
                    15Item
      6.
                    Exhibits.
                    15SignaturesExhibitsCertifications







- 2
-
 Table of Contents





PART
I - FINANCIAL INFORMATION





Item 1.   Financial
Statements





Our
      unaudited consolidated financial statements included in this Form 10-Q for
      the three and six months ended June 30, 2009 are as
    follows:F-1
            Unaudited
      Consolidated Balance Sheet as of June 30, 2009.F-2
            Unaudited
      Consolidated Statements of Operations for the three and six months ended
      June 30, 2009 and 2008 and from inception on September 5, 1997 to June 30,
      2009.F-3
            Unaudited
      Consolidated Statement of Changes in Stockholders' Equity from
      inception on September 5, 1997 to June 30, 2009.F-4
            Unaudited
      Consolidated Statements of Cash Flows for the three and six months ended
      June 30, 2009 and 2008 and from inception on September 5, 1997 to June 30,
      2009.F-5
            Notes
      to Unaudited Consolidated Financial
Statements.






These
unaudited consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and the SEC instructions to Form
10-Q.  In the opinion of management, all adjustments considered
necessary for a fair presentation have been included.  Operating
results for the interim period ended June 30, 2009 are not necessarily
indicative of the results that can be expected for the full year.







- 3
-
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Interim
Consolidated Balance Sheets
 (Expressed
in U.S. Dollars)
 (Unaudited – Prepared by
Management)


As
      at
                30
      June
                2009
              
              
              As
      at
                31
      December
                2008
                (Audited)$
              
              
              
              $AssetsCurrentCash
      and cash equivalents (Note 2)
              
              
              9,189
              
              
              
              492,903Taxes
      recoverable
              
              
              -
              
              
              
              4,394Prepaid
      expenses and deposit
              
              
              -
              
              
              
              1,9629,189
              
              
              
              499,259Mineral property interests(Note 4)
              
              
              1,510,000
              
              
              
              875,000Property and equipment(Note 5)
              
              
              21,545
              
              
              
              25,964Website development cost
      (Note 6)
              
              
              17,500
              
              
              
              24,1671,558,234
              
              
              
              1,424,390LiabilitiesCurrentAccounts
      payable and accrued liabilities (Note 3)
              
              
              556,228
              
              
              
              312,804Stockholders’
      equityCommon stock (Note
      7)Authorized200,000,000
      common shares, par value $0.00001 and200,000,000
      blank check preferred shares, par value $0.001Issued
      and outstanding30
      June 2009 – 13,103,585 common shares, par value $0.0000131
      December 2008 – 4,191,252 common shares, par value
$0.00001
              
              
              131
              
              
              
              42Share subscriptions received in
      advance(Note 7)
              
              
              -
              
              
              
              613,583Additional
      paid in capital
              
              
              12,809,984
              
              
              
              11,694,408Deficit,
      accumulated during the exploration stage
              
              
              (11,808,109
              )
              
              
              (11,196,447
              )1,002,006
              
              
              
              1,111,5861,558,234
              
              
              
              1,424,390





Nature, Basis of Presentation and
Continuance of Operations(Note 1), Commitments(Note 9) and Subsequent Events (Note
13)




The
accompanying notes are an integral part of the interim consolidated 
financial statements. F -
1
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Interim
Consolidated Statements of Operations
 (Expressed
in U.S. Dollars)
 (Unaudited – Prepared by
Management)


For
      the period from the date of inception on 5 September 1997 to
                30
      June
                2009
              
              
              For
      the
                three
      month period ended
                30
      June
                2009
              
              
              For
      the
                three
      month
                period
      ended
                30
      June
                2008
              
              
              For
      the
                six
      month period ended
                30
      June
                2009
              
              
              For
      the
                six
      month period ended
                30
      June
                2008$
              
              
              
              $
              
              
              
              $
              
              
              
              $
              
              
              
              $ExpensesAmortization
      – property and equipment
              
              
              28,064
              
              
              
              2,210
              
              
              
              3,372
              
              
              
              4,419
              
              
              
              6,742Amortization
      – website development costs
              
              
              22,502
              
              
              
              3,334
              
              
              
              3,333
              
              
              
              6,667
              
              
              
              5,000Bank
      charges
              
              
              9,275
              
              
              
              284
              
              
              
              742
              
              
              
              1,195
              
              
              
              1,506Consulting
      and management fees (recovery)
              
              
              4,832,122
              
              
              
              113,842
              
              
              
              (3,066,094
              )
              
              
              271,547
              
              
              
              (2,386,907
              )Foreign
      exchange (gain) loss
              
              
              17,596
              
              
              
              1,250
              
              
              
              1,299
              
              
              
              1,213
              
              
              
              (7,804
              )Investor
      communication and promotion
              
              
              618,571
              
              
              
              -
              
              
              
              53,747
              
              
              
              61,347
              
              
              
              80,200Office
      and administrative (recovery)
              
              
              124,510
              
              
              
              (7,290
              )
              
              
              6,202
              
              
              
              1,700
              
              
              
              31,762Professional
      fees
              
              
              538,325
              
              
              
              72,551
              
              
              
              71,508
              
              
              
              102,040
              
              
              
              108,912Rent
              
              
              48,416
              
              
              
              4,000
              
              
              
              5,836
              
              
              
              6,000
              
              
              
              13,070Telephone
              
              
              54,659
              
              
              
              -
              
              
              
              6,578
              
              
              
              276
              
              
              
              16,713Transfer
      agent and filing fees
              
              
              40,325
              
              
              
              1,383
              
              
              
              2,644
              
              
              
              3,083
              
              
              
              2,918Travel
      and accommodation
              
              
              377,754
              
              
              
              -
              
              
              
              48,577
              
              
              
              1,118
              
              
              
              83,813Website
      maintenance
              
              
              56,000
              
              
              
              7,500
              
              
              
              4,500
              
              
              
              15,000
              
              
              
              9,000Mineral
      property acquisition and exploration expenditures
              
              
              5,179,264
              
              
              
              -
              
              
              
              18,798
              
              
              
              136,057
              
              
              
              360,530Net
      operating income (loss) before other items
              
              
              (11,947,383
              )
              
              
              (199,064
              )
              
              
              2,838,958
              
              
              
              (611,662
              )
              
              
              1,674,545Other
      itemsForgiveness
      of debt
              
              
              39,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Gain
      on sale of oil and gas property
              
              
              10,745
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Interest
      income
              
              
              102,561
              
              
              
              -
              
              
              
              1,619
              
              
              
              -
              
              
              
              8,345Recovery
      of expenses
              
              
              4,982
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Write-down
      of incorporation cost
              
              
              (12,500
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Write-down
      of assets
              
              
              (5,514
              )Net
      operating income (loss) and comprehensive income (loss) for the
      period
              
              
              (11,808,109
              )
              
              
              (199,064
              )
              
              
              2,840,577
              
              
              
              (611,662
              )
              
              
              1,682,890Basic
      and diluted income (loss) per common share
              
              
              
              (0.02
              )
              
              
              1.67
              
              
              
              (0.09
              )
              
              
              .98Weighted
      average number of common shares
                used
      in per share calculations
              
              
              
              9,814,354
              
              
              
              1,696,997
              
              
              
              7,034,042
              
              
              
              1,709,633







F -
2
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Interim
Consolidated Statements of Cash Flows


(Expressed
in U.S. Dollars)
 (Unaudited – Prepared by
Management)


For
      the period from the date of inception on 5 September
                to
      30 June 2009
              
              
              For
      the three month period ended 30 June 2009
              
              
              For
      the three month period ended 30 June 2008
              
              
              For
      the six
                month
      period ended 30 June 2009
              
              
              For
      the
                six
                month
      period ended 30
                June
      2008$
              
              
              
              $
              
              
              
              $
              
              
              
              $
              
              
              
              $Cash
      flows used in operating activitiesNet
      Income (loss) for the period
              
              
              (11,808,109
              )
              
              
              (199,064
              )
              
              
              2,840,577
              
              
              
              (611,662
              )
              
              
              1,682,890Adjustments
      to reconcile loss to net cash used by operating activitiesAmortization
      (Notes 5 and 6)
              
              
              50,565
              
              
              
              5,544
              
              
              
              6,705
              
              
              
              11,086
              
              
              
              11,743Consulting
      fees
              
              
              40,200
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Forgiveness
      of debt
              
              
              (24,000
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Gain
      on sale of oil & gas property
              
              
              (10,745
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Mineral
      property acquisition
              
              
              1,816,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Stock
      based compensation (recovery)
              
              
              3,587,000
              
              
              
              -
              
              
              
              (3,167,823
              )
              
              
              -
              
              
              
              (2,606,434
              )Write-down
      of assets
              
              
              3,940
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Changes
      in operating assets and liabilities
              
              
              
              
              
              
              
              
              
              
              -Decrease
      in taxes recoverable
              
              
              -
              
              
              
              -
              
              
              
              70,490
              
              
              
              4,394
              
              
              
              18,728Decrease
      in exploration program advances
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              87,600(Increase)
      decrease in prepaid expenses and deposits
              
              
              -
              
              
              
              -
              
              
              
              (14
              )
              
              
              1,962
              
              
              
              (959
              )Increase
      (decrease) in accounts payable and accrued liabilities
              
              
              556,228
              
              
              
              157,331
              
              
              
              (51,962
              )
              
              
              243,424
              
              
              
              (541,592
              )Decrease
      in advances from related parties
              
              
              -
              
              
              
              -
              
              
              
              (22,135
              )
              
              
              -
              
              
              
              (44,680
              )(5,788,921
              )
              
              
              (36,189
              )
              
              
              (324,162
              )
              
              
              (350,796
              )
              
              
              (1,392,704
              )Cash
      flows from financing activitiesShares
      subscriptions received in advance
              
              
              -
              
              
              
              (19,000
              )
              
              
              -
              
              
              
              (613,583
              )
              
              
              -Cost
      of repurchase of common stock
              
              
              (1,000
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Proceeds
      from issuance of common stock, net of share issue costs
              
              
              6,371,915
              
              
              
              18,900
              
              
              
              -
              
              
              
              730,665
              
              
              
              -6,370,915
              
              
              
              (100
              )
              
              
              -
              
              
              
              117,082
              
              
              
              -Cash
      flows used in investing activitiesProceeds
      from sale of oil and gas property
              
              
              46,200
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Oil
      and gas property acquisitions
              
              
              (2,846
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Oil
      and gas exploration
              
              
              (22,609
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Acquisition
      of mineral rights
              
              
              (500,000
              )
              
              
              -
              
              
              
              -
              
              
              
              (250,000
              )
              
              
              -Purchase
      of equipment
              
              
              (53,550
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (9,667
              )Website
      development costs
              
              
              (40,000
              )
              
              
              -
              
              
              
              (20,000
              )
              
              
              -
              
              
              
              (30,000
              )(572,805
              )
              
              
              -
              
              
              
              (20,000
              )
              
              
              (250,000
              )
              
              
              (39,667
              )Increase
      (decrease) in cash and cash equivalents
              
              
              9,189
              
              
              
              (36,289
              )
              
              
              (344,162
              )
              
              
              (483,714
              )
              
              
              (1,432,371
              )Cash
      and cash equivalents, beginning of period
              
              
              -
              
              
              
              45,478
              
              
              
              869,647
              
              
              
              492,903
              
              
              
              1,957,856Cash
      and cash equivalents, end of period
              
              
              9,189
              
              
              
              9,189
              
              
              
              525,485
              
              
              
              9,189
              
              
              
              525,485


Supplemental
Disclosures with Respect of Cash Flows(Note
11)


The
accompanying notes are an integral part of the interim consolidated 
financial statements.


F -
3
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Interim
Consolidated Statements of Changes in Stockholders’ Equity
(Deficiency)


(Expressed
in U.S. Dollars)


(Unaudited – Prepared by
Management)


Number
      of
                              shares
                              issued
                            
                            
                            Share
                              capital
                            
                            
                            Additional
                              paid-in
                              capital
                            
                            
                            Deferred
                              stock-based
      compensation
                            
                            
                            Share
                              subscriptions
                              received
                            
                            
                            Deficit,
                              accumulated
                              during
      the
                              exploration
                              stage
                            
                            
                            Total
                              stockholders’
                              equity
                              (deficiency)$
                            
                            
                            
                            $
                            
                            
                            
                            $
                            
                            
                            $
                            
                            
                            
                            $
                            
                            
                            
                            $Balance
      at 5 September 1997 (inception)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      shares issued for cash ($0.25 per share)
                            
                            
                            4,000
                            
                            
                            
                            1
                            
                            
                            
                            999
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,000Net
      loss for the period
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (2,522
                            )
                            
                            
                            (2,522
                            )Balance
      at 30 September 1997
                            
                            
                            4,000
                            
                            
                            
                            1
                            
                            
                            
                            999
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (2,522
                            )
                            
                            
                            (1,522
                            )Common
      shares issued for acquisition of oil and gas properties ($25 per
      share)
                            
                            
                            400
                            
                            
                            
                            -
                            
                            
                            
                            10,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            10,000Common
      shares issued for cash ($0.25 per share)
                            
                            
                            4,000
                            
                            
                            
                            1
                            
                            
                            
                            999
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,000Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (1,246
                            )
                            
                            
                            (1,246
                            )Balance
      at 30 September 1998
                            
                            
                            8,400
                            
                            
                            
                            2
                            
                            
                            
                            11,998
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (3,768
                            )
                            
                            
                            8,232Common
      shares issued for cash ($25 per share)
                            
                            
                            4,000
                            
                            
                            
                            1
                            
                            
                            
                            99,999
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            
                            
                            
                            
                            100,000Common
      shares repurchased for cash ($0.25 per share)
                            
                            
                            (4,000
                            )
                            
                            
                            (1
                            )
                            
                            
                            (999
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (1,000
                            )Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (9,569
                            )
                            
                            
                            (9,569
                            )Balance
      at 30 September 1999
                            
                            
                            8,400
                            
                            
                            
                            2
                            
                            
                            
                            110,998
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (13,337
                            )
                            
                            
                            97,663Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (34,290
                            )
                            
                            
                            (34,290
                            )Balance
      at 30 September 2000
                            
                            
                            8,400
                            
                            
                            
                            2
                            
                            
                            
                            110,998
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (47,627
                            )
                            
                            
                            63,373Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (14,296
                            )
                            
                            
                            (14,296
                            )Balance
      at 30 September 2001
                            
                            
                            8,400
                            
                            
                            
                            2
                            
                            
                            
                            110,998
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (61,923
                            )
                            
                            
                            49,077Net
      income for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            10,954
                            
                            
                            
                            10,954Balance
      at 30 September 2002
                            
                            
                            8,400
                            
                            
                            
                            2
                            
                            
                            
                            110,998
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (50,969
                            )
                            
                            
                            60,031Net
      income for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            2,387
                            
                            
                            
                            2,387Balance
      at 30 September 2003
                            
                            
                            8,400
                            
                            
                            
                            2
                            
                            
                            
                            110,998
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (48,582
                            )
                            
                            
                            62,418Common
      shares issued for cash ($1.50 per share) and for services ($6 per
      share)
                            
                            
                            8,569
                            
                            
                            
                            1
                            
                            
                            
                            62,699
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            62,700Donated
      capital
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            5,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            5,000Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (64,175
                            )
                            
                            
                            (64,175
                            )Balance
      at 30 September 2004
                            
                            
                            16,969
                            
                            
                            
                            3
                            
                            
                            
                            178,697
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (112,757
                            )
                            
                            
                            65,943Donated
      capital
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            3,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            3,000Net
      loss for the period
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (7,750
                            )
                            
                            
                            (7,750
                            )Balance
      at 31 December 2004
                            
                            
                            16,969
                            
                            
                            
                            3
                            
                            
                            
                            181,697
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (120,507
                            )
                            
                            
                            61,193Common
      shares repurchased ($0.25 per share)
                            
                            
                            (4,000
                            )
                            
                            
                            (1
                            )
                            
                            
                            (999
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (1,000
                            )Donated
      capital
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            8,200
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            8,200Net
      loss for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (40,652
                            )
                            
                            
                            (40,652
                            )Balance
      at 31 December 2005
                            
                            
                            12,969
                            
                            
                            
                            2
                            
                            
                            
                            188,898
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (161,159
                            )
                            
                            
                            27,741


The accompanying notes are
an integral part of the interim consolidated  financial
statements.


F -
4
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Interim
Consolidated Statements of Changes in Stockholders’ Equity
(Deficiency)


(Expressed
in U.S. Dollars)


(Unaudited – Prepared by
Management)


Number
      of
                                shares
                                issued
                              
                              
                              
                              Share
                                Capital
                              
                              
                              
                              Additional
                                paid-in
                                capital
                              
                              
                              
                              Deferred
                                stock-based
                                compensation
                              
                              
                              Share
                                subscription
                                received
                              
                              
                              
                              Deficit,
                                accumulated
                                during
      the
                                exploration
                                stage
                              
                              
                              
                              Total
                                stockholders'
                                equity
                                (deficiency)$
                              
                              
                              
                              $
                              
                              
                              
                              $
                              
                              
                              $
                              
                              
                              
                              $
                              
                              
                              
                              $Balance
      at 31 December 2005
                              
                              
                              12,969
                              
                              
                              
                              2
                              
                              
                              
                              188,898
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (161,159
                              )
                              
                              
                              27,741Common
      shares issued for cash ($0.125 per share)
                              
                              
                              1,200,000
                              
                              
                              
                              12
                              
                              
                              
                              149,988
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              150,000Common
      shares cancelled
                              
                              
                              (8,467
                              )
                              
                              
                              (1
                              )
                              
                              
                              1
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Common
      shares issued for purchase of Finmetal OY (deemed at $25.60 per
      share)
                              
                              
                              50,000
                              
                              
                              
                              1
                              
                              
                              
                              1,279,999
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,280,000Common
      shares issued as stock-based compensation (deemed at $24.80 per
      share)
                              
                              
                              97,500
                              
                              
                              
                              1
                              
                              
                              
                              2,417,999
                              
                              
                              
                              (2,321,280
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              96,720Common
      shares issued for cash ($10 per share)
                              
                              
                              279,950
                              
                              
                              
                              2
                              
                              
                              
                              2,799,498
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              2,799,500Share
      issue costs
                              
                              
                              
                              
                              
                              
                              -
                              
                              
                              
                              (254,500
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (254,500
                              )Net
      loss for the year
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (2,506,896
                              )
                              
                              
                              (2,506,896
                              )Balance
      at 31 December 2006
                              
                              
                              1,631,952
                              
                              
                              
                              17
                              
                              
                              
                              6,581,883
                              
                              
                              
                              (2,321,280
                              )
                              
                              
                              -
                              
                              
                              
                              (2,668,055
                              )
                              
                              
                              1,592,565Common
      shares issued for cash ($25 per unit) (Note 7)
                              
                              
                              121,800
                              
                              
                              
                              1
                              
                              
                              
                              2,944,578
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              2,944,579Share
      issue costs
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (212,450
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (212,450
                              )Warrants
      issued (Note 7)
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              100,421
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              100,421Common
      shares issued as stock-based compensation (deemed at $29 per share) (Note
      7)
                              
                              
                              46,250
                              
                              
                              
                              1
                              
                              
                              
                              1,341,249
                              
                              
                              
                              (1,341,250
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Common
      shares issued for finder’s fee for mineral interests (deemed at
      $26.80)  per share (Note 7)
                              
                              
                              20,000
                              
                              
                              
                              1
                              
                              
                              
                              535,999
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              536,000Stock-based
      compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              3,023,282
                              
                              
                              
                              2,936,734
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              5,960,016Stock
      awards cancelled
                              
                              
                              (97,500
                              )
                              
                              
                              (1
                              )
                              
                              
                              1
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      loss for the year
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (9,511,457
                              )
                              
                              
                              (9,511,457
                              )Balance
      at 31 December 2007
                              
                              
                              1,722,502
                              
                              
                              
                              18
                              
                              
                              
                              14,314,964
                              
                              
                              
                              (725,796
                              )
                              
                              
                              -
                              
                              
                              
                              (12,179,512
                              )
                              
                              
                              1,409,674Stock-based
      compensation (Note 7)
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              725,796
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              725,796Stock
      awards cancelled (Note 7)
                              
                              
                              (31,250
                              )
                              
                              
                              (1
                              )
                              
                              
                              1
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Stock
      options forfeited (Note 7)
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (3,245,532
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (3,245,532
                              )Common
      shares issued for acquisition of mineral rights ($0.25 per share) (Note
      7)
                              
                              
                              2,500,000
                              
                              
                              
                              25
                              
                              
                              
                              624,975
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              625,000Share
      subscriptions received in advance
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              613,583
                              
                              
                              
                              -
                              
                              
                              
                              613,583Net
      income for the year
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              
                              
                              
                              
                              983,065
                              
                              
                              
                              983,065Balance
      at 31 December 2008
                              
                              
                              4,191,252
                              
                              
                              
                              42
                              
                              
                              
                              11,694,408
                              
                              
                              
                              -
                              
                              
                              
                              613,583
                              
                              
                              
                              (11,196,447
                              )
                              
                              
                              1,111,586Common
      shares issued for cash ($0.15 per unit) (Note 7)
                              
                              
                              5,412,333
                              
                              
                              
                              54
                              
                              
                              
                              811,796
                              
                              
                              
                              -
                              
                              
                              
                              (613,583
                              )
                              
                              
                              -
                              
                              
                              
                              198,267Share
      issue costs
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (81,185
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (81,185
                              )Common
      shares issued for acquisition of mineral rights ($0.11 per share) (Note
      7)
                              
                              
                              3,500,000
                              
                              
                              
                              35
                              
                              
                              
                              384,965
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              385,000Net
      loss for the period
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (611,662
                              )
                              
                              
                              (611,662
                              )Balance
      at 30 June 2009
                              
                              
                              13,103,585
                              
                              
                              
                              131
                              
                              
                              
                              12,809,984
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (11,808,109
                              )
                              
                              
                              1,002,006


The
accompanying notes are an integral part of the interim consolidated 
financial statements.


F -
5
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





1. Nature,
Basis of Presentation and Continuance of Operations





Amazon
Goldsands Ltd. (the “Company”) was incorporated under the laws of the State of
Nevada, U.S.A. under the name “Gondwana Energy, Ltd.” on 5 September
1997.  On 23 January 2007, the Company changed its name to “FinMetal
Mining Ltd.”.  On 27 November 2006, the Company completed the
acquisition of 100% of the shares of Finmetal Mining OY (“Finmetal OY”), a
company incorporated under the laws of Finland.  During the fiscal
year ended 31 December 2006, the Company changed its operational focus from
development of oil and gas properties, to acquisition of, exploration for and
development of mineral properties in Finland.  On 22 May 2008, the
Company changed its name to “Amazon Goldsands Ltd.” and on 18 September 2008,
the Company entered into a Mineral Rights Option Agreement and concurrently
re-focused on the acquisition of, exploration for and development of mineral
properties located in Peru. The Company is currently in the exploration
stage.





The
accompanying interim consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiary, Finmetal OY, a company incorporated
under the laws of Finland, since its date of acquisition on 27 November
2006.





The
Company is an exploration stage enterprise, as defined in Statement of Financial
Accounting Standards (“SFAS”) No. 7. The Company is devoting all of its present
efforts in securing and establishing a new business, and its planned principle
operations have not commenced, and, accordingly, no revenue has been derived
during the organization period.





The
interim consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States of
America (“GAAP”) applicable to exploration stage enterprises, and are expressed
in U.S. dollars.  The Company’s fiscal year end is 31
December.





The
Company’s interim consolidated financial statements as at 30 June 2009 and for
the six month period then ended have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business.  The Company had a
loss of $611,662 for the six month period ended 30 June 2009 (30 June 2008 –
income of $1,682,890) and has a working capital deficit of $547,039 at 30 June
2009 (31 December 2008 – working capital of $186,455).





Management
cannot provide assurance that the Company will ultimately achieve profitable
operations or become cash flow positive, or raise additional debt and/or equity
capital.  Management believes that the Company’s capital resources
should be adequate to continue operating and maintaining its business strategy
during the fiscal year ending 31 December 2009.  However, if the
Company is unable to raise additional capital in the near future, due to the
Company’s liquidity problems, management expects that the Company will need to
curtail operations, liquidate assets, seek additional capital on less favorable
terms and/or pursue other remedial measures.  These consolidated
financial statements do not include any adjustments related to the
recoverability and classification of assets or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.






F -
6
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





2. Significant
Accounting Policies





The
following is a summary of significant accounting policies used in the
preparation of these interim consolidated financial statements.





Principles
of consolidation





All
inter-company balances and transactions have been eliminated in these interim
consolidated financial statements.





Cash
and cash equivalents





The
Company considers all highly liquid instruments with a maturity of three months
or less at the time of issuance to be cash equivalents. As at 30 June 2009, the
Company has cash and cash equivalents in the amount of $9,189 (31 December 2008
– $492,903).





Website
and software development costs





The
Company recognizes the costs incurred in the development of the Company’s
website in accordance with Emerging Issues Task Force (“EITF”) 00-2, “Accounting for Website Development
Costs” and, with the provisions of American Institute of Certified Public
Accountants (“AICPA”) Statement of Position No. 98-1, “Accounting for the Costs of
Computer Software Developed or Obtained for Internal
Use”.  Accordingly, direct costs incurred during the
application stage of development are capitalized and amortized over the
estimated useful life of three years on a straight line basis.  Fees
incurred for website hosting are expensed over the period of the
benefit.  Costs of operating a website are expensed as
incurred.





Property
and equipment





Furniture
and office and computer equipment is carried at cost and is amortized over its
estimated useful life at rates of 20 to 30% per year.  The property
and equipment is written down to its net realizable value if it is determined
that its carrying value exceeds estimated future benefits to the
Company.





Mineral
property costs





Mineral
property acquisition costs are initially capitalized as tangible assets when
purchased in accordance with Emerging Issues Task Force (“EITF”) 04-2, “Whether Mineral Rights Are Tangible
or Intangible Assets”. At the end of each fiscal quarter end, the Company
assesses the carrying costs for impairment.  If proven and probable
reserves are established for a property and it has been determined that a
mineral property can be economically developed, costs will be amortized using
the units-of-production method over the estimated life of the probable
reserve.





Mineral
property exploration costs are expensed as incurred.








F -
7
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





Estimated
future removal and site restoration costs, when determinable are provided over
the life of proven reserves on a units-of-production basis.  Costs,
which include production equipment removal and environmental remediation, are
estimated each period by management based on current regulations, actual
expenses incurred, and technology and industry standards.  Any charge
is included in exploration expense or the provision for depletion and
depreciation during the period and the actual restoration expenditures are
charged to the accumulated provision amounts as incurred.





As of the
date of these interim consolidated financial statements, the Company has not
established any proven or probable reserves on its mineral properties and
incurred only acquisition and exploration costs.





Although
the Company has taken steps to verify title to mineral properties in which it
has an interest, according to the usual industry standards for the stage of
exploration of such properties, these procedures do not guarantee the Company’s
title.  Such properties may be subject to prior agreements or
transfers and title may be affected by undetected defects.





Environmental
costs





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





Comprehensive
loss





SFAS No.
130, “Reporting Comprehensive
Income”, establishes standards for the reporting and display of
comprehensive loss and its components in the financial statements.  As
at 30 June 2009, the Company has no items that represent a comprehensive loss
and, therefore, has not included a schedule of comprehensive loss in the interim
consolidated financial statements.








F -
8
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





Stock-based
compensation





Effective
1 January 2006, the Company adopted the provisions of SFAS No. 123(R), “Share-Based Payment”, which
establishes accounting for equity instruments exchanged for employee services.
Under the provisions of SFAS No.123(R), stock-based compensation cost is
measured at the grant date, based on the calculated fair value of the award, and
is recognized as an expense over the employees’ requisite service period
(generally the vesting period of the equity grant). Before 1 January 2006, the
Company accounted for stock-based compensation to employees in accordance with
Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
Employees,” and complied with the disclosure requirements of SFAS No.
123, “Accounting for
Stock-Based Compensation”.  The Company adopted SFAS No. 123(R)
using the modified prospective method, which requires the Company to record
compensation expense over the vesting period for all awards granted after the
date of adoption, and for the unvested portion of previously granted awards that
remain outstanding at the date of adoption.  Accordingly, financial
statements for the periods prior to 1 January 2006 have not been restated
to


reflect
the fair value method of expensing share-based compensation.





The
adoption of SFAS No. 123(R) does not change the way the Company accounts for
share-based payments to non-employees, with guidance provided by SFAS No. 123
(as originally issued) and EITF No. 96-18, “Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services”.





Foreign
currency translation





The
Company’s functional and reporting currency is U.S. dollars.  The
consolidated financial statements of the Company are translated to U.S. dollars
in accordance with SFAS No. 52, “Foreign Currency
Translation.”  Monetary assets and liabilities denominated in
foreign currencies are translated using the exchange rate prevailing at the
balance sheet date.  Gains and losses arising on translation or
settlement of foreign currency denominated transactions or balances are included
in the determination of income.  The Company has not, to the date of
these interim consolidated financial statements, entered into derivative
instruments to offset the impact of foreign currency fluctuations.





Basic
and diluted net loss per share





The
Company computes net income (loss) per share in accordance with SFAS No.128,
“Earnings per
Share”.  SFAS No. 128 requires presentation of both basic and
diluted earnings per share (“EPS”) on the face of the income
statement.  Basic EPS is computed by dividing net income (loss)
available to common shareholders (numerator) by the weighted average number of
shares outstanding (denominator) during the period.  Diluted EPS gives
effect to all dilutive potential common shares outstanding during the period
using the treasury stock method and convertible preferred stock using the
if-converted method.  In computing diluted EPS, the average stock
price for the period is used in determining the number of shares assumed to be
purchased from the exercise of stock options or warrants.  Diluted EPS
excluded all dilutive potential shares if their effect is
anti-dilutive.





F -
9
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





Income
taxes





Deferred
income taxes are reported for timing differences between items of income or
expense reported in the financial statements and those reported for income tax
purposes in accordance with SFAS No. 109, “Accounting for Income Taxes”,
which requires the use of the asset/liability method of accounting for income
taxes.  Deferred income taxes and tax benefits are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and for tax losses and credit
carry-forwards.  Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled.  The Company provides for deferred taxes for the estimated
future tax effects attributable to temporary differences and carry-forwards when
realization is more likely than not.





Long-lived
assets impairment





Long-term
assets of the Company are reviewed for impairment whenever events or
circumstances indicate that the carrying amount of assets may not be
recoverable, pursuant to guidance established in SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”.





Management
considers assets to be impaired if the carrying value exceeds the future
projected cash flows from related operations (undiscounted and without interest
charges). If impairment is deemed to exist, the assets will be written down to
fair value. Fair value is generally determined using a discounted cash flow
analysis.





Asset
retirement obligations





The
Company has adopted SFAS No. 143, “Accounting for Assets Retirement
Obligations”, which requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is incurred.
SFAS No. 143 requires the Company to record a liability for the present value of
the estimated site restoration costs with corresponding increase to the carrying
amount of the related long-lived assets. The liability will be accreted and the
asset will be depreciated over the life of the related assets. Adjustments for
changes resulting from the passage of time and changes to either the timing or
amount of the original present value estimate underlying the obligation will be
made. As at 30 June 2009, the Company does not have any asset retirement
obligations.





Accounting
for derivative instruments and hedging activities





The
Financial Accounting Standards Board (“FASB”) issued SFAS No. 133, “Accounting for Derivative
Instruments and Hedging Activities”. SFAS No. 133 requires companies to
recognize all derivatives contracts as either assets or liabilities in the
balance sheet and to measure them at fair value. If certain conditions are met,
a derivative may be specifically designated as a hedge, the objective of which
is to match the timing of gain or loss recognition on the hedging derivative
with the recognition of (i) the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk or (ii) as a hedging
instrument, the gain or loss is recognized in income in the period of
change.






F -
10
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





The
Company has not, to the date of these interim consolidated financial statements,
entered into derivative instruments to offset the impact of foreign currency
fluctuations.





Use
of estimates





The
preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amount of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amount of revenues and
expenses during the period. Actual results may differ from those
estimates.




Financial
instruments





The
carrying value of cash and cash equivalents and accounts payable and accrued
liabilities approximates their fair value because of the short maturity of these
instruments.  The Company’s operations are in Canada and virtually all
of its assets and liabilities are giving rise to significant exposure to market
risks from changes in foreign currency rates.  The Company’s financial
risk is the risk that arises from fluctuations in foreign exchange rates and the
degree of volatility of these rates.  Currently, the Company does not
use derivative instruments to reduce its exposure to foreign currency
risk.





Comparative
figures





Certain
comparative figures have been adjusted to conform to the current period’s
presentation.





International
Financial Reporting Standards





In
November 2008, the Securities and Exchange Commission (“SEC”) issued for comment
a proposed roadmap regarding potential use of financial statements prepared in
accordance with International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board.  Under the proposed
roadmap, the Company would be required to prepare financial statements in
accordance with IFRS in fiscal year 2014, including comparative information also
prepared under IFRS for fiscal 2013 and 2012.  The Company is
currently assessing the potential impact of IFRS on its consolidated financial
statements and will continue to follow the proposed roadmap for future
developments.











F -
11
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





Recent
accounting pronouncements





In June
2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principle – a
replacement of FASB statement No. 162”.  SFAS  No.
168 replaces the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with generally
accepted accounting principles as stated with FASB Accounting Standards
Codification becoming the source of authoritative U.S. GAAP recognized by the
FASB to be applied by nongovernmental entities. Rules and interpretive releases
of the SEC under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. SFAS No. 168 is effective for financial
statements issued for fiscal years and interim periods beginning after 15
September 2009.  The adoption of this statement did not have a
material impact on its interim consolidated financial statements.





In June
2009, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 167,
“Amendments to FASB Interpretation
No. 46(R)”.  SFAS No. 167 is
intended to establish general standards of financial reporting for companies
with variable interest entities.  It requires timely and useful
disclosure of information related to the Company’s involvement with variable
interest entities.  This disclosure should alert all users to the
effects on specific provisions of FASB Interpretation No. 46 (revised December
2003), “Consolidation of
Variable Interest Entities”, related to the changes to
the special-purpose entity proposal in FASB Statement No. 166, “Accounting for Transfers of
Financial Assets”, and the treatment of
specific provisions of Interpretation 46(R).  SFAS No. 167 is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2009.  The Company has determined that
the adoption of SFAS No. 167 will have no impact on its consolidated financial
statements.





In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of
Financial Assets—an amendment of FASB Statement” (“SFAS
166”).  SFAS No. 166 is intended to establish standards of financial
reporting for the transfer of assets and transferred assets to improve the
relevance, representational faithfulness, and comparability.  SFAS 166 was
established to clarify derecognition of assets under FASB Statement No. 140,
Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities.SFAS No. 166 is effective for financial
statements issued for fiscal years and interim periods beginning after 15
November 2009.  The Company has determined that the adoption of SFAS
No. 166 will have no impact on its consolidated financial
statements.





In May
2009, the FASB issued SFAS No. 165, “Subsequent Events”. SFAS No.
165 is intended to establish general standards of accounting for and disclosure
of events that occur after the balance sheet date, but before financial
statements are issued or are available to be issued.  It requires the
disclosure of the date through which an entity has evaluated subsequent events
and the basis for that date–that is, whether that date represents the date the
financial statements were issued or were available to be issued. This disclosure
should alert all users of financial statements that an entity has not evaluated
subsequent events after that date in the set of financial statements being
presented.  SFAS No. 165 is effective for financial statements issued
for fiscal years and interim periods ending after 15 June 2009. The adoption of
this statement did not have a material impact on its interim consolidated
financial statements.






F -
12
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





In May
2008, the FASB issued FSP Accounting Principles Board Opinion No. 14-1, “Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)”.  FSP No. 14-1 requires issuers of convertible
debt instruments that may be settled in cash to separately account for the
liability and equity components in a manner that will reflect the entity’s
nonconvertible debt borrowing rate when interest cost is recognized in periods
subsequent to adoption.  Upon adoption of FSP No. 14-1, the Company
will allocate a portion of the proceeds received from the issuance of
convertible notes between a liability and equity component by determining the
fair value of the liability component using the Company’s non-convertible debt
borrowing rate.  The difference between the proceeds of the notes and
the fair value of the liability component will be recorded as a discount on the
debt with a corresponding offset to paid-in-capital.  The resulting
discount will be accreted by recording additional non-cash interest expense over
the expected life of the convertible notes using the effective interest rate
method.  The provisions of FSP No. 14-1 are to be applied
retrospectively to all periods presented upon adoption and are effective for
fiscal years beginning after 15 December 2008 and interim periods within those
fiscal years.  Management has not determined the effect that adopting
this statement would have on the Company’s financial position, cash flows and
results of operations.





In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of FASB Statement No.
60”.  SFAS No. 163 provides enhanced guidance on the
recognition and measurement to be used to account for premium revenue and claim
liabilities and related disclosures and is


limited
to financial guarantee insurance (and reinsurance) contracts, issued by
enterprises included within the scope of FASB Statement No. 60, “Accounting and Reporting by
Insurance Enterprises.”SFAS No. 163 also requires that an
insurance enterprise recognize a claim liability prior to an event of default
when there is evidence that credit deterioration has occurred in an insured
financial obligation.  SFAS No. 163 is effective for financial
statements issued for fiscal years and interim periods beginning after 15
December 2008, with early application not permitted.  The adoption of
SFAS No. 163 did not have a material impact on its interim consolidated
financial statements.





In April
2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of
Intangible Assets”.  In determining the useful life of
intangible assets, FSP No. FAS 142-3 removes the requirement to consider whether
an intangible asset can be renewed without substantial cost of material
modifications to the existing terms and conditions and, instead, requires an
entity to consider its own historical experience in renewing similar
arrangements.  FSP No. FAS 142-3 also requires expanded disclosure
related to the determination of intangible asset useful lives.  FSP
No. FAS 142-3 is effective for financial statements issued for fiscal years
beginning after 15 December 2008.  The adoption of this statement did
not have a material impact on its interim consolidated financial
statements.








F -
13
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment of FASB Statement No.
133”.  SFAS No. 161 is intended to improve transparency in
financial reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows.  SFAS No. 161 applies
to all derivate instruments within the scope of SFAS No. 133, “Accounting for Derivative
Instruments and Hedging Activities”.  It also applies to
non-derivative hedging instruments and all hedged items designated and
qualifying as hedges under SFAS No. 133.  SFAS No. 161 is effective
prospectively for financial statements issued for fiscal years beginning after
15 November 2008, with early application encouraged.  The adoption of
SFAS No. 161 did not have a material impact on the Company’s interim
consolidated financial statements.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of Accounting Research Bulletin
No. 51”.  SFAS No. 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, the amount of consolidated net income attributable and to the
noncontrolling interest, changes in a parent’s ownership interest, and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated.  SFAS No. 160 also establishes disclosure requirements
that clearly identify and distinguish between the interests of the parent and
the interests of the noncontrolling owners.  SFAS No. 160 is effective
for fiscal years beginning after 15 December 2008.  The adoption of
SFAS No. 160 did not have a material impact on the Company’s interim
consolidated financial statements.





In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations”. SFAS
No. 141(R) establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any noncontrolling interest in the acquiree
and the goodwill acquired. SFAS No. 141(R) also establishes disclosure
requirements to enable the evaluation of the nature and financial effects of the
business combination. SFAS No. 141(R) is effective for fiscal years beginning
after 15 December 2008.  The adoption of SFAS No. 141(R) did not have
a material impact on the Company’s interim consolidated financial
statements.





3. Accounts
Payable and Accrued Liabilities





Included
in accounts payable and accrued liabilities as at 30 June 2009 are amounts due
to a company controlled by a director and officer of the Company of $43,647 (31
December 2008 – $Nil).  The amount is non-interest bearing, unsecured
and due on demand.





Included
in accounts payable and accrued liabilities as at 30 June 2009 is an advance
received from a former  officer of the Company of $28,084 (31 December
2008 – $28,084).  The amount is non-interest bearing, unsecured and
has no fixed terms of repayment.





F -
14
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





4. Mineral
Property Interests





31
      December 2008
                          
                          
                          Acquisition
      costs
                          
                          
                          Write-off
      to operations
                          
                          
                          30
      June 2009$
                          
                          
                          
                          $
                          
                          
                          
                          $
                          
                          
                          
                          $Temasek
      Propeties
                          
                          
                          875,000
                          
                          
                          
                          635,000
                          
                          
                          
                          -
                          
                          
                          
                          1,510,000Apofas
      Properties
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Magnus
      Properties
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -875,000
                          
                          
                          
                          635,000
                          
                          
                          
                          -
                          
                          
                          
                          1,510,000





The
Temasek Properties





Effective
18 September 2008 (the “Effective Date”), the Company entered into a Mineral
Right Option Agreement with Temasek Investments Inc. (“Temasek”), a company
incorporated under the laws of Panama  (the “Temasek
Agreement”).





Pursuant
to the Temasek Agreement, the Company acquired four separate options from
Temasek, each providing for the acquisition of a 25% interest in certain mineral
rights in Peru potentially resulting in the acquisition of 100% of the mineral
rights (the “Mineral Rights”).  The Mineral Rights are owned by Rio
Santiago Minerales S.A.C. (“Rio Santiago”).  Beardmore Holdings, Inc.
(“Beardmore”), a wholly-owned subsidiary of Temasek, owns 999 shares of the
1,000 shares of Rio Santiago that are issued and outstanding.  Temasek
owns the single remaining share of Rio Santiago.  The acquisition of
each 25% interest in the Mineral Rights will occur through the transfer to the
Company of 25% of the outstanding shares of Beardmore.





The
Company may exercise the initial 25% option to acquire a 25% interest in the
Mineral Rights after fulfilling the following conditions:





·
            Pay
      $250,000 (paid) to Temasek on the date the Agreement is
      executed;


·
            Issue
      2,500,000 common shares of the Company to Temasek within five business
      days from the Effective Date (issued) (Note 7);
  and


·
            Pay
      an additional $250,000 (paid) to Temasek within ninety days of the
      Effective Date.





The
Company entered into an amending agreement dated 12 May 2009 with Temasek
related to the Temasek Properties (the “Amending Temasek
Agreement”).  Under the Amending Temasek Agreement, the Company may
now exercise the second 25% option resulting in the acquision of a 50% interest
in the Mineral Rights by fulfilling the following conditions as set out in the
Amending Temasek Agreement as soon as practicable thereafter:





F -
15
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





·
            Exercise
      and complete the initial 25% option
(completed);


·
            Issue
      3,500,000 additional common shares of the Company to Temasek (issued)
      (Note 7); and


·
            Pay
      an additional $750,000 to Temasek by 18 September
  2009.


·
            The
      Company must also pay interest on any unpaid amount of the option payment
      of $750,000 at 5% per


annum
accruing from 12 May 2009 to the date that payment is made.





The
Company may exercise the third 25% option resulting in the acquisition of a 75%
interest in the Mineral Rights after fulfilling the following conditions within
18 September 2009:





·
            Exercise
      and complete the initial and second 25%
options;


·
            Pay
      an additional $1,250,000 to Temasek;
and


·
            Issue
      4,500,000 additional common shares of the Company to
    Temasek.





The
Company may exercise the fourth and final 25% option resulting in the
acquisition of a 100% interest in the Mineral Rights after fulfilling the
following conditions within 18 March 2010:





·
            Exercise
      and complete the initial, second and third 25%
  options;


·
            Pay
      an additional $2,500,000 to Temasek;
and


·
            Issue
      5,500,000 additional common shares of the Company to
    Temasek.





Upon the
acquisition of a 100% interest in the Mineral Rights, Temasek will hold its
single share of Rio Santiago in trust for the Company’s sole benefit and hold
the share strictly in accordance with the Company’s
instructions.  Upon the Company’s acquisition of a 100% interest in
the Mineral Rights, Temasek is entitled to an annual 2.5% net returns
royalty.  However, if the Company pays Temasek $2,000,000 within
ninety days of the acquisition of a 100% interest in the Mineral Rights, Temasek
will only be entitled to an annual 1.5% net returns royalty.





If the
Company exercises the second 25% option, resulting in the Company’s acquisition
of a 50% interest in the Mineral Rights, and fails to acquire a 100% interest in
the Mineral Rights, the Company and Temasek will form a joint venture in which
the Company will be wholly responsible for developing a feasible mining project
and all necessary facilities and Temasek shall retain a carried free interest in
the mining rights.  If the Company does not develop a feasible mining
project within three years, the Company will be responsible to pay Temasek an advance
minimum mining royalty of $500,000 per year, which will be deducted from
Temasek's net return royalty.





Temasek
became a significant shareholder of the Company through the issuance of the
2,500,000 common shares on exercise of the option to acquire the initial 25%
interest in the Mineral Rights and an additional 3,500,000 common shares on
exercise of the partial payment toward the exercise of the option to acquire the
second 25% interest.





F -
16
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





The
Apofas Properties





Pursuant
to an agreement dated 22 January 2007, the Company had the option to acquire a
100% interest in five mineral concessions, known as the Poronmannikko and
Sarkiahonkangas projects, located in Finland (the “Apofas Agreement”). Under the
terms of the Apofas Agreement, the Company had the right to acquire a 100%
interest in two projects by making cash payments totalling
€1,000,000:





·  Initial
payment of €150,000 due on or before 1 April 2007 (paid));


·  Second
payment of €150,000 due on or before 1 April 2008 (extended by agreement to 30
April 2008);


·  Third
payment of €300,000 due on or before 1 April 2009; and


·  Final
payment of €400,000 due on or before 1 April 2010.





Concurrent
with ratification of the Apofas Agreement on 4 May 2007, the Company issued
20,000 common shares as a finder’s fee. The mineral concessions were subject to
a 2% gross proceeds royalty.  The Apofas Agreement was signed with a
company controlled by a former president of the Company. During the year ended
31 December 2008, the Company determined not to proceed with the option to
acquire these projects.





The
Magnus Properties





Pursuant
to an agreement dated 6 October 2006 with Magnus Minerals Oy (“Magnus”), the
Company had the option to acquire a 100% interest in four different mineral
properties (Petrovaara, Poskijarvi-Kokka, Rautavaara and Tainiovaara) by paying
option payments for a total of €1,000,000 in cash for each property over a
period of four years (the “Magnus Agreement”).  The option payments
were to be paid annually at the beginning of each year as follows: first year of
€100,000 (paid); second year of €100,000; third year of €300,000; and fourth
year of €500,000 per property for a total of €4,000,000 if all 4 properties are
acquired fully; and by making a work commitment of €1,000,000 on each property,
of which 25% must be conducted annually.  All properties were subject
to a 2% net smelter return.





The first
year payments for all 4 properties totaling $523,400 (€400,000) were paid during
the year ended 31


December
2006.  The due date of the second option payment of €100,000 with
respect to the Rautavaara Property was extended pursuant to an amendment
agreement to 30 April 2008 in consideration of a €10,000 extension payment
(paid) and payment of applicable government and landowner payments according to
Finnish law (paid). The due date for the first year work commitment of €250,000
with respect to the Rautavaara Property was extended to 31 August 2008 and the
first year work commitment of €250,000 with respect to the
Tainiovarra.





Property
was extended to 31 May 2008.  During the year ended 31 December 2008,
the Company determined not to proceed with the option to acquire this
Property.





F -
17
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





On 11
June 2007, the Company entered into an Option Agreement with Magnus (the “Option
Agreement”), pursuant to which the Company entered into a joint venture to
explore the “Enonkoski area” in Finland primarily for nickel-copper-platinum
group elements.





Under the
terms of the Option Agreement, the Company had the right to acquire ownership
from Magnus of up to a 51% interest in certain claim reservations, and pending
claims comprising the Property as more particularly set forth in the Option
Agreement.





It was
intended that the Company be the operator of the joint venture and can earn a
51% interest in the Property by fulfilling $10,000,000 in work commitments and
€3,000,000 in option payments.





In order
to exercise the option, the Company was required to spend $10,000,000 in work
commitments with minimum expenditures as follows: $1,800,000 by 30 November
2008; $2,200,000 by 30 November 2009; $2,800,000 by 30 November 2010; and
$3,200,000 by 30 November 2011.





In
addition, the Company was required to make a total of €3,000,000 in option
payments to Magnus over four years as follows: €30,000 by 22 May 2007 (paid);
€270,000 upon execution of the Option Agreement (paid); €600,000 by 30 November
2008; €900,000 by 30 November 2009; and €1,200,000 by 30 November
2010.





During
the year ended 31 December 2008, the Company decided not to exercise the option
with respect to this Property.





Magnus is
a company in which the Company’s former president has an ownership
interest.





There are
certain inherent risks relating to the title to the mineral properties and
mining and exploration rights that the Company has an interest in through its
above noted option agreement, as registration of some of the mineral claims with
the Peruvian government has not yet been completed.  The Company,
therefore, cannot give any assurance that it will have valid title on its
mineral property interests.








F -
18
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





5. Property
and Equipment





Net
      Book ValueCost
                            
                            
                            Accumulated
                              amortization
                            
                            
                            30
      June
                              2009
                            
                            
                            31
      December
                              2008$
                            
                            
                            
                            $
                            
                            
                            
                            $
                            
                            
                            
                            $Furniture,
      computer and office equipment
                            
                            
                            38,505
                            
                            
                            
                            17,710
                            
                            
                            
                            20,795
                            
                            
                            
                            24,464Computer
      software
                            
                            
                            8,928
                            
                            
                            
                            8,178
                            
                            
                            
                            750
                            
                            
                            
                            1,50047,433
                            
                            
                            
                            25,888
                            
                            
                            
                            21,545
                            
                            
                            
                            25,964





During
the six month period ended 30 June 2009, total additions to property and
equipment were $Nil (31 December 2008 - $8,467).





6. Website
Development Cost





Net
      Book ValueCost
                            
                            
                            Accumulated
                              amortization
                            
                            
                            30
      June
                              2009
                            
                            
                            31
      December
                              2008$
                            
                            
                            
                            $
                            
                            
                            
                            $
                            
                            
                            
                            $Website
      development
                            
                            
                            40,000
                            
                            
                            
                            22,500
                            
                            
                            
                            17,500
                            
                            
                            
                            24,167





During
the six month period ended 30 June 2009, total additions to website development
were $Nil (31 December 2008 - $30,000).





7. Common
Stock





Authorized





The total
authorized capital consists of





·
            200,000,000
      of common shares with par value of
$0.00001


·
            200,000,000
      of blank check preferred shares with par value of
  $0.001





Issued
and outstanding





As at 30
June 2009, the total issued and outstanding capital stock is 13,103,585 common
shares with a par value of $0.00001 per share.






F -
19
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





On 23
June 2009, the Company issued 3,500,000 common shares valued at a $385,000
($0.11 per common share) pursuant to the Temasek Agreement (Note
4).  The fair value is equal to the market price of the Company’s
stock on the date of the transaction.





On 8 May
2009, the Company issued 140,000 common shares for total proceeds of $18,900
($0.15 per common share), net of share issue costs of $2,100.





On 31
March 2009, the Company issued 5,272,333 common shares at a price of $0.15 per
share for total proceeds of $711,765 ($0.15 per common share), net of share
issue costs of $79,085.





During
the year ended 31 December 2008, a total of 167,500 stock options
expired.





During
the year ended 31 December 2008, the Company issued 2,500,000 common shares
valued at $625,000 ($0.25 per common share) pursuant to the Temasek Agreement
(Note 4).  The fair value is equal to the market price of the
Company’s stock on the date of the transaction.





During
the year ended 31 December 2008, the Company completed a one new for twenty old
share reverse stock split.  The Company’s share transactions,
including the weighted average number of common shares outstanding calculation
for purposes of determining earnings per share, have been restated retroactively
to reflect all of the


above
corporate capital transactions in these interim consolidated financial
statements.





During
the year ended 31 December 2007, the Company issued 121,800 units at a price of
$25 per share for proceeds of $2,832,550, net of share issue costs of
$212,450.  Each unit consists of one share of common stock with par
value $0.00001 and one-half share purchase warrant. Each full share purchase
warrant entitles the holder to purchase one common share at a price of $35 up to
17 April 2008.  As at 31 December 2007, all of the related share
purchase warrants in this series remain outstanding.





During
the year ended 31 December 2007, the Company granted 37,500 restricted shares at
a deemed price of $29 per share to officers and directors of the
Company.  The deemed price is equal to the market price of the
Company’s stock on the date of the transaction.  During the year ended
31 December 2008, 30,000 restricted shares were cancelled and returned to
treasury.  Fifty percent of the remaining 7,500 shares vested during
the year ended 31 December 2008 and the balance have been deemed to have
vested.  The related stock-based compensation of $705,365 has been
recorded in the consolidated statement of operations during the year ended 31
December 2008.





During
the year ended 31 December 2007, the Company granted 8,750 restricted shares at
a deemed price of $3.60 per share to consultants of the Company. The deemed
price is equal to the market price of the Company’s stock as of 31 December
2007.  During the year ended 31 December 2008, 1,250 restricted shares
were cancelled and returned to treasury.  Fifty percent of the
remaining shares vested during the year ended 31 December 2008 and the balance
have been deemed to have vested.  The related stock-based compensation
of $20,431 has been recorded in the consolidated statement of operations during
the year ended 31 December 2008.





F -
20
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





Stock
options





As at 30 June 2009, there are Nil
incentive stock options outstanding (31 December 2008 – Nil).





During
the year ended 31 December 2007, the Company granted 167,500 incentive stock
options to officers, directors and consultants of the Company to purchase common
stock of the Company at a price of $25 per common share on or before 17 April
2017 and vesting as to one-quarter of the common shares under the stock option
on 17 April 2007 and one-quarter every six months thereafter in accordance with
the terms and conditions of the Company’s Stock Incentive Plan (the
“Plan”).  As at 31 December 2007, all of the related stock options in
this series remain outstanding.  During the year ended 31 December
2008, all of the related stock options in this series were
forfeited.





During
the year ended 31 December 2007, the Company adopted the Plan, which provides
for the grant of incentive stock options, non-qualified stock options, stock
appreciation rights, restricted stock, performance shares and performance units,
and stock awards to officers, directors or employees of, as well as advisers and
consultants to, the Company.





All stock
options and rights are to vest over a period determined by the Board of
Directors and expire not more than ten years from the date
granted.  Pursuant to the Plan, the maximum aggregate number of shares
that may be issued for awards is 500,000 and the maximum aggregate number of
shares that may be issued for incentive stock options is 500,000.





The
following is a summary of option activities during the six month periods ended
30 June 2009 and 2008:





Number
      of options
                      
                      
                      Weighted
      average exercise price$Outstanding
      and exercisable at 1 January 2009
                      
                      
                      -
                      
                      
                      
                      -Granted
                      
                      
                      -
                      
                      
                      
                      -Exercised
                      
                      
                      -
                      
                      
                      
                      -Expired
                      
                      
                      -
                      
                      
                      
                      -Outstanding
      and exercisable at 30 June 2009
                      
                      
                      -
                      
                      
                      
                      -Weighted
      average fair value of options granted during the period
                      
                      
                      
                      
                      
                      
                      -








F -
21
 Table of Contents





Amazon Goldsands
Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





Number
      of options
                      
                      
                      Weighted
      average exercise price$Outstanding
      and exercisable at 1 January 2008
                      
                      
                      167,500
                      
                      
                      
                      24.47Granted
                      
                      
                      -
                      
                      
                      
                      -Exercised
                      
                      
                      -
                      
                      
                      
                      -Expired
                      
                      
                      (167,500
                      )
                      
                      
                      (24.47
                      )Outstanding
      and exercisable at 30 June 2008
                      
                      
                      -
                      
                      
                      
                      -Weighted
      average fair value of options granted during the period
                      
                      
                      
                      
                      
                      
                      -





Warrants





As at 30
June 2009, there are Nil warrants outstanding (31 December 2008 –
Nil).





During
the year ended 31 December 2007, as part of the 121,800 unit private placement,
the Company issued 60,900 share purchase warrants.  Each share
purchase warrant entitles the holder to purchase one common share at a price of
$35 up to 17 April 2008.  As at 31 December 2007, all of the related
share purchase warrants in this series remain outstanding.  During the
six months ended 30 June 2008, all of the related share purchase warrants in
this series expired.





During
the year ended 31 December 2007, the Company issued 8,358 agent compensation
warrants for services rendered by a private placement agent.  Each
warrant entitles the holder to purchase one common share at a price of $35 up to
17 April 2008.  As at 31 December 2007, all of the related share
purchase warrants in this series remain outstanding.  During the six
months ended 30 June 2008, all of the related share purchase warrants in this
series expired.














F -
22
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





The
following is a summary of warrant activities during the three month periods
ended 30 June 2009 and 2008:





Number
      of warrants
                      
                      
                      Weighted
      average exercise price$Outstanding
      and exercisable at 1 January 2009
                      
                      
                      -
                      
                      
                      
                      -Granted
                      
                      
                      -
                      
                      
                      
                      -Exercised
                      
                      
                      -
                      
                      
                      
                      -Expired
                      
                      
                      -
                      
                      
                      
                      -Outstanding
      and exercisable at 30 June 2009
                      
                      
                      -
                      
                      
                      
                      -





Number
      of warrants
                    
                    
                    Weighted
      average exercise price$Outstanding
      and exercisable at 1 January 2008
                    
                    
                    69,258
                    
                    
                    
                    35.00Granted
                    
                    
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    -
                    
                    
                    
                    -Expired
                    
                    
                    (69,258
                    )
                    
                    
                    (35.00
                    )Outstanding
      and exercisable at 30 June 2008
                    
                    
                    -
                    
                    
                    
                    -





8. Related
Party Transactions





During
the six month period ended 30 June 2009, the Company paid or accrued $43,647
(2008 – $211,527) for consulting and management fees to officers and directors
of the Company.





During
the six month period ended 30 June 2009, the Company paid or accrued $6,169
(2008 – $25,486) for consulting fees included in mineral property exploration
expenditures, to a company controlled by an officer of the Company.





F -
23
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





9. Commitments





a.
            During
      the year ended 31 December 2008, the Company entered into a one-year
      contract for consulting services, commencing 1 December 2008, with a party
      to provide consulting services at 10% on all costs incurred related to
      providing exploration management and mineral property development services
      for the Company’s mineral project in Peru, as well as a one time fee of
      $125,000 due within sixty days of execution of the agreement
      (paid).





b.
            During
      the year ended 31 December 2008, the Company entered into a one-year
      contract for consulting services, commencing 1 November 2008, with a firm
      to provide website maintenance services for a monthly payment of
      $2,500.





c.
            During
      the year ended 31 December 2008, the Company entered into a one-year
      contract for consulting services, commencing 1 October 2008, with a party
      to provide investor relation services for a monthly payment of
      $10,000.  This contract was terminated effective 31 May
      2009.





d.
            During
      the year ended 31 December 2008, the Company entered into a one-year
      contract for consulting services, commencing 1 June 2008, with a party to
      provide investor relations services for a monthly payment of
      $10,000.





e.
            During
      the year ended 31 December 2008, the Company entered into a two-year
      contract for consulting services, commencing 1 April 2008, with a party to
      provide management services in Europe for a monthly payment of
      $5,000.





10. Geographic
Areas





Prior to
the operations of acquisition and exploration of mineral properties, the
Company’s areas of operations were primarily in Canada.  Since the
commencement of acquisition and exploration of mineral properties, during the
year ended 31 December 2006, the Company’s principal mineral property activities
have been in Finland.  During the year ended 31 December 2008, the
Company re-focused its acquisition and exploration of mineral properties
operations to Peru. As at 30 June 2009, the Company does not have any material
assets outside of North America.








F -
24
 Table of Contents





Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





11. Supplemental Disclosures with Respect
to Cash Flows


For
      the period from the date of inception on 6 March 2000 to 30 June
      2009
                            
                            
                            For
                              the
      three month period ended 30 June
                              2009
                            
                            
                            For
                              the
      three
                              month
      period ended 30 June
                              2009
                            
                            
                            For
                              the
      six month period ended
                              30
      June
                              2009
                            
                            
                            For
                              the
      six month period ended
                              30
      June
                              2008$
                            
                            
                            
                            $
                            
                            
                            
                            $
                            
                            
                            
                            $
                            
                            
                            
                            $Supplemental
      cash flows informationInterest
      expense
                            
                            
                            1,906
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Foreign
      exchange (gain) loss
                            
                            
                            17,559
                            
                            
                            
                            1,250
                            
                            
                            
                            1,299
                            
                            
                            
                            1,213
                            
                            
                            
                            (7,804
                            )Supplemental
      disclosure of non-cash investing and financingCommon
      shares issued for oil and gas property ($25 per share)
                            
                            
                            10,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      shares issued for services ($6 per share)
                            
                            
                            50,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Donated
      consulting services
                            
                            
                            16,200
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      shares cancelled and returned
                            
                            
                            (2
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      shares issued for equity acquisition of Finmetal ($25.60 per
      share)
                            
                            
                            1,280,000
                            
                            
                            
                            .
        -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Restricted
      shares issued ($24.80 per share)
                            
                            
                            2,418,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      shares issued for finder’s fee ($10 per unit)
                            
                            
                            254,500
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Warrants
      issued
                            
                            
                            100,421
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      shares issued for finder’s fee for mineral property interests ($26.80 per
      share)
                            
                            
                            536,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      shares issued for acquisition of mineral rights (deemed at $0.25 per
      share)
                            
                            
                            625,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Common
      shares issued for acquisition of mineral rights (deemed at $0.11 per
      share)
                            
                            
                            385,000
                            
                            
                            
                            385,000
                            
                            
                            
                            -
                            
                            
                            
                            385,000
                            
                            
                            
                            -








F -
25
 Table of Contents







Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





12. Income
Taxes





The
Company has losses carried forward for income tax purposes to 30 June
2009.  There are no current or deferred tax expenses for the period
ended 30 June 2009 due to the Company’s loss position.  The Company
has fully reserved for any benefits of these losses.  The deferred tax
consequences of temporary differences in reporting items for financial statement
and income tax purposes are recognized, as appropriate. Realization of the
future tax benefits related to the deferred tax assets is dependent on many
factors, including the Company’s ability to generate taxable income within the
net operating loss carry-forward period.  Management has considered
these factors in reaching its conclusion as to the valuation allowance for
financial reporting purposes.





The
provision for refundable federal income tax consists of the
following:





For
      the six month period ended 30 June 2009
                      
                      
                      For
      the six month period ended 30 June 2008$
                      
                      
                      
                      $Refundable
      federal tax asset (liability) attributable to:Current
      operations
                      
                      
                      207,965
                      
                      
                      
                      (572,183
                      )Contributions
      to capital by related parties
                      
                      
                      -Less:
      Change in valuation allowance
                      
                      
                      (207,965
                      )
                      
                      
                      572,183Net
      refundable amount
                      
                      
                      -
                      
                      
                      
                      -





The
composition of the Company’s deferred tax assets as at 30 June 2009 and 31
December 2008 are as follows:





As
      at 30
                        June
      2009
                      
                      
                      As
      at 31 December 2008 (Audited)$
                      
                      
                      
                      $Net
      income tax operating loss carryforward
                      
                      
                      368,363
                      
                      
                      
                      980,025Statutory
      federal income tax rate
                      
                      
                      34
                      %
                      
                      
                      34
                      %Deferred
      tax asset
                      
                      
                      125,243
                      
                      
                      
                      333,209Less:
      Valuation allowance
                      
                      
                      (125,243
                      )
                      
                      
                      (333,209
                      )Net
      deferred tax asset
                      
                      
                      -
                      
                      
                      
                      -








F -
26
 Table of Contents




Amazon
Goldsands Ltd.


(formerly
Finmetal Mining Ltd.)


(An
Exploration Stage Company)


Notes to
Interim Consolidated Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited
– Prepared by Management)


30
June 2009





The
potential income tax benefit of these losses has been offset by a full valuation
allowance.





As at 30
June 2009, the Company has an unused net operating loss carry-forward balance of
approximately $5,712,373 that is available to offset future taxable
income.  This unused net operating loss carry-forward balance expires
between 2024 and 2029.





13. Subsequent
Events





There are
no subsequent events from the date of the period ended 30 June 2009 to the date
the financial statements were available to be issued on 4 August
2009.








F -
27
 Table of Contents




Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.





This
Quarterly Report on Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The words “believe,” “expect,” “anticipate,”
“intend,” “estimate,” “may,” “should,” “could,” “will,” “plan,” “future,”
“continue,” and other expressions that are predictions of or indicate future
events and trends and that do not relate to historical matters identify
forward-looking statements. These forward-looking statements are based largely
on our expectations or forecasts of future events, can be affected by inaccurate
assumptions, and are subject to various business risks and known and unknown
uncertainties, a number of which are beyond our control. Therefore, actual
results could differ materially from the forward-looking statements contained in
this document, and readers are cautioned not to place undue reliance on such
forward-looking statements. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. A wide variety of factors could cause or contribute
to such differences and could adversely impact revenues, profitability, cash
flows and capital needs. There can be no assurance that the forward-looking
statements contained in this document will, in fact, transpire or prove to be
accurate.





Factors
that could cause or contribute to our actual results differing materially from
those discussed herein or for our stock price to be adversely affected include,
but are not limited to: (i) our short operating history; (ii) our ability to
manage business expansion; (iii) risks and uncertainties relating to the
interpretation of drill results, the geology, grade and continuity of mineral
deposits; (iv) results of initial feasibility, pre-feasibility and feasibility
studies, and the possibility that future exploration, development or mining
results will not be consistent with our expectations; (v) mining and development
risks, including risks related to accidents, equipment breakdowns, labor
disputes or other unanticipated difficulties with or interruptions in
production; (vi) the potential for delays in exploration or development
activities or the completion of feasibility studies; (vii) risks related to the
inherent uncertainty of production and cost estimates and the potential for
unexpected costs and expenses; (viii) risks related to commodity price
fluctuations; (ix) the uncertainty of profitability based upon our history of
losses; (x) risks related to failure to obtain adequate financing on a timely
basis and on acceptable terms for our planned exploration and development
projects; (xi) risks related to environmental regulation and liability; (xii)
risks that the amounts reserved or allocated for environmental compliance,
reclamation, post-closure control measures, monitoring and on-going maintenance
may not be sufficient to cover such costs; (xiii) risks related to tax
assessments; (xiv) political and regulatory risks associated with mining
development and exploration; (xv) other risks and uncertainties related to our
prospects, properties and business strategy; (xvi) potential that shareholders
may lose all or part of their investment if we are unable to compete in our
industry; (xvii) our dependence on key personnel; (xvii) sale of substantial
amounts of our common stock that may have a depressive effect on the market
price of the outstanding shares of our common stock; (xviii) possible issuance
of common stock subject to options and warrants that may dilute the interest of
shareholders; (xix) our ability to comply with Sarbanes-Oxley Act of 2002
Section 404; (xx) our nonpayment of dividends and lack of plans to pay dividends
in the future; (xxi) future sale of a substantial number of shares of our common
stock that could depress the trading price of our common stock, lower our value
and make it more difficult for us to raise capital; (xxii) our additional
securities available for issuance, which, if issued, could adversely affect the
rights of the holders of our common stock; (xxiii) our stock price which is
likely to be highly volatile because of several factors, including a relatively
limited public float; and (xxiv) indemnification of our officers and
directors.





As used
in this Quarterly Report, the terms “we,” “us,” “our,” and “Amazon” mean Amazon
Goldsands Ltd. and our subsidiaries unless otherwise indicated.








- 4
-
 Table of Contents





Overview





We were
incorporated in the state of Nevada under the name Gondwana Energy, Ltd. on
September 5, 1997, and previously operated under the name Finmetal Mining
Ltd.  We were previously focused on the acquisition and development of
our interests in the mineral rights on properties located in
Finland.





In
September 2008, we reorganized our operations and our current focus is on the
acquisition and development of our interests in the mineral rights on properties
located in northeastern Peru.  Effective June 6, 2008, we merged with
our wholly-owned subsidiary, Amazon Goldsands Ltd., pursuant to Articles of
Merger that we filed with the Nevada Secretary of State.  We decided
to change our name to "Amazon Goldsands Ltd." to better reflect our current
focus on the acquisition and development of the mineral and mining rights
underlying properties located in South America.





We are
considered an exploration or exploratory stage company because we are involved
in the examination and investigation of land that we believe may contain
valuable minerals, for the purpose of discovering the presence of ore, if any,
and its extent.  There is no assurance that a commercially viable
mineral deposit exists on any of the properties underlying our mineral property
interests, and a great deal of further exploration will be required before a
final evaluation as to the economic and legal feasibility for our future
exploration is determined.  We have no known reserves of any type of
mineral.  To date, we have not discovered an economically viable
mineral deposit on any of the properties underlying our mineral property
interests, and there is no assurance that we will discover one.  If we
cannot acquire or locate mineral deposits, or if it is not economical to recover
any mineral deposits that we do find, our business and operations will be
materially and adversely affected.





We no
longer have any interest in any properties located in Finland and have allowed
our options on these properties to lapse and revert back to the optionors so
that we can pursue the development of our interests in the mineral rights on
properties located in northeastern Peru.  As a result of our decision
to not pursue the development of any interests in properties located in Finland,
we dissolved our wholly-owned subsidiary, FinMetal OY, a corporation organized
under the laws of Finland, effective July 17, 2009.  A description of
each of our options to acquire the mineral and mining rights underlying
properties located in Peru and the conditions that we must meet in order to
exercise these options is set forth below.





The
Peru Property





Our properties are located in
northeastern Peru are in the exploration stage.  These properties are
without known reserves and the proposed plan of exploration detailed below is
exploratory in nature.  These properties are described
below.





On September 18, 2008 (the "Effective
Date"), we entered into a Mineral Right Option Agreement (the "Temasek Option
Agreement") with Temasek Investments Inc. ("Temasek"), a company incorporated
under the laws of Panama.  Pursuant to the Temasek Option Agreement,
we acquired four separate options from Temasek, each providing for the
acquisition of a twenty-five percent interest in certain mineral rights (the
"Mineral Rights") in certain properties in Peru (the “Peru Property”)
potentially resulting in our acquisition of one hundred percent of the Mineral
Rights.  The Mineral Rights are owned by Rio Santiago Minerales S.A.C.
("Rio Santiago").  Beardmore Holdings, Inc. ("Beardmore"), a
wholly-owned subsidiary of Temasek, owns 999 shares of the 1,000 shares of Rio
Santiago that are issued and outstanding.  Temasek owns the single
remaining share of Rio Santiago.  The acquisition of each 25% interest
in the Mineral Rights will occur through the transfer to us of twenty-five
percent of the outstanding shares of Beardmore.








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A
description of the Mineral Rights is set forth below:





Name
              Area
      (ha)
              Code
              Title
      No
              OwnerBianka
      1
              1000
              01-03905-08
              00074599
              Rio
      Santiago Minerales SACBianka
      2
              1000
              01-03878-08
              00074599
              Rio
      Santiago Minerales SACBianka
      3
              900
              01-03879-08
              00074599
              Rio
      Santiago Minerales SACBianka
      4
              1000
              01-03883-08
              00074599
              Rio
      Santiago Minerales SACBianka
      6
              1000
              01-03881-08
              00074599
              Rio
      Santiago Minerales SACBianka
      7
              1000
              01-03888-08
              00074599
              Rio
      Santiago Minerales SACDalma
      1
              1000
              01-03859-08
              00074599
              Rio
      Santiago Minerales SACDalma
      2
              1000
              01-03863-08
              00074599
              Rio
      Santiago Minerales SACDalma
      3
              1000
              01-03857-08
              00074599
              Rio
      Santiago Minerales SACDalma
      4
              800
              01-03865-08
              00074599
              Rio
      Santiago Minerales SACDalma
      5
              500
              01-03866-08
              00074599
              Rio
      Santiago Minerales SACDorotea
      1
              1000
              01-03909-08
              00074599
              Rio
      Santiago Minerales SACDorotea
      2
              900
              01-03906-08
              00074599
              Rio
      Santiago Minerales SACDorotea
      3
              1000
              01-03904-08
              00074599
              Rio
      Santiago Minerales SACDorotea
      4
              800
              01-03908-08
              00074599
              Rio
      Santiago Minerales SACDorotea
      5
              1000
              01-03910-08
              00074599
              Rio
      Santiago Minerales SACDorotea
      6
              1000
              01-03901-08
              00074599
              Rio
      Santiago Minerales SACDorotea
      7
              1000
              01-03899-08
              00074599
              Rio
      Santiago Minerales SAC





In
December 2008, we fulfilled the following conditions, resulting in our exercise
of the initial option to acquire a twenty-five percent interest in the Mineral
Rights:




·
            Payment
      of $250,000 to Temasek on the date the Temasek Option Agreement was
      executed;


·
            Issuance
      of 2,500,000 shares of Common Stock to Temasek within five business days
      from the Effective Date; and


·
            Payment
      of an additional amount of $250,000 to Temasek within ninety days of the
      Effective Date.





The
Temasek Option Agreement provided that we may exercise the second twenty-five
percent option, resulting in our acquisition of a fifty percent interest in the
Mineral Rights, after fulfilling the following conditions within six months of
the Effective Date:





·
            Payment
      of an additional amount of $750,000 to Temasek,
  and


·
            Issuance
      of 3,500,000 additional shares of Common Stock to
  Temasek.





On May
12, 2009, we entered into an agreement with Temasek to amend the Temasek Option
Agreement (the “Amended Option Agreement”) in order to revise the conditions
required for us to exercise the second twenty-five percent
option.  Under the terms of the Amended Option Agreement, we may
exercise the second twenty-five percent option, resulting in our acquisition of
a fifty percent interest in the Mineral Rights, after fulfilling the following
conditions:





·
            Issuance
      of 3,500,000 additional shares of our common stock to Temasek within 6
      months from the Effective Date or as soon as practicable thereafter,
      and


·
            Payment
      within 12 months from the Effective Date of an additional $750,000 to
      Temasek plus interest at a rate of 5% per annum accruing from the date of
      the Amended Option Agreement to the date that payment is
    made.




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On June
23, 2009, we issued 3,500,000 shares of our common stock to Temasek and its
designees as partial consideration for the exercise of the second twenty-five
percent option to acquire an aggregate fifty percent interest in the Mineral
Rights.  We will exercise the second twenty-five percent option,
resulting in our acquisition of an aggregate fifty percent interest in the
Mineral Rights, if on or before September 18, 2009 we pay $750,000 to Temasek,
plus interest at a rate of 5% per annum accruing from May 12, 2009, the date of
the Amended Option Agreement, to the date that payment is made.  We
will require additional financing in order to be able to exercise the second
twenty-five percent option.  There can be no assurance that we will be
successful in securing the necessary funding to exercise the second twenty-five
percent option.  Provided we are
successful in securing additional financing, we intend to exercise the second
twenty-five percent option.  In the event that we are unable to secure
additional financing in order to be able to exercise the second twenty-five
percent option in the time frame set forth above, our ownership interest in the
Mineral Rights may be limited to our twenty-five percent
interest.





We may
exercise the third twenty-five percent option, resulting in our acquisition of a
seventy-five percent interest in the Mineral Rights, after fulfilling the
following conditions within twelve months of the Effective Date (September 18,
2009):





·
            Exercise
      and complete the initial and second twenty-five percent
      options;


·
            Payment
      of an additional amount $1,250,000 to Temasek;
  and


·
            Issuance
      of 4,500,000 additional shares of Common Stock to
  Temasek.





We will require additional financing in order to be able
to exercise the third twenty-five percent option.  There can be no
assurance that we will be successful in securing the necessary funding to
exercise the third twenty-five percent option.  Provided we are
successful in securing additional financing, we intend to exercise the third
twenty-five percent option.  In the event that we have exercised the
second twenty-five percent option, but are unable to secure sufficient financing
in order to be able to exercise the third twenty-five percent option in the time
frame set forth above, our ownership interest in the Mineral Rights may be
limited to a fifty percent interest.





We may
exercise the fourth twenty-five percent option, resulting in our acquisition of
a one hundred percent interest in the Mineral Rights, after fulfilling the
following conditions within eighteen months of the Effective Date (March 18,
2010):





·
            Exercise
      and complete the initial, second and third twenty-five percent
      options;


·
            Payment
      of an additional amount $2,500,000 to Temasek,
  and


·
            Issuance
      of 5,500,000 additional shares of Common Stock to
  Temasek.





We will require additional financing in order to be able
to exercise the fourth twenty-five percent option.  There can be no
assurance that we will be successful in securing the necessary funding to
exercise the fourth twenty-five percent option.  Provided we are
successful in securing additional financing, we intend to exercise the fourth
twenty-five percent option.  In the event that we have exercised the
third twenty-five percent option, but are unable to secure sufficient financing
in order to be able to exercise the fourth twenty-five percent option in the
time frame set forth above, our ownership interest in the Mineral Rights may be
limited to a seventy-five percent interest.





If we are
able to complete the acquisition of a one hundred percent interest in the
Mineral Rights, Temasek will hold its single share of Rio Santiago in trust for
our sole benefit and hold the share strictly in accordance with our
instructions.





If we are
able to complete the acquisition of a one hundred percent interest in the
Mineral Rights, Temasek will be entitled to an annual 2.5% net returns
royalty.  However, if we pay Temasek $2,000,000 within ninety days of
our acquisition of a one hundred percent interest in the Mineral Rights, Temasek
will only be entitled to an annual 1.5% net returns royalty.





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If we
exercise the second twenty-five percent option, resulting in our acquisition of
a fifty percent interest in the Mineral Rights, but fail to acquire a one
hundred percent interest in the Mineral Rights, the Temasek Option Agreement
provides that we and Temasek will form a joint venture for the purpose of
placing the Peru Property into commercial production.  In the event
that this condition is satisfied and we enter into a joint venture with Temasek,
our responsibilities under the joint venture would include developing a feasible
mining project and all necessary facilities and Temasek shall retain a carried
free interest in the mining rights.  If we enter into a joint venture
with Temasek, but do not develop a feasible mining project within three years of
the Effective Date (or by September 18, 2011), we will be required to pay
Temasek an advance minimum mining royalty of $500,000 per year, which will be
deducted from Temasek's net return royalty .




Planned
Exploration Program





An
exploration base is being set up in the town of Saramiriza, which is located in
the center of the Manseriche alluvial camp on the western bank of the
Marañón.





Provided
we are successful in securing additional financing,we intend to conduct
a seismic survey along selected lines across the Marañón gravels in order to
define the gravel-bedrock contact.  This information is needed to plan a
drilling program and to assist with locating drill collar
positions.  The selection of seismic lines will made on the basis of
interpretation of aerial photos and satellite images, as well as from
reconnaissance-scale mapping of sedimentary features.  Scout drilling
utilizing churn drills will be undertaken on favorable areas, and anomalous
zones will be followed up with reverse circulation drilling (Becker) in order to
fully develop resources and reserves.





Provided
we are successful in securing additional financing andbefore
implementing the drilling plan, we intend to identify the landowners of the
plots on which the mines are located so as to determine who the legal owners or
current occupants are and/or the kind of tenancy or tenancy claim over the
surface of the land, as well as the location of Native or Creole communities
within the project’s area of influence.  This process has commenced,
but cannot be completed without securing additional financing.




An Environmental Impact Report will
also be required to be drafted so as to obtain the Environmental Impact
Declaration from the Peruvian Mining Authorities, which is an essential
requirement for any kind of exploration in Peru.




We intend to collect by backhoe and
excavator a number of bulk samples for metallurgical testing, and to confirm
drill results.  At the same time, mine development planning, process
design, and other engineering studies will be conducted with a view to
completing a feasibility study within an eighteen month
period.  Permitting work will be initiated as early in the exploration
and development cycle as possible, so that trial or pilot dredging can be
started as soon as feasibility has been established.  Provided we are successful in securing additional
financing,we anticipate that we will commence the mapping and geophysics
in the last quarter of 2009 with the initial drilling to begin shortly
thereafter.





Our
current cash on hand is insufficient to complete any of the activities set forth
in our planned exploration program.  If
we are unable to secure additional financing in the near future, we will be
forced to postpone the commencement of our exploration and development
program.Provided we are able to secure additional financing
through private equity offerings,we
anticipate that we will incur the following costs for the next twelve
months:





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Activity
                  
                  USD
      000sMINERAL
      PROPERTY COSTS:Annual
      Fee
                  
                  
                  50Surface
      Rights Access
                  
                  
                  15EXPLORATIONMapping
                  
                  
                  45Geophysics
      – Seismic
                  
                  
                  130DRILLINGChurn
      Drilling
                  
                  
                  500TECHNICAL
      SERVICESConsultants
                  
                  
                  180Personnel
                  
                  
                  230CAMP
      AND FIELD EXPENSESCamp
                  
                  
                  180Field
                  
                  
                  150TRANSPORT
      AND LOGISTICSAir
      Transport
                  
                  
                  180Water
      Transport
                  
                  
                  80Ground
      Transport
                  
                  
                  50EQUIPMENT
      & PERMITTING
                  
                  
                  110COMMUNITY
      OUTREACH
                  
                  
                  50ADMINISTRATION
                    NEW
      BUSINESS
                  
                  
                  150TOTAL
                  
                  
                  2,100





We also, as part of new business
activities, intend to focus on seeking additional mining opportunities, some of
which may be mineral deposits that are fully defined and have already completed
the feasibility stage of development and are ready to produce.  In
other cases, the mineral deposits we may seek to acquire may have a significant
amount of proven and probable resources with what we believe to be excellent
potential for expansion.  We may also seek to acquire other
drill-ready exploration projects that contain little or no proven resources, as
with the options we currently hold to acquire existing mining projects in Peru,
but that are strategically positioned to offer what we perceive as exceptional
potential at a comparatively minimal expense.  In order to acquire any
additional mining properties or exploration projects, we will need to secure
additional financing.  We have not made any progress in indentifying
any such properties due to our current financial position and require additional
financing to perform the requisite due diligence and complete the acquisition of
any property interest.





Due to the extensive and expensive
development programs required to prove mineral resources and reserves, as is
typical in the mining business, companies such as ours sometimes are able to
acquire deposits at significant discounts of the known in-the-ground value of
the gold, silver, or other minerals.   In the event that we do
locate a commercially exploitable mineral deposits, we may determine that it is
commercially advantageous to sell our property interests rather than enter into
production of any commercially mineral deposits on the property
ourselves.








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Results
of Operations





We have
not generated any revenues from our operations in either of the past two fiscal
years.





We
reported total expenses in the amount of $199,064 for the three months ended
June 30, 2009, compared to a credit balance in operating expenses of $2,838,958
for the three months ended June 30, 2008.  We reported total expenses
in the amount of $611,662 for the six months ended June 30, 2009, compared to a
credit balance in operating expenses of $1,674,545 for the six months ended June
30, 2008.  The increase in reported expenses was attributable to
stock-based compensation being credited to operations in the amount of
$3,066,094 for the three months ended June 30, 2008 and $2,386,907 for the six
months ended June 30, 2008 as a result of the expiration and cancellation of
stock options during the these period.





We
reported no other expenses or income for the three months ended June 30, 2009
compared to other income of $1,619 for the three months ended June 30,
2008.  We reported no other expenses or income for the six months
ended June 30, 2009 compared to other income of $8,345 for the six months ended
June 30, 2008.  Other income for the three and six months ended June
30, 2008 consisted solely of interest income.





We had
net loss of $199,064 for the three months ended June 30, 2009, as compared to a
net gain of $2,840,577 for the three months ended June 30, 2008.  We
had net loss of $611,662 for the six months ended June 30, 2009, as compared to
a net gain of $1,682,890 for the six months ended June 30, 2008.  This
decrease in net gain to a net loss in the reporting period was primarily
attributable to stock-based compensation being credited to operations as a
result of the expiration and cancellation of stock options during three and six
months ended June 30, 2008.





As a
result of the above, the basic and diluted loss per common share was $0.02 for
the three months ended June 30, 2009 and $0.09 for the six months ended June 30,
2009, as compared to basic and diluted income per common share of $1.67 for the
three months ended June 30, 2008 and $0.98 for the six months ended June 30,
2008.




Liquidity
and Capital Resources





At June
30, 2009, we had cash and cash equivalents of $9,189 at June 30, 2009 and a
working capital deficit of $547,039.  Our proposed plan of exploration
anticipates that we will incur exploration related expenditures of $2,100,000
over the next twelve months.  Over the next twelve months, we will be
required to make a payment of $750,000 if we elect to increase our
ownership interest in the Mineral Rights from a twenty-five percent
interest to a fifty percent interest and a payment of $1,250,000 if we
elect to further increase our interest in the Mineral Rights from a fifty
percent interest to a seventy-five percent interest.  We anticipate
spending approximately $50,000 in ongoing general and administrative expenses
per month for the next twelve months, for a total anticipated expenditure of
$600,000 over the next twelve months.  The general and administrative
expenses for the year will consist primarily of professional fees for the audit
and legal work relating to our regulatory filings throughout the year, as well
as transfer agent fees and general office expenses.  Our current cash
on hand is insufficient to be able to make our planned exploration expenditures
and to pay for our general administrative expenses over the next twelve
months.  Accordingly, we must obtain additional financing in order to
complete the landowner studies and environmental report and commence the mapping
and geophysics and initial drilling program described above.  We
believe that debt financing will not be an alternative for funding additional
phases of exploration as we do not have limited tangible assets to secure any
debt financing. We anticipate that additional funding will be in the form of
equity financing from the sale of our common stock.  We are currently
seeking additional funding in the form of equity financing from the sale of our
common stock, but cannot provide investors with any assurance that we will be
able to raise sufficient funding from the sale of our common stock to fund our
complete exploration program.  In the absence of such financing, we
will not be able to pursue our exploration program and maintain our mineral
property interests in





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good
standing.  If we do not fulfill the terms of any of these option
agreements according to our business plan, then our ability to commence or
continue operations could be materially limited.  We also may be
forced to abandon our mineral property interests.   If we are
unable to raise additional capital in the near future, we will experience
liquidity problems and management expects that we will need to curtail
operations, liquidate assets, seek additional capital on less favorable terms
and/or pursue other remedial measures and potentially cease
operations.




If we are able to locate an appropriate
partner, we may consider entering into a joint venture arrangement to provide
the required funding to explore the properties underlying our mineral property
interests. We have not undertaken any efforts to locate a joint venture
participant. Even if we determine to pursue a joint venture participant, there
is no assurance that any third party would enter into a joint venture agreement
with us in order to fund exploration of the properties underlying our mineral
property interests. If we enter into a joint venture arrangement, we would
likely have to assign a percentage of our interest in our mineral property
interests to the joint venture participant.





Cash
Used in Operating Activities





Operating
activities in the six months ended June 30, 2009 and 2008 used cash of $350,796
and $1,392,704, respectively, which reflect our recurring operating
losses.  Our net loss of $611,662 for the six months ended June 30,
2009 was the primary reason for our negative operating cash flow.





Cash
Used in Investing Activities





For the
six months ended June 30, 2009, we used $250,000 in investing activities, as
compared to $39,667 used in investing activities during the six months ended
June 30, 2008.  For the six months ended June 30, 2009, we paid
Temasek $250,000 for the acquisition of mineral rights pursuant to the Temasek
Option Agreement.





Cash
from Financing Activities





As we
have had no revenues since inception, we have financed our operations primarily
by using existing capital reserves and through private placements of our
stock.  Net cash flows provided by financing activities for the six
months ended June 30, 2009 was $117,082.  There was no cash flows
provided by financing activities for six months ended June 30,
2008.





Off
Balance Sheet Arrangements





We do not
have any off-balance sheet debt nor did we have any transactions, arrangements,
obligations (including contingent obligations) or other relationships with any
unconsolidated entities or other persons that may have material current or
future effect on financial conditions, changes in the financial conditions,
results of operations, liquidity, capital expenditures, capital resources, or
significant components of revenue or expenses.





Going
Concern





We have
incurred net losses for the period from inception on September 5, 1997 to June
30, 2009 of $11,808,109 and have no source of revenue.  The continuity
of our future operations is dependent on our ability to obtain financing and
upon future acquisition, exploration and development of profitable operations
from our mineral properties.  These conditions raise substantial doubt
about our ability to continue as a going concern.





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Critical
Accounting Policies





In
December 2001, the SEC requested that all registrants list their most “critical
accounting polices” in the Management Discussion and Analysis.  The
SEC indicated that a “critical accounting policy” is one which is both important
to the portrayal of a company’s financial condition and results, and requires
management’s most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain.  We believe the following critical accounting estimates
affect our more significant judgments and estimates used in the preparation of
our consolidated financial statements:





Mineral
Claim Payments and Exploration Expenditures





Mineral property acquisition costs are
initially capitalized as tangible assets when purchased in accordance with
Emerging Issues Task Force (“EITF”) 04-2, “Whether Mineral Rights Are Tangible
or Intangible Assets”. At the end of each fiscal quarter end, we assess
the carrying costs for impairment.  If proven and probable reserves
are established for a property and it has been determined that a mineral
property can be economically developed, costs will be amortized using the
units-of-production method over the estimated life of the probable
reserve.





Mineral property exploration costs are
expensed as incurred.  Estimated future removal and site restoration
costs, when determinable are provided over the life of proven reserves on a
units-of-production basis.  Costs, which include production equipment
removal and environmental remediation, are estimated each period by management
based on current regulations, actual expenses incurred, and technology and
industry standards.  Any charge is included in exploration expense or
the provision for depletion and depreciation during the period and the actual
restoration expenditures are charged to the accumulated provision amounts as
incurred.





As of the date of these interim
consolidated financial statements, we had not established any proven or probable
reserves on its mineral properties and incurred only acquisition and exploration
costs.





Although we have taken steps to verify
title to mineral properties in which we have an interest, according to the usual
industry standards for the stage of exploration of such properties, these
procedures do not guarantee our title.  Such properties may be subject
to prior agreements or transfers and title may be affected by undetected
defects.





Environmental
Costs





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





Stock-Based
Compensation





Effective 1 January 2006, we adopted
the provisions of SFAS No. 123(R), “Share-Based Payment”, which
establishes accounting for equity instruments exchanged for employee services.
Under the provisions of SFAS No.123(R), stock-based compensation cost is
measured at the grant date, based on the calculated fair value of the award, and
is recognized as an expense over the employees’ requisite service period
(generally the vesting period of the equity grant). Before 1 January 2006, we
accounted for stock-based compensation to employees in accordance with
Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued
to





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Employees,” and complied with
the disclosure requirements of SFAS No. 123, “Accounting for Stock-Based
Compensation”.  We adopted SFAS No. 123(R) using the modified
prospective method, which requires us to record compensation expense over the
vesting period for all awards granted after the date of adoption, and for the
unvested portion of previously granted awards that remain outstanding at the
date of adoption.  Accordingly, financial statements for the periods prior
to 1 January 2006 have not been restated to reflect the fair value method of
expensing share-based compensation.





The adoption of SFAS No. 123(R) does
not change the way we account for share-based payments to non-employees, with
guidance provided by SFAS No. 123 (as originally issued) and EITF No. 96-18,
“Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services”.





Foreign
Currency Translation





Our functional and reporting currency
is U.S. dollars.  The consolidated financial statements of the Company
are translated to U.S. dollars in accordance with SFAS No. 52, “Foreign Currency
Translation.”  Monetary assets and liabilities denominated in
foreign currencies are translated using the exchange rate prevailing at the
balance sheet date.  Gains and losses arising on translation or
settlement of foreign currency denominated transactions or balances are included
in the determination of income.  We have not, to the date of these
interim consolidated financial statements, entered into derivative instruments
to offset the impact of foreign currency fluctuations.





Item
3.        Quantitative
and Qualitative Disclosures About Market Risk





Not
Applicable.





Item 4T.       Controls and
Procedures.





Evaluation
of Disclosure Controls and Procedures





We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of June 30, 2009.  This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and interim Chief Financial Officer, Mr. Hector
Ponte.  Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that, as of June 30, 2009, our disclosure
controls and procedures are effective.





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





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Limitations on the
Effectiveness of Internal Controls





Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level.  Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within our company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.





Changes in Internal Control
Over Financial Reporting





There
have been no changes in our internal controls over financial reporting during
the quarter ended June 30, 2009 that have materially affected or are reasonably
likely to materially affect such controls.








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PART
II – OTHER INFORMATION





Item 1.     Legal
Proceedings.





We are
not a party to any pending legal proceeding.  We are not aware of any
pending legal proceeding to which any of our officers, directors, or any
beneficial holders of five percent or more of our voting securities are adverse
to us or have a material interest adverse to us.





Item 1A.   Risk
Factors.





Not
Applicable.





Item 2.       Unregistered
Sales of Equity Securities and Use of Proceeds.





During the reporting period, we issued
140,000 shares of our common stock at $0.15 per share, par value $0.00001 (the
“Shares”), to a total of six (6) investors.  The gross proceeds we received
from this private equity offering was $21,000.





These securities were offered and sold
in reliance on Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”).  In connection with the offer and sale of these
securities, we relied on each of the investors’ written
representations.  Sales were made only to persons who represented that
they were “accredited investors” as that term is defined in Rule 501(a) under
the Securities Act.   Each investor represented that they were
acquiring the securities for investment only and not with a view toward resale
or distribution. We our stock transfer agent affixed appropriate restricted
legends to the stock certificate issued to each investor.  Each investor
was given adequate access to sufficient information about us to make an informed
investment decision.  Neither we nor anyone acting on our behalf
offered or sold these Shares by any form of general solicitation or general
advertising.





The Shares were not sold through an
underwriter and accordingly, there were no underwriting discounts or commissions
involved.  No registration rights were granted to any of the
investors.





Item 3.      Defaults
upon Senior Securities.





None.





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





No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended June 30,
2009.





Item 5.    Other
Information.





None.





Item 6.    
Exhibits.





See the
Exhibit Index following the signatures page of this report, which is
incorporated herein by reference.





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SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.





Amazon
      Goldsands Ltd.Date:
            August
      18, 2009By:/s/ Hector
      Ponte
              Hector
      Ponte
              Title:Chief
      Executive Officer and DirectorDate:
            August
      18, 2009By:
      /s/ Gustavo
      Janeiro
              Gustavo
      Janeiro
              Title:Chief
      Financial Officer











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AMAZON
GOLDSANDS LTD.


(the
“Registrant”)


(Commission
File No. 000-51203)


Exhibit Index


to


Quarterly
Report on Form 10-Q


for
the Quarter Ended June 30, 2009





Exhibit
                No.
              Description
              Incorporated
      Herein by
                Reference
      to
              Filed
                Herewith10.1
              Amendment
      to Mineral Right Option Agreement, dated May 12, 2009.
              Exhibit
      10.1 of Form 10-Q
                filed
      on May 20, 2009.31.1
              Certification of Chief Executive Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
              
              X31.2
              Certification of Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
              
              X32.1
              Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002
              
              X












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