UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
 FORM
        20-F
 (Mark
        One)
 
              **REGISTRATION
                  STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
                  SECURITIES EXCHANGE ACT OF 1934**
                ORþ
              **ANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT OF 1934****For the
                  fiscal year ended**July
                  31,
                  2006
                OR
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT OF 1934****For the
                  transition period from****to**_______________________
              **SHELL
                  COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934****Date of event requiring
                  shell company report**
 Commission
        file number **0-31190**
 **CANPLATS
        RESOURCES CORPORATION**
 (Exact
        name of Registrant as specified in its charter)
   (Translation
        of Registrant’s name into English)
 British
        Columbia, Canada
 (Jurisdiction
        of incorporation or organization)
 Suite
        1180 – 999 West Hastings Street, Vancouver, British Columbia V6C
        2W2
 (Address
        of principal executive offices)
   Securities
        registered or to be registered pursuant to Section 12(b) of
        the Act.
 Title
                  of each classNone
              Name
                  of each exchange on which registeredNot Applicable
 Securities
        registered or to be registered pursuant to Section 12(g) of
        the Act.
  Common
        Stock without par value
 (Title
        of Class)
    Securities
        for which there is a reporting obligation pursuant to Section
        15(d) of the Act.
 None
 (Title
        of Class)
 Indicate
        the number of outstanding shares of each of the issuer's classes
        of capital or common stock as of the close of the period covered by the annual
        report.
 **40,327,806**
 Indicate
        by check mark if the registrant is a well-known seasoned issuer,
        as defined in Rule 405 of the Securities Act.
     
        Yes þ No
 If
        this report is an annual or transition report, indicate by check mark
        if the registrant is not required to file reports pursuant to Section 13
        or
        15(d) of the Securities Exchange Act of 1934.
     
        Yes þ No
 Note
–
Checking
        the box above will not relieve any registrant required to
        file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act
        of
        1934 from their obligations under those Sections.
 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
        registrant was required to file such reports), and (2) has been subject to
        such
        filing requirements for the past 90 days.
 þ Yes        No
 Indicate
          by check mark whether the registrant is a large accelerated
          filer, an accelerated filer, or a non-accelerated filer. See definition
          of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
          Act. (Check one):
 Large
                    accelerated filer    
                Accelerated
                    filer     
                Non-accelerated
                    filer    þ
 Indicate
        by check mark which financial statement item the Registrant has
        elected to follow.
 þ Item
        17         Item 18
 If
        this is an annual report, indicate by check mark whether the
        registrant is a shell company (as defined in Rule 12b-2 of the Exchange
        Act).
     
        Yes þ No
 (APPLICABLE
        ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
        PAST FIVE YEARS)
 Indicate
        by check mark whether the Registrant has filed all documents and
        reports required to be filed by Sections 12, 13 or 15(d) of the Securities
        Exchange Act of 1934 subsequent to the distribution of securities under a
        plan
        confirmed by a court.
     
        Yes        No
  -
        ii -
     **TABLE
        OF
        CONTENTS**
   **Page****ITEM
                1**
              **IDENTITY
                OF DIRECTORS, SENIOR MANAGEMENT
                AND ADVISERS**
              **1**A
              Directors
                and Senior Management
              **1**B
              Advisors
              **1**C
              Auditors
              **1****ITEM
                2**
              **OFFER
                STATISTICS AND EXPECTED
                TIMETABLE**
              **1****ITEM
                3**
              **KEY
                INFORMATION**
              **1**A
              Selected
                Financial Data
              **1**B
              Capitalization
                and Indebtedness
              **3**C
              Reasons
                for the Offer and Use of
                Proceeds
              **3**D
              Risk
                Factors
              **3****ITEM
                4**
              **INFORMATION
                ON THE
                COMPANY**
              **10**A
              History
                and Development of the
                Company
              **10**B
              Business
                Overview
              **10**C
              Organizational
                Structure
              **** 14D
              Property,
                Plant and Equipment
              14**ITEM
                5**
              **OPERATING
                AND FINANCIAL REVIEW AND
                PROSPECTS**
              17A
              Operating
                Results
              17B
              Liquidity
                and Capital Resources
              **19**C
              Research
                and Development, Patents and Licenses,
                etc.
              **20**D
              Trend
                Information
              **20****ITEM
                6**
              **DIRECTORS,
                SENIOR MANAGEMENT AND
                EMPLOYEES**
              **20**A
              Directors
                and Senior Management
              **20**B
              Compensation
              **22**C
              Board
                Practices
              **27**D
              Employees
              **27**E
              Share
                Ownership
              **27****ITEM
                7**
              **MAJOR
                SHAREHOLDERS AND RELATED PARTY
                TRANSACTIONS**
              **28**A
              Major
                Shareholders
              **28**B
              Related
                Party Transactions
              **28**C
              Interests
                of Experts and Counsel
              **28****ITEM
                8**
              **FINANCIAL
                INFORMATION**
              **29**A
              Consolidated
                Statements and Other Financial
                Information
              **29**B
              Significant
                Changes
              **29****ITEM
                9**
              **THE
                OFFER AND
                LISTING**
              **29**A
              Offer
                and Listing Details
              **29**B
              Plan
                of Distribution
              **31**C
              Markets
              **31**D
              Dilution
              **31**E
              Expenses
                of the Issue
              **31****ITEM
                10**
              **ADDITIONAL
                INFORMATION**
              **31**A
              Share
                Capital
              **31**B
              Memorandum
                and Articles of
                Association
              **33**C
              Material
                Contracts
              **34**D
              Exchange
                Controls and Investment Canada
                Act
              **34**E
              Taxation
              **36**F
              Dividends
                and Paying Agents
              **45**G
              Statement
                by Experts
              **45**H
              Documents
                on Display
              **45**I
              Subsidiary
                Information
              **45****ITEM
                11**
              **QUANTITATIVE
                AND QUALITATIVE DISCLOSURES
                ABOUT MARKET RISK**
              **45****ITEM
                12**
              **DESCRIPTION
                OF SECURITIES OTHER THAN
                EQUITY SECURITIES**
              **45****ITEM
                13**
              **DEFAULTS,
                DIVIDEND ARREARAGES AND
                DELINQUENCIES**
              **46****ITEM
                14**
              **MATERIAL
                MODIFICATIONS TO THE RIGHTS OF
                SECURITY HOLDERS AND USE OF PROCEEDS**
              **46****ITEM
                15**
              **CONTROLS
                AND
                PROCEDURES**
              **46****ITEM
                16**
              **RESERVED**
              **46**A
              Audit
                Committee Financial Expert
              **46**B
              Code
                of Ethics
              **46**C
              Principal
                Accountant Fees and
                Services
              **46**D
              Exemptions
                from the Listing Standards for Audit
                Committees
              **47**E
              Purchases
                of Equity Securities by the Issuer and
                Affiliated Purchasers
              **47****ITEM
                17**
              **FINANCIAL
                STATEMENTS**
              **47****ITEM
                18**
              **FINANCIAL
                STATEMENTS**
              **48****ITEM
                19**
              **EXHIBITS**
              **48**A
              Financial
                Statements
              **48**B
              Exhibits
              **48****SIGNATURE
                PAGE**
              ******CERTIFICATIONS**
              ****




**NOTE
      REGARDING FORWARD-LOOKING STATEMENTS**




This
      Annual Report contains forward-looking statements concerning our operations
      and
      planned future acquisitions within the meaning of the safe harbor for such
      statements under the Private Securities Litigation Reform Act of 1995. Any
      statements that involve discussions with respect to predictions, expectations,
      belief, plans, projections, objectives, assumptions or future events or
      performance (often but not always using phrases such as “expects”, or “does not
      expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”,
“estimates” or “intends”, or stating that certain actions, events or results
“may”, could”, “might”, or “will” be taken to occur or be achieved) are not
      statements of historical fact and may be “forward looking statements” and are
      intended to identify forward-looking statements, which include statements
      relating to, among other things, our ability to continue to successfully compete
      in its market. You are cautioned not to place undue reliance on forward looking
      statements. These forward-looking statements are based on the beliefs of our
      management as well as on assumptions made by and information currently available
      to us at the time such statements were made. We undertake no obligation to
      update forward-looking statements should circumstances or estimates or opinions
      change. Forward-looking statements are subject to a variety of risks and
      uncertainties which could cause actual events or results to differ from those
      reflected in the forward looking statements, including, without limitation,







·
              uncertainty
                  of production at our mineral exploration properties;




·
            risks
                related to our ability to finance the continued exploration of our
                mineral
                properties;




·
            risks
                related to no Proven Mineral Reserves or Probable Mineral
                Reserves;




·
            our
                history of losses and expectation of future losses;




·
            risks
                related to factors beyond our
                control;




·
            risks
                and uncertainties associated with new mining
                operations;




·
            risks
                related to our ability to obtain adequate financing for our planned
                development activities;




·
            lack
                of infrastructure at our mineral exploration properties;




·
            risks
                and uncertainties relating to the interpretation of drill results
                and the
                geology, grade and continuity of our mineral deposits;




·
            unpredictable
                risks and hazards related to mining
                operations;




·
            risks
                related to governmental regulations, including environmental regulations;




·
            commodity
                price fluctuations;




·
            our
                ability to attract and retain qualified
                personnel;




·
            uncertainties
                related to title to our mineral properties;




·
            risks
                related to reclamation activities on our properties;




·
            risks
                related to political instability and unexpected regulator
                change;




·
            currency
                fluctuations;




·
            increased
                competition in the mining industry for properties and qualified
                personnel;




·
            risks
                related to some of our directors and officers involvement with other
                natural resource companies;




·
            enforcement
                of U.S. judgments and laws in
                Canada;




·
            our
                ability to attract and retain qualified management;




·
            our
                classification as a passive foreign investment company under the
                Internal
                Revenue Code.




Actual
      results could differ materially from those projected in the forward-looking
      statements as a result of the matters set out or incorporated in this Annual
      Report generally and certain economic and business factors, some of which may
      be
      beyond our control. Some of the important risks and uncertainties that could
      effect forward looking statements as described further in this document under
      the headings “Risk Factors”, “History and Development of the Company”, “Business
      Overview”, “Descriptions of Properties” and “Operating and Financial Review and
      Prospects”.




In
      this Annual Report, “we”, “us”, “our”, “Canplats” and “the Company” refer to
      Canplats Resources Corporation, a company incorporated under the *Business
      Corporations Act* (British
      Columbia).












**Table
          of Contents**




**PART
      I**




**Item
                1**
            **Identity
                of Directors, Senior Management and
                Advisers**




**A.**
            **Directors
                and Senior Management**




This
      Form 20-F is being filed as an annual report under the Securities Exchange
      Act
      of 1934, as amended (the “Exchange Act”), and, as such, there is no requirement
      to provide any information under this item.






**B.**
            **Advisors**




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.






**C.**
            **Auditors**




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.






**Item
                2**
            **Offer
                Statistics and Expected
                Timetable**




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.






**Item
                3**
            **Key
                Information**




**A.**
            **Selected
                Financial Data**




The
      following table summarizes certain of our selected financial data. This
      information should be read in conjunction with the more detailed financial
      statements included in this Annual Report.




**Table
      No. 1**


**Selected
      Financial Data**


**(expressed
      in thousands of Canadian dollars, except per share and number of shares
      data)**




**Year
                ended Jul 31, 2006**
            **Year
                ended Jul 31, 2005**
            **Year
                ended Jul 31, 2004**
            **Year
                ended Jul 31, 2003**
            **Year
                ended Jul 31, 2002**1.Revenues
            Nil
            Nil
            Nil
            Nil
            Nil2.Loss
                for period*
            (335,568)
            (1,493,747)
            (1,270,193)
            (294,424)
            (211,299)3.Loss
                per common share*
            (0.01)
            (0.05)
            (0.06)
            (0.02)
            (0.02)4.Total
                assets
            4,070,670
            2,326,011
            3,457,993
            1,924,475
            1,638,7185.Long
                term obligations and redeemable pre-ferred stock**
            Nil
            Nil
            Nil
            Nil
            Nil6.Capital
                stock
            12,725,289
            11,340,245
            11,267,220
            8,722,470
            8,125,6367.Cash
                dividends per common share
            Nil
            Nil
            Nil
            Nil
            Nil8.Number
                of shares
            40,327,806
            29,442,306
            29,142,306
            16,997,303
            10,217,303*All
                of our operations are continuing.
              **No
                preferred stock has been issued








-
          1
          -
 **Table
          of Contents**




The
      selected financial data is presented in Table 1 above and in the financial
      statements in accordance with generally accepted accounting principles (“GAAP”)
      prevailing in Canada as of the dates shown.




The
      selected financial data under U.S. GAAP for the above periods is indicated
      below
      in Table 2:




**Table
      No. 2**


**Selected
      Financial Data**


**(expressed
      in thousands of Canadian dollars, except per and number of shares
      data)**




**Year
                ended Jul 31, 2006**
            **Year
                ended Jul 31, 2005***
            **Year
                ended Jul 31, 2004**
            **Year
                ended Jul 31, 2003**
            **Year
                ended Jul 31, 2002**1.Revenues
            Nil
            Nil
            Nil
            Nil
            Nil2.Loss
                for period*
            (932,806)
            (1,408,849)
            (1,519,224)
            (290,870)
            (703,084)3.Loss
                per common share*
            (0.03)
            (0.05)
            (0.07)
            (0.02)
            (0.08)4.Total
                assets
            1,676,249
            609,528
            1,734,262
            449,775
            160,4645.Long
                term obligations and redeemable pre-ferred stock**
            Nil
            Nil
            Nil
            Nil
            Nil6.Capital
                stock
            12,725,289
            11,340,245
            11,267,220
            8,722,470
            8,125,6367.Cash
                dividends per common share
            Nil
            Nil
            Nil
            Nil
            Nil8.Number
                of shares
            40,327,806
            29,442,306
            29,142,306
            16,997,303
            10,217,303*     
                  Certain comparative figures have been restated - see note 14 to
                  the
                  financial statements.
                **   
                  All of our operations are continuing.
                *** 
                  No preferred stock has been
                  issued.






Reference
      should be made to note 14 to the financial statements for a description of
      material differences between Canadian and U.S. GAAP.




***U.S./Canadian
        Dollar Exchange Rates***
  In
        this Annual Report, unless otherwise specified, all dollar amounts are expressed
        in Canadian dollars (Cdn$). The Government of Canada permits a floating exchange
        rate to determine the value of the Canadian dollar against the U.S. dollar
        (US$). In this Annual Report all references to “$” and “Cdn$” refer to Canadian
        Dollars and all references to “US$” refer to United States
        Dollars.


-
          2
          -
 **Table
          of Contents**




Table
      No. 3 below sets out the rate of exchange for the Canadian dollar at July 31,
      2006, July 31, 2005, July 31, 2004, July 31, 2003 and July 31 2002, the average
      rates for the period and the range of high and low rates for the period. Table
      No. 4 sets out the high and low rates of exchange for the Canadian dollar for
      each month during the previous six months.




For
      purposes of these tables, the rate of exchange means the noon buying rate in
      New
      York City for cable transfers in foreign currencies as certified for customs
      purposes by the Federal Reserve Bank of New York. The tables set out the number
      of Canadian dollars required under that formula to buy one U.S. dollar. The
      average rate in Table No. 3 means the average of the exchange rates on the
      last
      day of each month during the period.




**Table
      No. 3**


**U.S.
      Dollar/Canadian Dollar Exchange Rates for Five Most Recent Financial
      Years**




**Average**
            **High**
            **Low**
            **Close**Fiscal
                Year Ended July 31, 2006
            1.16
            1.22
            1.10
            1.13Fiscal
                Year Ended July 31, 2005
            1.24
            1.33
            1.18
            1.23Fiscal
                Year Ended July 31, 2004
            1.33
            1.40
            1.27
            1.33Fiscal
                Year Ended July 31, 2003
            1.50
            1.59
            1.33
            1.41Fiscal
                Year Ended July 31, 2002
            1.57
            1.61
            1.51
            1.58




**Table
      No. 4**


**U.S.
      Dollar/Canadian Dollar Exchange Rates for Previous Six
      Months**




**July**
            **August**
            **September**
            **October**
            **November**
            **December**High
            1.14
            1.13
            1.13
            1.14
            1.15
            1.17Low
            1.11
            1.11
            1.11
            1.12
            1.13
            1.14




On
      January 22, 2007, the exchange rate of Canadian dollars into United States
      dollars, based upon the noon buying rate in New York City for cable transfers
      payable in Canadian dollars as certified for customs purposes by the Federal
      Reserve Bank of New York, was US $1.00 equals Cdn $1.1759.




**B.**
            **Capitalization
                and
                Indebtedness**




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.




**C.**
                **Reasons
                    for the Offer and Use of
                    Proceeds**  **This
          Form 20-F is being filed as an annual report under the Exchange Act, and,
          as
          such, there is no requirement to provide any information under this
          item.**


-
          3
          -
 **Table
          of Contents**






**D.**
            **Risk
                Factors**




***Our
      exploration programs may not result in a commercial mining
      operation.***




Mineral
      exploration involves significant risk because few properties that are explored
      contain bodies of ore that would be commercially economic to develop into
      producing mines. Our mineral properties are without a known body of commercial
      ore and our proposed programs are an exploratory search for ore. We cannot
      provide any assurance that our current exploration programs will result in
      any
      commercial mining operation. If the exploration programs do not result in the
      discovery of commercial ore, we will be required to acquire additional
      properties and write-off all of our investments in our existing
      properties.




***We
      may not have sufficient funds to complete further exploration
      programs.***




We
      have limited financial resources (working capital of approximately $1,590,448
      million at July 31, 2006), do not generate operating revenue, and must finance
      our exploration activity by other means, including financing through joint
      ventures, debt financing or equity financing. We cannot provide any assurance
      that additional funding will be available for further exploration of our
      projects or to fulfil our anticipated obligations under our existing property
      agreements. If we fail to obtain additional financing, we will have to delay
      or
      cancel further exploration of our properties, and we could lose all of our
      interest in our properties.




***We
      do not have Proven Mineral Reserves or Probable Mineral
      Reserves.***




We
      have not established the presence of any Proven Mineral Reserves or Probable
      Mineral Reserves (as such terms are defined in National Instrument 43-101 of
      the
      Canadian Securities Administrators) at any of our mineral properties. We cannot
      provide any assurance that future feasibility studies will establish Proven
      Mineral Reserves or Probable Mineral Reserves at our properties. The failure
      to
      establish Proven Mineral Reserves or Probable Mineral Reserves could restrict
      our ability to successfully implement our strategies for long-term
      growth.




***We
      have a history of losses and expect to incur losses for the foreseeable
      future.***




We
      have incurred losses during each of the following periods and expect to incur
      losses for the foreseeable future:




·
            $335,568
                for the year ended July 31, 2006;




·
            $1,493,747
                for the year ended July 31, 2005;




·
            $1,270,193
                for the year ended July 31, 2004;




·
            $294,424
                for the year ended July 31, 2003;
                and




·
            $211,299
                for the year ended July 31, 2002.




As
      of July 31, 2006, we had an accumulated deficit of $10,042,748. We expect to
      continue to incur losses unless and until such time as one or more of our
      properties enter into commercial production and generate sufficient revenues
      to
      fund our continuing operations. If our exploration programs successfully locate
      an economic ore body, we will be subject to additional risks associated with
      mining including those set out in ** this
      Item 3.D - “Risk Factors” under the heading “ *We
      have no revenue from operations and no *ongoing
      mining operations of any kind.”**


-
          4
          -
 **Table
          of Contents**




***Factors
      beyond our control may determine whether any mineral deposits we discover are
      sufficiently economic to be developed into a mine.***




The
      determination of whether our mineral deposits are economic is affected by
      numerous factors beyond our control. These factors include:




·
            the
                metallurgy of the mineralization forming the mineral
                deposit;




·
            market
                fluctuations for precious metals;




·
            the
                proximity and capacity of natural resource markets and processing
                equipment; and




·
            government
                regulations governing prices, taxes, royalties, land tenure, land
                use,
                importing and exporting of minerals and environmental protection.




***We
      have no revenue from operations and no ongoing mining operations of any
      kind.***




We
      are a mineral exploration company and have no revenues from operations and
      no
      ongoing mining operations of any kind. Our properties are in the exploration
      stage, and we have not defined or delineated any proven or probable reserves
      on
      any of our properties. If our exploration programs successfully locate an
      economic ore body, we will be subject to additional risks associated with
      mining:




·
            We
                will require additional funds to place the ore body into commercial
                production. Substantial expenditures will be required
                to:




o
            establish
                ore reserves through drilling;




o
            develop
                metallurgical processes to extract the metals from the ore;
                and




o
            construct
                the mining and processing facilities at any site chosen for
                mining.




The
      sources of external financing that we may use for these purposes include public
      or private offerings of debt, convertible notes and equity. In addition, we
      may
      enter into one or more strategic alliances and may utilize one or a combination
      of all these alternatives. We cannot provide any assurance that the financing
      alternative chosen by us will be available on acceptable terms, or at all.
      If
      additional financing is not available, we may have to postpone the development
      of, or sell, the property.




·
            The
                majority of our property interests are not located in developed areas
                and
                as a result may not be served by
                appropriate




o
            road
                access;




o
            water
                and power supply; and




o
            other
                support infrastructure.




These
      items are often needed for development of a commercial mine. If we cannot
      procure or develop roads, water, power and other infrastructure at a reasonable
      cost, it may not be economic to develop properties, where our exploration has
      otherwise been successful, into a commercial mining operation.




·
            In
                making determinations about whether to proceed to the next stage
                of
                development, we must rely upon estimated calculations as to the mineral
                reserves and grades of mineralization on our properties.
                Until ore is actually mined and processed, mineral reserves and grades
                of
                mineralization must be considered as estimates only. These estimates
                are
                imprecise and depend upon geological interpretation and statistical
                inferences drawn from drilling and sampling which may prove to be
                unreliable. We cannot provide any assurance
                that:




o
              these
                  estimates will be accurate;
  o
              resource
                  or other mineralization figures will be accurate;
                  or


-
          5
          -
 **Table
          of Contents**




o
            this
                mineralization can be mined or processed
                profitably.




Any
      material changes in mineral reserve estimates and grades of mineralization
      will
      affect the economic viability of the placing of a property into production
      and a
      property’s return on capital.




·
            Mining
                operations often encounter unpredictable risks and hazards that add
                expense or cause delay. These
                include:




o
            unusual
                or unexpected geological
                formations;




o
            metallurgical
                and other processing problems;




o
            metal
                losses;




o
            environmental
                hazards;




o
            power
                outages;




o
            labour
                disruptions;




o
            industrial
                accidents;




o
            periodic
                interruptions due to inclement or hazardous weather
                conditions;




o
            flooding,
                explosions, fire, rockbursts, cave-ins, landslides,
                and;




o
            inability
                to obtain suitable or adequate machinery, equipment or
                labour.




·
            We
                may become subject to liabilities in connection with:




o
            pollution;




o
            cave-ins;
                or




o
            hazards
                against which we cannot insure against or which we may elect not
                to
                insure.




The
      payment of these liabilities could require the use of financial resources that
      would otherwise be spent on mining operations.




·
            Mining
                operations and exploration activities are subject to national and
                local
                laws and regulations governing:




o
            prospecting,
                development, mining and production;




o
            exports
                and taxes;




o
            labour
                standards, occupational health and mine
                safety;




o
            waste
                disposal, toxic substances, land use and environmental
                protection.




In
                order to comply, we may be required to make capital and operating
                expenditures or to close an operation until a particular problem
                is
                remedied. In addition, if our activities violate any such laws and
                regulations, we may be required to compensate those suffering loss
                or
                damage, and may be fined if convicted of an offence under such
                legislation.


·
              Our
                  profitability and long-term viability will depend, in large part,
                  on the
                  market price of gold and other metals. The market prices for these
                  metals
                  are volatile and are affected by numerous factors beyond our control,
                  including:
  o
              global
                  or regional consumption patterns;


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          6
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 **Table
          of Contents**


o
            supply
                of, and demand for, gold and other
                metals;




o
            speculative
                activities;




o
            expectations
                for inflation; and




o
            political
                and economic conditions.




We
      cannot predict the effect of these factors on metals prices.




·
            In
                order to bring our mineral properties into production we will experience
                significant growth in our operations. We expect this growth to create
                new
                positions and responsibilities for management personnel and increase
                demands on our operating and financial systems. There can be no assurance
                that we will successfully meet these demands and effectively attract
                and
                retain additional qualified personnel to manage our anticipated growth.
                The failure to attract such qualified personnel to manage growth
                effectively could have a material adverse effect on our business,
                financial condition and results of
                operations.




***We
      are subject to significant governmental regulations.***




Our
      exploration activities are subject to extensive federal, state, provincial,
      territorial and local laws and regulations governing various matters, including:




·
            environmental
                protection;




·
            management
                and use of toxic substances and
                explosives;




·
            management
                of natural resources;




·
            exploration
                of mineral properties;




·
            exports;




·
            price
                controls;




·
            taxation;




·
            labor
                standards and occupational health and safety, including mine safety;
                and




·
            historic
                and cultural preservation.




Failure
      to comply with applicable laws and regulations may result in civil or criminal
      fines or penalties or enforcement actions, including orders issued by regulatory
      or judicial authorities enjoining or curtailing operations or requiring
      corrective measures, installation of additional equipment or remedial actions,
      any of which could result in significant expenditures. We may also be required
      to compensate private parties suffering loss or damage by reason of a breach
      of
      such laws, regulations or permitting requirements. It is also
      possible that future laws and regulations, or more stringent enforcement of
      current laws and regulations by governmental authorities, could cause additional
      expense, capital expenditures, restrictions on or suspensions of our activities
      and delays in the exploration of our properties.




***Our
        properties may be subject to uncertain title.***
  We
        own, lease or have under option, unpatented and patented mining claims, mineral
        claims or concessions which constitute our property holdings. The ownership
        and
        validity, or title, of unpatented mining claims and concessions are often
        uncertain and may be contested. We have not conducted surveys of all of the
        claims in which we hold direct or indirect interests. A successful claim
        contesting our title to a property will cause us to lose our rights to explore
        and, if warranted, develop that property. This could result in our not being
        compensated for our prior expenditures relating to the property.


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          7
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***Land
      reclamation requirements for our exploration properties may be
      burdensome.***




Although
      variable depending on location and the governing authority, land reclamation
      requirements are generally imposed on mineral exploration companies (as well
      as
      companies with mining operations) in order to minimize long term effects of
      land
      disturbance. Reclamation may include requirements to:




·
            control
                dispersion of potentially deleterious effluents;
                and




·
            reasonably
                re-establish pre-disturbance land forms and
                vegetation.




In
      order to carry out reclamation obligations imposed on us in connection with
      our
      mineral exploration, we must allocate financial resources that might otherwise
      be spent on further exploration programs.




***Political
      or economic instability or unexpected regulatory change in the countries where
      our properties are located could adversely affect our
      business.***




Certain
      of our properties are located in countries, provinces and states more likely
      to
      be subject to political and economic instability, or unexpected legislative
      change, than is usually the case in certain other countries, provinces and
      states. Our mineral exploration activities could be adversely affected
      by:




·
            political
                instability and violence;




·
            war
                and civil disturbance;




·
            expropriation
                or nationalization;




·
            changing
                fiscal regimes;




·
            fluctuations
                in currency exchange rates;




·
            high
                rates of inflation;




·
            underdeveloped
                industrial and economic infrastructure;
                and




·
            unenforceability
                of contractual rights;




any
      of which may adversely affect our business in that country.




***We
      may be adversely affected by fluctuations in foreign exchange
      rates.***




We
      maintain our bank accounts mainly in Canadian dollars. Any appreciation in
      the
      currency of Mexico or other countries where we carryout exploration activities
      against the Canadian dollar will increase our costs of carrying out operations
      in such countries. In addition, any decrease in the U.S. dollar against the
      Canadian
      dollar will result in a loss on our books to the extent we hold funds in U.S.
      dollars.




***We
        face industry competition in the acquisition of exploration properties and
        the
        recruitment and retention of qualified personnel.***
  We
        compete with other exploration companies, many of which have greater financial
        resources than us or are further in their development, for the acquisition
        of
        mineral claims, leases and other mineral interests as well as for the
        recruitment and retention of qualified employees and other personnel.
        Competition for exploration resources at all levels is currently very intense,
        particularly affecting the availability of manpower, drill rigs and supplies.
        If
        we require and are unsuccessful in acquiring additional mineral properties
        or
        personnel, we will not be able to grow at the rate we desire or at
        all.


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          8
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          of Contents**




***Some
      of our directors and officers have conflicts of interest as a result of their
      involvement with other natural resource companies.***




Some
      our directors and officers are directors or officers of other natural resource
      or mining-related companies such as, at present, Mr. Quartermain who serves
      as a
      director and officer of Silver Standard Resources Inc. and Radiant Resources
      Inc. and as a director of Vista Gold Corporation, Cogent Integrated Healthcare
      Solutions Corp. and Minco Silver Corporation. These associations may give rise
      to conflicts of interest from time to time. As a result of these conflicts
      of
      interest, we may miss the opportunity to participate in certain transactions,
      which may have a material, adverse effect on our financial
      position.




***Enforcement
      of judgments or bringing actions outside the United States against us and our
      directors and officers may be difficult.***




We
      are organized under the law of and headquartered in British Columbia, Canada,
      and none of our directors and officers are citizens or residents of the United
      States. In addition, a substantial part of our assets are located outside the
      United States and Canada. As a result, it may be difficult or impossible for
      an
      investor to (a) enforce in courts outside the United States judgments against
      us
      and our directors and officers obtained in United States’ courts based upon the
      civil liability provisions of United States’ federal securities laws or (b)
      bring in courts outside the United States an original action against us and
      our
      directors and officers to enforce liabilities based upon such United States’
securities laws.




***We
      may experience difficulty attracting and retaining qualified management to
      grow
      our business, which could have a material adverse effect on our business and
      financial condition.***




We
      are dependent on the services of key executives including our President and
      other highly skilled and experienced executives and personnel focused on
      advancing our corporate objectives as well as the identification of new
      opportunities for growth and funding. Due to our relatively small size, the
      loss
      of these persons or our inability to attract and retain additional highly
      skilled employees required for our activities may have a material adverse effect
      on our business and financial condition.




***Under
      U.S. federal tax rules, we may be classified as a passive foreign investment
      company (a “PFIC”), which may result in special and generally unfavorable U.S.
      federal tax consequences to our U.S. shareholders.***




As
      a non-U.S. corporation, we may be a PFIC depending on the percentage of our
      gross income which is “passive”, within the meaning of the U.S. Internal Revenue
      Code of 1986, as amended, or the percentage of our assets that produce or are
      held to produce passive income. We may have been a PFIC in our 2006 taxable
      year, and we may be a PFIC in subsequent taxable years. If we are a PFIC for
      any
      taxable year during
      a U.S. shareholder’s holding period in our common stock, such U.S. shareholder
      may be subject to increased U.S. federal income tax liability on the sale of
      common shares or on the receipt of dividends. See Item 10.E - “Taxation”. The
      PFIC rules are complex and may be unfamiliar to U.S. shareholders. Accordingly,
      U.S. shareholders are urged to consult their own tax advisors concerning the
      application of the PFIC rules to their investment in our common
      shares.


-
          9
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 **Table
          of Contents**




**Item
                4**
            **Information
                on the
                Company**




**A.**
            **History
                and Development of the
                Company**




***General
      Background***




We
      were incorporated under the laws of the Province of British Columbia, Canada
      on
      February 15, 1967 under the name Colby Mines Ltd. (N.P.L.). On January 11,
      1977,
      we changed our name to Colby Mines Ltd. and then to Colby Resources Corp. on
      February 11, 1980. On October 14, 1999, we changed our name to International
      Colby Resources Corporation and consolidated our shares on a five for one basis.
      On March 15, 2000, we changed our name to “Canplats Resources Corporation”. On
      December 15, 2005, our shareholders adopted new articles as required by the
      then
      new British Columbia *Business
      Corporations Act* and
      authorized an increase in our authorized capital from 100,000,000 common shares
      without par value to an unlimited number of common shares without par
      value.




Our
      head office and registered and records office is located at: Suite 1180 - 999
      West Hastings Street, Vancouver, British Columbia, Canada V6C 2W2. The contact
      person is R.E. Gordon Davis, President. The telephone number is (604) 689-3846;
      the facsimile number is (604) 689-3847. We do not have a registered agent in
      the
      United States.




In
      October 2005, we returned the Santa Lucia gold prospect to the vendors of the
      prospect. The Santa Lucia gold prospect is located in the state of Baja
      California Norte, Mexico just south of the U.S. - Mexico border approximately
      70
      miles east of Tijuana. See Item 4.B - “Business Overview”.




In
      December 2005, we announced the acquisition of the Mecatona Gold Prospect,
      located in the state of Chihuahua, Mexico. The Mecatona Gold Prospect is subject
      to the Silver Standard back-in right. See Item 4.B - “Business
      Overview”.




In
      May 2006, we announced the acquisition by staking of the Maijoma Prospect,
      located in the state of Chihuahua, Mexico. See Item 4.B - “Business
      Overview”.




The
      information contained in this Annual Report is current as at July 31, 2006,
      other than where a different date is specified.




**B.**
            **Business
                Overview**




All
      disclosure about our exploration properties in this Annual Report conforms
      to
      the standards of United States Securities & Exchange Commission Industry
      Guide 7, *Description
      of Property by Issuers Engaged or to be Engaged in Significant Mining
      Operations* .




Our
      primary business focus is the exploration for gold in Mexico. We are an
      exploration stage company and none of our properties are currently beyond the
      advanced exploration stage. There is no assurance that a commercially viable
      mineral deposit exists on any of our properties and further exploration work
      may
      be required before a final evaluation as to the economic and legal feasibility
      is determined. For further information, see Item 3.D - “Risk
      Factors”.




We
        do not currently have a principal mineral property. We have five properties
        that
        are located in Mexico, on which we intend to focus our exploration efforts
        in
        2007. These properties are the Rodeo Gold Prospect, Yerbabuena Gold Prospect,
        El
        Rincon Gold Prospect, Mecatona Gold Prospect and Maijoma Prospect. We have
        also
        recently staked other properties in Mexico in the vicinity of the Maijoma
        Prospect. In addition, we have a number of property holdings prospective
        for
        platinum group metals in the Nipigon Region in Ontario, Canada that we have
        placed on care and maintenance and are not considered principal or secondary
        properties.


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          10
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 **Table
          of Contents**




***Rodeo
      Gold Prospect***




In
      February 2003, we acquired by staking a 100% interest in the Rodeo gold prospect
      located 150 kilometers north of Durango, Mexico, subject to the payment of
      a
      finder’s fee to La Cuesta International, Inc. (“LCI”). Under an agreement dated
      February 20, 2003, we are required to pay LCI a finder’s fee in respect of our
      acquisition of the Rodeo prospect of:




·
            US
                $10,000 on signing the agreement
                (paid);




·
            every
                six months commencing June 11, 2003, the greater of US $5,000 and
                2% of
                direct exploration expenditures made for the benefit of the
                property;




·
            on
                commencement of commercial production on the property, a 0.25% net
                smelter
                returns royalty (net smelter returns (“NSR”) means the amount actually
                paid to the mine or mill owner from the sale of ore, minerals and
                other
                materials or concentrates mined and removed from mineral properties.
                This
                type of royalty provides cash flow that is free of any operating
                or
                capital costs and environmental
                liabilities.);




provided
      that the maximum amount payable to LCI in respect of the finder’s fee for the
      Rodeo prospect is US $500,000.




In
      October 2003, we granted to Silver Standard Resources Inc. (“Silver Standard”) a
      right of first offer on all properties referred to us by Silver Standard. Under
      the terms of the right of first offer, if we intend to dispose of an interest
      in
      any referred property, we must give Silver Standard the first opportunity to
      acquire the interest. Our Rodeo property is subject to the right of first
      offer.




We
      currently hold a 100% interest in the Rodeo prospect, subject to making the
      above described payments to LCI and the right of first offer granted to Silver
      Standard.




***Yerbabuena
      Gold Prospect***




Under
      an agreement dated July 11, 2003, we acquired from LCI  a
      lease with option to purchase a 100% interest in the Yerbabuena gold prospect
      located approximately 150 kilometres north-northwest of Durango, Mexico. In
      order to maintain the lease in good standing, we are required to pay
      LCI:




·
            US
                $7,500 on signing the agreement
                (paid);




·
            US
                $5,000 on or before September 1, 2003 (paid);




·
            US
                $7,500 on or before March 1, 2004
                (paid);




·
            US
                $7,500 on or before September 1, 2004
                (paid);




·
              US
                  $10,000 on or before March 1, 2005
                  (paid);
  ·
              US
                  $10,000 on or before September 1, 2005
                  (paid);
  ·
              US
                  $15,000 every six months thereafter commencing March 1,
                  2006;
  ·
              on
                  commencement of commercial production on the property, the greater
                  of US
                  $25,000 per quarter and a 2% NSR;
  We
        can purchase the property from LCI at anytime on payment of US $2,000,000,
        less
        all lease payments described above.


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          11
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 **Table
          of Contents**




Our
      Yerbabuena prospect is subject to the right of first offer granted to Silver
      Standard.




Under
      the terms of the lease with option to purchase, we have the exclusive right
      to
      explore and mine the Yerbabuena prospect, subject to making the above described
      payments to LCI and the right of first offer granted to Silver
      Standard.




***Santa
      Lucia Gold Prospect***




In
      October 2003, we acquired by staking a 100% interest in the Santa Lucia gold
      prospect located in Baja California Norte, Mexico, subject to the payment of
      a
      finder’s fee to LCI. Under an agreement dated October 3, 2003, we are required
      to pay LCI a finder’s fee in respect of our acquisition of the Santa Lucia
      prospect of:




·
            US
                $15,000 on signing the agreement
                (paid);




·
            US
                $5,000 on or before December 12, 2003(paid);




·
            every
                six months commencing June 12, 2004, the greater of US $5,000 and
                2% of
                direct exploration expenditures made for the benefit of the
                property;




·
            on
                commencement of commercial production on the property, the greater
                of US
                $10,000 per year and a 0.25% NSR;




provided
      that the maximum amount payable to LCI in respect of the finder’s fee for the
      Santa Lucia prospect is US $500,000.




In
      October 2005, we returned the Santa Lucia gold prospect to LCI.




We
      no longer hold an interest in the Santa Lucia prospect.




***El
      Rincon Gold Prospect***




In
      May 2004, we acquired by staking a 100% interest in the El Rincon gold prospect
      located in Durango State, Mexico, subject to the payment of a finder’s fee to
      LCI and the back-in right to Silver Standard. Under an agreement dated August
      24, 2004, we are required to pay LCI a finder’s fee in respect of our
      acquisition of the El Rincon prospect of:




·
            US
                $5,000 on signing the agreement
                (paid);




·
            every
                six months commencing May 3, 2004, the greater of US $5,000 and 2%
                of
                direct exploration expenditures made for the benefit of the
                property;




·
              on
                  commencement of commercial production on the property, a 0.25%
                  NSR;
  provided
        that the maximum amount payable to LCI in respect of the finder’s fee for the El
        Rincon prospect is US $2,000,000.
  Effective
        March 24, 2004, we granted Silver Standard a one-time right to acquire a
        51%
        interest in any property we acquire that was referred to us by Silver Standard,
        which is known as the “back-in right”. This one-time right to acquire replaces
        the right of first offer, granted in 2003, for properties acquired after
        March
        24, 2004. In order to exercise the back-in right in respect of any property,
        Silver Standard must (a) exercise the back-in right prior to, or on, our
        incurring US $1.5 million in exploration expenditures on the property and
        (b)
        incur exploration expenditures equal to twice the acquisition and exploration
        expenditures we have incurred on the property at the time of exercise. The
        El
        Rincon prospect is subject to the back-in right granted to Silver
        Standard.


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          12
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 **Table
          of Contents**




We
      currently hold a 100% interest in the El Rincon gold prospect, subject to making
      the above described payments to LCI and the back-in right granted to Silver
      Standard.




***Mecatona
      Gold Prospect***




In
      December 2005, we acquired the Mecatona Gold Prospect consisting
      of:




·
            an
                option to acquire 12 claims comprising 65.7301 hectares with the
                following
                payments:




o
            US
                $5,000 on signing the agreement
                (paid);




o
            US
                $10,000 on the first anniversary of signing the
                agreement;




o
            US
                $20,000 on the second anniversary of signing the
                agreement;




o
            US
                $215,000 on the third anniversary of signing the agreement;
                and




o
            a
                1% NSR capped at US $250,000;




·
            an
                option to acquire one claim comprising 29.5896 hectares with the
                following
                payments:




o
            US
                $10,000 on signing the agreement
                (paid);




o
            US
                $20,000 on the first anniversary of signing the
                agreement;




o
            US
                $30,000 on the second anniversary of signing the
                agreement;




o
            US
                $50,000 on the third anniversary of signing the
                agreement;




o
            US
                $90,000 on the fourth anniversary of signing the agreement;
                and




o
            US
                $800,000 on the fifth anniversary of signing the agreement;
                and




·
            the
                acquisition of two claim blocks covering approximately 4,000 hectares
                for
                staking costs.




We
        are required to pay LCI a finder’s fee in respect of our acquisition of the
        Mecatona prospect of:
  ·
              US
                  $5,000 on signing the agreement
                  (paid);
  ·
              every
                  six months the greater of US $5,000 and 2% of direct exploration
                  expenditures made for the benefit of the
                  property;
  ·
              on
                  commencement of commercial production on the property, a 0.25%
                  NSR;
  provided
        that the maximum amount payable to LCI in respect of the finder’s fee for the
        Mecatona prospect is US $2,000,000.


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          13
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          of Contents**




The
      Mecatona prospect is subject to the back-in right granted to Silver Standard
      (See Item 4.B - “El Rincon Gold Prospect”).




We
      currently hold a 100% interest in the Mecatona Gold Prospect, subject to making
      the above described option payments, payments to LCI and the back-in right
      granted to Silver Standard.




***Maijoma
      Prospect***




In
      May 2006, we acquired by staking a 100% interest in the Maijoma Prospect located
      in Durango State, Mexico, subject to the payment of a finder’s fee to LCI. Under
      an agreement dated January 1, 2006, we are required to pay LCI a finder’s fee in
      respect of our acquisition of the Maijoma Prospect of:




·
            US
                $5,000 on signing the agreement
                (paid);




·
            every
                six months commencing October 28 2006, the greater of US $5,000 and
                2% of
                direct exploration expenditures made for the benefit of the
                property;




·
            on
                commencement of commercial production on the property, a 0.25%
                NSR;




provided
      that the maximum amount payable to LCI in respect of the finder’s fee for the
      Maijoma Prospect is US $2,000,000.




We
      currently hold a 100% interest in the Maijoma Prospect, subject to making the
      above described payments to LCI.




***Other
      Properties***




We
      have also recently staked other properties in Mexico in the vicinity of the
      Maijoma Prospect. In addition, we have several other property holdings in
      Ontario, Canada, including the Geikie Property (described in our Annual Report
      on Form 20-F for the year ended July 31, 2002, file no. 0-31190 **** filed
      on December 31, 2002) which are not considered our primary or secondary
      properties. These property interests are being held for possible future
      exploration, sale, or joint venture. Interests in all of our properties are
      currently held through claims, leases and options and through working interests.
      We review such holdings on a regular basis to determine if they should be
      retained.




C.Organizational
        Structure
  We
        have one subsidiary: Canplats de Mexico S.A. de C.V., which was incorporated
        under the laws of Mexico on January 5, 2004. We hold a 100% beneficial interest
        in Canplats de Mexico S.A. de C.V.
  **D.**
              **Property, Plant and
                  Equipment**
  **Mexican
        Gold Prospects**
  ***Rodeo
        Gold Prospect***
  The
        Rodeo gold prospect is located approximately 150 kilometers north of Durango,
        Mexico and is comprised of two mineral claims covering an area of 13,820-hectare
        (53.4 square miles). The property is accessed by paved highway.


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          14
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          of Contents**




The
      Rodeo property is located along a major northwest-trending fault system, which
      places volcanic rocks against limestones and shales.




The
      Rodeo prospect was explored in the 1990s by Monarch Resources de Mexico, S.A.
      de
      C.V., whose objective was to locate near-surface, bulk tonnage gold
      mineralization. Monarch completed extensive mapping, selective and grid rock
      chip sampling, and reverse circulation drilling. Sampling demonstrated highly
      anomalous disseminated and vein-controlled values in gold, silver, arsenic,
      antimony and mercury. Strong geochemical anomalies were noted in multiple target
      areas over significant lengths and widths.




In
      January and February 2004, we carried out a Phase 1 drill program at Rodeo
      of
      reverse circulation drilling (a rotary percussion drill in which the drilling
      mud and cuttings return to the surface through the drill pipe). Results of
      the
      program ranged from 0.71 grams per tonne of gold over 10 metres (0.02 ounces
      per
      ton of gold over 32.8 feet) to 5.94 grams per tonne of gold over 27 metres
      (0.17
      ounces of gold per ton over 88.6). In September 2004, we completed a Phase
      2
      drill program at Rodeo, with results ranging from holes with no significant
      values of gold to 2.04 grams of gold per tonne over 29 metres (0.06 ounces
      of
      gold per ton over 95.1 feet). In the two programs, a total of 2,377 meters
      in 21
      holes were drilled.




***Yerbabuena
      Gold Prospect***




The
      Yerbabuena gold prospect is located approximately 150 kilometers north-northwest
      of Durango, Mexico and is comprised of three mineral claims totaling 7,610
      hectares (29.4 square miles). The property is accessed by gravel
      road.




The
      Yerbabuena prospect is located along a major northwest-trending fault system,
      which places volcanic rocks against limestones and shales. The property covers
      four distinct areas of mineralization.




In
      May 2005, we completed a Phase 1 drill program at Yerbabuena consisting of
      12
      reverse circulation drill holes totalling 1,882 meters and three diamond drill
      holes (a type of rotary drill in which the cutting is done by abrasion using
      diamonds embedded in a matrix with the drill cutting a core of rock which is
      recovered in long cylindrical sections) totalling 608 meters. Results of the
      program ranged from no significant values in certain drill holes to 0.57 grams
      per tonne of gold over 31.5 metres (0.02 ounces of gold per ton over 103
      feet).




***Santa
          Lucia Gold Prospect***
 The
        Santa Lucia project is located in the state of Baja California Norte just
        south
        of the U.S. - Mexico border approximately 70 miles east of Tijuana. The property
        is comprised of one mineral claim covering an area of 4,550-hectare (17.6
        square
        miles). The property is accessed by paved highway.
  Santa
        Lucia is prospective for bulk mineable, epithermal gold mineralization located
        in feeder systems defined by fault structures. At Santa Lucia, an east-west
        trending ridge and low hills are composed of a basement complex of plutonic
        rock
        intruding structurally contorted marble, gneiss and schist overlain by the
        Pliocene Canebrake Conglomerate and Imperial Formation.
  A
        drill program was completed on the Santa Lucia prospect in July, 2004. No
        significant results were encountered. Following completion of the drill program,
        additional geological interpretation of the prospect was carried out, which
        concluded that no further work be carried out on the prospect. In October
        2005,
        we returned the Santa Lucia gold prospect to LCI. We no longer hold an interest
        in the Santa Lucia prospect.


-
          15
          -
 **Table
          of Contents**


***El
      Rincon Gold Prospect***




The
      El Rincon Gold Prospect is located approximately 100 kilometers north of
      Durango, Mexico and is comprised of one mineral claim totaling 13,300 hectares
      (51.4 square miles). The property is accessed by gravel road.




The
      El Rincon prospect is located along a northeast-trending structural corridor
      which hosts two nearby gold deposits. The property covers geophysical anomalies,
      for which mapping, sampling and detailed geophysics are recommended prior to
      drilling.




***Mecatona
      Gold Prospect***




The
      Mecatona Gold Prospect is located approximately 12 miles south of Parral, Mexico
      and is comprised of four claim blocks covering approximately 15.4 square miles
      (4,000 hectares). The property is accessed by gravel road.




The
      properties cover the principal veins of the Mecatona gold-silver district where
      historic mining activities focused on gold-silver production from epithermal
      veins measuring from one to five meters in thickness. In late 2005, a mapping
      and sampling program was completed to identify drill sites. In March 2006,
      a
      drill program comprised of 10 holes totalling 1,010 meters was completed that
      tested the Maria and Plateada veins on the Mecatona Gold Prospect. The best
      results from the drill program came from the Maria Vein where drilling
      intersected up to 2.4 grams of gold-equivalent per tonne over 42 meters (0.07
      ounces of gold-equivalent per ton over 137.8 feet) from surface in hole MC-08.
      Drilling tested approximately 600 meters of strike length of the vein, which
      has
      been mapped over 2,000 meters. Additional surface work is planned to determine
      whether a follow up drill program is warranted.




***Maijoma
      Prospect***




The
      Maijoma Prospect is located approximately 70 kilometers southeast of Ojinaga,
      Mexico and is comprised of one claim block covering approximately 48 square
      miles (12,500 hectares). The property is accessed by gravel road from paved
      Highway 67.




The
      prospect covers a large (+25 kilometers2) area of hydrothermal alteration within
      the lower volcanic sequence. This alteration is associated with iron-stained
      and
      locally silicified volcanic breccias, rhyolite-to-latite dikes and domes, and
      highly calcified intrusive rocks. Several small windows through the volcanic
      sequence have exposed intensely altered limestone and skarn with associated
      jasperoids, hematite, jarosite, sulphide casts and local gossans up to two
      meters thick. Exploration targets for the property include massive sulphide
      veins and replacement zones (mantos and chimneys) localized along structures
      peripheral to a variably skarned intrusive; and precious and base metals
      disseminated in the host sedimentary and volcanic rocks around the intrusive.
      Geologic mapping and systematic sampling of the property is currently underway,
      with an initial trenching program and geophysical survey planned to
      follow.




***Office
      Space***




Under
      a Management Services Agreement with Silver Standard, we retained Silver
      Standard to provide us with general corporate management, administrative and
      technical services. For personnel, hourly rates charged are based on direct
      salary costs and benefits, as well as a factor for overhead costs, office
      equipment, usage, management services personnel, office space and furnishings.
      See Item 6D. - “Employees”.


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          16
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          of Contents**




**Item
                5**
            **Operating
                and Financial Review and
                Prospects**




**A.**
            **Operating
                Results**




Management’s
      discussion and analysis is presented in relation to our financial statements,
      which statements are prepared in accordance with Canadian GAAP. Reference should
      be made to note 14 to our financial statements for a discussion of material
      differences from the amount presented to U.S. GAAP.




***Year
      ended July 31, 2006 compared to year ended July 31,
      2005.***




During
      the fiscal year ended July 31, 2006, we incurred a loss of $335,568 ($0.01
      per
      share) compared to a loss of $1,493,747 ($0.05 per share) for fiscal year ended
      July 31, 2005.




Total
      expenses for the year decreased to $348,304 from the $402,431 recorded in the
      prior year. Without stock-based compensation expense, total expenses in the
      prior year were $291,431, resulting in an increase of $56,873 in 2006 compared
      to 2005. Exploration expense increased to $134,878 from $14,780 in the prior
      year with the majority of the increase relating to Mexican generative programs
      that commenced in January, 2006. As a result of this exploration, the Maijoma
      and Agua de la Loca properties in the state of Chihuahua were staked. The
      arrangement with G2 Consultants Corporation to provide financial relations
      services continued throughout fiscal 2006, but with a reduced rate due to the
      reduced activity. Investor relations costs for fiscal 2006 were $87,930 compared
      to $156,928 recorded in the prior year and of the amount expended in fiscal
      2006, $40,000 (2005 - $82,000) was paid to G2 Consultants. Also under investor
      relations, costs for attendance at trade shows and related travel were $23,968
      less than the prior year. Listing and filing fees of $13,672 (2005 - $7,752)
      were up in the current year due to more financing activity. No stock options
      were granted in fiscal 2006. Stock-based compensation expense of $111,000 was
      recognized in the prior year as
      options granted in earlier years vested.




Interest
      income decreased to $18,319 in fiscal 2006, compared to $21,239 in fiscal 2005.
      This decrease relates to lower cash balances available for investment partially
      offset by higher interest rates.




There
      was a recovery of $6,104 relating to the Santa Lucia property in Mexico that
      was
      written off in the prior year. This relates to an over-accrual of property
      expenses. During the prior year, a total of $1,133,280 in mineral properties
      in
      Ontario and Mexico were abandoned and written-off.




***Year
        ended July 31, 2005 compared to year ended July 31,
        2004.***
  During
        the fiscal year-ended July 31, 2005, we incurred a loss of $1,493,747 ($0.05
        per
        share) compared to a loss of $1,270,193 ($0.06 per share) for fiscal year-ended
        July 31, 2004.
  Total
        expenses for the year, including non-cash stock-based compensation expenses,
        decreased to $402,431 from the $557,428 recorded in the prior year. Without
        stock-based compensation expense, total cash expenses were $291,431, which
        is
        only slightly higher than the $283,528 recorded in the prior year. Exploration
        expense increased to $14,780 from $5,347 in the prior year with all of the
        increase relating to Mexican generative programs. The arrangement with G2
        Consultants Corporation to provide financial relations services continued
        throughout fiscal 2005. Investor relations costs for fiscal 2005 stayed
        relatively the same at $156,928 from the $157,938 recorded in the prior year
        and
        of the amount expended in fiscal 2005, $82,000 (2004 - $94,000) was paid
        to G2
        Consultants. Listing and filing fees of $7,752 (2004 - $19,107) were down
        in the
        current year due to less financing activity. Mid-way through fiscal 2004,
        the
        arrangement with Silver Standard Resources Inc., whereby Silver Standard
        provided certain administrative services for the company was amended. Prior
        to
        the change, Silver Standard charged us a flat monthly fee for management
        administration and rent. After the change, these costs were charged to us
        at the
        salary charge-out rates. The overall impact on us was approximately neutral
        as
        reductions in the management administration fee and office rent expense were
        offset by a corresponding increase in salary expense.


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          17
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 **Table
          of Contents**




In
      fiscal 2005, a $111,000 stock-based compensation expense (2004 - $273,900)
      was
      recorded reflecting the expensing of the non-cash fair value of options granted
      to employees, directors and officers.




Interest
      income decreased to $21,239 in fiscal 2005, compared to $26,386 in fiscal 2004.
      This decrease relates to lower cash balances available for investment partially
      offset by higher interest rates.




Mineral
      properties in Ontario and Mexico with
      a carry value of $1,133,280were abandoned and written off in fiscal
      2005 compared to $745,151 written off in the prior year. Properties written
      off
      were Stucco ($12,176), Grand Bay ($346,297) and Geikie properties ($520,149)
      in
      Ontario, and Santa Lucia property ($254,658) in Mexico.




During
      fiscal 2005, flow-through shares totalling $100,000 were issued, which funds
      are
      required to be spent on certain Canadian exploration expenditures. Because
      we no
      longer have the ability to use the expenditures for tax purposes, we are
      required to record a future tax liability, which is equal to the renunciation,
      times the corporation tax rate when expenditures are renounced. However, because
      we have unused tax losses and resource pools in excess of the renunciation,
      the
      future tax liability becomes a future income tax recovery and, as a consequence,
      a $35,600 recovery was recorded in fiscal 2005.




**Selected
      Quarterly Financial Data** (unaudited)




**2006**
              **$**
            **2005**
              **$****Q1**
            **Q2**
            **Q3**
            **Q4**
            **Q1**
            **Q2**
            **Q3**
            **Q4**Total
                revenues
            Nil
            Nil
            Nil
            Nil
            Nil
            Nil
            Nil
            NilLoss
                for the quarter
            (44,306)
            (111,284)
            (110,381)
            (69,597)
            (106,671)
            (152,756)
            (657,337)*(1)*
            (576,983)*(2)*Loss
                per share - basic and diluted
            (0.00)
            (0.01)
            (0.00)
            (0.00)
            (0.00)
            (0.01)
            (0.02)
            (0.02)




*1)*
              *During
                  the third quarter of 2005, we wrote off a total of $598,582 in
                  property
                  costs and of this amount, $346,297 related to the Grand Bay property
                  in
                  Ontario and $252,285 related to the Santa Lucia property in
                  Mexico.*
  *(2)*
              *During
                  the fourth quarter of 2005, we wrote off a total of $522,522 in
                  property
                  costs, with the largest being $520,149 relating to the Geikie property
                  in
                  Ontario.*


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          18
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 **Table
          of Contents**







B.
            **Liquidity
                and Capital
                Resources**




At
      July 31, 2006, we had $1,590,245 (2005 - $486,251) in cash and cash equivalents
      and working capital of $1,590,448 (2005 - $445,314). Subsequent to year-end,
      we
      received $674,312 on the exercise of stock options and warrants. Management
      has
      estimated that we will have adequate funds from existing working capital to
      meet
      our corporate, administrative and property obligations for the coming year.
      If
      we are to advance or develop our mineral properties further, it will be
      necessary to obtain additional financing and while we have been successful
      in
      the past, there can be no assurance that we will be able to do so in the
      future.




We
      have no contractual obligations other than mineral property holding and finder’s
      fee costs.




**Operating
      Activities**




Operating
      activities required a funding of $376,708 in 2006 and $201,617 and $380,624 for
      the years ending July 31, 2005 and July 31, 2004, respectively. The increase
      in
      2006 is due to higher levels of generative exploration, partially offset by
      lower investor relations costs.




**Financing
      Activities**




A
      total of $2,061,750 was raised in fiscal 2006 through the issuance of common
      shares. A summary of the components of the funds raised in 2006 and the two
      prior years is as follows:




**2006**
              **$**
            **2005**
              **$**
            **2004**
              **$**Private
                placement
            2,030,000
            100,000
            1,350,000Exercise
                of stock options
            5,500
            5,500
            26,250Exercise
                of agents’ options
            -
            -
            75,000Exercise
                of warrants
            26,250
            -
            1,158,0002,061,750
            105,500
            2,609,250




*Private
      Placement - January 2006*




In
      January 2006, we completed a private placement consisting of 5,150,000 units
      at
      a price of $0.20 per unit for total proceeds of $1,030,000. In July 2006, we
      completed a second private placement consisting of 5,000,000 units at a price
      of
      $0.20 per unit for total proceeds of $1,000,000. Cash costs associated with
      these two private placements were $5,828. $5,500 was raised from the exercise
      of
      50,000 stock options that had an exercise price of $0.11 per share. An
      additional $26,250 was raised from the exercise of 105,000 warrants that had
      an
      exercise price of $0.25 per share.


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          19
          -
 **Table
          of Contents**




**Investing
      Activities**




A
      total of $594,942 in cash was spent on our various mineral properties in 2006.
      All of the funds were spent on properties in Mexico. The most active exploration
      program, which included $115,334 of drilling, was on the Mecatona property
      where
      $356,455 was spent. Cash exploration costs at our other properties were $109,441
      (2005 - $537,912) at Yerbabuena; $55,763 (2005 - nil) at the newly-acquired
      Maijoma and Agua de la Loca properties; $53,109 (2005 - $204,468) at Rodeo
      and
      $20,174 (2005 - $82,675) at the El Rincon property.




***Acquisitions
      and Disposals***




See
      Item 4.A - “General Background”.




***Risks
      and Uncertainties***




As
      a mineral exploration company, we are exposed to a number of risks and
      uncertainties. See Item 3.D.-“Risk Factors”.




***Impact
      of Inflation***




Currently,
      inflation in Canada is similar to that in the U.S. Inflation is not expected
      to
      have a material impact on us beyond the impact on all businesses generally,
      such
      as higher cost of materials, services and salaries.




**C.**
            **Research
                and Development, Patents and Licenses,
                etc.**




We
      are a mineral exploration company with no producing properties; the information
      required by this item is inapplicable.




**D.**
            **Trend
                Information**




We
      are a mineral exploration company with no producing properties; the information
      required by this item is inapplicable.




**Item
                6**
            **Directors,
                Senior Management and
                Employees**




**A.**
            **Directors
                and Senior Management**




The
      following table lists as of November 31, 2006 the names of our directors and
      senior management. Each of the directors and senior officers has served in
      his
      or her respective capacity since his or her election and/or appointment and
      will
      serve until the next annual general meeting of shareholders or until a successor
      is duly elected, unless the office is vacated in accordance with our
      Articles.




**Table
      No. 5**


**Our
      Directors and Senior Management**




**Name**
            **Position
                with Canplats**
            **Date
                of First**
              **Appointment**
            **Age**R.E.
                Gordon Davis(1)
                (2) (3)
            President
                and director
            March
                2000
            68Robert
                A. Quartermain(1)
                (2) (3)
            Director
            March
                2000
            51James
                W. Tutton(1) (2) (3)
            Director
            October
                1999
            67Kenneth
                C. McNaughton(3)
            Vice
                President, Exploration
            March
                2000
            48Ross
                A. Mitchell(3)
            Vice
                President, Finance
            March
                2000
            58Linda
                J. Sue(3)
            Corporate
                Secretary
            March
                2000
            51




(1)
            Member
                of the Audit Committee


(2)
            Member
                of the Compensation Committee


(3)
            Resident
                of Canada






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          20
          -
 **Table
          of Contents**




***Resumes***




***Our
      Board of Directors and Senior Management***




The
      following is a brief description of the principal business activities
      of **** our
      directors and senior management:




**R.E.
      Gordon Davis**




Mr.
      Davis is responsible for our day to day operations as well as strategic planning
      and the raising of capital to fund our operations. Mr. Davis graduated with
      a
      Bachelor of Applied Science Degree in Geological Engineering in 1962. He was
      a
      Director and Senior Executive with Dynasty Explorations Ltd. and its successor
      corporation, Cyprus Anvil Mining Corporation from 1964 to 1982. Since 1982,
      Mr.
      Davis has been a director of a number of resource companies including Pine
      Point
      Mines Ltd., Cabre Exploration Ltd., Golden Knight Resources Inc. and Northern
      Crown Mines Ltd. In addition, Mr. Davis is a director of Silver Standard, a
      mineral resource exploration company (whose shares are listed on the Toronto
      Stock Exchange and Nasdaq Global Market) with which we have two common directors
      and common officers, Canadian Empire Exploration Corp., Pacific Ridge
      Exploration Ltd. and Western Prospector Group Ltd.




**Robert
      A. Quartermain**




Mr.
      Quartermain graduated in 1977 from University of New Brunswick with a B.Sc.
      in
      geology, and from Queen’s University in 1981 with a M.Sc. in mineral
      exploration. From 1976 to 1982 he worked for the Geological Survey of Canada
      and
      in private industry on mapping and exploration programs. Mr. Quartermain also
      worked for Teck Corp. before becoming president and a director of Silver
      Standard Resources Inc. in 1985 to the current date. Mr. Quartermain also serves
      as a director and officer of Radiant Resources Inc. (“Radiant”), as well as a
      director of: Vista Gold Corporation, Cogent Integrated Healthcare Solutions
      Corp. and Minco Silver Corporation.


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          21
          -
 **Table
          of Contents**




**James
      W. Tutton**




Mr.
      Tutton is a self-employed business consultant. From 1968 to 1992 he was employed
      as Chairman, President and Director of Webb & Knapp (Canada) Ltd. following
      amalgamation with Wolstencroft Agencies Ltd. Mr. Tutton is also serves as a
      director of Archon Minerals Limited, Horseshoe Gold Mining Inc., Finlay Minerals
      Ltd., Consolidated Firstfund Capital Corp., New Nadina Explorations Limited,
      Williams Creek Explorations Limited and Prism Resources Inc.




**Kenneth
      C. McNaughton**




Mr.
      McNaughton devotes approximately 7% of his time to our business, with the
      remainder of his time allocated to Silver Standard. Mr. McNaughton is a
      professional engineer and earned a B.A.Sc. and M.A.Sc. in geological engineering
      in 1981 and 1983, respectively, from the University of Windsor. Before joining
      Silver Standard in 1991 as Vice President, Exploration, he worked as contract
      engineer for Oretech Engineering and worked on exploration programs for three
      bulk mineable gold or copper/gold deposits in Arizona and British Columbia.
      From
      1984 to 1989, he was employed by Corona Corporation and its affiliate Mascot
      Gold Mines Ltd. as a project geologist and engineer for projects in British
      Columbia.




**Ross
      A. Mitchell**




Mr.
      Mitchell devotes approximately 4% of his time to our business, with the
      remainder of his time split between Silver Standard and Radiant. Prior to his
      appointment as Vice President, Finance of Silver Standard and Golden Knight
      Resources Inc. in 1996, Mr. Mitchell was employed by Westmin Resources and
      its
      predecessor Western Mines Ltd. from 1975. He held various financial positions
      including controller treasurer of Western Mines from 1975 to 1980 and assistant
      treasurer and controller of the mining division at Westmin until 1985. He was
      then appointed treasurer of Westmin and became vice president and treasurer
      in
      1989, the position he held until 1995. Mr. Mitchell was Vice President, Finance
      of Golden Knight Resources Inc. from January 1996 to May 1999. He earned a
      B.
      Comm. from the University of British Columbia in 1971 and a C.A. from the
      Institute of Chartered Accountants of British Columbia in 1973.




**Linda
      J. Sue**




Ms.
      Sue devotes approximately 19% of her time to our business, with the remainder
      of
      her time split between Silver Standard and Radiant. Ms. Sue has been the
      Corporate Secretary of Silver Standard since 1985. Her responsibilities include
      management of our land titles system.




There
      are no family relationships among the members of our board of directors or
      the
      members of our senior management.




**B.**
            **Compensation**




We
      have no formal plan for compensating our directors for their services in their
      capacity as directors. The board of directors may award special remuneration
      to
      any director undertaking any special services on our behalf other than services
      ordinarily required of a director. Other than indicated below, no director
      received any compensation for his or her services as a director, including
      committee participation and/or special assignments.


-
          22
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 **Table
          of Contents**




***Compensation
      of Named Executive Officers***




“Named
      Executive Officers” means the Chief Executive Officer (“CEO”) and the Chief
      Financial Officer (“CFO”) of a company, or if a company does not have a CFO, an
      individual which acted in a similar capacity, regardless of the amount of
      compensation of that individual, each of a company’s three most highly
      compensated executive officers, other than the CEO and CFO, who were serving
      as
      executive officers at the end of the most recent financial year and whose total
      salary and bonus amounted to $150,000 or more. In addition, disclosure is also
      required for any individuals whose total salary and bonus during the most recent
      financial year was $150,000 whether or not they are an executive officer at
      the
      end of the financial year.




We
      currently have two Named Executive Officers, R.E. Gordon Davis, the President
      and Ross A. Mitchell, the Chief Financial Officer of the Company.




**Summary
      Compensation Table**




**Table
      No. 6**


**Summary
      Compensation Table**


*Annual
                  Compensation*
              *Long
                  Term Compensation*Awards
              Payouts*Name
                  and Principal Position*
              *Year*
                *(1)*
              *Salary*
                *($)*
              *Bonus
                  ($)*
              *Other
                  Annual Compensation*
                *($)*
              *Securities*
                *Under
                  Options Granted*
                *(#)
                  (2)*
              *Shares
                    or*
                *Units
                  Subject to Resale Restrictions ($)*
              *LTIP*
                *Payouts*
                *($)*
                *(4)*
              *All
                  Other Compensation*
                *($)*R.E.
                  Gordon DavisPresident
                  and Director
              2006
                  2005 2004
              Nil
                Nil
                Nil
              Nil
                Nil
                Nil
              Nil
                Nil
                Nil
              Nil
                50,000
                70,000
              Nil
                Nil
                Nil
              Nil
                Nil
                Nil
              Nil
                Nil
                NilRoss
                  A. Mitchell(3)
                Vice
                  President, Finance
              2006
                2005
                2004
              $6,155
                $5,288
                $4,583
              Nil
                Nil
                Nil
              Nil
                Nil
                Nil
              Nil
                25,000
                Nil
              Nil
                Nil
                Nil
              Nil
                Nil
                Nil
              Nil
                Nil
                Nil




(1)
            Fiscal
                years ended July 31.


(2)
            Figures
                represent options granted during a particular year; see “Aggregated
                Option” table for the aggregate number of options outstanding at year end.


(3)
            We
                do not compensate Mr. Mitchell directly; however, Mr. Mitchell receives
                remuneration as an officer of Silver Standard, a portion of which
                is
                charged to us by Silver Standard pursuant to the Management Agreement
                we
                have with Silver Standard. See Item 6.D “Employees” for further
                details.




**Long
      Term Incentive Plan**




Long
      term incentive plan (“LTIP”) means any plan providing compensation intended to
      motivate performance over a period greater than one financial year. LTIPs do
      not
      include option or stock appreciation
      rights plans or plans for compensation through shares or units that are subject
      to restrictions on resale. We did not grant any LTIPs during the recently
      completed fiscal year ended July 31, 2005.


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          23
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 **Table
          of Contents**




**Options
      and SARs**




*Stock
      Appreciation Rights*




Stock
      appreciation right (“SAR”) means a right, granted by an issuer or any of its
      subsidiaries as compensation for employment services or office to receive cash
      or an issue or transfer of securities based wholly or in part on changes in
      the
      trading price of our shares. No SARs were granted or exercised by the Named
      Executive Officers during the recently completed fiscal year ended July 31,
      2006.




**Aggregated
      Option Exercises During the Most Recently Completed Financial Year and Financial
      Year-End Option Values**




The
      following table sets forth details of all exercises of stock options during
      the
      last financial year ended July 31, 2006, by the Named Executive Officers and
      the
      financial year-end value of unexercised options on an aggregated basis:






**Table
      No. 8**


**Aggregated
      Option Exercises During the Most Recently Completed Financial
      Year**


**and
      Financial Year-End Option Values**




*Name*
            *Securities*
              *Acquired
                on*
              *Exercise*
            *Aggregate
                Value Realized ($)**(1)*
            *Unexercised
                Options at Financial Year-End # Exercisable/ Unexercisable*
            *Value
                of Unexercised In-the-Money Options at Financial Year-End ($)**(2)**Exercisable/ Unexercisable*R.E.
                Gordon Davis
            Nil
            Nil
            50,000/
                0
            0
                / 0Ross
                A. Mitchell
            Nil
            Nil
            25,000/
                0
            0
                / 0




(1)
            Valued
                using the closing price of our common shares on the TSX Venture Exchange
                (the "Exchange") on the date of exercise, less the exercise price
                per
                share.


(2)
            Valued
                using the closing price of our common shares on the Exchange on July
                31,
                2006, being the last trading day of our shares for the financial
                year, of
                $0.37 per share, less the exercise price per share.




**Termination
      of Employment, Change in Responsibilities and Employment Contracts**




We
      have no plans or arrangements in respect of remuneration received or that may
      be
      received by our Named Executive Officers in our most recently completed
      financial year or current financial year in respect of compensating such officer
      in the event of termination of employment (as a result of resignation,
      retirement, change of control, etc.) or a change in responsibilities following
      a
      change of control, where the value of such compensation exceeds $100,000 per
      executive officer.


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          24
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 **Table
          of Contents**




***Compensation
      to Directors and Executive Officers***




**Compensation
      of Directors who are not Executive Officers**




During
      fiscal 2006, we had no arrangements, standard or otherwise, pursuant to which
      we
      or our subsidiaries compensated our directors for their services in their
      capacity as directors, or for committee participation, involvement in special
      assignments or for services as consultants or experts.




The
      following table sets forth details of all exercises of stock options during
      the
      last financial year ended July 31, 2006, by directors who are not Named
      Executive Officers, as a group, and the financial year-end value of unexercised
      stock options on an aggregated basis:




**Table
      No. 10**


**Aggregated
      Option Exercises in Last Financial Year and Financial Year-End Option Values
      of**


**Directors
      Who are Not Named Executive Officers (as a group)**


*Name*
            *Securities
                Acquired on Exercise*
              *(#)*
            *Aggregate
                Value Realized*
              *($)*(1)
            *Unexercised
                Options at Financial Year-End (#) Exercisable/ Unexercisable*
            *Value
                of Unexercised In-the-Money Options at Financial Year-End
                ($)*(2)*Exercisable/
                Unexercisable*Directors
                who are not Named Executive Officers (2)
            0
            0
            70,000/
                0
            0
                / 0




(1)
            Valued
                using the closing price of our common shares on the Exchange on the
                date
                of exercise, less the exercise price per share.


(2)
            Valued
                using the closing price of our common shares on the Exchange on July
                31,
                2006, being the last trading day of our shares for the financial
                year, of
                $0.37 per share, less the exercise price per share.




During
      the most recently completed financial year, except for the above-noted Stock
      Options, our directors did not receive compensation for services provided to
      us
      in their capacities as directors and/or consultants and/or experts.




**Compensation
      of Directors and Senior Officers**




Total
      compensation for all directors and senior officers during the year ended July
      31, 2006 totalled $52,988, based on hourly rates charged for personnel by Silver
      Standard, which included direct salary costs and benefits, as well as a factor
      for overhead costs, office equipment, usage, management services personnel,
      office space and furnishings (see Item 6.D. - “Employees”). The reported figure
      is for direct salary costs and benefits only.




***Executive
        Benefits***
  We
        do not have a pension, retirement fund or similar benefits plan or other
        arrangement for non-cash compensation to our directors or senior officers,
        with
        the exception of incentive stock options.
  ***Options
        to Purchase Securities from Company or Subsidiaries***
  *Options
        Outstanding*
  Stock
        Options to purchase our securities are granted to our directors, officers
        and
        employees on terms and conditions acceptable to the regulatory authorities
        in
        Canada, notably the TSX Venture Exchange (the “Exchange”). Our board of
        directors adopted the 2003 Stock Option Plan under which 10% of our issued
        and
        outstanding shares are reserved for issuance on the exercise of incentive
        stock
        options (including previously issued stock options). The 2003 Stock Option
        Plan
        was first approved by our shareholders at our 2003 Annual General Meeting
        held
        on December 17, 2003 and has been approved and ratified by our shareholders
        at
        each of our subsequent Annual General Meetings, including our 2006 Annual
        General Meeting held on December 19, 2006.


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          of Contents**




Under
      our 2003 Stock Option Plan, (a) stock options in favor of any one individual
      may
      not exceed 5% of the issued and outstanding shares of common stock, (b) no
      stock
      option is transferable by the optionee other than by will or the laws of descent
      and distribution, (c) a stock option is exercisable during the lifetime of
      the
      optionee only by such optionee, (d) the maximum term of each stock option is
      five years, with the vesting period determined at the discretion of the Board
      of
      Directors and (e) the minimum exercise price for a stock option is the last
      closing price of our common shares on the TSX Venture Exchange immediately
      preceding the granting of the option.




The
      number of stock options and the number of common shares subject to such stock
      options granted to executive officers as a group and to directors who are not
      executive officers as a group are set out below as of July 31, 2006. The
      exercise price of the stock options is stated in Canadian dollars.




**Table
      No. 11**


**Outstanding
      Stock Options**




**Number
                of Options Outstanding**
            **Exercise
                Price***
            **Expiry
                Date**Executive
                Officers
            75,000
            $0.37
            Jan
                12, 2008Directors
                who are not
              Executive
                Officers
            70,000
            $0.37
            Jan
                12, 2008Employees
                and Consultants
            390,000
            $0.37
            Jan
                12, 200875,000
            $0.30
            Sept
                16, 2006Total:
            610,000




In
      addition, as at July 31, 2006, we had the following outstanding share purchase
      warrants, with each share purchase warrant entitling the holder thereof to
      acquire one of our common shares:




**Table
      No. 12**


**Outstanding
      Share Purchase Warrants**




**Amount**
            **Exercise
                Price**
            **Expiry
                Date**2,610,250(1)
            $0.25
            January
                26, 20085,800,000
            $0.25
            July
                20, 2008Total:
            8,410,250




(1)  Subsequent
      to July 31, 2006, we gave notice to the warrant holders that were part of the
      January, 2006 private placement that our shares had traded for a period of
      20
      consecutive days at a price at or above $0.35 per share. In accordance with
      the
      terms of the warrants, the warrant holders were required to exercise their
      warrants within 30 days of receipt of this notice or the warrants would lapse.
      As a result, 2,607,250 warrants were exercised at a price of $0.25 for total
      proceeds of $651,812. A total of 3,000 warrants expired.




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**C.**
            **Board
                Practices******




Our
      directors are elected annually and hold office until the next annual general
      meeting of our shareholders or until their successors in office are duly elected
      or appointed. We do not have an executive committee. All directors are elected
      for a one-year term. All officers serve at the pleasure of the Board. We held
      an
      annual general meeting of our shareholders on December 19, 2006 and anticipate
      holding our next annual general meeting of our shareholders in December of
      2007.




Our
      Board of Directors has two committees: the Audit Committee and the Compensation
      Committee. The members of the Audit Committee and Compensation Committee do
      not
      have any fixed terms for holding their positions, are appointed and replaced
      from time to time by resolution of the Board of Directors and do not receive
      any
      separate remuneration for acting as members of the committees.




The
      Audit Committee, comprised of R.E. Gordon Davis, Robert Quartermain and James
      Tutton, has the responsibility of reviewing with our Auditor all financial
      statements to be submitted to an annual general meeting of our shareholders,
      prior to their consideration by the Board of Directors. Following its review,
      the Audit Committee must submit a report on the financial statements to the
      Board of Directors.




The
      Compensation Committee, comprised of R.E. Gordon Davis, Robert Quartermain
      and
      James Tutton, has the responsibility for determining executive and management
      direct remuneration and stock options. The President’s function in relation to
      the Compensation Committee is to make specific recommendations on remuneration
      with supporting commentary on individual performance and industry
      standards.




Currently,
      we do not have service contracts with any of our officers or those of our
      subsidiaries providing for benefits upon termination of employment (see Item
      6.B
      - “Compensation”).




**D.**
            **Employees**




On
      February 1, 2004, we entered into a management services agreement with Silver
      Standard. Under the agreement, Silver Standard provides us with general
      corporate management, administrative and technical services. For personnel,
      hourly rates charged are based on direct salary costs and benefits, as well
      as a
      factor for overhead costs, office equipment, usage, management services
      personnel, office space and furnishings. The agreement also provides for Silver
      Standard to recalculate charge out rates from time to time
      to take into account increased costs of providing the services. Effective
      January 1, 2005, Silver Standard increased its charge out
      rates.




**E.**
              **Share
                  Ownership**
  The
        following table sets out, as of December 31, 2006 the number of our common
        shares beneficially owned by the Named Executive Officers, whom, to our
        knowledge, possess sole voting and investment power with respect to the shares
        shown.
  **Table
        No. 13**
 **Named
        Executive Officer Share Ownership**
  **Name
                  of Beneficial**
                **Owner**
              **Title
                  of Class**
              **Number
                  of Securities of Class**
              **Percent
                  of Class**R.E.
                  Gordon Davis
              Common
              1,588,750*
              3.7%Ross
                  A. Mitchell
              Common
              500,000*
              1.2%
  *includes
        options and warrants exercisable within 60 days.


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          of Contents**




As
      at December 31, 2006, our directors and officers held, as a group, directly
      or
      indirectly, an aggregate of 3,867,000 common shares and no share purchase
      warrants.




The
      number of stock options and the number of common shares subject to such stock
      options granted to the Named Executive Officers are set out below as of December
      31, 2006. The exercise price of the stock options is stated in Canadian
      dollars.




**Table
      No. 14**


**Named
      Executive Officer Stock Options**




**Name**
            **Number
                of Options Outstanding**
            **Exercise
                Price**
            **Expiry
                Date**R.E.
                Gordon Davis
            50,000
              350,000
            $0.37
              $0.44
            Jan
                12, 2008
              Dec
                19, 2011Ross
                A. Mitchell
            25,000
              100,000
            $0.37
              $0.44
            Jan
                12, 2008
              Dec
                19, 2011




**Item
                7**
            **Major
                Shareholders and Related Party
                Transactions**




**A.**
            **Major
                Shareholders**




To
      the best of our knowledge at the date of this Annual Report, no shareholder
      directly or indirectly owns more than 5% of our issued shares.




To
      the best of our knowledge, we are not directly or indirectly owned or controlled
      by another corporation, by any foreign government or by any other natural or
      legal person severally or jointly.




Our
      common stock is issued in registered form and the following information is
      taken
      from the records of Computershare Investor Services Inc. (located in Vancouver,
      British Columbia, Canada), the registrar and transfer agent for the common
      stock.




On
        July 31, 2006, the shareholders' list for our common stock showed 1,576
        registered shareholders and 40,327,806 shares outstanding. 1,279 of these
        registered shareholders were U.S. residents, owning 5,926,612, shares
        representing 14.7% of our issued and outstanding shares.
  **B.**
              **Related
                  Party
                  Transactions**
  Since
        August 1, 2005, we have entered or have proposed to enter into the following
        transactions that have materially affected or will materially affect us in
        which
        any director, executive officer, or beneficial holder of more than 10% of
        the
        outstanding common stock, or any of their respective relatives, spouses,
        associates or affiliates has had or will have any direct or material indirect
        interest.
  We
          entered into a Management Services Agreement with under
          which Silver Standard
  **C.**
              **Interests
                  of Experts and
                  Counsel**
  This
        Form 20-F is being filed as an annual report under the Exchange Act, and,
        as
        such, there is no requirement to provide any information under this
        sub-item.


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          28
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          of Contents**




**Item
                8**
            **Financial
                Information**




**A.**
            **Consolidated
                Statements and Other Financial
                Information**




Our
      financial statements are stated in Canadian dollars (Cdn$) and are prepared
      in
      Canadian Generally Accepted Accounting Principles (“GAAP”), which differ in
      certain respects from those principles that we would have followed had our
      financial statements been prepared in accordance with US GAAP. The major
      measurement differences between Canadian and US GAAP, as they affect us, are
      disclosed in note 14 to the financial statements.




Exhibited
      hereto are audited financial statements prepared by our management, audited
      by
      an independent auditor and accompanied by an audit report:




(a)
            PricewaterhouseCoopers
                LLP Auditors’ Report, dated November 21,
                2006.




(b)
            Consolidated
                Balance Sheets as at July 31, 2006 and July 31, 2005 (in Canadian
                Dollars).




(c)
            Consolidated
                Statements of Loss and Deficit for the years ended July 31, 2006,
                July 31,
                2005 and July 31, 2004 (in Canadian
                Dollars).




(d)
            Consolidated
                Statements of Cash Flows for the years ended July 31, 2006, July
                31, 2005
                and July 31, 2004 (in Canadian
                Dollars).




(e)
            Consolidated
                Statements of Changes in Shareholders’ Equity for the years ended July 31,
                2006, July 31, 2005 and July 31, 2004 (in Canadian
                Dollars).




(f)
            Notes
                to Consolidated Financial Statements for the years ended July 31,
                2006,
                July 31, 2005 and July 31, 2004 (in Canadian
                Dollars).




We
      have not paid dividends in the past five years and do not expect to pay
      dividends in the near future. Our present policy is to retain future earnings
      for use in our operations and the expansion of our business.




B.Significant
        Changes
  No
        significant changes have occurred since the date of our most recent audited
        financial statements, July 31, 2006, other than the following:
  (a)
              in
                  September 2006, we gave notice to the warrant holders that were
                  part of
                  the January, 2006 private placement that our shares had traded
                  for a
                  period of 20 consecutive days at a price at or above $0.35 per
                  share. In
                  accordance with the terms of the warrants, the warrant holders
                  were
                  required to exercise their warrants within 30 days of receipt of
                  this
                  notice or the warrants would lapse. As a result, 2,607,250 warrants
                  were
                  exercised at a price of $0.25 for total proceeds of $651,812. A
                  total of
                  3,000 warrants expired.
  **Item
                  9**
              **The
                  Offer and
                  Listing**
  **A.**
              **Offer
                  and Listing Details**
  We
        became a reporting issuer in the Province of British Columbia upon the issuance
        of a receipt for a prospectus on December 11, 1967 and our common shares
        were
        first listed on the Vancouver Stock Exchange (a predecessor of the TSX Venture
        Exchange) on June 21, 1972. In April 1992, our common shares were delisted
        by
        the Vancouver Stock Exchange for failure to pay sustaining fees. We were
        the
        subject of cease trade orders issued by the British Columbia Securities
        Commission on September 9, 1992 and January 11, 1993, for failure to submit
        statutory filings. Both of these cease trade orders were rescinded by the
        British Columbia Securities Commission on January 22, 1993.


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          of Contents**




Our
      initial public offering prospectus was filed with and receipted by the British
      Columbia and Alberta Securities Commissions on February 14, 2001. Effective
      March 22, 2001, our common shares again commenced trading on the TSX Venture
      Exchange in Toronto, Ontario, Canada, under the trading symbol CPQ and CUSIP
      #138054-10-1.




The
      following tables set out the reported high and low prices for (a) the five
      most
      recent fiscal years; (b) each quarterly period for the past two fiscal years
      and
      for the first quarter of 2006; and (c) each month for the past six
      months.




**Table
      No. 15**


**High
      and Low Price for the Five Most Recent Fiscal Years**


**on
      the TSX (Cdn$’s)**




**Fiscal
                Year Ended**
            **High**
            **Low**July
                31, 2006
            $0.37
            $0.10July
                31, 2005
            $0.49
            $0.12July
                31, 2004
            $0.84
            $0.095July
                31, 2003
            $0.14
            $0.04July
                31, 2002
            $0.27
            $0.09




**Table
      No. 16**


**High
      and Low Prices for each Quarterly Period for the Past Two Fiscal
      Years**


**and
      for the First Quarter of 2005 on the TSX (Cdn$’s)**




**Period
                Ended**
            **High**
            **Low**October
                31, 2006
            $0.43
            $0.31July
                31, 200
            $0.37
            $0.185April
                30, 2006
            $0.35
            $0.225January
                31, 2006
            $0.335
            $0.10October
                31, 2005
            $0.155
            $0.10July
                31, 2005
            $0.30
            $0.12April
                30, 2005
            $0.49
            $0.30January
                31, 2005
            $0.49
            $0.31October
                31, 2003
            $0.24
            $0.095




**Table
      No. 17**


**High
      and Low Prices for each Month for the Past Six Months on the TSX
      (Cdn$’s)**




**Month
                Ended**
            **High**
            **Low**December
                31, 2006
            $0.44
            $0.365November
                30, 2006
            $0.49
            $0.33October
                31, 2006
            $0.405
            $0.33September
                30, 2006
            $0.43
            $0.31August
                31, 2006
            $0.42
            $0.335July
                31, 2006
            $0.37
            $0.30




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**B.**
            **Plan
                of
                Distribution**




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.




**C.**
            **Markets**




See
      the first paragraph of this Item 9.




**D.**
            **Dilution**




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.




**E.**
            **Expenses
                of the
                Issue**




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.




Item
      10Additional
      Information




**A.**
            **Share
                Capital**




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.




**B.**
            **Memorandum
                and Articles of
                Association**




***Incorporation***




We
      were incorporated in British Columbia, Canada, under Certificate of
      Incorporation number 72955 on February 15, 1967. We do not have any stated
      “objects” or “purposes” as such are not required by the corporate laws of the
      Province of British Columbia. Rather, we are, by such corporate laws, entitled
      to carry on any activities whatsoever, which are not specifically precluded
      by
      other statutory provisions of the Province of British Columbia.




***Powers
      and Functions of the Directors***




The
      powers and functions of the directors are set out in our Articles which were
      adopted on December 15, 2004 and filed on May 16, 2005. They
      provide:




(a)
            a
                director is obligated to disclose his potential interest in a proposal,
                arrangement or contract being considered by us, and may not vote
                on any
                proposal, arrangement or contract proposed, but such director shall
                be
                counted in the quorum at the meeting of the directors at which the
                proposal, arrangement or contract is
                approved;




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(b)
            the
                directors may, in the absence of an independent quorum, vote compensation
                to themselves;




(c)
            there
                are no limitations on the exercise by the directors of our borrowing
                powers;




(d)
            there
                are no provisions for the retirement or non-retirement of directors
                under
                an age limit; and




(e)
            there
                is no requirement for a director to hold any of our
                shares.




***Rights
      and Restrictions Attached to the Shares***




As
      all of our authorized and issued shares are of one class there are no special
      rights or restrictions of any nature or kind attached to any of the shares.
      All
      authorized and issued shares rank equally in respect to the declaration and
      receipt of dividends, the rights to share in any profits or surplus on our
      liquidation, dissolution or winding. Each share has attached to it one
      non-cumulative vote.




***Alteration
      of Share Rights***




To
      alter the rights of holders of our issued shares such alteration must be
      approved by the majority vote of 66 2 / 3 %
      of our issued shares attending and voting at a meeting of our
      shareholders.




***Annual
      General Meetings***




Annual
      general meetings are called and scheduled upon decision by the Board of
      Directors. The directors may convene an extraordinary general meeting of the
      shareholders. The holders of not less than 5% of our issued shares may
      requisition an extraordinary meeting of the shareholders. All meetings of the
      shareholders may be attended by registered shareholders or persons who hold
      powers of attorney or proxies given to them by registered
      shareholders.




***Foreign
      Ownership Limitations***




Our
      Articles do not contain limitations prohibiting shares being held by
      non-residents, foreigners or any other group.




***Change
      of Control***




There
      are no provisions in our Articles that would have an effect of delaying,
      deferring or preventing a change in our control, or that would operate with
      respect to any proposed merger, acquisition or corporate
      restructuring.




***Share
      Ownership Reporting Obligations***




There
      are no provisions in our Articles requiring share ownership to be disclosed.
      The
      securities laws of the Province of British Columbia require disclosure of
      shareholdings by:




(a)
            persons
                who are our directors or senior officers;
                and


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(b)
            a
                person who has direct or indirect beneficial ownership of, control
                or
                direction over, or a combination of direct or indirect beneficial
                ownership of and control or direction over our securities carrying
                more
                than 10% of the voting rights attached to all of our outstanding
                voting
                securities.




***Differences
      from U.S. Law***




The
      threshold of share ownership percentage requiring disclosure of ownership is
      higher in the home jurisdiction of British Columbia than the U.S. where U.S.
      securities law prescribes a 5% threshold for ownership disclosure.




**C.**
            **Material
                Contracts**




The
      following is a summary of each material contract, other than contracts entered
      into in the ordinary course of business, to which we or any member of the group
      is a party, for the two years immediately preceding publication of the document,
      including dates, parties, general nature of the contracts, terms and conditions,
      and amount of any consideration passing to or from us or any other member of
      the
      group.




1.
            Services
                agreement dated February 1, 2004 between Silver Standard Resources
                Inc.
                and Canplats. See Item 6.D - “Employees” for a description of the services
                agreement




2.
            Back-In
                Right agreement dated effective March 24, 2004 between Silver Standard
                Resources Inc. and Canplats. See Item 4.B - “Business Overview” under the
                heading “El Rincon Gold Prospect” for a description of the back-in right
                agreement.




3.
            Finder’s
                fee agreement dated May 3, 2004 between La Cuesta International,
                Inc. and
                Canplats in respect of the El Rincon Gold Prospect. See Item 4.B
                -
                “Business Overview” under the heading “El Rincon Gold Prospect” for a
                description of the finder’s fee
                agreement.




4.
            Option
                agreements dated December 2005 between Canplats and Mrs. E. Alvarado
                and
                Minas Vesper S.A. de C.V. in respect of the Mecatona Gold Prospect.
                See
                Item 4.B - “Business Overview” under the heading “Mecatona Gold Prospect”
                for a description of the option
                agreements.




5.
            Finder’s
                fee agreement between La Cuesta International, Inc. and Canplats
                in
                respect of the Mecatona Gold Prospect. See Item 4.B - “Business Overview”
                under the heading “Mecatona Gold Prospect” for a description of the
                finder’s fee agreement.




6.
            Consulting
                and finder’s fee agreement between La Cuesta International, Inc. and
                Canplats dated January 1, 2006 applicable to the Maijoma Prospect.
                See
                Item 4.B - “Business Overview” under the heading “Maijoma Prospect” for a
                description of the consulting and finder’s
                agreement.




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**D.**
            **Exchange
                Controls and Investment Canada
                Act**




Canada
      has no system of exchange controls. There are no exchange restrictions on
      borrowing from foreign countries nor on the remittance of dividends, interest,
      royalties and similar payments, management fees, loan repayments, settlement
      of
      trade debts, or the repatriation of capital. Any such remittances to United
      States residents, however, may be subject to a withholding tax pursuant to
      the
      Canadian Income Tax Act as modified by the reciprocal tax treaty between Canada
      and the United States. See “Item 10 E, Taxation”.




The
      Investment Canada Act (the “Act”), enacted on June 20, 1985, requires prior
      notification to the Government of Canada on the “acquisition of control” of
      Canadian businesses by non-Canadians, as defined in the Act. Certain
      acquisitions of control, discussed below, are reviewed by the Government of
      Canada. The term “acquisition of control” is defined as any one or more
      non-Canadian persons acquiring all or substantially all of the assets used
      in
      the Canadian business, or the acquisition of the voting shares of a Canadian
      corporation carrying on the Canadian business or the acquisition of the voting
      interests of an entity controlling or carrying on the Canadian business. The
      acquisition of the majority of the outstanding shares is deemed to be an
“acquisition of control” of a corporation. The acquisition of less than a
      majority, but one-third or more, of the voting shares of a corporation is
      presumed to be an “acquisition of control” of a corporation unless it can be
      established that the purchaser will not control the corporation.




Investments
      requiring notification and review are all direct acquisitions of Canadian
      businesses with assets of C$5,000,000 or more (subject to the comments below
      on
      WTO investors), and all indirect acquisitions of Canadian businesses (subject
      to
      the comments below on WTO investors) with assets of more than C$50,000,000
      or
      with assets of between C$5,000,000 and C$50,000,000 which represent more than
      50% of the value of the total international transaction. In addition, specific
      acquisitions or new businesses in designated types of business activities
      related to Canada’s cultural heritage or national identity could be reviewed if
      the Government of Canada considers that it is in the public interest to do
      so.


The
        Act was amended with the implementation of the Agreement establishing the
        World
        Trade Organization (“WTO”) to provide for special review thresholds for “WTO
        investors”, as defined in the Act. “WTO investor” generally means (i) an
        individual, other than a Canadian, who is a national or a WTO member (such
        as,
        for example, the United States), or who has the right of permanent residence
        in relation
        to that WTO member, (ii) governments of WTO members, and (iii) entities that
        are
        not Canadian controlled, but which are WTO investor controlled, as determined
        by
        rules specified in the Act. The special review thresholds for WTO investors
        do
        not apply, and the general rules described above do apply, to the acquisition
        of
        control of certain types of businesses specified in the Act, including a
        business that is a “cultural business”. If the WTO investor rules apply, an
        investment in our shares by or from a WTO investor will be reviewable only
        if it
        is an investment to acquire control of Canplats and the value of our assets
        is
        equal to or greater than a specified amount (the “WTO Review Threshold”). The
        WTO Review Threshold is adjusted annually by a formula relating to increases
        in
        the nominal gross domestic product of Canada. The 2006 WTO Review Threshold
        is
        C$265,000,000.




If
      any non-Canadian, whether or not a WTO investor, acquires control of Canplats
      by
      the acquisition of shares, but the transaction is not reviewable as described
      above, the non-Canadian is required to notify the Canadian government and to
      provide certain basic information relating to the investment. A non-Canadian,
      whether or not a WTO investor, is also required to provide a notice to the
      government on the establishment of a new Canadian business. If our business
      is
      then a prescribed type of business activity related to Canada’s cultural
      heritage or national identity, and if the Canadian government considers it
      to be
      in the public interest to do so, then the Canadian government may give notice
      in
      writing within 21 days requiring the investment to be reviewed.




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For
      non-Canadians (other than WTO investors), an indirect acquisition of control,
      by
      the acquisition of voting interests of an entity that directly or indirectly
      controls Canplats, is reviewable if the value of our assets is then C$50,000,000
      or more. If the WTO investor rules apply, then this requirement does not apply
      to a WTO investor, or to a person acquiring the entity from a WTO investor.
      Special rules specified in the Act apply if the value of our assets is more
      than
      50% of the value of the entity so acquired. By these special rules, if the
      non-Canadian (whether or not a WTO investor) is acquiring control of an entity
      that directly or indirectly controls Canplats, and the value of our assets
      and
      all other entities carrying on business in Canada, calculated in the manner
      provided in the Act and the regulations under the Act, is more than 50% of
      the
      value, calculated in the manner provided in the Act and the regulations under
      the Act, of the assets of all entities, the control of which is acquired,
      directly or indirectly, in the transition of which the acquisition of control
      of
      Canplats forms a part, then the thresholds for a direct acquisition of control
      as discussed above will apply, that is, a WTO Review Threshold of C$192,000,000
      (in 2000) for a WTO investor or a threshold of C$5,000,000 for a non-Canadian
      other than a WTO investor. If the value exceeds that level, then the transaction
      must be reviewed in the same manner as a direct acquisition of control by the
      purchase of our shares.




If
      an investment is reviewable, an application for review in the form prescribed
      by
      the regulations is normally required to be filed with the Director appointed
      under the Act (the “Director”) prior to the investment taking place and the
      investment may not be consummated until the review has been completed. There
      are, however, certain exceptions. Applications concerning indirect acquisitions
      may be filed up to 30 days after the investment is consummated and applications
      concerning reviewable investments in culture-sensitive sectors are required
      upon
      receipt of a notice for review. In addition, the Minister (a person designated
      as such under the Act) may permit an investment to be consummated prior to
      completion of the review, if he is satisfied that delay would cause undue
      hardship to the acquirer or jeopardize the operations of the Canadian business
      that is being acquired. The Director will submit the application to the
      Minister, together with any other information or written undertakings given
      by
      the acquirer and any representation submitted to the Director by a province
      that
      is likely to be significantly affected by the investment.


The
        Minister will then determine whether the investment is likely to be of net
        benefit to Canada, taking into account the information provided and having
        regard to certain factors of assessment where they are relevant.
        Some of the factors to be considered are (i) the effect of the investment
        on the
        level and nature of economic activity in Canada, including the effect on
        employment, on resource processing, and on the utilization of parts, components
        and services produced in Canada; (ii) the effect of the investment on exports
        from Canada; (iii) the degree and significance of participation by Canadians
        in
        the Canadian business and in any industry in Canada of which it forms a part;
        (iv) the effect of the investment on productivity, industrial efficiency,
        technological development, product innovation and product variety in Canada;
        (v)
        the effect of the investment on competition within any industry or industries
        in
        Canada; (vi) the compatibility of the investment with national industrial,
        economic and cultural policies; (vii) the compatibility of the investment
        with
        national industrial, economic and cultural policies taking into consideration
        industrial, economic and cultural objectives enunciated by the government
        or
        legislature of any province likely to be significantly affected by the
        investment; and (viii) the contribution of the investment to Canada's ability
        to
        compete in world markets.




The
      Act sets certain time limits for the Director and the Minister. Within 45 days
      after a completed application has been received, the Minister must notify the
      acquirer that (a) he is satisfied that the investment is likely to be of net
      benefit to Canada, or (b) he is unable to complete his review, in which case
      he
      shall have 30 additional days to complete his review (unless the acquirer agrees
      to a longer period), or (c) he is not satisfied that the investment is likely
      to
      be of net benefit to Canada.




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Where
      the Minister has advised the acquirer that he is not satisfied that the
      investment is likely to be of net benefit to Canada, the acquirer has the right
      to make representations and submit undertakings within 30 days of the date
      of
      the notice (or any further period that is agreed upon between the acquirer
      and
      the Minister). On the expiration of the 30 day period (or the agreed extension),
      the Minister must quickly notify the acquirer (i) that he is now satisfied
      that
      the investment is likely to be of net benefit to Canada or (ii) that he is
      not
      satisfied that the investment is likely to be of net benefit to Canada. In
      the
      latter case, the acquirer may not proceed with the investment or, if the
      investment has already been consummated, must divest itself of control of the
      Canadian business.




The
      Act provides civil remedies for non-compliance with any provision. There are
      also criminal penalties for breach of confidentiality or providing false
      information.




**E.**
            **Taxation**




A
      brief description of certain provisions of the tax treaty between Canada and
      the
      United States is included below, together with a brief outline of certain taxes,
      including withholding provisions, to which United States security holders are
      subject under existing laws and regulations of Canada. The consequences, if
      any,
      of provincial, state and local taxes are not considered.




The
      Company recommends security holders seek the advice of their own tax advisors,
      tax counsel or accountants with respect to the applicability or effect on their
      own individual circumstances of the matters referred to herein and of any
      provincial, state or local taxes.




***Certain
      Canadian Federal Income Tax Consequences***




The
      discussion under this heading summarizes the principal Canadian federal income
      tax consequences of acquiring, holding and disposing of shares of common stock
      of the Company for a shareholder of the Company who is not a resident of Canada
      but is a resident of the United States and who will acquire and hold shares
      of
      common stock of the Company as capital property for the purposes of the *Income
      Tax Act* (Canada) (the “Canadian Tax Act”). This summary does not apply to a shareholder
      who carries on business in Canada through a “permanent establishment” situated
      in Canada or performs independent personal
      services in Canada through a fixed base in Canada if the shareholder’s holding
      in the Company is effectively connected with such permanent establishment or
      fixed base. This summary is based on the provisions of the Canadian Tax Act
      and
      the regulations thereunder and on an understanding of the administrative
      practices of Revenue Canada, and takes into account all specific proposals
      to
      amend the Canadian Tax Act or regulations made by the Minister of Finance of
      Canada as of the date hereof. It has been assumed that there will be no other
      relevant amendment of any governing law although no assurance can be given
      in
      this respect. The Company recommends security holders seek the advice of their
      own Canadian and U.S. tax advisors.




The
      provisions of the Canadian Tax Act are subject to income tax treaties to which
      Canada is a party, including the Canada-United States Income Tax Convention
      (1980), as amended (the “Convention”).




***Dividends
      on Common Shares and Other Income***




Under
      the Canadian Tax Act, a non-resident of Canada is generally subject to Canadian
      withholding tax at the rate of 25% on dividends paid or deemed to have been
      paid
      to him or her by a corporation resident in Canada. The Convention limits the
      rate to 15 percent if the shareholder is a resident of the United States and
      the
      dividends are beneficially owned by and paid to such shareholder, and to 5
      percent if the shareholder is also a corporation that beneficially owns at
      least
      10 percent of the voting stock of the payor corporation.




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The
      amount of a stock dividend (for tax purposes) would generally be equal to the
      amount by which the paid up or stated capital of the Company had increased
      by
      reason of the payment of such dividend. The Company will furnish additional
      tax
      information to shareholders in the event of such a dividend. Interest paid
      or
      deemed to be paid on the Company’s debt securities held by non-Canadian
      residents may also be subject to Canadian withholding tax, depending upon the
      terms and provisions of such securities and any applicable tax
      treaty.




The
      Convention generally exempts from Canadian income tax dividends paid to a
      religious, scientific, literary, educational or charitable organization or
      to an
      organization constituted and operated exclusively to administer a pension,
      retirement or employee benefit fund or plan, if the organization is a resident
      of the United States and is exempt from income tax under the laws of the United
      States.




***Dispositions
      of Common Shares***




Under
      the Canadian Tax Act, a taxpayer’s capital gain or capital loss from a
      disposition of a share of common stock of the Company is the amount, if any,
      by
      which his or her proceeds of disposition exceed (or are exceeded by,
      respectively) the aggregate of his or her adjusted cost base of the share and
      reasonable expenses of disposition. The capital gain or loss must be computed
      in
      Canadian currency using a weighted average adjusted cost base for identical
      properties. One-half of a capital gain (the “taxable capital gain”) is included
      in income, and one-half of a capital loss in a year (the “allowable capital
      loss”) is deductible from taxable capital gains realized in the same year. The
      amount by which a shareholder’s allowable capital loss exceeds the taxable
      capital gain in a year may be deducted from a taxable capital gain realized
      by
      the shareholder in the three previous years or any subsequent year, subject
      to
      certain restrictions in the case of a corporate shareholder and subject to
      adjustment when the capital gains inclusion rate in the year of disposition
      differs from the inclusion rate in the year the deduction is
      claimed.


If
        a share of common stock of the Company is disposed of to the Company other
        than
        in the open market in the manner in which shares would normally be purchased
        by
        the public, the proceeds of disposition will,
        in general terms, be considered as limited to the paid-up capital of the
        share
        and the balance of the price paid will be deemed to be a dividend. In the
        case
        of a shareholder that is a corporation, the amount of any capital loss otherwise
        determined may be reduced, in certain circumstances, by the amount of dividends
        previously received in respect of the shares disposed of, unless the corporation
        owned the shares for at least 365 days prior to sustaining the loss and
        (together with corporations, persons and other entities, with whom the
        corporation was not dealing at arm’s length) did not own more than five percent
        of the shares of any class of the corporation from which the dividend was
        received. These loss limitation rules may also apply where a corporation
        is a
        member of a partnership or a beneficiary of a trust that owned the shares
        disposed of.




Under
      the Canadian Tax Act, a non-resident of Canada is subject to Canadian tax on
      taxable capital gains, and may deduct allowable capital losses, realized on
      a
      disposition of “taxable Canadian property.” Shares of common stock of the
      Company will constitute taxable Canadian property of a shareholder at a
      particular time if the shareholder used the shares in carrying on business
      in
      Canada, or if at any time in the five years immediately preceding the
      disposition 25 percent or more of the issued shares of any class or series
      in
      the capital stock of the Company belonged to one or more persons in a group
      comprising the shareholder and persons with whom the shareholder did not deal
      at
      arm’s length and in certain other circumstances. Corporations disposing of
      taxable Canadian property must file a Canadian tax return to report the
      disposition.




The
      Convention relieves United States residents from liability for Canadian tax
      on
      capital gains derived on a disposition of shares unless:




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(a)
            the
                value of the shares is derived principally from “real property” in Canada,
                including the right to explore for or exploit natural resources and
                rights
                to amounts computed by reference to
                production;




(b)
            the
                shareholder was resident in Canada for 120 months during any period
                of 20
                consecutive years preceding, and at any time during the 10 years
                immediately preceding, the disposition and the shares were owned
                by him
                when he or she ceased to be resident in Canada;
                or




(c)
            the
                shares formed part of the business property of a “permanent establishment”
                that the holder has or had in Canada within the 12 months preceding
                the
                disposition.




***United
      States Federal Income Tax Consequences***




The
      following is a general discussion of certain possible United States federal
      income tax consequences, under current law, generally applicable to a U.S.
      Holder (as hereinafter defined) of common shares of the Company. This discussion
      does not address all potentially relevant federal income tax matters and it
      does
      not address consequences peculiar to persons subject to special provisions
      of
      federal income tax law, such as those described below as excluded from the
      definition of a U.S. Holder. In addition, this discussion does not cover any
      state, local or foreign tax consequences (see “Taxation - Certain Canadian
      Federal Tax Consequences” above).




The
      following discussion is based upon the sections of the Internal Revenue Code
      of
      1986, as amended (the “Code”), Treasury Regulations, published Internal Revenue
      Service (“IRS”) rulings, published administrative positions of the IRS and court
      decisions that are currently applicable, any or all of which could be materially
      and adversely changed, possibly on a retroactive basis, at any time and which
      are subject to differing interpretations. This discussion does not consider
      the
      potential effects, both adverse and
      beneficial, of any proposed legislation which, if enacted, could be applied,
      possibly on a retroactive basis, at any time. The Company recommends holders
      and
      prospective holders of common shares of the Company consult their own tax
      advisors about the federal, state, local, and foreign tax consequences of
      purchasing, owning and disposing of common shares of the
      Company.




***U.S.
        Holders***
  As
        used herein, a “U.S. Holder” means a holder of common shares of the Company who
        is (i) a citizen or individual resident of the United States, (ii) a corporation
        or partnership created or organized in or under the laws of the United States
        or
        of any political subdivision thereof, (iii) an estate whose income is taxable
        in
        the United States irrespective of source or (iv) a trust subject to the primary
        supervision of a court within the United States and control of a United States
        fiduciary as described Section 7701(a)(30) of the Code. This summary does
        not
        address the tax consequences to, and U.S. Holder does not include, persons
        subject to specific provisions of federal income tax law, such as tax-exempt
        organizations, qualified retirement plans, individual retirement accounts
        and
        other tax-deferred accounts, financial institutions, insurance companies,
        real
        estate investment trusts, regulated investment companies, broker-dealers,
        persons or entities that have a “functional currency” other than the U.S.
        dollar, shareholders subject to the alternative minimum tax, shareholders
        who
        hold common shares as part of a straddle, hedging, conversion transaction,
        constructive sale or other arrangement involving more than one position,
        and
        shareholders who acquired their common shares through the exercise of employee
        stock options or otherwise as compensation for services. This summary is
        limited
        to U.S. Holders who own common shares as capital assets within the meaning
        of
        Section 1221 of the Code. This summary does not address the consequences
        to a
        person or entity holding an interest in a shareholder or the consequences
        to a
        person of the ownership, exercise or disposition of any options, warrants
        or
        other rights to acquire common shares.


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***Distribution
      on Common Shares of the Company***




U.S.
      Holders receiving dividend distributions (including constructive dividends)
      with
      respect to common shares of the Company are required to include in gross income
      for United States federal income tax purposes the gross amount of such
      distributions, equal to the U.S. dollar value of such distributions on the
      date
      of receipt (based on the exchange rate on such date), to the extent that the
      Company has current or accumulated earnings and profits, without reduction
      for
      any Canadian income tax withheld from such distributions. Such Canadian tax
      withheld may be credited, subject to certain limitations, against the U.S.
      Holder’s federal income tax liability or, alternatively, may be deducted in
      computing the U.S. Holder's federal taxable income by those who itemize
      deductions. (See more detailed discussion at “Foreign Tax Credit” below). To the
      extent that distributions exceed current or accumulated earnings and profits
      of
      the Company, they will be treated first as a return of capital up to the U.S.
      Holder’s adjusted basis in the common shares and thereafter as gain from the
      sale or exchange of the common shares. Preferential tax rates for long-term
      capital gains are applicable to a U.S. Holder which is an individual, estate
      or
      trust. There are currently no preferential tax rates for long-term capital
      gains
      for a U.S. Holder which is a corporation.




In
      the case of foreign currency received as a dividend that is not converted by
      the
      recipient into U.S. dollars on the date of receipt, a U.S. Holder will have
      a
      tax basis in the foreign currency equal to its U.S. dollar value on the date
      of
      receipt. Generally any gain or loss recognized upon a subsequent sale or other
      disposition of the foreign currency, including the exchange for U.S. dollars,
      will be ordinary income or loss. However, an individual whose realized gain
      does
      not exceed $200 will not recognize that gain, to the extent that there are
      no
      expenses associated with the transaction that meet the requirements for
      deductibility as a trade or business expense (other than travel expenses in
      connection with a business trip) or as an expense for the production of
      income.




Dividends
        paid on the common shares of the Company generally will not be eligible for
        the
        dividends received deduction provided to corporations receiving dividends
        from
        certain United States corporations. A U.S. Holder which is a corporation
        and
        which owns shares representing at least 10% of the voting power and value
        of the
        Company may, under certain circumstances, be entitled to a 70% (or 80% if
        the
        U.S. Holder owns shares representing at least 20% of the voting power and
        value
        of the Company) deduction of the United States source portion of dividends
        received from the Company (unless the Company qualifies as a “foreign personal
        holding company” or a “passive foreign investment company,” as defined below).
        The availability of this deduction is subject to several complex limitations
        which are beyond the scope of this discussion.
  Under
        current Treasury Regulations, dividends paid on the Company’s common shares, if
        any, generally will not be subject to information reporting and generally
        will
        not be subject to U.S. backup withholding tax. However, dividends and the
        proceeds from a sale of the Company’s common shares paid in the U.S. through a
        U.S. or U.S. related paying agent (including a broker) will be subject to
        U.S.
        information reporting requirements and may also be subject to the 31% U.S.
        backup withholding tax, unless the paying agent is furnished with a duly
        completed and signed Form W-9 or the recipient is exempt from such procedures.
        Any amounts withheld under the U.S. backup withholding tax rules will be
        allowed
        as a refund or a credit against the U.S. Holder’s U.S. federal income tax
        liability, provided the required information is furnished to the IRS. U.S.
        Holders are urged to consult their own tax counsel regarding the information
        reporting and backup withholding rules applicable to the Company’s common
        shares.


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***Foreign
      Tax Credit***




A
      U.S. Holder who pays (or has withheld from distributions) Canadian income tax
      with respect to the ownership of common shares of the Company may be entitled,
      at the option of the U.S. Holder, to either receive a deduction or a tax credit
      for such foreign tax paid or withheld. Generally, it will be more advantageous
      to claim a credit because a credit reduces United States federal income taxes
      on
      a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s
      income subject to tax. This election is made on a year-by-year basis and applies
      to all foreign taxes paid by (or withheld from) the U.S. Holder during that
      year. There are significant and complex limitations which apply to the credit,
      among which is the general limitation that the credit cannot exceed the
      proportionate share of the U.S. Holder’s United States income tax liability that
      the U.S. Holder’s foreign source income bears to his or its worldwide taxable
      income. In the determination of the application of this limitation, the various
      items of income and deduction must be classified into foreign and domestic
      sources. Complex rules govern this classification process. In addition, this
      limitation is calculated separately with respect to specific classes of income
      such as “passive income, “ “high withholding tax interest,” “financial services
      income,” “shipping income,” and certain other classifications of income.
      Dividends distributed by the Company will generally constitute “passive income”
or, in the case of certain U.S. Holders, “financial services income” for these
      purposes. In addition, U.S. Holders which are corporations that own 10% or
      more
      of the voting stock of the Company may be entitled to an “indirect” foreign tax
      credit under Section 902 with respect to the payment of dividends by the Company
      under certain circumstances and subject to complex rules and limitations. The
      availability of the foreign tax credit and the application of the limitations
      on
      the credit are fact specific, and U.S. Holders of common shares of the Company
      should consult their own tax advisors regarding their particular
      circumstances.




***Information
      Reporting and Backup Withholding***


U.S.
      Information reporting requirements may apply with respect to the payment of
      dividends to U.S. Holders of the Company’s common shares. Under Treasury
      regulations currently in effect, non-corporate holders may be subject to backup
      withholding at a 31% rate with respect to dividends when such holder (1) fails
      to furnish or certify a correct taxpayer identification number to the payor
      in
      the required manner, (2) is notified by the IRS that it has failed to report
      payments of interest or dividends properly or (3) fails, under certain
      circumstances, to certify that it has been notified by the IRS that it is
      subject to backup withholding for failure to report interest and dividend
      payments. Any amounts withheld under the backup withholding rules from a payment
      to a U.S. Holder generally will be allowed as a credit against the U.S. Holder’s
      U.S. federal income tax liability and may entitle the U.S. Holder to a refund,
      provided that the required information is furnished to the IRS. Certain U.S.
      Holders, including corporations, are not subject to backup
      withholding.




***Disposition
      of Common Shares of the Company***




A
      U.S. Holder will recognize gain or loss upon the sale of common shares of the
      Company equal to the difference, if any, between (i) the amount of cash
      plus the fair market value of any property received, and (ii) the
      shareholder’s tax basis in the common shares of the Company. Preferential tax
      rates apply to long-term capital gains of U.S. Holders which are individuals,
      estates or trusts. This gain or loss will be capital gain or loss if the common
      shares are a capital asset in the hands of the U.S. Holder, which will be
      long-term capital gain or loss if the common shares of the Company are held
      for
      more than one year. Deductions for net capital losses are subject to significant
      limitations. For U.S. Holders who are not corporations, any unused portion
      of
      such net capital loss may be carried over to be used in later tax years until
      such net capital loss is thereby exhausted. For U.S. Holders that are
      corporations (other than corporations subject to Subchapter S of the Code),
      an
      unused net capital loss may be carried back three years and carried forward
      five
      years from the loss year to be offset against capital gains until such net
      capital loss is thereby exhausted.




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***Currency
      Exchange Gains or Losses***




U.S.
      Holders generally are required to calculate their taxable incomes in United
      States dollars. Accordingly, a U.S. Holder who purchases common shares of the
      Company with Canadian dollars will be required to determine the tax basis of
      such shares in United States dollars based on the exchange rate prevailing
      on
      the settlement date of the purchase (and may be required to recognize the
      unrealized gain or loss, if any, in the Canadian currency surrender in the
      purchase transaction). Similarly, a U.S. Holder receiving dividends or sales
      proceeds from common shares of the Company in Canadian dollars will be required
      to compute the dividend income or the amount realized on the sale, as the case
      may be, in United States dollars based on the exchange rate prevailing at the
      time of receipt in the case of dividends and on the settlement date in the
      case
      of sales on an established securities exchange. Gain or loss, if any, recognized
      on a disposition of Canadian currency in connection with the described
      transactions generally will be treated as ordinary gain or loss.




***Other
      Considerations***




In
      the following circumstances, the above sections of this discussion may not
      describe the United States federal income tax consequences resulting from the
      holding and disposition of common shares:




***Foreign
      Personal Holding Company***




If
      at any time during a taxable year (i) more than 50% of the total combined voting
      power or the total value of the Company’s outstanding shares is owned, directly
      or indirectly, by five or fewer individuals who
      are citizens or residents of the United States and (ii) 60% (50% in some
      circumstances) or more of the Company’s gross income for such year was “foreign
      personal holding company income” (e.g. dividends, interest and similar income),
      the Company may be treated as a “foreign personal holding company.” In that
      event, U.S. Holders that hold common shares would be required to include in
      gross income for such year their allocable portions of such “foreign personal
      holding company income” to the extent the Company does not actually distribute
      such income. The Company does not believe that it currently qualifies as a
      foreign personal holding company. However, there can be no assurance that the
      Company will not be considered a foreign personal holding company for the
      current or any future taxable year.


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***Foreign
      Investment Company***




If
      50% or more of the combined voting power or total value of the Company's
      outstanding shares is held, directly or indirectly, by citizens or residents
      of
      the United States, United States domestic partnerships or corporations, or
      estates or trusts other than foreign estates or trusts (as defined by the Code
      Section 7701(a)(31)), and the Company is found to be engaged primarily in the
      business of investing, reinvesting, or trading in securities, commodities,
      or
      any interest therein, it is possible that the Company may be treated as a
“foreign investment company” as defined in Section 1246 of the Code, causing all
      or part of any gain realized by a U.S. Holder selling or exchanging common
      shares to be treated as ordinary income rather than capital gain. The Company
      does not believe that it currently qualifies as a foreign investment company.
      However, there can be no assurance that the Company will not be considered
      a
      foreign investment company for the current or any future taxable
      year.




***Passive
      Foreign Investment Company***




Certain
      United States income tax legislation contains rules governing “passive foreign
      investment companies” (“PFIC”) which can have significant tax effects on U.S.
      Holders of foreign corporations. These rules do not apply to non-U.S. Holders.
      Section 1297 of the Code defines a PFIC as a corporation that is not formed
      in
      the United States and, for any taxable year, either (i) 75% or more of its
      gross
      income is “passive income,” which includes interest, dividends and certain rents
      and royalties or (ii) the average percentage, by fair market value (or, if
      the
      corporation is not publicly traded and either is a controlled foreign
      corporation or makes an election, by adjusted tax basis), of its assets that
      produce or are held for the production of “passive income” is 50% or more. If a
      foreign corporation owns, directly or indirectly, at least 25% by value of
      the
      stock a second corporation, then for purposes of the PFIC tests described above,
      the first corporation will be treated as owning a proportionate share of the
      assets of, and as receiving a proportionate share of the income of, the second
      corporation. The Company believes that it qualified as a PFIC for its most
      recently ended fiscal year and may qualify as a PFIC in subsequent fiscal years.
      There can be no assurance that the Company’s determination concerning its PFIC
      status will not be challenged or that it will be able to satisfy record keeping
      requirements that will be imposed on a qualified electing fund (“QEF”). Each
      U.S. Holder of the Company is urged to consult a tax advisor with respect to
      how
      the PFIC rules affect their tax situation.




A
      U.S. Holder who holds stock in a foreign corporation during any year in which
      such corporation qualifies as a PFIC is subject to United States federal income
      taxation under one of two alternative tax regimes at the election of each such
      U.S. Holder. The following is a discussion of such two alternative tax regimes
      applied to such U.S. Holders of the Company. In addition, special rules apply
      if
      a foreign corporation qualifies as both a PFIC and a “controlled foreign
      corporation” (as defined below) and a U.S. Holder owns, actually or
      constructively, 10% or more of the total combined voting power of all classes
      of
      stock entitled to vote of such foreign corporation (See more detailed
      discussion at “Controlled Foreign Corporation” below).


A
      U.S. Holder who elects in a timely manner to treat the Company as a QEF (an
      “Electing U.S. Holder”) will be subject, under Section 1293 of the Code, to
      current federal income tax for any taxable year in which the Company qualifies
      as a PFIC on his pro rata share of the Company’s (i) “net capital gain” (the
      excess of net long-term capital gain over net short-term capital loss), which
      will be taxed as long-term capital gain to the Electing U.S. Holder and (ii)
      “ordinary earnings” (the excess of earnings and profits over net capital gain),
      which will be taxed as ordinary income to the Electing U.S. Holder, in each
      case, for the shareholder’s taxable year in which (or with which) the Company’s
      taxable year ends, regardless of whether such amounts are actually
      distributed.




The
      effective QEF election also allows the Electing U.S. Holder to
      (i) generally treat any gain realized on the disposition of his common
      shares in the Company (or deemed to be realized on the pledge of his shares)
      as
      capital gain; (ii) treat his share of the Company’s net capital gain, if
      any, as long-term capital gain instead of ordinary income; and (iii) either
      avoid interest charges resulting from PFIC status altogether, or make an annual
      election, subject to certain limitations, to defer payment of current taxes
      on
      his share of the Company’s annual realized net capital gain and ordinary
      earnings subject, however, to an interest charge. If the Electing U.S. Holder
      is
      not a corporation, such an interest charge would be treated as “personal
      interest” that is not deductible.




The
      procedure a U.S. Holder must comply with in making an effective QEF election
      will depend on whether the year of the election is the first year in the U.S.
      Holder’s holding period in which the Company is a PFIC. If the U.S. Holder makes
      a QEF election in such first year, i.e., a timely QEF election, then the U.S.
      Holder may make the QEF election by simply filing the appropriate documents
      at
      the time the U.S. Holder files his tax return for such first year. If, however,
      the Company qualified as a PFIC in a prior year, then in addition to filing
      documents, the U.S. Holder must elect to recognize (i) under the rules of
      Section 1291 of the Code (discussed herein), any gain that he would otherwise
      recognize if the U.S. Holder sold his stock on the qualification date or
      (ii) if the Company is a controlled foreign corporation, the U.S. Holder’s
      pro rata share of the Company’s post-1986 earnings and profits as of the
      qualification date. The qualification date is the first day of the Company’s
      first tax year in which the Company qualified as a QEF with respect to such
      U.S.
      Holder. The elections to recognize such gain or earnings and profits can only
      be
      made if such U.S. Holder’s holding period for the common shares of the Company
      includes the qualification date. By electing to recognize such gain or earnings
      and profits, the U.S. Holder will be deemed to have made a timely QEF election.
      A U.S. Holder who made elections to recognize gain or earnings and profits
      after
      May 1, 1992 and before January 27, 1997 may, under certain
      circumstances, elect to change such U.S. Holder’s qualification date to the
      first day of the first QEF year. U.S. Holders are urged to consult a tax advisor
      regarding the availability of and procedure for electing to recognize gain
      or
      earnings and profits under the foregoing rules.




-
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            of Contents**




A
      QEF election, once made with respect to the Company, applies to the tax year
      for
      which it was made and to all subsequent tax years, unless the election is
      invalidated or terminated, or the IRS consents to revocation of the election.
      If
      a QEF election is made by a U.S. Holder and the Company ceases to qualify as
      a
      PFIC in a subsequent tax year, the QEF election will remain in effect, although
      not applicable, during those tax years in which the Company does not qualify
      as
      a PFIC. Therefore, if the Company again qualifies as a PFIC in a subsequent
      tax
      year, the QEF election will be effective and the U.S. Holder will be subject
      to
      the rules described above for Electing U.S. Holders in such tax year and any
      subsequent tax years in which the Company qualifies as a PFIC. In addition,
      the
      QEF election remains in effect, although not applicable, with respect to an
      Electing U.S. Holder even after such U.S. Holder disposes of all of his or
      its
      direct and indirect interest in the shares of the Company. Therefore, if such
      U.S. Holder reacquires an interest in the Company, that U.S. Holder will be
      subject to the rules described above for Electing U.S. Holders for each tax
      year
      in which the Company qualifies as a PFIC.


If
      a U.S. Holder does not make a timely QEF election during a year in which it
      holds (or is deemed to have held) the common shares in question and the Company
      is a PFIC (a “Non-Electing U.S. Holder”), then special taxation rules under
      Section 1291 of the Code will apply to (i) gains realized on the
      disposition (or deemed to be realized by reasons of a pledge) of his common
      shares in the Company and (ii) certain “excess distributions” (generally,
      distributions received in the current taxable year that are in excess of 125%
      of
      the average distributions received during the three preceding years or, if
      shorter, the U.S. Holder’s holding period) by the Company.




A
      Non-Electing U.S. Holder generally would be required to pro rate all gains
      realized on the disposition of his common shares in the Company and all excess
      distributions on his common shares in the Company over the entire holding period
      for the common shares. All gains or excess distributions allocated to prior
      years of the U.S. Holder (other than years prior to the first taxable year
      of
      the Company during such U.S. Holder’s holding period and beginning after
      January 1, 1987 for which it was a PFIC) would be taxed at the highest tax
      rate for each such prior year applicable to ordinary income. The Non-Electing
      U.S. Holder also would be liable for interest on the foregoing tax liability
      for
      each such prior year calculated as if such liability had been due with respect
      to each such prior year. A Non-Electing U.S. Holder that is not a corporation
      must treat this interest charge as “personal interest” which, as discussed
      above, is wholly nondeductible. The balance of the gain or the excess
      distribution will be treated as ordinary income in the year of the disposition
      or distribution, and no interest charge will be incurred with respect to such
      balance.




If
      the Company is a PFIC for any taxable year during which a Non-Electing U.S.
      Holder holds common shares of the Company, then the Company will continue to
      be
      treated as a PFIC with respect to such common shares in the Company, even if
      it
      is no longer definitionally a PFIC. A Non-Electing U.S. Holder may terminate
      this deemed PFIC status by electing to recognize gain (which will be taxed
      under
      the rules discussed above for Non-Electing U.S. Holders) as if such common
      shares in the Company had been sold on the last day of the last taxable year
      for
      which it was a PFIC.




-
            43
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            of Contents**




Effective
      for tax years of U.S. Holders beginning after December 31, 1997, U.S. Holders
      who hold, actually or constructively, marketable stock (as specifically defined
      in the Treasury Regulations) of a foreign corporation that qualifies as a PFIC
      may annually elect to mark such stock to the market (a “mark-to-market
      election”). If such an election is made, such U.S. Holder will generally not be
      subject to the special taxation rules of Section 1291 discussed above. However,
      if the mark-to-market election is made by a Non-Electing U.S. Holder after
      the
      beginning of the holding period for the PFIC stock, then the Section 1291 rules
      will apply to certain dispositions of, distributions on and other amounts
      taxable with respect to the common shares in the Company. A U.S. Holder who
      makes the mark-to market election will include in income for the taxable year
      for which the election was made an amount equal to the excess, if any, of the
      fair market value of the common shares of the Company as of the close of such
      tax year over such U.S. Holder’s adjusted basis in such common shares. In
      addition, the U.S. Holder is allowed a deduction for the lesser of (i) the
      excess, if any, of such U.S. Holder’s adjusted tax basis in the common shares
      over the fair market value of such shares as of the close of the tax year,
      or
      (ii) the excess, if any, of (A) the mark-to-market gains for the
      common shares in the Company included by such U.S. Holder for prior tax years,
      including any amount which would have been included for any prior tax year
      but
      for the Section 1291 interest on tax deferral rules discussed above with respect
      to Non-Electing U.S. Holders, over (B) the mark-to-market losses for shares
      that were allowed as deductions for prior tax years. A U.S. Holder’s adjusted
      tax basis in the common shares of the Company will be adjusted to reflect the
      amount included in or deducted from income as a result of a mark-to-market
      election. A mark-to-market election applies to the taxable year in which the
      election is made and to each subsequent taxable year, unless the common shares
      of the Company cease to be marketable, as specifically defined, or the IRS
      consents to revocation of the election. Because the IRS has not established
      procedures for making a mark-to-market election, U.S. Holders should consult
      their tax advisor regarding the manner of making such an election.




Under
      Section 1291(f) of the Code, the IRS has issued Treasury Regulations that,
      subject to certain exceptions, would treat as taxable certain transfers of
      PFIC
      stock by Non-Electing U.S. Holders that are generally not otherwise taxed,
      such
      as gifts, exchanges pursuant to corporate reorganizations, and transfers at
      death. Generally, in such cases the basis of the common shares of the Company
      in
      the hands of the transferee and the basis of any property received in the
      exchange for those common shares would be increased by the amount of gain
      recognized. Under the Proposed Treasury Regulations, an Electing U.S. Holder
      would not be taxed on certain transfers of PFIC stock, such as gifts, exchanges
      pursuant to corporate reorganizations, and transfers at death. The transferee’s
      basis in this case will depend on the manner of the transfer. The specific
      tax
      effect to the U.S. Holder and the transferee may vary based on the manner in
      which the common shares are transferred. Each U.S. Holder of the Company is
      urged to consult a tax advisor with respect to how the PFIC rules affect their
      tax situation.




Certain
      special, generally adverse, rules will apply with respect to common shares
      of
      the Company while the Company is a PFIC whether or not it is treated as a QEF.
      For example under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC
      stock as security for a loan (including a margin loan) will, except as may
      be
      provided in regulations, be treated as having made a taxable disposition of
      such
      shares.




***Controlled
      Foreign Corporation***




If
      more than 50% of the total combined voting power of all classes of shares
      entitled to vote or the total value of the shares of the Company is owned,
      actually or constructively, by citizens or residents of the United States,
      United States domestic partnerships or corporations, or estates or trusts other
      than foreign estates or trusts (as defined by the Code Section 7701(a)(31)),
      each of which own, actually or constructively, 10% or more of the total combined
      voting power of all classes of shares entitled to vote of the Company (“United
      States Shareholder”), the Company could be treated as a controlled foreign
      corporation (“CFC”) under Subpart F of the Code. This classification would
      effect many complex results, one of which is the inclusion of certain income
      of
      a CFC which is subject to current U.S. tax. The United States generally taxes
      United States Shareholders of a CFC currently on their pro-rata shares of the
      Subpart F income of the CFC. Such United States Shareholders are generally
      treated as having received a current distribution out of the CFC’s
      Subpart F income and are also subject to current U.S. tax on their pro rata
      shares of the CFC’s earnings invested in U.S. property. The foreign tax credit
      described above may reduce the U.S. tax on these amounts. In addition, under
      Section 1248 of the Code, gain from the sale or exchange of shares by a U.S.
      Holder of common shares of the Company which is or was a United States
      Shareholder at any time during the five-year period ending with the sale or
      exchange is treated as ordinary income to the extent of earnings and profits
      of
      the Company attributable to the shares sold or exchanged. If a foreign
      corporation is both a PFIC and a CFC, the foreign corporation generally will
      not
      be treated as a PFIC with respect to United States Shareholders of the CFC.
      This
      rule generally will be effective for taxable years of United States Shareholders
      beginning after 1997 and for taxable years of foreign corporations ending with
      or within such taxable years of United States Shareholders. Special rules apply
      to United States Shareholders who are subject to the special taxation rules
      under Section 1291 discussed above with respect to a PFIC. Because of the
      complexity of Subpart F, a more detailed review of these rules is outside of
      the
      scope of this discussion. The Company does not believe that it currently
      qualifies as a CFC. However, there can be no assurance that the Company will
      not
      be considered a CFC for the current or any future taxable year.




-
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            of Contents**




F.Dividends
      and Paying Agents




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.




**G.**
            **Statement
                by
                Experts**




This
      Form 20-F is being filed as an annual report under the Exchange Act, and, as
      such, there is no requirement to provide any information under this
      item.




**H.**
            **Documents
                on
                Display**




Any
      of the documents referred to above can be viewed at our registered office,
      which
      is located at Suite 1180, 999 West Hastings Street, Vancouver, British Columbia,
      Canada. All of these documents are in English.




**I.**
            **Subsidiary
                Information**




This
      information is not required for reports filed in the United States.




**Item
                11**
            **Quantitative
                and Qualitative Disclosures About Market
                Risk**




At
      this time, we are not subject to any interest rate risk, foreign currency
      exchange rate risk or commodity price risk.




**Item
                12**
            **Description
                of Securities Other than Equity
                Securities**




Not
      applicable.




-
            45
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            of Contents**


**PART
      II**




**Item
                13**
            **Defaults,
                Dividend Arrearages and
                Delinquencies**




Not
      applicable.




**Item
                14**
            **Material
                Modifications to the Rights of Security Holders and
                Use of Proceeds**




Not
      applicable.




**Item
                15**
            **Controls
                and
                Procedures**




As
      of July 31, 2006, we carried out an evaluation, under the supervision and with
      the participation of our principal executive officer and principal financial
      officer, of the effectiveness of the design and operation of our disclosure
      controls and procedures. Based on this evaluation, our principal executive
      officer and principal financial officer have concluded that our disclosure
      controls and procedures are effective to ensure that information required to
      be
      (a) included in our periodic reports to the Securities and Exchange Commission
      is recorded, processed, summarized and reported in a timely manner and (b)
      disclosed in the reports that we file or submit under the Securities Exchange
      Act of 1934 is accumulated and communicated to our management, including our
      principal executive officer and principal financial officer, to allow timely
      decisions regarding required disclosure.




In
        addition, there were no changes in our internal control over financial reporting
        during our fiscal year covered by this annual report on Form 20-F that has
        materially affected, or is reasonably likely to materially affect, our internal
        control over financial reporting subsequent to the date of their last
        evaluation.
  **Item
                  16**
              **[Reserved]**
  **A.**
              **Audit
                  committee financial expert.******
  Our
        board of directors has determined that we do not have an audit committee
        financial expert serving on our audit committee. We currently have limited
        operations and funds and as a result do not believe an audit committee financial
        expert is required to serve on our audit committee at this time. As our
        operations grow and finances become more complex, we will commence a search
        for
        an audit committee financial expert to be appointed to our board of directors
        and our audit committee.
  **B.**
              **Code
                  of Ethics.******
  We
        have adopted a Code of Business Conduct that applies to our Chief Executive
        Officer, Chief Financial Officer and other senior financial officers performing
        similar functions. The Code of Business Conduct is available for viewing
        on our
        website at www.canplats.com .
  **C.**
              **Principal
                  Accountant Fees and
                  Services.******
  The
        following is a summary of the aggregate fees billed in each of the last two
        fiscal years by our principal accountant.


-
          46
          -
 **Table
          of Contents**




**Principal
                Accountant Fees and Services**
            
            **Fiscal
                year ended July 31, 2006**
            
            **Fiscal
                year ended July 31, 2005**Audit
                Fees(1)
            
            $10,500
            
            $9,125All
                Other Fees
            
            Nil
            
            $1,605**Total**
            
            $10,500
            
            $10,730




(1)
            Includes audit, interim financial statements review and fees in connection
                with regulatory financial filings.




Pre-Approval
      Policies and Procedures




Our
      audit committee has established policies and procedures that are intended to
      control the services provided by our auditors and to monitor their continuing
      independence. Under these policies, no services may be undertaken by our
      auditors unless the engagement is specifically approved by our audit committee
      or the services are included within a category which has been pre-approved
      by
      our audit committee. The maximum charge for services is established by the
      audit
      committee when the specific engagement is approved or the category of services
      pre-approved. Management is required to notify the audit committee of the nature
      and value of pre-approved services undertaken.




Our
      audit committee will not approve engagements relating to, or pre-approve
      categories of, non-audit services to be provided by our auditors (i) if such
      services are of a type the performance of which would cause our auditors to
      cease to be independent within the meaning of applicable Securities and Exchange
      Commission rules, and (ii) without consideration, among other things, of whether
      our auditors are best situated
      to provide the required services and whether the required services are
      consistent with their role as auditor.


All
      services provided by our principal accountant in 2006 were pre-approved by
      our
      audit committee.




**D.**
            **Exemptions
                from the Listing Standards for Audit
                Committees.******




Not
      applicable.




**E.**
            **Purchases
                of Equity Securities by the Issuer and Affiliated
                Purchasers.******




Not
      applicable.




**PART
      III**




**Item
                17**
            **Financial
                Statements**




Our
      consolidated financial statements are stated in Canadian Dollars (Cdn$) and
      are
      prepared in Canadian GAAP, which differs in certain respects from those
      principles that we would have followed had our financial statements been
      prepared in accordance with US GAAP. The major measurement differences between
      Canadian and US GAAP, as they affect us, are disclosed in note 14 to the
      financial statements.




The
      consolidated financial statements and notes thereto as required under Item
      17
      are attached to this Annual Report, are individually listed under Item 14,
      and
      are found immediately following the text of this Annual Report. The audit report
      of PricewaterhouseCoopers, LLP is included in this Annual Report immediately
      preceding the financial statements.




-
            47
            -
 **Table
            of Contents**


**Item
                18**
            **Financial
                Statements**




Not
      applicable.




**Item
                19**
            **Exhibits**




All
      Financial Statements and Exhibits referred to in this Item 19 are incorporated
      by reference into this Annual Report.




**A.**
            **Financial
                Statements**





**Document**
            **Page**Consolidated
                Financial Statements as at July 31, 2006,
                July 31, 2005 and July 31, 2004 (in Canadian Dollars).
            F-1PricewaterhouseCoopers
                LLP Auditors’ Report, dated
                November 21, 2006.
            F-3Consolidated
                Balance Sheets as at July 31, 2006 and
                July 31, 2005 (in Canadian Dollars).
            F-4Consolidated
                Statements of Loss and Deficit for the
                years ended July 31, 2006, July 31, 2005 and July 31, 2004 (in Canadian
                Dollars).
            F-5Consolidated
                Statements of Cash Flows for the years
                ended July 31, 2006, July 31, 2005 and July 31, 2004 (in Canadian
                Dollars).
            F-6Consolidated
                Statements of Changes in Shareholders’ Equity
                for the years ended July 31, 2006, July 31, 2005 and July 31, 2004
                (in
                Canadian Dollars).
            F-7Notes
                to Consolidated Financial Statements for the years
                ended July 31, 2006, July 31, 2005 and July 31, 2004 (in Canadian
                Dollars).
            F-8




**B.**
            **Exhibits**





**Exhibit
                Number**
            **Description**1.1
            Memorandum,
                Articles and Certificate of Incorporation incorporated by reference
                from
                Exhibit 1.1 to Registration Statement under the Securities Exchange
                Act of
                1934 on Form 20-F, file no. 0-31190****filed
                on July 30, 2001.1.1
            Notice
                of Articles and Articles of Incorporation incorporated by reference
                from
                Exhibit 1.1 to Annual Report under the Securities Exchange Act of
                1934 on
                Form 20-F, file no. 0-31190****filed
                on December 30, 2005.12.1
            Certification
                of President As Adopted Pursuant to
                Section 302 of the Sarbanes-Oxley Act of 2002.12.2
            Certification
                of Chief Financial Officer As Adopted
                Pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.13.1
            Certification
                of President Pursuant to 18 U.S.C.
                Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                Act
                of 2002.13.2
            Certification
                of Chief Financial Officer Pursuant to 18
                U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.






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A.     Financial
      Statements












**Canplats
        Resources Corporation**
  **Consolidated
        Financial Statements**
 **July
        31, 2006, 2005 and 2004 (in Canadian dollars)**
 
 
  F
              -1
 
   **Management’s
        Responsibility for Financial Reporting**
 
 The
        accompanying consolidated financial statements of the company have been prepared
        by management in accordance with accounting principles generally accepted
        in
        Canada and reconciled to accounting principles generally accepted in the
        United
        States as set out in note 14 and contain estimates based on management’s
        judgement and based on currently available information. Management is
        responsible for all information in the annual report. All financial and
        operating data in the annual report is consistent, where appropriate, with
        that
        contained in the consolidated financial statements.
 
 A
        system of internal control over financial reporting is maintained in order
        to
        provide reasonable assurance that assets are safeguarded and that transactions
        are properly recorded and executed in accordance with management’s
        authorization. This system includes established policies and procedures,
        the
        selection and training of qualified personnel, and an organization for
        appropriate delegation of authority and segregation of
        responsibilities.
 
 The
        Audit Committee of the Board of Directors has met with the company’s independent
        auditors to review the scope and results of the annual audit, and to review
        the
        financial statements and related financial reporting matters prior to submitting
        the financial statements to the Board for approval.
 
 The
        company’s independent auditors, PricewaterhouseCoopers LLP, are appointed by the
        shareholders to conduct an audit in accordance with Canadian generally accepted
        auditing standards and the auditing standards of the Public Company Accounting
        Oversight Board (United States), and their report follows.
 
 
 *“R.E. Gordon Davis”*
              *“Ross A. Mitchell”*R.E. Gordon Davis
                President
              Ross A. Mitchell
                Vice
                  President, Finance
 
 November
        21, 2006
 
 
 F
              -2
 
 
 **PricewaterhouseCoopers
        LLP**
 **Chartered
        Accountants**
 PricewaterhouseCoopers
        Place
 250
        Howe Street, Suite 700
 Vancouver,
        British Columbia
 Canada
        V6C 3S7
 Telephone
        +1 604 806 7000
 Facsimile
        +1 604 806 7806
   **Independent
        Auditors’ Report**
 To
        the Shareholders of Canplats Resources Corporation
 
 We
        have audited the consolidated balance sheet of Canplats Resources Corporation
        (the “Company”) as at July 31, 2006 and the consolidated statements of loss
        and deficit and cash flows for the year then ended. These consolidated financial
        statements are the responsibility of the Company’s management. Our
        responsibility is to express an opinion on these financial statements based
        on
        our audit.
 
 We
        conducted our audit in accordance with Canadian generally accepted auditing
        standards and with the standards of the Public Company Accounting Oversight
        Board (United States). Those standards require that we plan and perform an
        audit
        to obtain reasonable assurance whether the financial statements are free
        of
        material misstatement. An audit includes examining, on a test basis, evidence
        supporting the amounts and disclosures in the financial statements. An audit
        also includes assessing the accounting principles used and significant estimates
        made by management, as well as evaluating the overall financial statement
        presentation.
 
 In
        our opinion, these consolidated financial statements present fairly, in all
        material respects, the financial position of the Company as at July 31, 2006
        and
        the results of its operations and its cash flows for the year then ended
        in
        accordance with Canadian generally accepted accounting principles.
 
 The
        consolidated financial statements for the years ended July 31, 2005 and 2004
        were audited by other auditors who expressed an opinion without reservation
        on
        those statements in each of their reports dated October 7, 2005 and October
        4,
        2004 respectively.
 
 
 "PricewaterhouseCoopers
        LLP"
 
 **Chartered
        Accountants**
 Vancouver,
        British Columbia
 November
        21, 2006
  PricewaterhouseCoopers
          refers to the Canadian firm of PricewaterhouseCoopers LLP and the other
          member
          firms of PricwaterhouseCoopers International Limited, each of which is
          a
          separate and independent legal entity.
 F
            -3
 **Canplats
          Resources Corporation**
 (An
          Exploration Stage Company)
 **CONSOLIDATED
        BALANCE SHEETS**
 
 **As
        at July 31**
 (expressed
        in Canadian dollars)
 
 **2006**
              
              **2005**$
              
              $**ASSETS****Current**Cash
                  and cash equivalents
              
              
              **1,590,245**
              
              
              486,251Receivables
              
              
              **72,138**
              
              
              99,348Prepaid
                  expense
              
              
              **13,866**
              
              
              1,911**Total
                  current assets**
              
              
              **1,676,249**
              
              
              587,510**Mineral
                  properties**(note 3)
              
              
              **2,394,421**
              
              
              1,716,483**Property,
                  plant and equipment**(note
                  4)
              
              
              **-**
              
              
              22,018**Total
                  assets**
              
              
              **4,070,670**
              
              
              2,326,011**LIABILITIES
                  AND SHAREHOLDERS’ EQUITY****Current**Accounts
                  payable and accrued liabilities
              
              
              **38,332**
              
              
              54,666Due
                  to related parties (note 8)
              
              
              **47,469**
              
              
              87,530**85,801**
              
              
              142,196**Future
                  income tax liability**(note
                  9)
              
              
              **200,200**
              
              
              119,500**Total
                  liabilities**
              
              
              **286,001**
              
              
              261,696**Shareholders’
                  equity**Share
                  capital issued (note 5)
              
              
              **12,725,289**
              
              
              11,340,245Value
                  assigned to stock options and warrants
              
              
              **785,678**
              
              
              431,250Contributed
                  surplus
              
              
              **316,450**
              
              
              -Deficit
              
              
              **(10,042,748**
              **)**
              
              (9,707,180
              )**Total
                  shareholders’ equity**
              
              
              **3,784,669**
              
              
              2,064,315**Total
                  liabilities and shareholders’ equity**
              
              
              **4,070,670**
              
              
              2,326,011
 
 Commitments
        (note 12)
 Subsequent
        event (note 15)
 
 
 Approved
        by the Board of Directors
 
 
  *“James W. Tutton”*
              *“R.E.
                Gordon Davis”*_________________________
              _______________________James W. Tutton, Director
              R.E. Gordon Davis, Director
  
    The
          accompanying notes are an integral part of the consolidated financial
          statements.
 F
              -4
 **Canplats
        Resources Corporation**
 (An
            Exploration Stage Company)
 
 **CONSOLIDATED
        STATEMENTS OF LOSS AND
        DEFICIT**
 
 **Years
        ended July 31**
 (expressed
        in Canadian dollars, except number of shares)
 
 **2006**
              
              **2005**
              
              **2004**$
              
              $
              
              **$****Expenses**Bank
                  charges
              
              
              **1,571**
              
              
              1,556
              
              
              1,755General
                  exploration
              
              
              **134,878**
              
              
              14,780
              
              
              5,347Insurance
              
              
              **10,457**
              
              
              7,481
              
              
              8,765Investor
                  relations
              
              
              **87,930**
              
              
              156,928
              
              
              157,938Legal,
                  accounting and audit
              
              
              **10,500**
              
              
              11,230
              
              
              15,476Listing
                  and filing fees
              
              
              **13,672**
              
              
              7,752
              
              
              19,107Management
                  administration fee
              
              
              **-**
              
              
              -
              
              
              9,000Office
              
              
              **6,691**
              
              
              11,186
              
              
              2,983Rent
              
              
              **-**
              
              
              -
              
              
              6,000Salaries
              
              
              **58,363**
              
              
              49,225
              
              
              27,880Shareholder
                  relations
              
              
              **12,318**
              
              
              19,318
              
              
              19,702Stock-based
                  compensation (note 6)
              
              
              **-**
              
              
              111,000
              
              
              273,900Transfer
                  agents
              
              
              **11,924**
              
              
              11,975
              
              
              9,575**(348,304**
              **)**
              
              (402,431
              )
              
              (557,428
              )**Other
                  income (loss)**Interest
                  income
              
              
              **18,319**
              
              
              21,239
              
              
              26,386Foreign
                  exchange gain (loss)
              
              
              **(11,687**
              **)**
              
              (14,875
              )
              
              6,000Recovery
                  (write-off) of mineral properties (note 3)
              
              
              **6,104**
              
              
              (1,133,280
              )
              
              (745,151
              )**12,736**
              
              
              (1,126,916
              )
              
              (712,765
              )**Loss
                  before income taxes**
              
              
              **(335,568**
              **)**
              
              (1,529,347
              )
              
              (1,270,193
              )Future
                  income tax recovery (note 9(d))
              
              
              **-**
              
              
              35,600
              
              
              -**Loss
                  for the year**
              
              
              **(335,568**
              **)**
              
              (1,493,747
              )
              
              (1,270,193
              )**Deficit,
                  beginning of the year**
              
              
              **(9,707,180**
              **)**
              
              (8,213,433
              )
              
              (6,943,240
              )**Deficit,
                  end of the year**
              
              
              **(10,042,748**
              **)**
              
              (9,707,180
              )
              
              (8,213,433
              )**Weighted
                  average number of issued shares**
              
              
              **32,390,739**
              
              
              29,348,744
              
              
              22,856,098**Basic
                  and diluted loss per common share**
              
              
              **(0.01**
              **)**
              
              (0.05
              )
              
              (0.06
              )
  
  The
          accompanying notes are an integral part of the consolidated financial
          statements.
 F
              -5
 Canplats Resources
        Corporation (An
              Exploration Stage Company)
 
  
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 
 **Years
        ended July 31**
 (expressed in Canadian dollars)
  **2006**
                  
                  **2005**
                  
                  **2004**$
                  
                  $
                  
                  $**OPERATING
                      ACTIVITIES**Loss
                      for the year
                  
                  
                  (335,568
                  )
                  
                  (1,493,747
                  )
                  
                  (1,270,193
                  )Non-cash
                      items:Stock-based
                      compensation
                  
                  
                  -
                  
                  
                  111,000
                  
                  
                  273,900Write-off
                      (recovery) of mineral properties
                  
                  
                  (6,104
                  )
                  
                  1,133,280
                  
                  
                  745,151Future
                      income tax recovery
                  
                  
                  -
                  
                  
                  (35,600
                  )
                  
                  -(341,672
                  )
                  
                  (285,067
                  )
                  
                  (251,142
                  )Net
                      changes in non-cash working capital items:Accounts
                      receivable and prepaid expenses
                  
                  
                  15,255
                  
                  
                  21,410
                  
                  
                  (104,647
                  )Due
                      from related parties
                  
                  
                  -
                  
                  
                  -
                  
                  
                  5,954Accounts
                      payable and accrued liabilities
                  
                  
                  (10,230
                  )
                  
                  (15,073
                  )
                  
                  (10,164
                  )Due
                      to related parties
                  
                  
                  (40,061
                  )
                  
                  77,113
                  
                  
                  (20,625
                  )**Cash
                      used in operating activities**
                  
                  
                  (376,708
                  )
                  
                  (201,617
                  )
                  
                  (380,624
                  )**FINANCING
                      ACTIVITIES**Shares
                      and warrants issued for cash
                  
                  
                  2,061,750
                  
                  
                  105,500
                  
                  
                  2,609,250Share
                      issue costs
                  
                  
                  (5,828
                  )
                  
                  (675
                  )
                  
                  (48,650
                  )**Cash
                      generated****by
                      financing activities**
                  
                  
                  2,055,922
                  
                  
                  104,825
                  
                  
                  2,560,600**INVESTING
                      ACTIVITIES**Mineral
                      property costs
                  
                  
                  (594,942
                  )
                  
                  (997,369
                  )
                  
                  (994,182
                  )Sale
                      (purchase) of property, plant and equipment
                  
                  
                  19,722
                  
                  
                  -
                  
                  
                  (31,181
                  )**Cash
                      used in investing activities**
                  
                  
                  (575,220
                  )
                  
                  (997,369
                  )
                  
                  (1,025,363
                  )**Increase
                      (decrease) in cash and cash equivalents**
                  
                  
                  1,103,994
                  
                  
                  (1,094,161
                  )
                  
                  1,154,613**Cash
                      and cash equivalents - Beginning of year**
                  
                  
                  486,251
                  
                  
                  1,580,412
                  
                  
                  425,799**Cash
                      and cash equivalents - End of year**
                  
                  
                  1,590,245
                  
                  
                  486,251
                  
                  
                  1,580,412Supplemental
                      cash flow information (note 10)
 
 The
          accompanying notes are an integral part of the consolidated financial
          statements.
 F
              -6
 Canplats Resources
        Corporation (An
              Exploration Stage Company)
 
 **CONSOLIDATED
        STATEMENTS OF**
 **SHAREHOLDERS’
        EQUITY**
 
 **Years
        Ended July 31**
 (expressed
        in Canadian dollars except number of shares)
 
 **Number
                  of Common Shares**
              
              **Share
                  Capital Issued**
                **$**
              
              **Value
                  Assigned to Stock Options and Warrants**
                **$**
              
              **Contributed**
                **Surplus**
                **$**
              
              **Deficit**
                **$**
              
              **Total**
                **Shareholders’**
                **Equity**
                **$****Balance
                  at July 31, 2003**
              
              
              16,997,303
              
              
              8,722,470
              
              
              34,300
              
              
              -
              
              
              (6,943,240
              )
              
              1,813,530For
                  cash
              
              
              11,995,000
              
              
              2,609,250
              
              
              -
              
              
              -
              
              
              -
              
              
              2,609,250Value
                  assigned to options granted
              
              
              -
              
              
              -
              
              
              338,900
              
              
              -
              
              
              -
              
              
              338,900Value
                  assigned to options exercised
              
              
              -
              
              
              49,150
              
              
              (49,150
              )
              
              -
              
              
              -
              
              
              -Shares
                  issued for finder’s fees
              
              
              150,000
              
              
              37,500
              
              
              -
              
              
              -
              
              
              -
              
              
              37,500Share
                  issue costs
              
              
              -
              
              
              (151,150
              )
              
              -
              
              
              -
              
              
              -
              
              
              (151,150
              )Adjustment
                  relating to partial shares
              
              
              3
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Loss
                  for the year
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,270,193
              )
              
              (1,270,193
              )**Balance
                  at July 31, 2004**
              
              
              29,142,306
              
              
              11,267,220
              
              
              324,050
              
              
              -
              
              
              (8,213,433
              )
              
              3,377,837For
                  cash
              
              
              300,000
              
              
              105,500
              
              
              -
              
              
              -
              
              
              -
              
              
              105,500Value
                  assigned to options granted
              
              
              -
              
              
              -
              
              
              111,000
              
              
              -
              
              
              -
              
              
              111,000Value
                  assigned to options exercised
              
              
              -
              
              
              3,800
              
              
              (3,800
              )
              
              -
              
              
              -
              
              
              -Future
                  income tax recovery
              
              
              -
              
              
              (35,600
              )
              
              -
              
              
              -
              
              
              -
              
              
              (35,600
              )Share
                  issue costs
              
              
              -
              
              
              (675
              )
              
              -
              
              
              -
              
              
              -
              
              
              (675
              )Loss
                  for the year
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,493,747
              )
              
              (1,493,747
              )**Balance
                  at July 31, 2005**
              
              
              29,442,306
              
              
              11,340,245
              
              
              431,250
              
              
              -
              
              
              (9,707,180
              )
              
              2,064,315For
                  cashPrivate
                  placements
              
              
              10,150,000
              
              
              1,418,216
              
              
              611,784
              
              
              -
              
              
              -
              
              
              2,030,000Exercise
                  of options
              
              
              50,000
              
              
              5,500
              
              
              -
              
              
              -
              
              
              -
              
              
              5,500Exercise
                  of warrants
              
              
              105,000
              
              
              26,250
              
              
              -
              
              
              -
              
              
              -
              
              
              26,250Non-cash:Value
                  assigned to warrants granted
              
              
              -
              
              
              -
              
              
              72,646
              
              
              -
              
              
              -
              
              
              72,646Value
                  assigned to options exercised
              
              
              -
              
              
              3,800
              
              
              (3,800
              )
              
              -
              
              
              -
              
              
              -Value
                  assigned to warrants exercised
              
              
              -
              
              
              9,752
              
              
              (9,752
              )
              
              -
              
              
              -
              
              
              -Value
                  assigned to expired warrants
                and
                  options
              
              
              -
              
              
              -
              
              
              (316,450
              )
              
              316,450
              
              
              -
              
              
              -Shares
                  issued for finder’s fees on
                private
                  placement
              
              
              580,500
              
              
              80,716
              
              
              -
              
              
              -
              
              
              -
              
              
              80,716Share
                  issue costs
              
              
              -
              
              
              (159,190
              )
              
              -
              
              
              -
              
              
              -
              
              
              (159,190
              )Loss
                  for the year
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (335,568
              )
              
              (335,568
              )**Balance
                  at July 31, 2006**
              
              
              40,327,806
              
              
              12,725,289
              
              
              785,678
              
              
              316,450
              
              
              (10,042,748
              )
              
              3,784,669
 
 The
          accompanying notes are an integral part of the consolidated financial
          statements.
 F
            -7
 Canplats Resources
        Corporation (An
              Exploration Stage Company)
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 **1.**
              **NATURE
                  AND CONTINUANCE OF
                  OPERATIONS**
 
 The
        company is in the process of acquiring, exploring and developing precious
        and
        base metal mineral properties. The company will attempt to bring the properties
        to production, structure joint ventures with others, option or lease properties
        to third parties, or sell the properties outright. The company has not
        determined whether these properties contain ore reserves that are economically
        recoverable and the company is considered to be in the exploration stage.
 
 These
        consolidated financial statements have been prepared assuming the company
        will
        continue on a going-concern basis. Management has estimated that the company
        will have adequate funds from existing working capital to meet its corporate,
        administrative and property obligations for the coming year. If the company
        is
        to advance or develop its mineral properties further, it will be necessary
        to
        obtain additional financing and while it has been successful in the past,
        there
        can be no assurance that it will be able to do so in the future.
 
 The
        recoverability of the amounts shown for mineral properties and related deferred
        costs is dependent upon the existence of economically recoverable reserves,
        securing and maintaining title and beneficial interest in the properties,
        the
        ability of the company to obtain necessary financing to complete the
        development, and upon future profitable production or sale. The amounts shown
        as
        deferred expenditures and property acquisition costs represent net costs
        to
        date, less amounts amortized and written-off, and do not necessarily represent
        present or future values.
 
 Although
        the company has taken steps to verify title to mineral properties in which
        it
        has an interest, in accordance with industry standards for the current stage
        of
        exploration of such properties, these procedures do not guarantee the company’s
        title. Property title may be subject to unregistered prior agreements or
        transfers and may be affected by undetected defects.
 
 **2.**
              **SIGNIFICANT
                  ACCOUNTING POLICIES**
 
 **Generally
        accepted accounting principles**
 
 These
        consolidated financial statements have been prepared in accordance with Canadian
        generally accepted accounting principles (Canadian GAAP). The significant
        differences between those principles and those that would be applied under
        U.S.
        generally accepted accounting principles and requirements promulgated by
        the
        Securities and Exchange Commission (collectively U.S. GAAP), as they affect
        the
        company, are disclosed in note 14.
 
 **Principles
        of consolidation**
 
 These
        consolidated financial statements include the accounts of the company and
        its
        wholly-owned subsidiary, Canplats de Mexico S.A. de C.V. Inter-company balances
        are eliminated upon consolidation.
 
 **Use
        of estimates**
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the amounts reported in the consolidated financial statements and
        related
        notes. Significant areas where management’s judgment is applied are the
        determination of asset impairment, stock-based compensation and future income
        tax valuation allowances. Actual results could differ from those
        estimates.
 
 
 F
              -8
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
            the years ended July 31, 2006, 2005 and 2004**
 (expressed
            in Canadian dollars, unless otherwise stated)
 
 **2.**
              **SIGNIFICANT
                  ACCOUNTING POLICIES**(continued)
 
 **Foreign
        currency translation**
 
 The
        company’s subsidiary is an integrated foreign operation and its results and
        financial position are translated into its functional currency, the Canadian
        dollar, using the temporal method. Foreign currency monetary items are
        translated at the exchange rate in effect at the balance sheet date; foreign
        currency non-monetary items are translated at historical exchange rates.
        Income
        and expense foreign currency items are translated at the average exchange
        rate
        for the period. Translation gains and losses are reflected in consolidated
        statements of loss unless they relate to a specific mineral property in which
        case, they are capitalized.
 
 **Cash
        and cash equivalents**
 
 Cash
        and cash equivalents include cash, bank balances and highly liquid deposits
        with
        maturity of three months or less at date of acquisition. These instruments
        are
        stated at cost, which approximates market value.
  **Mineral
        properties**
 
 The
        company records its interests in mineral properties at cost. The costs of
        acquiring mineral properties and related exploration and development
        expenditures, holding costs to maintain a property and related foreign exchange
        amounts are deferred and would be amortized against future production following
        commencement of commercial production or are written-off if the properties
        are
        sold, allowed to lapse or abandoned. General exploration, overhead and
        administration costs are expensed in the period incurred.
 
 Option
        payments received are treated as a reduction of the carrying value of the
        related mineral property and deferred costs until the receipts are in excess
        of
        costs incurred, at which time they are credited to income. Option payments
        are
        at the discretion of the optionee, and accordingly, are recorded on a cash
        basis.
 
 Management
        of the company regularly reviews the net carrying value of each mineral
        property. Where events or changes in circumstances suggest impairment, estimated
        future cash flows are calculated using estimated future prices, proven and
        probable reserves, value beyond proven and probable reserves, probability
        weighted outcomes and operating capital and reclamation costs on an undiscounted
        basis. If it is determined that the future cash flows are less than the carrying
        value, a write-down to the estimated fair value is expensed for the period.
        The
        company presently has no proven or probable reserves. Where estimates of
        future
        net cash flows are not available and where other conditions suggest impairment,
        management assesses if carrying values can be recovered. If the carrying
        values
        exceed estimated recoverable values, then the project is written-down to
        estimated fair values with the write-down expensed in the period.
 
 Management’s
        estimates of future mineral prices, recoverable resources, initial and operating
        capital and reclamation costs are subject to certain risks and uncertainties
        that may affect the recoverability of mineral property costs. Although
        management has made its best estimate of these factors, it is possible that
        changes could occur that could adversely affect management’s estimate of the net
        cash flows to be generated from its properties.
 
 
 F
              -9
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
            the years ended July 31, 2006, 2005 and 2004**
 (expressed
            in Canadian dollars, unless otherwise stated)
 
 **2.**
              **SIGNIFICANT
                  ACCOUNTING POLICIES**(continued)
 
 **Property,
        plant and equipment**
 
 Property,
        plant and equipment are carried at cost less accumulated amortization. The
        company provides for amortization calculated using the declining balance
        method
        at rates ranging from 20% to 30% per annum. Amortization commences at the
        time
        when the assets are available for use.
 
 **Stock-based
        compensation**
 
 Compensation
        expense for stock options granted is measured at the fair value at the grant
        date using the Black-Scholes valuation model and is recognized over the vesting
        period of the options granted. In situations where stock options are granted
        in
        exchange for services related to specific mineral properties, the expense
        is
        capitalized against that mineral property. The value assigned to stock options
        within shareholders’ equity is subsequently reduced if the options are exercised
        with the amount recorded credited to share capital. Any values assigned to
        stock
        options that have expired are credited to contributed surplus.
 
 **Income
        taxes**
 
 The
        liability method of income tax allocation is used and is based on differences
        between financial reporting and tax bases of assets and liabilities. Temporary
        differences arising from the difference between the tax basis of an asset
        or
        liability and its carrying amount on the balance sheet are used to calculate
        future income tax liabilities or assets. Future income tax liabilities or
        assets
        are calculated using the tax rates anticipated to apply in the periods that
        the
        temporary differences are expected to reverse. Future tax assets are recognized
        to the extent that they are considered more likely than not to be
        realized.
 
 **Loss
        per common share**
 
 Loss
        per share is calculated based on the weighted average number of common shares
        issued and outstanding during the year. The effect of potential issuances
        of
        shares under options and warrants would be anti-dilutive, and therefore,
        basic
        and diluted loss per share are the same.
 
 **Flow-through
        shares**
 
 Canadian
        Income Tax Legislation permits an enterprise to issue securities referred
        to as
        flow-through shares whereby the investor may claim the tax deductions arising
        from the related resource expenditures. When resource expenditures are renounced
        to the investors and the company has reasonable assurance that the expenditures
        will be completed, future income tax liabilities are recognized (renounced
        expenditures multiplied by the effective corporate tax rate) thereby reducing
        share capital.
 
 If
        a company has sufficient eligible unused tax losses and deductions (“losses”) to
        offset all or part of the future income tax liabilities and no future income
        tax
        assets have been previously recognized on such losses, a portion of such
        unrecognized losses (losses multiplied by the effective corporate tax rate)
        is
        recorded as income up to the amount of the future income tax liability that
        was
        previously recognized on the renounced expenditures.
 
 
 F
              -10
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 **3.**  **MINERAL
        PROPERTY COSTS**
 
 The
        company’s mineral properties are as follows:
 
 Rodeo
              Yerbabuena
              El
                  Rincon
              Mecatona
              Other(Mexico)
              (Mexico)
              (Mexico)
              (Mexico)
              (Mexico)
              Total$
              $
              $
              $
              $
              $Balance,
                  July 31, 2005
              699,999
              908,536
              107,948
              -
              -
              1,716,483Acquisition
                  costs
              -
              28,947
              11,387
              22,931
              -
              63,265Amortization
              230
              482
              46
              1,354
              184
              2,296Assaying
              2,374
              9,235
              -
              21,382
              9,245
              42,236Claim
                  taxes
              22,205
              12,085
              7,154
              28,857
              -
              70,301Consulting
                  and contracting services
              -
              2,659
              -
              3,509
              -
              6,168Drafting
                  salaries and consulting
              472
              -
              -
              11,798
              -
              12,270Drilling
              -
              -
              -
              115,334
              -
              115,334Foreign
                  exchange
              123
              (1,989)
              445
              2,036
              2,186
              2,801Geology
                  consulting
              -
              -
              -
              48,050
              1,466
              49,516Geology
                  salaries and consulting
              7,434
              1,478
              -
              23,281
              3,620
              35,813Geophysics
                  airborne and ground
              -
              -
              1,106
              -
              -
              1,106Equipment
              3,638
              3,173
              -
              19,338
              363
              26,512Labour
                  and expediting
              13,283
              33,995
              -
              22,817
              9,312
              79,407Legal
              -
              234
              -
              890
              -
              1,124Licenses
                  and government fees
              -
              1,055
              -
              10,132
              10,274
              21,461Living
                  costs and travel
              2,232
              2,480
              -
              14,991
              4,730
              24,433Maps,
                  prints and film
              300
              186
              -
              273
              13,664
              14,423Office
                  expenses
              1,048
              644
              82
              3,978
              455
              6,207Property
                  holding costs associated with future
                income
                  taxes
              26,276
              35,523
              4,470
              12,480
              1,951
              80,700Storage
              -
              12,499
              -
              4,669
              117
              17,285Supplies
              -
              2,760
              -
              2,189
              331
              5,280Exploration
                  costs for the year
              79,615
              116,499
              13,303
              347,358
              57,898
              614,673Balance,
                  July 31, 2006
              779,614
              1,053,982
              132,638
              370,289
              57,898
              2,394,421
 
 
 F
              -11
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
            the years ended July 31, 2006, 2005 and 2004**
 (expressed
            in Canadian dollars, unless otherwise stated)
 
 **3.**
              **MINERAL
                  PROPERTY COSTS**(continued)
 
 
 Rodeo
              Yerbabuena
              El
                  Rincon
              Grand
                  Bay
              Geikie
              Stucco
              Santa
                  Lucia(Mexico)
              (Mexico)
              (Mexico)
              (Canada)
              (Canada)
              (Canada)
              (Mexico)
              Total$
              $
              $
              $
              $
              $
              $
              $Balance,
                  July 31, 2004
              442,217
              302,791
              17,757
              205,864
              519,430
              12,176
              223,496
              1,723,731Acquisition
                  costs
              12,257
              22,131
              18,973
              -
              -
              -
              11,637
              64,998Amortization
              4,581
              4,582
              -
              -
              -
              -
              -
              9,163Assaying
              37,213
              81,245
              3,002
              2,056
              -
              -
              6,435
              129,951Claim
                  taxes
              11,768
              12,518
              9,945
              -
              -
              -
              6,218
              40,449Consulting
                  and contract services
              29,314
              26,578
              6,943
              -
              -
              -
              -
              62,835Drafting
                  salaries and consulting
              1,800
              2,703
              118
              2,128
              -
              -
              1,732
              8,481Drilling
              68,187
              176,947
              -
              83,829
              -
              -
              -
              328,963Engineering
              309
              5,867
              -
              -
              -
              -
              -
              6,176Equipment
              -
              54,732
              -
              20,478
              -
              -
              -
              75,210Foreign
                  exchange
              4,336
              6,598
              2,739
              -
              -
              -
              (7,203)
              6,470Geology
                  salaries and consulting
              13,894
              27,055
              40,491
              7,256
              -
              -
              6,037
              94,733Geophysics
                  airborne and ground
              -
              -
              361
              -
              -
              -
              -
              361Labour
                  and expediting
              4,132
              83,466
              -
              800
              -
              -
              -
              88,398Legal
              8,230
              8,318
              -
              -
              -
              -
              241
              16,789Living
                  costs
              662
              4,189
              -
              7,503
              656
              -
              1,119
              14,129Maps,
                  prints and film
              7
              611
              -
              -
              -
              -
              66
              684Office
                  expenses
              5,101
              8,447
              -
              5,280
              63
              -
              758
              19,649Property
                  holding costs associated with
                future
                  income taxes
              48,733
              63,251
              7,516
              -
              -
              -
              -
              119,500Storage
              3,454
              6,481
              -
              5,400
              -
              -
              163
              15,498Supplies
              470
              745
              103
              -
              -
              -
              117
              1,435Travel
                  and transportation
              3,334
              9,281
              -
              5,703
              -
              -
              3,842
              22,160Exploration
                  costs for the year
              245,525
              583,614
              71,218
              140,433
              719
              -
              19,525
              1,061,034Mineral
                  properties written-off
                for
                  the year
              -
              -
              -
              (346,297)
              (520,149)
              (12,176)
              (254,658)
              (1,133,280)Balance,
                  July 31, 2005
              699,999
              908,536
              107,948
              -
              -
              -
              -
              1,716,483
 
  **PRINCIPAL
        PROPERTIES**
  **Rodeo,
        Mexico**
 
 In
        fiscal 2003, the company acquired through staking a 100% interest in the
        Rodeo
        property located 150 kilometers north of Durango, Mexico. The property is
        subject to a finder’s fee consisting of US$5,000 on acquisition; the greater of
        US$5,000 every six months thereafter or 2% of all direct exploration
        expenditures and a 0.25% net smelter royalty. The maximum amount payable
        in
        respect of this finder’s fee is US$500,000. The property is also subject to a
        right of first offer (note 12 (a)).
 
 F
              -12
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 3.  
        MINERAL PROPERTY COSTS **(continued)**
 
 **Yerbabuena,
        Mexico**
 
 In
        fiscal 2003, the company entered into a lease with an option to purchase
        agreement for a 100% interest in the Yerbabuena epithermal gold prospect
        located
        approximately 150 kilometres north-northwest of Durango, Mexico. The property
        is
        subject to a 2% net smelter royalty.
 
 Under
        the terms of the agreement with La Cuesta International, Inc. (“LCI”), owner of
        the Yerbabuena property, the company may make staged payments totalling
        US$62,500 over three years and US$30,000 annually thereafter, plus applicable
        taxes, to lease the property. On commencement of commercial production on
        the
        property, the company is to pay the greater of US$25,000 per quarter and
        a 2%
        net smelter royalty. The company may purchase the property for a total
        consideration of US$2,000,000 less all lease payments paid under the agreement.
        The property is also subject to a right of first offer (note 12
        (a)).
 
 **El
        Rincon, Mexico**
 
 In
        fiscal 2004, the company acquired, by staking, the El Rincon gold project
        in
        Durango, Mexico, subject to a finder’s fee to LCI.
 
 Under
        the terms of the agreement with LCI, dated August 24, 2004, but effective
        May 3,
        2004, the company is required to pay LCI US$5,000 on signing the agreement
        (paid); every six months commencing May 3, 2004, the greater of US$5,000
        and 2%
        of direct exploration expenditures made for the benefit of the property;
        and, on
        commencement of commercial production on the property, a 0.25% net smelter
        return royalty; provided that the maximum amount payable to LCI for the El
        Rincon property is US$2,000,000.
 
 On
        and prior to the company expending US$1.5 million on the property, Silver
        Standard Resources Inc. can earn a 51% interest in El Rincon by incurring
        expenditures equal to two times the company’s accrued acquisition and
        exploration expenditures (note 12(a)).
 
 **Mecatona,
        Mexico**
 
 In
        fiscal 2006, the company acquired, by a combination of option agreements
        and
        staking, four claim blocks for a 100% interest in the Mecatona property located
        in the Mecatona gold/silver district in the state of Chihuahua, Mexico located
        approximately 20 kilometres south of Parral.
 
 For
        two claim blocks, the company agreed to pay, under separate option agreements,
        two private owners an aggregate of US$15,000 on signing (paid). Subsequent
        option payments for one of these claim blocks are US$10,000 on November 25,
        2006, US$20,000 on November 25, 2007, US$215,000 on November 25, 2008 and
        1% net
        smelter return capped at US$250,000. For the other claim block, subsequent
        option payments are US$20,000 on November 26, 2006, US$30,000 on November
        26,
        2007, US$50,000 on November 26, 2008, $90,000 on November 26, 2009 and
        US$800,000 on November 26, 2010. The company acquired the other two claim
        blocks
        by staking.
 
 Under
        the terms of the agreement with LCI, the company is required to pay LCI US$5,000
        on acquisition of the property (paid); every six months, the greater of US$5,000
        and 2% of direct exploration expenditures made for the benefit of the property;
        and, on commencement of commercial production on the property, a 0.25% net
        smelter return royalty; provided that the maximum amount payable to LCI for
        the
        Mecatona property is US$2,000,000.
 
 
 F
              -13
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 3. **MINERAL
        PROPERTY COSTS** **(continued)**
 
 On
        and prior to the company expending US$1.5 million on the property, Silver
        Standard Resources Inc. (“Silver Standard”), a company in which two directors
        are also directors of the company, can earn a 51% interest in Mecatona by
        incurring expenditures equal to two times the company’s accrued acquisition and
        exploration expenditures (note 12(a)).
 
 **Other,
        Mexico**
 
 In
        fiscal
        2006, the company acquired, by staking, the Maijoma and Agua de la Loca
        properties in the state of Chihuahua, Mexico.
 
 Under
        the terms of the agreement with LCI, the company is required to pay LCI US$5,000
        on acquisition of the property; every six months, the greater of US$5,000
        and 2%
        of direct exploration expenditures made for the benefit of the property;
        and, on
        commencement of commercial production on the property, a 0.25% net smelter
        return royalty; provided that the maximum amount payable to LCI for the Mecatona
        property is US$2,000,000.
 
 **Grand
        Bay, Canada**
 
 The
        company had an option to acquire from Canadian Golden Dragon Resources Ltd.
        up
        to a 75% interest in 5 mineral claims (76 units) by paying Golden Dragon
        $26,000
        (paid) over two years and spending a total of $500,000 in exploration by
        June
        30, 2003. In January 2002, the company met its obligations and earned a 50%
        interest in the property by incurring $100,000 in exploration on the property,
        but failed to spend the $500,000 by June 30, 2003. Based on exploration results,
        the property was abandoned and $346,297 in costs was written-off during fiscal
        2005.
 
 **Geikie,
        Canada**
 
 The
        company had an agreement to acquire a 100% interest in 7 mineral claims (108
        units) near Cheeseman and Kitchen Lake area, by an initial cash payment of
        $10,000 (paid) and the requirement to issue a total of 100,000 common shares
        (issued) in four equal installments of 25,000 shares in six month intervals,
        and
        the granting of a 1% NSR which may be repurchased by the company for $500,000.
        Based on exploration results, the property was abandoned and $520,149 in
        costs
        was written-off during fiscal 2005.
 
 **Stucco,
        Canada**
 
 The
        company had a 100% interest in a 16 unit claim that was purchased by the
        issuance of 50,000 common shares. The vendors retain a 2% NSR of which 1%
        could
        be purchased for $1,000,000 and the remaining 1% could be purchased on a
        right
        of first refusal basis.
 
 In
        September
        2001, the company signed an option agreement with Platinum Group Metals Ltd.
        (“PGM”) whereby PGM can earn up to a 60% interest in the Stucco property. Under
        the terms of the agreement, PGM can earn a 51% interest in the property through
        cash payments totalling $65,000 ($40,000 paid) and exploration and development
        expenditures of $1,000,000 over four years. In fiscal 2004 PGM terminated
        the
        option agreement. Based
        on exploration results, the property was abandoned and $12,176 in costs was
        written-off during fiscal 2005.
 
 
 
 F
              -14
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 **3.**  **MINERAL
        PROPERTY COSTS** (continued)
 
 **Santa
        Lucia, Mexico**
 
 In
        October
        2003, the company acquired by staking a 100% interest in the 4,550-hectare
        Santa
        Lucia gold prospect located in Baja California Norte, Mexico, subject to
        the
        payment of a finder’s fee to LCI. Under an agreement dated October 3, 2003, the
        company was required to pay LCI a finder’s fee in respect of its acquisition of
        the Santa Lucia prospect of US$15,000 on signing the agreement (paid); US$5,000
        on or before December 12, 2003 (paid); every six months commencing June 12,
        2004, the greater of US$5,000 and 2% of direct exploration expenditures made
        for
        the benefit of the property. Based
        on exploration results, the property was abandoned and $254,658 in costs
        was
        written-off during fiscal 2005.
 
 
 **4.**  **PROPERTY,
        PLANT AND EQUIPMENT**
 
 **2006**
              **2005****Cost**
                **$**
              **Accumulated**
                **Amortization**
                **$**
              **Net
                  Book**
                **Value**
                **$**
              **Net
                  Book**
                **Value**
                **$**Automotive
                  equipment
              -
              -
              -
              20,486Office
                  equipment
              -
              -
              -
              821Mining
                  equipment
              -
              -
              -
              711-
              -
              -
              22,018
 
 During
        fiscal 2006, the company sold its assets at net book value to a related company
        (note 8).
 
 
 F
              -15
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
            the years ended July 31, 2006, 2005 and 2004**
 (expressed
            in Canadian dollars, unless otherwise stated)
 **5.** **SHARE
        CAPITAL**
 
 **Authorized:** Unlimited
        common shares without par value.
 
 The
        company had the following shares issued and outstanding:
 
 **Number
                  of**
                **Shares**
              
              **$**Balance,
                  July 31, 2003
              
              
              16,997,303
              
              
              8,722,470For cash:Private
                  placement
              
              
              5,400,000
              
              
              1,350,000Exercise
                  of options
              
              
              75,000
              
              
              26,250Exercise
                  of agent’s options
              
              
              750,000
              
              
              75,000Exercise
                  of warrants
              
              
              5,770,000
              
              
              1,158,000Value
                  assigned to options exercised
              
              
              -
              
              
              49,150Share
                  issue costs settled with shares
              
              
              150,000
              
              
              37,500Correction
                  relating to fractional units
              
              
              3
              
              
              -Share
                  issue costs
              
              
              -
              
              
              (151,150
              )Balance,
                  July 31, 2004
              
              
              29,142,306
              
              
              11,267,220For cash:Private
                  placement (a)
              
              
              250,000
              
              
              100,000Exercise
                  of options
              
              
              50,000
              
              
              5,500Value
                  assigned to options exercised
              
              
              -
              
              
              3,800Flow-through
                  shares - future income tax recovery (note 9(d))
              
              
              -
              
              
              (35,600
              )Share
                  issue costs
              
              
              -
              
              
              (675
              )Balance,
                  July 31, 2005
              
              
              29,442,306
              
              
              11,340,245For
                  cash:Private
                  placements (b) and (c)
              
              
              10,150,000
              
              
              1,418,216Exercise
                  of options
              
              
              50,000
              
              
              5,500Exercise
                  of warrants
              
              
              105,000
              
              
              26,250Value
                  assigned to options exercised
              
              
              -
              
              
              3,800Value
                  assigned to warrants exercised
              
              
              -
              
              
              9,752Shares
                  issued for finder’s fees
              
              
              580,500
              
              
              80,716Share
                  issue costs
              
              
              -
              
              
              (159,190
              )Balance,
                  July 31, 2006
              
              
              40,327,806
              
              
              12,725,289
 
 
 As
        at July 31, 2006 and 2005, the company had no shares subject to escrow
        agreements.
 
 (a)
              In
                  October 2004, the company closed a private placement consisting
                  of 250,000
                  flow-through shares at $0.40 per share. Total proceeds of $100,000
                  relating to the flow-through financing were
                  received.
 
 F
              -16
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 **5.** **SHARE
        CAPITAL** (continued)
 
 (b)
              In
                  January 2006, the company completed a private placement of 5,150,000
                  units
                  at a price of $0.20 per unit for gross proceeds of $1,030,000.
                  The gross
                  proceeds were assigned values of $790,840 to the shares and $239,160
                  to
                  the warrants. Each unit consisted of one common share and one half
                  of a
                  common share purchase warrant. Each full warrant entitled the holder
                  to
                  purchase one additional common share at a price of $0.25 in year
                  one or
                  $0.35 in year two, provided that if the shares of the company trade
                  for a
                  period of 20 consecutive days (after the expiry of the four month
                  hold
                  period) at or above $0.35 per share in year one or $0.45 per share
                  in year
                  two on the TSX Venture Exchange, the warrant holders will be required
                  to
                  exercise their warrants. A finder’s fee of 6% (280,500 units valued at
                  $56,100) was paid in units on a portion of the placement. The values
                  assigned to these finder’s fee units was $43,073 to the shares and $13,027
                  to the warrants (note 15).
 
 (c)
              In
                  June 2006, the company completed a private placement of 5,000,000
                  units at
                  a price of $0.20 per unit for gross proceeds of $1,000,000. The
                  gross
                  proceeds were assigned values of $627,376 to the shares and $372,624
                  to
                  the warrants. Each unit consisted of one common share and one common
                  share
                  purchase warrant. Each warrant entitled the holder to purchase
                  one
                  additional common share at a price of $0.25 for two years, provided
                  that
                  if the shares of the company trade for a period of 20 consecutive
                  days
                  (after the expiry of the four month hold period) at or above $0.40
                  per
                  share on the TSX Venture Exchange, the warrant holders will be
                  required to
                  exercise their warrants. A finder’s fee of 6% (300,000 units valued at
                  $60,000) was paid in units on a portion of the placement. The values
                  assigned to these finder’s fee units was $37,643 to the shares and $22,357
                  to the warrants. A further 10% in broker’s fees (500,000 warrants) was
                  paid in warrants relating to this placement. The values assigned
                  to these
                  broker’s fee warrants was $37,262.
 
 The
        fair value of the common share purchase warrants issued as part of the private
        placements in fiscal 2006 were based on the Black-Scholes pricing model,
        using
        the following weighted average assumptions:
 
 Expected
                  dividend yield (%)
              NilRisk-free
                  interest rate (%)
              4.1Term
                  to expiry (years)
              2.0Expected
                  volatility (%)
              99.2
 
 Warrant
        and option pricing models require the input of highly subjective assumptions
        including the expected price volatility. Changes in the subjective input
        assumptions can materially affect the fair value estimate, and therefore,
        the
        existing models do not necessarily provide a reliable measure of the fair
        value
        of the company’s warrants and stock options.
 
 **6.** **STOCK
        OPTIONS**
 
 The
        company has a comprehensive share option plan for its employees, directors,
        officers and consultants. The plan provides for the issuance of incentive
        options to acquire up to a total of 10% of the issued and outstanding common
        shares of the company. The exercise price of each option shall not be less
        than
        the closing market price of the company’s stock on the award date. The options
        can be granted for a maximum term of 5 years with vesting provisions determined
        by the company.
 
 F
              -17
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 **6.** **STOCK
        OPTIONS** (continued)
 
 During
        2006, 1,170,000 in options expired. The value assigned to these options of
        $251,450 has been reclassified to contributed surplus.
 
 Stock
        options issued are as follows:
 
 **2006**
              
              2005
              
              2004**Number**
                **of
                  Shares**
              **Weighted**
                **Average**
                **Exercise**
                **Price**
                **$**
              Number
                of
                  Shares
              Weighted
                Average
                Exercise
                Price
                $
              Number
                of
                  Shares
              Weighted
                Average
                Exercise
                Price
                $Options
                  outstandingat August 1
              1,830,000
              0.35
              1,270,000
              0.33
              940,000
              0.50Granted
              -
              -
              610,000
              0.36
              405,000
              0.29Expired
              (1,170,000)
              0.35
              -
              -
              -
              -Exercised
              (50,000)
              0.11
              (50,000)
              0.11
              (75,000)
              0.35Options
                  outstanding
                at July 31
              610,000
              0.36
              1,830,000
              0.35
              1,270,000
              0.33Options
                  exercisable
                at July 31
              610,000
              0.36
              1,830,000
              0.35
              1,190,000
              0.34
 
 The
        following table summarizes information about stock options outstanding and
        exercisable at July 31, 2006:
  **Exercise**
                **Price**
                **$**
              **Options**
                **Outstanding**
              **Options**
                **Exercisable**
              **Expiry**
                **Date**
              **Weighted
                  Average**
                **remaining
                  life (years)**0.30
              75,000
              75,000
              September
                  16, 2006
              0.10.37
              535,000
              535,000
              January
                  12, 2008
              1.5610,000
              610,000
              
              0.8
 
 **7.** **WARRANTS**
 
 In
        the year ended July 31, 2006, 8,515,250 common share purchase warrants were
        issued relating to two private placements. Of the warrants issued, 7,575,000
        were issued for cash of $611,784 and 940,250 were issued for finder’s and
        broker’s fees. The fair value assigned to the 940,250 warrants issued was
        $72,646.
 
 During
        the current year, 5,870,000 warrants expired. The value assigned to these
        warrants of $65,000 has been reclassified to contributed surplus.
 
 F
              -18
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 **7.** **WARRANTS** (continued)
 
 Warrants
        issued are as follows:
 
 **2006**
              
              
              
              2005
              
              
              
              2004**Number**
                **of Shares**
              
              **Weighted**
                **Average**
                **Exercise**
                **Price**
                **$**
              
              Number
                of
                  Shares
              
              Weighted
                Average
                Exercise
                Price
                $
              
              Number
                of
                  Shares
              
              Weighted
                Average
                Exercise
                Price
                $Warrants
                  outstandingat August 1
              
              
              5,870,000
              
              
              0.40
              
              
              5,870,000
              
              
              0.40
              
              
              5,000,000
              
              
              0.20Issued
                  (note 5(b)
                and 6(b))
              
              
              8,515,250
              
              
              0.25
              
              
              -
              
              
              -
              
              
              6,640,000
              
              
              0.38Expired
              
              
              (5,870,000
              )
              
              0.40
              
              
              -
              
              
              -
              
              
              -
              
              
              -Exercised
              
              
              (105,000
              )
              
              0.25
              
              
              -
              
              
              -
              
              
              5,770,000
              
              
              0.20Warrants
                  outstanding
                at July 31
              
              
              8,410,250
              
              
              0.25
              
              
              5,870,000
              
              
              0.40
              
              
              5,870,000
              
              
              0.40
 
 The
        following table summarizes information about warrants outstanding and
        exercisable at July 31, 2006:
  **Exercise**
                **Price**
                **$**
              
              **Warrants
                  Outstanding**
              
              **Expiry**
                **Date**
              
              **Weighted
                  Average**
                **remaining
                  life (years)**0.25
              
              2,610,250
              
              January
                  26, 2008
              
              1.50.25
              
              5,800,000
              
              July
                  20, 2008
              
              2.08,410,250
              
              
              
              1.8
 
 
 **8.** **RELATED
        PARTY TRANSACTIONS**
 
 The
        company paid or accrued $312,300 (2005 - $246,800) in geological support,
        management and administration expenses to Silver Standard Resources Inc.,
        a
        company of which two directors are also directors of the company. During
        fiscal
        2006, the company sold its property, plant and equipment to a related company
        for proceeds of $19,722. Included in amounts payable at July 31, 2006 is
        $47,469
        (2005 - $87,530) payable to Silver Standard. Any amounts payable to related
        parties are non-interest bearing and without specific terms of repayment.
        Any
        transactions for expense reimbursement or asset sales with related parties
        are
        at normal business terms.
 
 **9.** **INCOME
        TAXES**
  (a)
              The
                income taxes shown on the consolidated statements of loss and deficit
                differs from the amounts obtained by applying statutory rates due
                to the
                following:
 
 F
              -19
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
            the years ended July 31, 2006, 2005 and 2004**
 (expressed
            in Canadian dollars, unless otherwise stated)
 
 **9.** **INCOME
        TAXES** (continued)
  **2006**
                
                **2005**
                
                **2004**$
                
                $
                
                **$**Statutory
                    tax rate
                
                
                34.1
                %
                
                35.6
                %
                
                36.5
                %Loss
                    for the year before taxes
                
                
                (335,568
                )
                
                (1,493,747
                )
                
                (1,270,193
                )Provision
                    for income taxes based on statutory rates
                
                
                (114,500
                )
                
                (531,800
                )
                
                (463,600
                )Non
                    deductible expenses and adjustment for income tax
                
                
                22,500
                
                
                431,400
                
                
                370,600Future
                    income tax recovery
                
                
                -
                
                
                35,600
                
                
                -Unrecognized
                    benefit of net operating losses
                  carried forward
                
                
                92,000
                
                
                100,400
                
                
                93,000-
                
                
                
                
                
                35,600
                
                
                -
 
 
 (b) Future
        income taxes reflect the net tax effects of temporary differences between
        the
        carrying amounts of assets and liabilities for financial reporting purposes
        and
        the amounts used for income tax purposes. Significant components of the
        company’s future tax assets and liabilities as of July 31 are as
        follows:
  **2006**
                
                **2005**$
                
                $Future
                    tax assets:Mineral properties
                
                
                1,445,600
                
                
                1,737,000Finance charge
                
                
                55,100
                
                
                21,000Non-capital losses
                
                
                436,600
                
                
                373,0001,937,300
                
                
                2,131,000Future
                    tax liability:Mineral properties
                
                
                (200,200
                )
                
                (119,500
                )Valuation
                    allowance
                
                
                (1,937,300
                )
                
                (2,131,000
                )Net
                    future tax liability
                
                
                (200,200
                )
                
                (119,500
                )
  
 The
        potential income tax benefit of these losses and tax pool balances have been
        offset by a valuation allowance.
 
 (c) As
        of July 31, 2006, the company has approximately $1,279,600 in operating losses,
        $4,887,100 in accumulated Canadian and foreign exploration and development
        expenditures and $161,700 in unclaimed share issuance costs available to
        reduce
        future taxable income. The potential benefit of these losses has not been
        reflected in these consolidated financial statements. The operating losses
        expire as follows:
 
 F
              -20
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
            the years ended July 31, 2006, 2005 and 2004**
 (expressed
            in Canadian dollars, unless otherwise stated)
 
 **9.** **INCOME
        TAXES** (continued)
 
 
 **$**2007
              26,8002008
              168,3002009
              145,2002010
              123,6002014
              255,2002015
              304,7002016
              255,8001,279,600
  
 (d)
              During
                  2005, flow-through shares totalling
                  $100,000 were issued, which funds were required to be spent on
                  certain
                  Canadian exploration expenditures. Because the company no longer
                  had the
                  ability to use the expenditures for tax purposes, the company was
                  required
                  to record a future tax liability, which was equal to the renunciation
                  times the corporation tax rate when expenditures are renounced.
                  However,
                  because the company had unused tax losses and resource pools in
                  excess of
                  the renunciation, the company was able to reduce its valuation
                  allowance
                  with respect to these unused tax losses and resource pools and,
                  as a
                  consequence, a $35,600 future income tax recovery was recorded
                  in fiscal
                  2005.
 
 **10.**  **SUPPLEMENTAL
        CASH FLOW INFORMATION**
  **2006**
                
                **2005**
                
                **2004**$
                
                $
                
                **$****Non-cash
                    financing activities**Share
                    issue costs
                
                
                (153,362
                )
                
                -
                
                
                (102,500
                )Share
                    capital issued for finder’s fees
                
                
                80,716
                
                
                -
                
                
                37,500
   **11.** **SEGMENTED
        INFORMATION**
 
 The
        company operates in one industry segment which is the acquisition and
        exploration of mineral properties. Segment assets by geographic location
        are as
        follows:
  **July
                      31, 2006****Canada**
                    **$**
                  **Mexico**
                    **$**
                  **Total**
                    **$**Loss
                      for the year
                  (287,016)
                  (48,552)
                  **(335,568)**Total
                      assets
                  2,249,668
                  1,821,002
                  **4,070,670**
 **July
                    31, 2005****Canada**
                  **$**
                **Mexico**
                  **$**
                **Total**
                  **$**Loss
                    for the year
                (1,363,582)
                (130,165)
                (1,493,747)Total
                    assets
                405,578
                1,920,433
                2,326,011
  
 
 F
              -21
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 **12.**  **COMMITMENTS**
 
 (a)
              The
                  company has granted to Silver Standard a right of first offer on
                  the
                  company’s Rodeo and Yerbabuena properties, which properties were referred
                  to the company by Silver Standard. Under the terms of the right
                  of first
                  offer, if the company intends to dispose of an interest in any
                  referred
                  property, the company must give Silver Standard the first opportunity
                  to
                  acquire the interest.
 
 Effective
        March 24, 2004, the company granted Silver Standard a one-time right to acquire
        a 51% interest in any property referred to the company by Silver Standard
        that
        is subsequently acquired by the company. This one-time right to acquire replaces
        the right of first offer and, in order to exercise the right in respect of
        any
        property, Silver Standard must (a) exercise the right prior to, or on, the
        company incurring US$1.5 million in exploration expenditures on the property
        and
        (b) incur exploration expenditures equal to twice the acquisition and
        exploration expenditures incurred by the company on the property at the time
        of
        exercise. The El Rincon and Mecatona properties (note 3) are subject to this
        back-in right.
 
 (b)
              In
                  June 2003, the company entered into an agreement with a non-related
                  company to provide financial public relations services. The company
                  pays a
                  monthly amount ranging up to $8,500 per month plus approved expenses
                  solely in cash, for financial public relations services, communications
                  materials and travel. The agreement is now month-to-month, subject
                  to a
                  30-day termination notice.
 
 (c)
              Mineral
                  property commitments, all of which are optional, are described
                  in note
                  3.
 
 **13.**  **FINANCIAL
        INSTRUMENTS**
 
 (a)
              Fair
                  value
 The
        estimated fair values of cash and cash equivalents, receivables, accounts
        payables and accrued liabilities and amounts due to related parties approximate
        book values due to the short-term nature of these instruments.
 
 (b)  Foreign
        exchange risk
 Foreign
        exchange risk arises from foreign currency fluctuations. The company does
        not
        use any derivative instruments to reduce its exposure to fluctuations in
        foreign
        currency exchange rates.
 
 (c)
              Credit
                  risk
 Financial
        instruments that potentially subject the company to credit risk consist of
        cash
        and cash equivalents and receivables. The company deposits cash and cash
        equivalents with high-credit, quality financial institutions.
 
 
 **14.**
              **DIFFERENCES
                  BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
                  PRINCIPLES (GAAP)**
 
 These
        consolidated financial statements are prepared in accordance with Canadian
        GAAP
        which differs in certain respects from those applicable in the U.S. GAAP
        and
        from the practice promulgated by the United States Securities and Exchange
        Commission (SEC). Any significant measurement differences between Canadian
        and
        U.S. GAAP as they pertain to the accompanying consolidated financial statements
        are as follows:
  
 F
              -22
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
            the years ended July 31, 2006, 2005 and 2004**
 (expressed
            in Canadian dollars, unless otherwise stated)
 
 **14.**
              **DIFFERENCES
                  BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
                  PRINCIPLES (GAAP)**(continued)
 
 (a)
              Mining
                  and mineral property assets
  SEC
                  staff have interpreted U.S. GAAP to require that mineral property
                  exploration and land use costs must be expensed as incurred, until
                  commercially mineable deposits are determined to exist within a
                  particular
                  property. Accordingly, for U.S. GAAP purposes, for all periods
                  presented,
                  the company has expensed all land use costs for mineral properties
                  and
                  deferred exploration costs, that have been incurred by the company,
                  for
                  which commercially mineable revenues do not exist. Under Canadian
                  GAAP,
                  such costs have been deferred.
  For
        Canadian GAAP, cash flows relating to mineral property exploration and land
        use
        costs are reported as investing activities. For U.S. GAAP, these costs would
        be
        characterized as operating activities.
  (b)
              Stock
                  based compensation
  Effective
        August 1, 2005, the company adopted Statement of Financial Accounting Standard
        (SFAS) No. 123R, “ *Share
        Based Payment* ”.
        SFAS 123R is a revision of SFAS No. 123 “ *Accounting
        for Stock-Based Compensation* ”.
        SFAS 123R establishes standards for the accounting for transactions in which
        an
        entity exchanges its equity instruments for goods or services. It also addresses
        transactions in which an entity incurs liabilities in exchange for goods
        or
        services that are based on the fair value of the entity’s equity instruments or
        that may be settled by the issuance of those equity instruments. SFAS 123R
        focuses primarily on accounting for transactions in which an entity obtains
        employee services in share-based payment transactions.
  SFAS
        123R does not change the accounting guidance for share-based payment
        transactions with parties other than employees provided in SFAS 123 as
        originally issued. SFAS 123R requires a public entity to measure the cost
        of
        employee services received in exchange for an award of equity instruments
        based
        on the grant-date fair value of the award (with limited exceptions). That
        cost
        will be recognized over the period during which an employee is required to
        provide service in exchange for the award - the requisite service period.
        Upon
        adoption of SFAS 123R, there was no cumulative affect adjustment required
        and no
        differences exist between the accounting treatment between Canadian and U.S.
        GAAP.
 
 (c)
              Flow-through
                  equity financing
  Under
        Canadian income tax legislation, a company is permitted to issue shares whereby
        the company agrees to incur qualifying expenditures and renounce the related
        income tax deductions to the investors. The company has accounted for the
        issue
        of flow-through shares by reducing shareholders’ equity and recognizing a future
        income tax liability for the amount of tax credits renounced to the investors
        in
        accordance with Canadian GAAP. This future tax liability was subsequently
        reduced to $nil by the reversal of a portion of the valuation allowance relating
        to previously unrecognized future tax assets. This resulted in a future tax
        recovery for Canadian GAAP purposes in 2005.
  Under
        U.S. GAAP, no such future tax liability would arise and, accordingly, there
        would be no associated future income tax liability.
  (d)
              Prior
                  year restatement
  Certain
        of the comparative numbers in this Canadian to U.S. GAAP reconciliation note
        have been restated to reflect errors in the previous year’s presentation. As a
        result of this restatement, shareholders’ equity under U.S. GAAP increased by
        $119,500 and loss for the year under U.S. GAAP decreased by $83,900. Basic
        and
        diluted loss per share under U.S. GAAP was not impacted by this
        restatement.
 
 F
              -23
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 **14.
        DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
        PRINCIPLES (GAAP)** (continued)
 
 (e)
              The
                  effect of the significant measurement differences between Canadian
                  GAAP
                  and U.S. GAAP on the amounts reported in the consolidated balance
                  sheets,
                  statements of loss and deficit and cash flows are as
                  follows:
 
 **Balance
                  Sheets**
                As
                  at July 31
              
              2006
                $
              
              As
                  Restated
                2005
                $Assets
                  under Canadian GAAP
              
              
              4,070,670
              
              
              2,326,011Mineral
                  property exploration and development (a)
              
              
              (2,394,421
              )
              
              (1,716,483
              )Assets
                  under U.S. GAAP
              
              
              1,676,249
              
              
              609,528Liabilities
                  under Canadian GAAP
              
              
              286,001
              
              
              261,696Future
                  income tax liability (a)
              
              
              (200,200
              )
              
              (119,500
              )Liabilities
                  under U.S. GAAP
              
              
              85,801
              
              
              142,196Shareholders’
                  equity under Canadian GAAP
              
              
              3,784,669
              
              
              2,064,315Mineral
                  property exploration and development (a)
              
              
              (2,394,421
              )
              
              (1,716,483
              )Future
                  income tax liability (a)
              
              
              200,200
              
              
              119,500Shareholders’
                  equity under U.S. GAAP
              
              
              1,590,448
              
              
              467,332
 
  **Statements
                    of Operations**Years
                    ended July 31
                
                2006
                  $
                
                As
                    Restated
                  2005
                  $
                
                2004
                  $Loss
                    for the year, Canadian GAAP
                
                
                335,568
                
                
                1,493,747
                
                
                1,270,193Flow-through
                    shares
                
                
                -
                
                
                6,250
                
                
                -Mineral
                    property exploration costs (note 3)
                
                
                597,238
                
                
                1,006,532
                
                
                994,182Future
                    income tax recovery (note 9)
                
                
                -
                
                
                35,600
                
                
                -Mineral
                    property costs written off for the year
                
                
                -
                
                
                (1,133,280
                )
                
                (745,151
                )Loss
                    and comprehensive loss for the year,
                  U.S. GAAP
                
                
                932,806
                
                
                1,408,849
                
                
                1,519,224Weighted
                    average number of
                  shares outstanding
                
                
                32,390,739
                
                
                29,348,744
                
                
                22,856,098Loss
                    per share, basic and diluted under U.S. GAAP
                
                
                (0.03
                )
                
                (0.05
                )
                
                (0.07
                )
 
 
 F
              -24
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 
 NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
          the years ended July 31, 2006, 2005 and 2004**
 (expressed
          in Canadian dollars, unless otherwise stated)
 
 **14.
        DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
        PRINCIPLES (GAAP)** (continued)
  **Statements
                    of Cash Flows**Cash
                    used in operating activities
                  under Canadian GAAP
                
                
                376,708
                
                
                201,617
                
                
                380,624Mineral
                    property exploration and
                  development expenditures (a)
                
                
                594,942
                
                
                997,369
                
                
                994,182Cash
                    used in operating activities,
                  under U.S. GAAP
                
                
                971,650
                
                
                1,198,986
                
                
                1,374,806Cash
                    generated by financing activities,
                  under Canadian and U.S. GAAP
                
                
                2,055,922
                
                
                104,825
                
                
                2,560,600Cash
                    used in investing activities,
                  under Canadian GAAP
                
                
                575,220
                
                
                997,369
                
                
                1,025,363Mineral
                    property exploration and
                  development expenditures (a)
                
                
                (594,942
                )
                
                (997,369
                )
                
                (994,182
                )Cash
                    used in (from) investing activities,
                  under U.S. GAAP
                
                
                (19,722
                )
                
                -
                
                
                31,181Cash
                    and cash equivalents end of year,
                  under Canadian and U.S. GAAP
                
                
                1,590,245
                
                
                486,251
                
                
                1,580,412
  
 (f)
              Impact
                  of recent United States accounting
                  pronouncements
  (i)
                In
                  July 2006, FASB released FASB Interpretation No. 48,*“Accounting
                  for Uncertainty in Income Taxes, and interpretation of FASB Statement
                  No.
                  109”*(FIN 48). FIN 48 prescribes a comprehensive model for how a company
                  should
                  recognize, measure, present, and disclose in its financial statements
                  uncertain tax positions that the company has taken or expects to
                  take on a
                  tax return (including a decision whether to file or not file a
                  return in a
                  particular jurisdiction). Under the Interpretation, the financial
                  statements will reflect expected future tax consequences of such
                  positions
                  presuming the taxing authorities’ full knowledge of the position and all
                  relevant facts, but without considering time values. The Interpretation
                  also revises disclosure requirements and introduces a prescriptive,
                  annual, tabular roll-forward of the unrecognized tax benefits.
                  It is
                  effective for fiscal years beginning after December 15,
                  2006.
  (ii)
              On
                  June 1, 2005, the FASB issued SFAS No. 154,*“Accounting
                  Changes and Error Corrections”*,
                  a replacement of APB Opinion No. 20,*“Accounting
                  Changes”*,
                  and FASB Statement No. 3,*“Reporting
                  Accounting Changes in Interim Financial Statements”*.
                  SFAS 154 requires retrospective application to prior periods’ financial
                  statements of any change in accounting principle unless it is
                  impracticable to do so. This is a change from the existing practice
                  that
                  requires most accounting changes to be accounted for by including
                  in net
                  income in the period of the change the cumulative effect of changing
                  to
                  the new accounting principle. SFAS 154 will be effective for accounting
                  changes and corrections of errors made in fiscal years beginning
                  after
                  December 15, 2005. The company will apply this standard for U.S.
                  GAAP
                  purposes for the year ended July 31,
                  2007.
 
 F
              -
              25
 Canplats
          Resources
          Corporation (An
                Exploration Stage Company)
 NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS
 
 **For
            the years ended July 31, 2006, 2005 and 2004**
 (expressed
            in Canadian dollars, unless otherwise stated)
  
 **15.**  **SUBSEQUENT
        EVENT**
 
 Subsequent
        to the year-end, the company gave notice to the warrant holders that were
        part
        of the January, 2006 private placement that the shares of the company traded
        for
        a period of 20 consecutive days at a price at or above $0.35 per share. The
        warrant holders were required to exercise their warrants within 30 days of
        receipt of this notice or the warrants would lapse. As a result, 2,607,250
        warrants were exercised at a price of $0.25 for total proceeds of $651,812.
        A
        total of 3,000 warrants expired.
            END
        OF
        FINANCIAL STATEMENTS





F
          -
          26
 **Table
          of Contents**




**SIGNATURES**






The
      registrant hereby certifies that it meets all of the requirements for filing
      on
      Form 20-F and that it has duly caused and authorized the undersigned to sign
      this annual report on its behalf.







Canplats
                Resources Corporation(Company)
              By:   *"R.E. Gordon Davis"*Date:January
                23,
                2007
            R.E.
                Gordon Davis, President &
Director







- 50
          -
 **Table
          of Contents**


**Exhibit
      12.1**


CERTIFICATION


AS
      ADOPTED PURSUANT TO


SECTION
      302 OF THE SARBANES-OXLEY ACT OF 2002




I,
      R.E. Gordon Davis, certify that:




1.
            I
                have reviewed this annual report on Form 20-F of Canplats Resources
                Corporation;




2.
            Based
                on my knowledge, this report does not contain any untrue statement
                of a
                material fact or omit to state a material fact necessary to make
                the
                statements made, in light of the circumstances under which such statements
                were made, not misleading with respect to the period covered by this
                report;




3.
            Based
                on my knowledge, the financial statements, and other financial information
                included in this report, fairly present in all material respects
                the
                financial condition, results of operations and cash flows of the
                company
                as of, and for, the periods presented in this
                report;




4.
            The
                company’s other certifying officer(s) and I are responsible for
                establishing and maintaining disclosure controls and procedures (as
                defined in Exchange Act Rules 13a-15(e) [omitted pursuant to Transition
                Period provisions at Section III of Release 34-47986 of the Securities
                and
                Exchange Commission entitled "Management's Reports on Internal Control
                over Financial Reporting and Certification of Disclosure in Exchange
                Act
                Periodic Reports"] for the company and
                have:




(a)
            Designed
                such disclosure controls and procedures, or caused such disclosure
                controls and procedures to be designed under our supervision, to
                ensure
                that material information relating to the company, including its
                consolidated subsidiaries, is made known to us by others within those
                entities, particularly during the period in which this report is
                being
                prepared;




(b)
            [omitted
                pursuant to Transition Period provisions at Section III of Release
                34-47986 of the Securities and Exchange Commission entitled "Management's
                Reports on Internal Control over Financial Reporting and Certification
                of
                Disclosure in Exchange Act Periodic
                Reports"];




(c)
            Evaluated
                the effectiveness of the company’s disclosure controls and procedures and
                presented in this report our conclusions about the effectiveness
                of the
                disclosure controls and procedures, as of the end of the period covered
                by
                this report based on such evaluation;
                and




(d)
            Disclosed
                in this report any change in the company’s internal control over financial
                reporting that occurred during the period covered by the annual report
                that has materially affected, or is reasonably likely to materially
                affect, the company’s internal control over financial reporting;
                and




5.
            The
                company’s other certifying officer(s) and I have disclosed, based on our
                most recent evaluation of internal control over financial reporting,
                to
                the company’s auditors and the audit committee of the company’s board of
                directors (or persons performing the equivalent
                functions):




(a)
              All
                    significant deficiencies and material weaknesses in the design
                    or
                    operation of internal control over financial reporting which
                    are
                    reasonably likely to adversely affect the company’s ability to record,
                    process, summarize and report financial information;
                    and


(b)
              Any
                  fraud, whether or not material, that involves management or other
                  employees who have a significant role in the company’s internal control
                  over financial reporting.
   Date: January
        23 ,
        2007
      "R.E.
          Gordon Davis"
  R.E.
          Gordon Davis
 President


-
          51/52
          -
 **Table
          of Contents**




**Exhibit
      12.2**


CERTIFICATION


AS
      ADOPTED PURSUANT TO


SECTION
      302 OF THE SARBANES-OXLEY ACT OF 2002




I,
      Ross A. Mitchell, certify that:




1.
            I
                have reviewed this annual report on Form 20-F of Canplats Resources
                Corporation;




2.
            Based
                on my knowledge, this report does not contain any untrue statement
                of a
                material fact or omit to state a material fact necessary to make
                the
                statements made, in light of the circumstances under which such statements
                were made, not misleading with respect to the period covered by this
                report;




3.
            Based
                on my knowledge, the financial statements, and other financial information
                included in this report, fairly present in all material respects
                the
                financial condition, results of operations and cash flows of the
                company
                as of, and for, the periods presented in this
                report;




4.
            The
                company’s other certifying officer(s) and I are responsible for
                establishing and maintaining disclosure controls and procedures (as
                defined in Exchange Act Rules 13a-15(e) [omitted pursuant to Transition
                Period provisions at Section III of Release 34-47986 of the Securities
                and
                Exchange Commission entitled "Management's Reports on Internal Control
                over Financial Reporting and Certification of Disclosure in Exchange
                Act
                Periodic Reports"] for the company and
                have:




(a)
            Designed
                such disclosure controls and procedures, or caused such disclosure
                controls and procedures to be designed under our supervision, to
                ensure
                that material information relating to the company, including its
                consolidated subsidiaries, is made known to us by others within those
                entities, particularly during the period in which this report is
                being
                prepared;




(b)
            [omitted
                pursuant to Transition Period provisions at Section III of Release
                34-47986 of the Securities and Exchange Commission entitled "Management's
                Reports on Internal Control over Financial Reporting and Certification
                of
                Disclosure in Exchange Act Periodic
                Reports"];




(c)
            Evaluated
                the effectiveness of the company’s disclosure controls and procedures and
                presented in this report our conclusions about the effectiveness
                of the
                disclosure controls and procedures, as of the end of the period covered
                by
                this report based on such evaluation;
                and




(d)
            Disclosed
                in this report any change in the company’s internal control over financial
                reporting that occurred during the period covered by the annual report
                that has materially affected, or is reasonably likely to materially
                affect, the company’s internal control over financial reporting;
                and




5.
            The
                company’s other certifying officer(s) and I have disclosed, based on our
                most recent evaluation of internal control over financial reporting,
                to
                the company’s auditors and the audit committee of the company’s board of
                directors (or persons performing the equivalent
                functions):




(a)
                All
                      significant deficiencies and material weaknesses in the design
                      or
                      operation of internal control over financial reporting which
                      are
                      reasonably likely to adversely affect the company’s ability to record,
                      process, summarize and report financial information;
                      and
 (b)
              Any
                  fraud, whether or not material, that involves management or other
                  employees who have a significant role in the company’s internal control
                  over financial reporting.
  
  Date: January
        23 ,
        2007
     "Ross
        A. Mitchell"
 Vice
          President, Finance
  -
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            -
 **Table
            of Contents**


**Exhibit
      13.1**


CERTIFICATION
      PURSUANT TO


18
      U.S.C. SECTION 1350,


AS
      ADOPTED PURSUANT TO


SECTION
      906 OF THE SARBANES-OXLEY ACT OF 2002




In
      connection with the Annual Report on Form 20-F of Canplats Resources Corporation
      for the year ended July 31, 2006, as filed with the Securities and Exchange
      Commission on the date hereof (the “Amended Annual Report”), I hereby certify,
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002, that:




1.
            The
                Annual Report fully complies with the requirements of Section 13(a)
                or
                15(d) of the Securities Exchange Act of 1934, as amended; and




2.
            The
                information contained in the Annual Report fairly presents, in all
                material respects, the financial condition and results of operations
                of
                the registrant.






Date:
      January 23 ,
      2007









"R.E.
      Gordon Davis"




R.E.
      Gordon Davis


President







-
          55
          -
 **Table
          of Contents**




**Exhibit
      13.2**


CERTIFICATION
      PURSUANT TO


18
      U.S.C. SECTION 1350,


AS
      ADOPTED PURSUANT TO


SECTION
      906 OF THE SARBANES-OXLEY ACT OF 2002




In
      connection with the Annual Report on Form 20-F of Canplats Resources Corporation
      for the year ended July 31, 2006, as filed with the Securities and Exchange
      Commission on the date hereof (the “Amended Annual Report”), I hereby certify,
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002, that:




1.
            The
                Annual Report fully complies with the requirements of Section 13(a)
                or
                15(d) of the Securities Exchange Act of 1934, as amended; and




2.
            The
                information contained in the Annual Report fairly presents, in all
                material respects, the financial condition and results of operations
                of
                the registrant.




Date:
      January 23 ,
      2007













"Ross
        A. Mitchell"
 Vice
          President, Finance







-
            56
            -