UNITED STATES
         SECURITIES AND EXCHANGE COMMISSION
               Washington, D.C. 20549

                    FORM 10-KSB
[X]  Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

       FOR THE YEAR ENDED DECEMBER 31, 2003
        Commission File Number 333-79405

             NATALMA INDUSTRIES, INC.
  ---------------------------------------------
(Exact name of registrant as specified in its charter)

        Nevada                        88-0409369
 (State or other jurisdiction of    (I.R.S. Employer
 incorporation or organization)   Identification No.)

      1550 Ostler Court
   N. Vancouver, B.C., Canada                 V7G 2P1
 (Address of principal executive offices)    (Zip Code)

Registrant's telephone number, including area code:(604) 924-8000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001 per share

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,
and (2) has been subject to such filing requirements for the
past 90 days.  YES: [X] NO: [ ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

The number of shares outstanding of Registrant's common stock as
of December 31, 2003 was 11,777,500. Registrant had no revenues
for the year ended December 31, 2003.

Registrant's common stock is listed on the OTCBB under the symbol
NTAL.

Registrant's Form SB-2/A and all exhibits thereto, and Form 10QSB
for the quarters ended March 30, 2003, June 30, 2003 and September
30, 2003 are ALL incorporated herein by reference.

                               1


               Forward-Looking Statements
               --------------------------
In addition to historical information, this Annual Report contains
forward-looking statements. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those reflected in these forward-
looking statements. Factors that might cause such a difference
include, but are not limited to, those discussed in the section
entitled Management's Discussion and Analysis of Financial
Position and Results of Operations.  Readers are cautioned not to
place undue reliance on these forward-looking statements, which
reflect management's opinions only as of the date hereof. Registrant
undertakes no obligation to revise or publicly release the results
of any revision to these forward-looking statements. Readers should
carefully review the risk factors described in other documents the
Registrant files from time to time with the Securities and Exchange
Commission, including the Quarterly Reports on Form 10-Q to be
filed by the Registrant in the year 2004, under SEC File No. 333-79405.

                               PART I
                               ======
ITEM 1.  DESCRIPTION OF BUSINESS
General
--------
Natalma Industries, Inc. was incorporated in the State of Nevada on
July 9, 1998 and is engaged in the acquisition and exploration of
mining properties. Registrant is a relatively new company and, as such,
is considered to be a junior mining company. It is common practice in
the mining industry for a junior mining company to complete exploration
activities on a property to determine if any minerals exist. At such
time as mineralization is located, a junior mining company then
attempts to recruit a major mining company, with ample cash reserves
and equipment, to assist in the development of a property. As a junior
mining company, Registrant intends to conduct exploration activities on
its properties and, if warranted, will seek a major mining company to
joint venture in any development and/or production. However, Registrant
has not yet commenced any exploration activities and there is no
guarantee it will locate any mineralization on its properties or, if
mineralization is located in a quantity sufficient to warrant
development, there is no guarantee it will be able to recruit a major
mining company as a joint venture partner. Registrant has been seeking
to find a joint venture partner for its exploration program, however,
has not yet been successful in doing so. In the event Registrant is
unable to enter into a joint venture agreement with a major mining
company to assist in the development of its properties, as a junior
mining company with limited cash reserves, Registrant will likely be
required to raise additional monies, either through sales of its
equity securities or through loans from financial institutions or
third parties, prior to commencement of any development activities
on its properties.

                             2






Description of Mining Properties
--------------------------------
In December, 1998, Registrant entered into an Option to Purchase
Agreement with John Martin, an unrelated third party, to acquire
100% of the rights, titles and interests  in  and  to  a total
of 10  mining claims in the North Mt.Lorne Properties, Per 1-10
mineral claims, Grant No. YC08501-YC08510, in the Whitehorse
Mining  District,  Yukon Territory, Canada, in exchange for
$55,000 U.S. in cash and  500,000  shares  of Registrant's
restricted common  stock. On December 1, 1998, Mr. Martin obtained
an option to the same claims from Mr. Costas Takkas, an unrelated
third party.  The terms of the options are identical except Mr.
Martin received 500,000 shares of restricted common stock and
$5,000 for his assignment to Registrant. On March 16, 1999,
Registrant exercised its Option and acquired the mining claims.
Registrant also agreed to pay a 2% net smelter return, which
means 2% of the net proceeds from the sale of any minerals after
deducting the costs of extracting and smelting the minerals,
excluding any administrative or selling costs, to Mr. Martin,
which he, in turn, must pay to Mr. Takkas, on any and all minerals
located and produced on the properties. In addition, Registrant
was required to complete a minimum of $80,000 Cdn. Exploration and
development work on the properties on or before September 1, 1999;
however, since Registrant had not yet raised the money to commence
any on-site exploration work on the properties, this date was once
again extended by a verbal agreement between the parties to
April 1, 2004.

The existing roads leading to the properties in the Yukon Territory
are Rough-graded dirt and, during rainy weather, are sometimes
inaccessible or washed out.  To date, Registrant has not performed
any geological work on any of the claims, as it will not be able to
perform full exploration without the assistance of a major mining
company. Registrant is concentrating all of its current efforts on
finding a partner before the Option expires on April 1, 2004.

Historical Background of Whitehorse Mining District
----------------------------------------------------
There is no known history of any operations on our mining claims;
however, adjacent claims have been staked and excavated.

The  main rock units historically found in the area include
limestone, limestone conglomerate, black siltstone and several
phases of felsic to intermediate dykes cross-cutting the sedimentary
stratigraphy. Elevated gold and arsenic values obtained from the
mining  district occur proximal to felsic dykes. Highly anomalous
copper values were found in chalcopyrite/malachite samples taken
from a  garnet skarn outcrop in  the  area. Magnetic surveys have
revealed linear structures, possibly  magnetic dykes and/or sills,
which may be associated with skarn-type mineralization and/or
mesothermal gold-arsenic mineralization. Registrant does not know
if there is any mineralization on the properties.

                               3



Proposed Exploration Program
----------------------------
Previous exploration work on adjacent properties since 1959 has
indicated that mineral occurrences exist in the area of the
properties; however, further exploration is needed to determine what
amount of minerals, if any, exist on the properties and if any minerals
which are found can be economically extracted and profitably processed.
Registrant believes there are numerous valuable unexplored and
sometimes unclaimed prospects in the Whitehorse Mining District where
the properties are located.

Registrant's exploration program will be designed to economically
explore, evaluate and acquire properties which, in its opinion, may
merit exploration.

Registrant does not claim to have any mineralization or reserves
whatsoever at this time on any of its properties; however, between
1959 and 1980, adjacent claims were staked and excavated. Research
data reveals that in 1995, several rock samples were collected from
claims adjacent to Registrant's claims by Kennecott Canada, Hemlo
Gold Mines, Inc. and some individuals, which revealed gold
mineralization in the area. Based on this data, Registrant believes
there is a sufficient basis to engage in exploration activities, and
anticipates finding some possible gold reserves.

Environmental Regulations
-------------------------
Environmental laws and regulations relating to public lands in Canada
are expected  to  be  tightly  enforced. Registrant intends to explore
and, when required, develop its properties in strict compliance with
all environmental requirements applicable to the mineral processing and
mining industry. Registrant will secure all the necessary permits for
exploration and, if development is warranted on any property, will
file final Plans of Operation prior to the commencement of any mining
operations. Registrant anticipates no discharge of water into any
active stream, creek, river, lake or any other body of water regulated
by environmental law or regulation.  No significant endangered species
will be disturbed.  Re-contouring and re-vegetation of disturbed
surface areas will be completed pursuant to all Canadian provincial and
local legal requirements. Any portals, adits or shafts will be sealed
upon abandonment of a property.  It is difficult to estimate the cost
of compliance with environmental laws since the full nature and extent
of proposed activities cannot be determined until Registrant commences
operations and knows what that will involve from an environmental
standpoint.

Government Regulations
-----------------------
Registrant will also be subject to all the laws, rules and regulations
which govern the mineral processing and mining industry in Canada.
Registrant intends to fully comply with all environmental, health and
safety laws, rules, regulations and statutes.


                                   4


Specifically, the proposed exploration of the property will be governed
by the Yukon Quartz Mining Act. Under the Act the Governor in Council
makes regulations which prescribe operating conditions governing all
exploration programs. Registrant ill be required to notify the Chief of
Mining Land Use of its exploration plan to ensure compliance.
Registrant intends to fully determine and comply with all rules and
regulations governing its operations prior to commencement of same.

Employees and Employment Agreements
-----------------------------------
At present, Registrant has no employees, other than Derick Sinclair,
its President, Secretary, Treasurer and Chairman of the Board, and Rex
Pegg, Vice President of Exploration, who are not presently
compensated for their services and do not have employment agreements
with us. Initially, Registrant intends to use the services of
subcontractors for all exploration work on its properties. Registrant
does not presently have pension, health, annuity, insurance, stock
options, profit sharing or similar benefit plans; however, it may adopt
such plans in the future. There are presently no personal benefits
available to any officers, directors or employees.

ITEM 2.  DESCRIPTION OF PROPERTY

Registrant does not own any property other than the rights to the
mining claims disclosed above in Item 1. Registrant currently conducts
business operations from the home of its President and Chairman of the
Board, Mr. Derick Sinclair, in North Vancouver, B.C., Canada, on a
rent-free basis. Once Registrant begins its exploration and development
program on the mining claims, it intends to set up a remote office
trailer on or near the properties to conduct all business operations.

ITEM 3.  LEGAL PROCEEDINGS

Registrant is not a party to any legal proceedings and is unaware
of any pending or threatened legal proceedings.


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

There were no matters submitted to a vote of security holders
during the fourth quarter of the fiscal year ended December 31,
2002.

                             PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Registrant's Common Stock is listed on the OTCBB under the symbol
NTAL, however, there is no active trading market for the stock.

Registrant has adopted the policy to reinvest earnings to fund
future growth. Accordingly, Registrant has not paid dividends
and does not anticipate declaring dividends on its Common Stock
in the foreseeable future.

                                   5

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Results of Operations
---------------------
Registrant has not yet commenced full business operations, as
it is still diligently seeking a major mining company partner
and, therefore, has not yet realized any substantial revenues.

Registrant had a net loss of $7,463 for the year ended December
31, 2003, resulting in a negligible net loss per share, as compared
to a net loss of $34,009 at December 31, 2002. From inception to
December 31, 2003, Registrant has had a total net loss of
$110.702, resulting in a $.01 net loss per share.

General and administrative expenses at December 31, 2003 were
$7,463 compared to $34,009 at December 31, 2002. These expenses
consists of $7,806 in professional fees, including legal and
accounting fees, and operating expenses in the amount of $223.

Liquidity and Capital Resources
-------------------------------
At December 31, 2003, Registrant's primary sources of liquidity
included cash and cash equivalents in the amount of $234,478,
which represents the balance of proceeds raised in Registrant's
public offering in 2002.

Registrant believes that its existing cash balance and future
operating cash flows will be sufficient for near term operating
needs. The extent to which such sources will be sufficient to
meet Registrant's anticipated cash requirements is subject to a
number of uncertainties, the most important of which is
Registrant's ability to generate sufficient cash flow to support
its business operations.

Plan of Operation
-----------------
Registrant intends to continue aggressively seeking a joint
venture partner to assist with its exploration and development
program. Registrant is hoping it will find a partner to begin
development of its properties in June 2004, when the roads in
the area leading to its mining claims are cleared and passable.
Registrant is continuing to study data and perform research
activities on the properties and surrounding areas in
anticipation of implementing its exploration and development
plans this summer.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Registrant's financial statement for the year ended December
31, 2003, audited by Clyde Bailey, PC, an independent Certified
Public Accountant, is included at the end of this report.


                             6


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

There were no changes in and/or disagreements with accountants
on accounting and financial disclosures during period covered
by this report.

Item 8a. Accounting Controls and Procedures
         ----------------------------------
Accounting Policies
-------------------
The financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and
Exchange Commission. Management believes the disclosures
made are adequate to make the information not misleading.
The financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles.
Preparing financial statements requires Management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. These estimates and assumptions are affected by Management's
application of accounting policies. These important accounting
policies include the successful efforts method of accounting
for property and equipment, revenue recognition, accounting for
income taxes and foreign currency translation.

Management maintains disclosure controls and procedures designed
to ensure that we are able to timely collect the information
we are required to disclose in our reports filed with the
U.S. Securities and Exchange Commission. Within the 90 days
prior to the date of this report, we performed an evaluation,
under the supervision and with the participation of our Management,
of the effectiveness of the design and operation of our disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14.
Based upon the evaluation, our Principal Executive Officer and
Principal Financial Officer concluded that the current disclosure
controls are effective in timely alerting us to any material
information required to be included in our periodic SEC filings.

We also maintain a system of internal controls designed to
provide reasonable assurance that (i) transactions are executed
in accordance with Management's general and specific
authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (ii) access to assets is permitted
only in accordance with Management's general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
We believe that our internal controls are effective to provide
reasonable assurance that our financial statements are fairly

                             7


presented in conformity with generally accepted accounting
principals. Since our most recent evaluation, there have been
no changes in our internal controls or in other factors that
could significantly affect our internal controls, nor were any
corrective actions required with regard to significant
deficiencies and material weaknesses.


                           PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.

Each of Registrant's directors is elected by the stockholders
to a term of one year and serves until his or her successor is
elected and qualified. Each of the officers is elected by the
Board of Directors to a term of one year and serves until his
or her successor is duly elected and qualified, or until he or
she is removed from office. The Board of Directors has no
nominating, auditing or compensation committees.

The names, addresses, ages and positions of the current officers
and directors is set  forth  below:

<TABLE><CAPTION>
<S>                         <C>      <C>
Name and Address            Age      Position(s)
----------------           ----      -------------
Derick Sinclair             45       President, CEO, Secretary,
1550 Ostler Court                    Treasurer, CFO and Chairman
N. Vancouver, B.C.                   of the Board
Canada V7G 2P1

Rex S. Pegg                 49       Vice President of
1-410 Mahon Ave.                     Exploration
N. Vancouver, B.C.
Canada V7M 2R5
</TABLE>

Background of Officers and Directors
------------------------------------
Derick Sinclair has been the President,CEO, Secretary, Treasurer,
CFO and Chairman of the Board of Directors of Registrant since
inception. Since February 2004, he has been the Chief Financial
Officer of Image Innovations Holdings Inc., a Nevada corporation
publicly traded on the OTCBB under the symbol BNSE. From March
1996 to February 2004, he was the Chief Financial Officer and Vice
President for Navigata Communications Ltd/Westel Telecommunications/
RSL COM Canada, Inc. in Vancouver, B.C., a privately held Canadian
company. Since March 1997, he has also been President of Cosmah
Industries Inc., a privately-held exploratory mining company in
Vancouver, Canada. Since March 1996, he has also been a Director of

                              8



Fleet Management for BC Rail, Ltd., a privately-held freight train
service in Vancouver, B.C., Canada. He received a Bachelors Degree
in Commerce from the University of Windsor, Canada in 1982 and
became a member of the Institute of Chartered Accounts of British
Columbia in 1985. Mr. Sinclair devotes his time as required to the
business.

Rex S. Pegg has been the Vice President of Exploration of Registrant
since October 5, 1999.  Since April 1989, he has also been an
Independent Geologist/Consultant specializing in exploration of mining
properties. From April 1985 to April 1989, he was an Exploration
Geologist for British Petroleum-Canada.  He received a Bachelor of
Science Geological Engineering (Exploration Option) Degree from the
University of Toronto, Ontario, Canada in 1976.  Mr. Pegg will devote
his time as required to the business.

Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than
ten percent of our Common Stock, to file with the Securities and
Exchange Commission initial reports of ownership and reports of
changes of ownership of our Common Stock. Officers, directors and
greater than ten percent stockholders are required by SEC regulation
to furnish us with copies of all Section 16(a) forms they file.

To the best of our knowledge, during the year ended December 31,
2003, all Section 16(a) filing requirements applicable to our officers,
directors and greater than ten percent beneficial owners were
complied with. In making these disclosures, we have relied solely on
a review of the copies of such reports furnished to us and written
representations by our directors, executive officers and greater
than ten percent stockholders.

Code of Ethics
--------------
At this time, Registrant has not adopted a formal Code of Ethics that
applies to the Chief Executive Officer and Chief Financial Officer,
but expects to adopt a formal Code of Ethics sometime during the
current year. Registrant has, however, followed an informal Code of
Ethics requiring Board of Director approval of any material transaction
involving the Chief Executive Officer and/or Chief Financial Officer.
Management believes this procedure will deter material wrongdoing and
promote honest and ethical conduct from the executive officers.

Item 10.  Executive Compensation
          ----------------------
The officers and directors do not presently receive any cash or
non-cash compensation for their services and there are currently no
plans to implement any such compensation. They are, however,
reimbursed for any out-of-pocket expenses incurred.


                            9


Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than
ten percent of our Common Stock, to file with the Securities and
Exchange Commission initial reports of ownership and reports of
changes of ownership of our Common Stock. Officers, directors and
greater than ten percent stockholders are required by SEC regulation
to furnish us with copies of all Section 16(a) forms they file.

To the best of our knowledge, during the year ended December 31,
2003, all Section 16(a) filing requirements applicable to our officers,
directors and greater than ten percent beneficial owners were
complied with. In making these disclosures, we have relied solely on
a review of the copies of such reports furnished to us and written
representations by our directors, executive officers and greater
than ten percent stockholders.

Code of Ethics
--------------
At this time, we have not adopted a formal Code of Ethics that
applies to the Chief Executive Officer and Chief Financial Officer.
We expect to adopt a formal Code of Ethics sometime during the current
year. We have, however, followed an informal Code of Ethics requiring
Board of Director approval of any material transaction involving our
Chief Executive Officer and/or Chief Financial Officer. We believe
this procedure reasonably deters material wrongdoing and promotes
honest and ethical conduct from our executive officers.

Item 10.  Executive Compensation
          ----------------------
Our officers and directors do not presently receive any cash or
non-cash compensation for their services and there are currently no
plans to implement any such compensation. They are, however,
reimbursed for any out-of-pocket expenses incurred on our behalf.

<TABLE><CAPTION>
-----------------------------------------------------------------
                  SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------
                        Annual Compensation     Long-Term Comp.
                                       Other    Awards    Payouts
Name and                               Annual
Position(s)       Year  Salary  Bonus  Comp.
-----------------------------------------------------------------

                <c>  <c>      <c>    <c>       <c>      <c>
Derick Sinclair   2003  None    None   None      None      None
President, CEO,
CFO, Secretary,
Treasurer and
Director

Rex Pegg,         2003  None    None   None      None      None
Vice President
and Director
</TABLE>                                 10
Employment Agreements
---------------------
The officers and directors are not currently party to any
employment agreements and we do not presently have any pension,
health, annuity, insurance, stock options, profit sharing
or similar benefit plans; however, it may adopt such plans in the
future. There are presently no personal benefits available to
directors, officers or employees

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

The following table sets forth the total number of shares owned
beneficially by each of Registrant's directors, officers and key
employees, individually and as a group, and the present owners
of 5% or more of total outstanding shares. The stockholders listed
below have direct ownership of their shares and possess sole voting
and dispositive power with respect to the shares.
<TABLE><CAPTION>
-------------------------------------------------------------------
Title of Class  Name and Address           Amount and
                of Beneficial              Nature of      Percent
                    Owner                  Beneficial     of Class
                                           Ownership
-------------------------------------------------------------------
<S>                     <C>                <C>              <c>

Common Stock    Derick Sinclair           3,000,000         25%
                1550 Ostler Court
                N. Vancouver, B.C.
                Canada V7G 2P1
-------------------
All Officers and
Directors as a
Group (1 person)                          3,000,000         25%
</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Registrant is currently using the home of its President and
CEO, Derick Sinclair, on a rent-free basis to conduct its
business operations.There is no written lease agreement or other
material terms or arrangements relating to our agreement with Mr.
Sinclair to use his home. Registrant does not have any other related
transactions and has not yet formulated a policy for the resolution
of any related transaction conflicts, should they arise.


ITEM 13.  EXHIBITS, LISTS AND REPORTS ON FORM 8-K.

(a) 1 & 2.  Registrant's financial statement for the years ended
            December 31, 2003 and 2002 are included herein in
            their entirety.

(a) 3.      Registrant filed no reports on Form 8-K during the
            fourth quarter ended December 31, 2003

                                11
The following exhibits are included herein, except for the
exhibits marked with an asterisk, which are incorporated herein
by reference and can be found in Registrant's original Form SB-2
Registration Statement, filed on May 27, 1999, under SEC File
Number 333-79405 at the U.S. Securities and Exchange Commission's
website (www.sec.gov).

<TABLE><CAPTION>
<S>                     <C>
Exhibit Number     Description
--------------     -----------
    3(i) *         Articles of Incorporation
    3(ii)*         Bylaws
   23              Consent of Accountant
   99.1            Sec. 302 Certification
   99.2            Sec. 906 Certifications

</TABLE>

(b) There were no reports on Form 8-K filed for the year
ended December 31, 2003.





























                               12














                      NATALMA INDUSTRIES, INC.





                    Audited Financial Statements
                    ----------------------------


                    December 31, 2003 and 2002













                       Clyde Bailey, P.C.
                  Certified Public Accountant
                   10924 Vance Jackson #404
                   San Antonio, Texas 78230


















                                   13


CLYDE BAILEY P.C.
Certified Public Accountant
10924 Vance Jackson #404
San Antonio, Texas 78230
(210) 699-1287(ofc.)
(888) 699-1287  (210) 691-2911 (fax)

Board of Directors
Natalma Industries, Inc.

INDEPENDENT AUDITOR'S REPORT

I have audited the accompanying balance sheet of Natalma Industries,
Inc. (Company) as of December 31, 2003 and the related statement of
operations, statement of stockholders' equity, and the statement of
cash flows for the years then ended December 31, 2003 and 2002 and
from July 9, 1998 (Initial) to December 31, 2003. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these statements based
on my audit.

I conducted my audit in accordance with generally accepted auditing
standards in the United States. Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable
basis for my opinion.

The Company is a development stage enterprise, as defined in
Financial Accounting Standards Board No. 7. The Company is devoting
all of its present efforts in securing and establishing a new
business, and its planned principal operations have not commenced,
and, accordingly, minimal revenue has been derived during the
organizational period.

In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the
Company as of December 31, 2003 and the results of its operations
for the years then ended December 31, 2003 and 2002 and from July 9,
1998 ( Initial) to December 31, 2003, in accordance with accounting
principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.  The Company has limited
operations currently and suffered recurring losses from operations
that raise substantial doubt about the Company's ability to continue
as a going concern.  This is further explained in Note 8 in the
notes to financial statements.

/s/ Clyde Bailey P.C.
    San Antonio, Texas
    February 6, 2004                14


<TABLE><CAPTION>
                             NATALMA INDUSTRIES, INC.
                        (An Exploration Stage Enterprise)
                                 Balance Sheet
                        As of December 31, 2003 and 2002

                                   A S S E T S
                                   -----------
   \                                           2003            2002
                                           -------------   ----------
<S>                                               <C>          <C>

Current Assets
--------------
Cash                                          $    234,478  $  241,441
                                              ------------   ----------
     Total Current Assets                          234,478     241,441
                                              ------------   ----------
     Total Assets                             $    234,478     241,441
                                              ============   ==========

                              L I A B I L I T I E S
                              ---------------------
Current Liabilities
-------------------
Accounts Payable                                     2,250        1,750
Officer Advances                                         -            -
                                                ------------  ---------
-
     Total Current Liabilities                       2,250        1,750
                                               ------------  ----------
     Total Liabilities                               2,250        1,750

Commitments and Contingencies                             -          .-

                      S T O C K H O L D E R S '   E Q U I T Y
                      ---------------------------------------
Common Stock                                        11,778       11,500
     25,000,000 authorized shares, par value $.001
     11,777,500 shares issued and outstanding

Additional Paid-in-Capital                         331,152      331,152
Accumulated Deficit during the
  exploration period                              (110,702)   (103,239)
                                              ------------   ----------
     Total Stockholders' Equity (Deficit)          232,228      239,691
 .                                            ------------   ----------
     Total Liabilities and Stockholders'
     Equity                                    $   234,478   $  241,441
                                               ===========   ==========
</TABLE>
<FN>
The accompanying notes are integral part of the consolidated
financial statements.
</FN>
                                15
<TABLE><CAPTION>
                           NATALMA INDUSTRIES, INC.
                       (An Exploration Stage Enterprise)
                            Statement of Operations

                                                        From 7/8/98
                                 For the Years Ended    (Initial)
                                     December 31            to
                                  2003       2002    December 31, 2003
                                 -------------------------------------

                               <c>          <c>          <c>
Revenues:
---------
     Revenues                    $     -     $     -   $        -
                                 -------------------------------------
          Total Revenues         $     -     $     -   $        -

Expenses:
---------
     Professional Fees              7,806     28,659        42,167
     Operating Expenses               223      5,350        13,601
     Interest Income                 (566)                    (566)
     Option to Purchase
      Mineral Property                 -           -        55,500
                                 -------------------------------------
          Total Expenses            7,463     34,009       110,702
                                 -------------------------------------
Net Income before Taxes         $  (7,463)   (34,009)     (110,702)

Provision for Income Taxes:
---------------------------
     Income Tax Benefit                -         -              -
          Net Income (Loss)     $  (7,463)   (34,009)     (110,702)
                                ======================================
Basic and Diluted Earnings Per
Common Share                        (0.00)     (0.00)        (0.01)
                               ---------------------------------------
Weighted Average number of
Common Shares used in per
share calculations              11,777,500  11,777,500  11,500,000
                               =======================================
</TABLE>






<FN>
The accompanying notes are integral part of the consolidated
financial statements.
</FN>

                                  16



<TABLE><CAPTION>
                           NATALMA INDUSTRIES, INC.
                      (An Exploration Stage Enterprise)
                       Statement of Stockholders' Equity
                           As of December 31, 2003

                                        Accumulated
                                         Deficit
                      $.001   Paid-In   During the
Stockholders'
            Shares  Par Value Capital  Exploration Period     Equity
            ------  --------- ------- -------------------  ------------
-
<S>           <C>      <C>      <C>           <C>               <C>
Balance,
July 9, 1998    -   $    -   $    -     $      -           $      -

Issuance of
Common
Stock     3,000,000    3,000      -            -              3,000

Net Income
(Loss)          -        -        -            -                  -
          ---------  --------  -------   ----------         --------
Balance,
December
31, 1998  3,000,000    3,000      -            -              3,000

Issuance of
Common
Stock     8,500,000    8,500     72,000        -             80,500

Expenses
for stock
offering        -        -       18,070        -            (18,070)

Net Income
(Loss)          -        -        -         (57,849)        (57,849)
          ---------  --------  --------   ----------         --------
Balance
December 31,
1999     11,500,000   11,500     53,930     (57,849)          7,581
         ----------  --------  --------   ----------         --------
Net Income
(Loss)          -         -       -          (1,691)         (1,691)
          ---------  -------    -------    ----------        --------
Balance
December 31,
2000     11,500,000   11,500     53,930     (59,540)          5,890
          ---------  --------  --------   ----------         --------
Net Income
(Loss)          -         -        -         (9,690)         (9,690)
          ---------  --------  --------   ----------         --------



                                  17






Balance
December 31,
2001     11,500,000   11,500     53,930     (69,230)         (3,800)
         ----------  --------  --------   ----------         --------
Issuance of
Common
Stock       252,500      253    252,247           -         252,500

Expenses of
stock
offering     25,000       25     24,975           -          25,000

Net Income
(Loss)          -         -        -        (34,009)        (34,009)
          ---------  --------  --------   ----------         --------
Balance,
December 31,
2002     11,777,500   11,778   331,152     (103,239)        239,691

Net Income
(Loss)          -         -        -         (7,463)         (7,463)
          ---------  --------  --------   ----------       --------
Balance,
December 31,
2003     11,777,500   11,778   331,152     (110,702)        232,228
         ==========  =======   ========   =========        =========
</TABLE>




















                                    18



<TABLE><CAPTION>
                           NATALMA INDUSTRIES, INC.
                        (An Exploration Stage Enterprise)
                           Statement of Cash Flows
                                                          From
                                 For the Years Ended  7/9/98 (Initial)
                                      December 31     to December 31
                                  2003         2002        2003
                                 ----------------------------------

                               <c>          <c>          <c>
Cash Flows from Operating Activities:
-------------------------------------
     Net Income (Loss)           $ 7,463()    $(34,009)   $(110,702)
  Changes in operating assets
  and liabilities:
     Stock Issued for Services
      and Mineral Option                -           -        3,500
     Increase(Decrease)in
      Accounts Payable                500        1,750       6,450
                                 ----------------------------------
  Total Adjustments                   500        1,750       9,450
                                 ----------------------------------
Net Cash used in
Operating Activities               (6,963)    (32,259)    (100,752)

Cash Flows from Investing Activities:
------------------------------------
Purchase of Mineral Properties          -           -            -
                                 ----------------------------------
Net Cash Used in Investing
Activities                              -           -            -
                                 ----------------------------------
Cash Flows from Financing Activities:
-------------------------------------
 Payments on Stockholder Advance        -      (4,200)      (4,200)
 Proceeds from Issuance of Stock        -     277,500      357,500
 Costs Incurred to Raise Capital        -           -      (18,070)
                                  ----------------------------------
Net Cash Provided by
Financing Activities                          273,300      335,230
                                 ----------------------------------
Net Increase(Decrease) in Cash   $ (6,963)    241,041      234,478
                                 ----------------------------------
Cash Balance, Begin Period        241,441         400            -
                                 ----------------------------------
Cash Balance, End Period         $234,478    $241,441     $234,478
                                 ==================================
Supplemental Disclosures:
 Cash Paid for interest         $      -     $     -        $     -
 Cash Paid for income taxes     $      -     $     -        $     -
 Stock Issued for Option to
    Purchase                           -           -       500,000
 Stock Issued for Services         25,000          -     3,025,000
</TABLE>

                                     19
<PAGE>
                        NATALMA INDUSTRIES, INC.
                       Notes to Financial Statements

Note 1  -  Summary of Significant Accounting Policies
-----------------------------------------------------
Organization
------------
Natalma Industries, Inc.("the Company") was incorporated under the
laws of the State of Nevada on July 9, 1998 for the purpose to
promote and carry on any lawful business for which a corporation
may be incorporated under the laws of the State of Nevada. The
company has a total of 25,000,000 authorized shares with a par
value of $.001 per share and with 11,777,500 shares issued and
outstanding as of December 31, 2003 and December 31, 2002.

Exploration Stage Enterprise
----------------------------
The Company is an exploration stage enterprise, as defined in
Financial Accounting Standards Board No. 7 and Industry Guide 7
of the SEC Industry Guide. The Company is devoting all of its
present efforts in securing and establishing a new business, and
its planned principal operations have not commenced, and,
accordingly, no revenue has been derived during the organizational
period.

Federal Income Tax
------------------
The Company will be taxed under Subchapter C of the Internal
Revenue Code for its US operations. The Company has adopted the
provisions of Financial Accounting Standards Board Statement
No. 109, Accounting for Income Taxes. The Company accounts for
income taxes pursuant to the provisions of the Financial
Accounting Standards Board Statement No. 109, "Accounting for
Income Taxes", which requires an asset and liability approach to
calculating deferred income taxes.  The asset and liability
approach requires the recognition of deferred tax liabilities
and assets for the expected future tax consequences of temporary
differences between the carrying amounts and the tax basis of
assets and liabilities.

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 reported amounts of
assets and liabilities and disclosure on contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.

                              20






Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents.

Accounting Method
-----------------
The Company's financial statements are prepared using the accrual
method of accounting. Revenues are recognized when earned and
expenses when incurred. Fixed assets are stated at cost.
Depreciation and amortization using the straight-line method for
financial reporting purposes and accelerated methods for income
tax purposes.

Earnings per Common Share
-------------------------
The Company adopted Financial Accounting Standards (SFAS) No. 128,
Earnings Per Share, which simplifies the computation of earnings
per share requiring the restatement of all prior periods.

Basic earnings per share are computed on the basis of the weighted
average number of common shares outstanding during each year.

Diluted earnings per share are computed on the basis of the weighted
average number of common shares and dilutive securities outstanding.
Dilutive securities having an anti-dilutive effect on diluted
earnings per share are excluded from the calculation.

Comprehensive Income
--------------------
Statement of Financial Accounting Standards (SFAS) No. 130, Reporting
Comprehensive Income, establishes standards for reporting and display
of comprehensive income, its components and accumulated balances.
Comprehensive income is defined to include all changes in equity
except those resulting from investments by owners and distributions
to owners.  Among other disclosures, SFAS No.130 requires that all
items that are required to be recognized under current accounting
standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as
other financial statements. The Company does not have any assets
requiring disclosure of comprehensive income.

Segments of an Enterprise and Related Information
-------------------------------------------------
Statement of Financial Accounting Standards (SFAS) No. 131,
Disclosures about Segments of an Enterprise and Related Information,
supersedes SFAS No. 14, Financial Reporting for Segments of a
Business Enterprise. SFAS 131 establishes standards for the way
that public companies report information about operating segments
in annual financial statements and requires reporting of selected
information about operating segments in interim financial statements

                            21



issued to the public.  It also establishes standards for disclosures
regarding products and services, geographic areas and major customers.
SFAS 131 defines operating segments as components of a company about
which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. The Company has
evaluated this SFAS and does not believe it is applicable at this
time.

Recent Accounting Pronouncements
--------------------------------
In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, including
Indirect Guarantees of Indebtedness of Others"  ("Interpretation No.
45"). Interpretation No. 45 elaborates on the existing disclosure
requirements for most guarantees, including loan guarantees such as
standby letters of credit. It also clarifies that at the time a company
issues a guarantee, the company must recognize an initial liability for
the fair market value of the obligations it assumes under that
guarantee and must disclose that information in its interim and annual
financial statements. The initial recognition and measurement
provisions of Interpretation No. 45 apply on a prospective basis to
guarantees issued or modified after December 31, 2002. Interpretation
No. 45 did not have an effect on the financial statements.
In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities" ("Interpretation No. 46"), that
clarifies the application of Accounting Research Bulletin No. 51,
"Consolidated Financial Statements," to certain entities in which
equity investors do not have the characteristics of a controlling
financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated
financial support from other parties. Interpretation No. 46 is
applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created prior to
January 31, 2003, the provisions of Interpretation No. 46 are
applicable no later than July 1, 2003. Interpretation No. 46 did not
have an effect on the financial statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-
Based Compensation -- Transition and Disclosure, an amendment of FASB
Statement No. 123" ("SFAS 148"). This Statement amends SFAS 123 to
provide alternative methods of transition for a voluntary change to the
fair value method of accounting for stock-based employee compensation.
In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to
require prominent disclosures in both annual and interim financial
statements. Certain of the disclosure modifications are required for
fiscal years ending after December 15, 2002 and are included in the
notes to these consolidated financial statements.
Statement of Financial Accounting Standards SFAS No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities", SFAS
No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity", were recently issued.
SFAS No, 149, and 150 have no current applicability to the Company or
their effect on the financial statements would not have been
significant.

                                22
Fair Value of Financial Instruments
-----------------------------------
The Financial Accounting Standards Board (FASB) Statement No. 107.
Disclosure About Fair Value of Financial Instruments is a part of
a continuing process by the FASB to improve information on
financial statements. The carrying amounts reported in the balance
sheets for the Company's assets and liabilities approximate their
fair values as of December 31, 2003 and 2002.

Impairment of Long-Lived Assets
-------------------------------
The Company follows SFAS No. 121, Accounting for Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of.
The Statement requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events of changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.

Note 2 - COMMON STOCK
---------------------
In 2002 the Company issued 252,500 shares of common stock to various
investors for cash totaling $252,247.

In 2002 the Company issued 25,000 shares of common stock for services.

In 1998 the Company issued 8,000,000 shares of common stock to various
investors for cash totaling $80,000.

The Company issued 500,000 shares of common stock at $.001 per share
in accordance with the Assignment of Option to Purchase Agreement of
Mineral Properties.

Note 3 - SUPPLEMENTARY OF SCHEDULE OF NONCASH ACTIVITIES
--------------------------------------------------------
No amounts were actually paid for either interest or income taxes
during the years ended December 31, 2003 and 2002.

During the year ended December 31, 1999, deferred offering cost of
$12,885 previously included in organization costs, were charged to
additional paid-in-capital in accordance with Staff Accounting
Bulletin 5A.

On May 11, 1999 a related third party acquired a total of 500,000
shares of the Company's common stock as partial payment for mineral
properties.

Note 4 - MINERAL PROPERTIES
---------------------------
On December 11, 1998, the Company entered into an Option to
Purchase Agreement with an unrelated third party, ("Seller)
wherein the Company would acquire 100% of the rights, title and
interests in and to a total of 10 unpatented mining claims in
the Whitehorse Mining District, Yukon Territory, Canada.  The
Agreement called for the Company to pay $55,000 U.S. in cash
and to issue 500,000 shares of its common stock. On March 16,

                             23

1999, the Company consummated the Agreement by paying the Seller
$55,000 U.S. in cash. On May 11, 1999 the Company issued 500,000
shares of its common stock. In addition, the Company has agreed
to pay a 2% net smelter reruns on all minerals produced by the
properties to the Seller, and to complete a minimum of $80,000,
Canadian, exploration and development work on the properties on
or before September 1, 2002, which was extended by the parties
in writing to September 1, 2003. The Company has expensed the cost
of the option when the payments were paid in March 16, 1999.
The company did not complete the minimum $10,000 Cdn epxloration
work on the properties before the required date of September 1,
2003 and have verbally agreed to an extension to April 1, 2004.

Note 5 - ORGANIZATION COSTS
---------------------------
The Company has incurred legal, accounting and other formation
costs. During the year ended December 31, 1999, these costs were
charged to operations in accordance with the American Institute
of Certified Public Accountants' Statement of Position 98-5.
During the year ended December 31, 1998, the Company also incurred
$12,885 in expenses related to an offering of shares of its common
stock.  At December 31, 1999, these costs were included in
organization costs, as no proceeds had yet been received from
the offering. During the year ended December 31, 1999, these
expenses, plus additional offering costs incurred, were charged
against the gross proceeds received from the offering in
accordance with the Securities and Exchange Commission's Staff
Accounting Bulletin 5A.

Note 6 - RELATED PARTIES
------------------------
During 2002, the advance from a major shareholder of the Company
that totaled $4,200 was repaid.

Note 7 - INCOME TAXES
---------------------
Deferred tax benefits and liabilities are calculated using enacted
tax rates in effect for the year in which the differences are
expected to reverse.  The following is a schedule of the
composition of the provision for income taxes:

<TABLE><CAPTION>
                                             2003     2002
         <S>                                 <C>       <C>
                                           ------------------
        Current                            $  2,537  $11,563
        Deferred                           $  -0-    $ -0-
                                           ------------------
  Total provisions for
     income taxes                          $  2,537  $11,563
                                           ==================
</TABLE>
Deferred federal income taxes consist of future tax benefits and
liabilities attributed to:

                               24
<TABLE><CAPTION>
                                             2003     2002
                                           ------------------
         <S>                                  <C>      <C>
        Net operating loss carryforwards   $ 2,537   $ 11,563
        Valuation allowance                $(2,537)   (11,563)
                                           ------------------
  Total provisions for
  income taxes                             $  -0-    $  -0-
                                           ==================
</TABLE>

The net operating loss carryforward will expire if not applied by 2020.

Note 8  -  Going Concern
------------------------
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern that raise substantial
doubt about the Company's ability to continue as a going concern. The
stockholders/officers and or directors have committed to advancing
operating costs to the Company interest free.

Note 9 - SUBSEQUENT EVENTS
--------------------------
There were no other material subsequent events that have occurred
since the balance sheet date that warrants disclosure in these
financial statements.




















                                25




                            SIGNATURES
                            ----------
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                          NATALMA INDUSTRIES, INC., Registrant

Dated: March 29, 2004     By:/s/ Derick Sinclair
                          President, CEO, Treasurer, CFO,
                          Secretary and Director

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of Registrant and in the capacities and on the dates
indicated:

By: /s/ Derick Sinclair, President, CEO, Treasurer, CFO,
        Secretary and Director

Dated:  March 29, 2004


By: /s/ Rex S. Pegg, Vice President of Exploration

Dated:  March 29, 2004




                                    27