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 fiscal
        year ended May 31, 2007



Or



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



For the
        transition period from __________________ to __________________________.



Commission File Number: 000-32919



PATRIOT GOLD CORP.

(Exact
        name of registrant as specified in its charter)



Nevada

                        (State or other jurisdiction of incorporation)

                    86-0947048

                        (IRS Employer Identification No.)




#501-1775
        Bellevue Avenue

West
        Vancouver, B.C., Canada V7V 1A9

(Address
        of principal executive offices)



(604)
        925-5257

(Registrant’s telephone number, including

area
        code)



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



Securities registered pursuant to section 12(g) of the Act: Common Stock, no
        par value



Check
        whether the issuer (l) has filed all reports required to be filed by Section 13 or 15(d) of
        the Exchange Act during the past 12 months (or for such shorter period that the registrant
        was required to file such reports), and (2) has been subject to such filing requirements
        for the past 90 days. [ X ] Yes [ ] No



Check if
        there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is
        not contained in this form, and no disclosure will be contained, to the best of
        registrant’s knowledge, in definitive proxy or information statements incorporated by
        reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
        x



---





Indicate
        by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
        Exchange Act)

[

                    ] Yes

                    x No




Revenues
        for fiscal year ended May 31, 2007 were $0.



The
        aggregate market value of the voting common equity held by non-affiliates computed by
        reference to the price at which the common equity was sold, or the average bid and asked
        price of such common equity, as of August 24, 2007 (a date within the past 60 days) was
        $1,820,196.



The
        number of shares of the issuer’s Common Stock outstanding as of August 24, 2007 is
        26,224,400.



Documents Incorporated By Reference: None



Transitional Small Business Disclosure Format (check one): Yes [ ] No [X
        ]



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TABLE OF
        CONTENTS



PageGlossary of Mining Terms

                    4PART IItem 1. Description of Business

                    7Item 2. Properties

                    14Item 3. Legal Proceedings

                    28Item 4. Submission of Matters to a Vote of Security
                        Holders

                    28PART II

                    28Item 5. Market for Common Equity and Related Stockholder
                        Matters

                    28Item 6. Management’s Discussion and Analysis or Plan
                        of Operation

                    31Item 7. Financial Statements

                    35Item 8. Changes in and Disagreements with Accountants on
                        Accounting and Financial Disclosure

                    35Item 8A. Controls and Procedures

                    35Item 8B. Other Information

                    35PART III

                    36Item 9. Directors, Executive Officers, Promoters, Control
                        Persons and Corporate Governance; Compliance with Section 16(a) of the
                        Exchange Act

                    36Item 10. Executive Compensation

                    38Item 11. Security Ownership of Certain Beneficial Owners and
                        Management and Related Stockholder Matters

                    40Item 12. Certain Relationships and Related Transactions, and
                        Director Independence

                    42Item 13. Exhibits

                    44Item 14. Principal Accountant Fees and Services

                    45






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Glossary
        of Mining Terms



Adularia. A potassium-rich alteration mineral
        – a form of orthoclase.



Air
        track holes. Drill hole constructed with a small portable drill
        rig using an air-driven hammer.



BLEG
        sampling. Bulk leach sampling. A large sample of soil or rock
        that is leached using cyanide to determine gold and silver content down to a detection
        limit of as little as 1.0 parts per billion.



CSMT
        Survey. An electromagnetic method used to map the variation of
        the Earth’s resistance to conduct electricity by measuring naturally occurring
        electric and magnetic fields at the Earth’s surface.



Controlled Source Magneto-telluric Survey. The
        recording of variations in a generated electrical field using sophisticated survey
        methods.



Core
        holes. A hole in the ground that is left after the process where
        a hollow drill bit with diamond chip teeth is used to drill into the ground. The center of
        the hollow drill fills with the core of the rock that is being drilled into, and when the
        drill is extracted, a hole is left in the ground.

Felsic
        Tertiary Volcanic Rocks. Quartz-rich rocks derived from volcanoes
        and deposited between two and sixty-five million years ago.

Geochemical sampling. Sample of soil, rock,
        silt, water or vegetation analyzed to detect the presence of valuable metals or other
        metals which may accompany them. For example, arsenic may indicate the presence of
        gold.

Geochemical Sampling. Sampling of rocks or soil
        and determination of the absolute abundances of elements.

Geologic
        mapping. Producing a plan or sectional map of the rock types,
        structure and alteration.



Geophysical survey. Electrical, magnetic and
        other means used to detect features, which may be associated with mineral
        deposits



Ground
        magnetic survey. Recording variations in the earth’s
        magnetic field and plotting same.



Ground
        radiometric survey. A survey of radioactive minerals on the land
        surface.



Leaching. Leaching is a cost effective process
        where ore is subjected to a chemical liquid that dissolves the mineral component from the
        ore, and then the liquid is collected and the metals extracted from it.



Magnetic
        lows. An occurrence that may be indicative of a destruction of
        magnetic minerals by later hydrothermal (hot water) fluids that have come up along these
        faults. These hydrothermal fluids may in turn have carried and deposited precious metals
        such as gold and/or silver.



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Plug. Landform similar to a dome, but
        smaller.



Quartz
        Monzonite. A coarsely crystalline rock composed primarily of the
        minerals quartz, plagioclase and orthoclase.



Quartz
        Stockworks. A multi-directional quartz veinlets.



RC
        holes. Short form for Reverse Circulation Drill holes. These are
        holes left after the process of Reverse Circulation Drilling.



Resource. An estimate of the total tons and
        grade of a mineral deposit.



Reverse
        circulation drilling. A less expensive form of drilling that does
        not allow for the recovery of a tube or core of rock. The material is brought up from depth
        as a series of small chips of rock that are then bagged and sent in for analysis. This is a
        quicker and cheaper method of drilling, but does not give as much information about the
        underlying rocks.



Rhyolite
        plug dome. A domal feature formed by the extrusion of viscous
        quartz-rich volcanic rocks.



Scintillometer survey. A survey of radioactive
        minerals using a scintillometer, a hand-held, highly accurate measuring device.



Scoping
        Study. A detailed study of the various possible methods to mine a
        deposit.



Silicic
        dome. A convex landform created by extruding quartz-rich volcanic
        rocks



Tertiary. That portion of geologic time that
        includes abundant volcanism in the western U.S.



Trenching. A cost effective way of examining
        the structure and nature of mineral ores just beneath the surface. It involves digging long
        usually shallow trenches in carefully selected areas to expose unweathered rock and allow
        sampling.



Volcanic
        center. Origin of major volcanic activity



Volcanoclastic. Coarse, unsorted sedimentary
        rock formed from volcanic rocks.



5



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Forward-Looking Statements



This
        Annual Report on Form 10-KSB contains forward-looking information. Forward-looking
        information includes statements relating to future actions, prospective products, future
        performance or results of current or anticipated products, sales and marketing efforts,
        costs and expenses, interest rates, outcome of contingencies, financial condition, results
        of operations, liquidity, business strategies, cost savings, objectives of management of
        Patriot Gold Corp. (the “Company” or “we”) and other matters.
        Forward-looking information may be included in this Annual Report on Form 10-KSB or
        may be incorporated by reference from other documents filed with the Securities and
        Exchange Commission (the “SEC”) by the Company. One can find many of these
        statements by looking for words including, for example, “believes,”
        “expects,” “anticipates,” “estimates” or similar
        expressions in this Annual Report on Form 10-KSB or in documents incorporated by
        reference in this Annual Report on Form 10-KSB. The Company undertakes no obligation
        to publicly update or revise any forward-looking statements, whether as a result of new
        information or future events.



The
        Company has based the forward-looking statements relating to the Company’s operations
        on management’s current expectations, estimates and projections about the Company and
        the industry in which it operates. These statements are not guarantees of future
        performance and involve risks, uncertainties and assumptions that we cannot predict. In
        particular, we have based many of these forward-looking statements on assumptions about
        future events that may prove to be inaccurate. Accordingly, the Company’s actual
        results may differ materially from those contemplated by these forward-looking statements.
        Any differences could result from a variety of factors, including, but not limited to
        general economic and business conditions, competition, and other factors.





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PART
        I

Item 1.

                    Description of Business.




We are
        engaged in natural resource exploration and anticipate acquiring, exploring, and if
        warranted and feasible, developing natural resource properties. Currently we are in the
        exploration state and are undertaking exploration programs in Arizona and
        Nevada.



History



We were
        incorporated in the State of Nevada on November 30, 1998. We were originally organized to
        engage in the business of breeding, raising and marketing ostriches, ostrich meat and
        ostrich by-products to the wholesale and retail markets. We operated from November 30, 1998
        through approximately May 31, 2000 when we ceased all operations due to lack of
        capital.



Mr. Manfred Schultz and Mr. Gerald Hinkley were our sole officers
        and directors from inception in November 1998, until they resigned on October 31, 2002.
        During such time, Messrs. Schultz and Hinkley were responsible for maintaining the
        Company in compliance with all SEC and other rules and regulations and for finding a
        suitable business opportunity to acquire or merge with the Company. On October 20, 2002,
        Mr. Bruce Johnstone was appointed to the board of directors and as an officer. On
        October 31, 2002, Mr. Manfred Schultz and Mr. Gerald Hinkley resigned as
        directors and officers of the Company. The resignations were offered for personal reasons
        and not for any disagreement with management of the Company or its policies. Both resigning
        directors and the Company parted ways on good terms.



On or
        about May 1, 2001, the directors determined that it was in the best interest of our
        stockholders to become active again and we began seeking potential operating businesses and
        business opportunities with the intent to acquire or merge with such businesses. In June
        2003, we filed an Amended and Restated Articles of Incorporation with the Secretary of
        State of the State of Nevada changing the name of our Company and authorizing the issuance
        of preferred stock.



On June
        12, 2003, we issued 13,500,000 Series A 7% Redeemable Preferred Shares to Mr. Bruce
        Johnstone, our director and officer, in consideration for his services; this issuance
        having been previously approved by a vote of both the Board of Directors and the majority
        stockholders. Each Series A 7% Redeemable Preferred Share had the right to vote with the
        common shares on all matters requiring stockholder vote, including without limitation the
        election of directors. Mr. Johnstone received the shares in lieu of cash compensation
        for the services he provided to us. These services included, without limitation, the
        determination to transform the Company from the then business of ostrich meat production to
        the current business activity of resource exploration and ensuring that the Company would
        maintain its corporate existence. During this process, Mr. Johnstone was responsible
        for finding and securing qualified directors for the board, which made up the new
        management team for the Company. Along with this he was also responsible for arranging and
        closing our July 2003 private placement financing. These funds provided the necessary
        funding to secure the first resource exploration projects which Mr. Johnstone
        established when he signed the Letter of Intent with MinQuest Inc. on June 27,
        2003.



On June
        13, 2003, Messrs. Schultz and Hinkley, our former officers and directors, returned a
        total of 700,000 shares of common stock to us for cancellation. Given the fact that said
        individuals were



7



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no
        longer affiliated with the Company, at our request they agreed to return 70% of their
        holdings in the company. We determined that having them maintain 30% of their initial
        holdings in the Company was adequate consideration for the four years’ of services
        which they had performed. Since Messrs. Schultz and Hinkley were satisfied with our
        business plan to make the Company a natural resource exploration company, they did not
        request any consideration for the return of their shares. On June 17, 2003, each issued and
        outstanding share of common stock was forward split at a rate of one for seven and
        six-tenths (1:7.6) so that each share of common stock became equal to 7.6
        shares.



On June
        17, 2003, we received a new trading symbol to reflect the company name change and forward
        split of the common stock. The new trading symbol is PGOL.



On June
        23, 2003 the Board adopted a resolution to (i) increase the number of positions on the
        Board to a total of three and (ii) appointed to the newly created positions Mr. Robert
        A. Sibthorpe of Vancouver, B.C. and Mr. Robert D. Coale of Solana Beach,
        CA.



On July
        21, 2003, Mr. Bruce Johnstone resigned as an officer and director. The resignation was
        offered for personal reasons and not for any disagreement with management of the Company or
        its policies. On July 21, 2003, Mr. Ronald C. Blomkamp was appointed as the President,
        Chief Executive and Financial Officer and Secretary and a director of the
        Company.



On October
        13, 2005, Mr. Ronald Blomkamp, the Chairman, President, Chief Executive Officer, Chief
        Operating Officer, Secretary, and a director resigned from each of his positions as an
        officer and director of the Company. On the same date, the Company’s board of
        directors voted to appoint Mr. Robert Coale as Chairman, President, Chief Executive
        Officer, Chief Operating Officer, and Secretary. Also on the same date, the Company’s
        board of directors elected Mr. Duncan Budge as a member of the board of directors of the
        Company.



On March
        10, 2006 the Company granted stock options to Mr. Robert Coale, who is the Chairman,
        President, Chief Executive Officer, Chief Operating Officer, Secretary, and Director and to
        Mr. Robert Sibthorpe who is a director of the Company. In consideration therefor, Mr.
        Coale, Mr. Sibthorpe and the Company entered into Buy-Back Option Agreements, pursuant to
        which Messrs. Coale and Sibthorpe granted to the Company the option to purchase all or any
        portion of the 3,000,000 shares of the Company’s common stock that are owned by each
        of Mr. Coale and Mr. Sibthorpe respectively for a purchase price of $0.01 per
        share.



Also on
        March 10, 2006, the Registrant entered into a Redemption Agreement with Ronald Blomkamp,
        the Company’s former President and Chief Executive Officer pursuant to which the
        Company purchased from Mr. Blomkamp the 3,000,000 shares of the Company’s common
        stock that were owned by Mr. Blomkamp. The purchase price for such shares paid to Mr.
        Blomkamp by the Company was $0.01 per share, which amounted to an aggregate of $30,000. The
        purchased share were returned to treasury and cancelled.



Business Operations



We are a
        natural resource exploration company with an objective of acquiring, exploring, and if
        warranted and feasible, developing natural resource properties. Our primary focus in the
        natural



8



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resource
        sector is gold. We are an exploration stage company. We do not consider ourselves a
        “blank check” company required to comply with Rule 419 of the Securities and
        Exchange Commission, because we were not organized for the purpose of effecting, and our
        business plan is not to effect, a merger with or acquisition of an unidentified company or
        companies, or other entity or person. We do not intend to merge with or acquire another
        company in the next 12 months.



Though
        we have the expertise on our board of directors to take a resource property that hosts a
        viable ore deposit into mining production, the costs and time frame for doing so are
        considerable, and the subsequent return on investment for our shareholders would be very
        long term. Therefore, we anticipate selling or partnering any ore bodies that we may
        discover to a major mining company. Most major mining companies obtain their ore reserves
        through the purchase of ore bodies found by junior exploration companies. Although these
        major mining companies do some exploration work themselves, many of them rely on the junior
        resource exploration companies to provide them with future deposits for them to mine. By
        selling or partnering a deposit found by us to these major mining companies, it would
        provide an immediate return to our shareholders without the long time frame and cost of
        putting a mine into operation ourselves, and it would also provide future capital for the
        company to continue operations.



The
        search for valuable natural resources as a business is extremely risky. We can provide
        investors with no assurance that the properties we have optioned in Nevada and purchased in
        Arizona contain commercially exploitable reserves. Exploration for natural reserves is a
        speculative venture involving substantial risk. Few properties that are explored are
        ultimately developed into producing commercially feasible reserves. Problems such as
        unusual or unexpected formations and other conditions are involved in mineral exploration
        and often result in unsuccessful exploration efforts. In such a case, we would be unable to
        complete our business plan and any money spent on exploration would be lost.



Natural
        resource exploration and development requires significant capital and our assets and
        resources are limited. Therefore, we anticipate participating in the natural resource
        industry through the selling or partnering of our properties, the purchase of small
        interests in producing properties, the purchase of properties where feasibility studies
        already exist or by the optioning of natural resource exploration and development projects.
        To date we have several properties under option, and are in the early stages of exploring
        these properties. There has been no indication as yet that any commercially viable mineral
        deposits exist on these properties, and there is no assurance that a commercially viable
        mineral deposit exists on any of our properties. Further exploration will be required
        before a final evaluation as to the economic and legal feasibility is
        determined.



Financing



In July
        2003 we completed a private placement of shares and warrants which generated an aggregate
        of $367,500 in proceeds. The private placement we closed in November 2003 generated an
        additional $1,080,000 in gross proceeds. Also, $2,060,825 and $1,597,500 during the years
        ended May 31, 2004 and 2005, respectively, was obtained from the exercise of stock options
        issued under the Company’s 2003 stock option plan. There were no fund raising
        activities undertaken by the Company during the fiscal year ended May 31, 2007. With the
        funds currently



9



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held by
        the Company, we are adequately funded for all work programs and option commitments for the
        next 12 months. If we were to develop any of our properties beyond the exploration
        activities currently being undertaken by the Company, we would need to raise further
        funding. If additional funding is required, management plans to seek the additional capital
        through private placements and public offerings of its common stock but there can be no
        assurances that management would be successful in its attempt to raise the additional
        funds.



Competition



The
        mineral exploration industry, in general, is intensively competitive and even if commercial
        quantities of ore are discovered, a ready market may not exist for sale of same. Numerous
        factors beyond our control may affect the marketability of any substances discovered. These
        factors include market fluctuations, the proximity and capacity of natural resource markets
        and processing equipment, government regulations, including regulations relating to prices,
        taxes, royalties, land tenure, land use, importing and exporting of minerals and
        environmental protection. The exact effect of these factors cannot be accurately predicted,
        but the combination of these factors may result in our not receiving an adequate return on
        invested capital.

Government Regulation



The
        federal government and various state and local governments have adopted laws and
        regulations regarding the protection of natural resources, human health and the
        environment. We will be required to conduct all exploration activities in accordance with
        all applicable laws and regulations. These may include requiring working permits for any
        exploration work that results in physical disturbances to the land and locating claims,
        posting claims and reporting work performed on the mineral claims. The laws and regulations
        may tell us how and where we can explore for natural resources, as well as environmental
        matters relating to exploration and development. Because these laws and regulations change
        frequently, the costs of compliance with existing and future environmental regulations
        cannot be predicted with certainty.



Any
        exploration or production on United States Federal land will have to comply with the
        Federal Land Management Planning Act which has the effect generally of protecting the
        environment. Any exploration or production on private property, whether owned or leased,
        will have to comply with the Endangered Species Act and the Clean Water Act. The cost of
        complying with environmental concerns under any of these acts varies on a case-by-case
        basis. In many instances the cost can be prohibitive to development. Environmental costs
        associated with a particular project must be factored into the overall cost evaluation of
        whether to proceed with the project.



Other
        than the normal bonding requirements, there are no costs to us at the present time in
        connection with compliance with environmental laws. However, since we do anticipate
        engaging in natural resource projects, these costs could occur at any time. Costs could
        extend into the millions of dollars for which we could be liable. In the event of
        liability, we would be entitled to contribution from other owners so that our percentage
        share of a particular project would be the percentage share of our liability on that
        project. However, other owners may not be willing or able to share in the cost of the
        liability. Even if liability is limited to our percentage share, any significant liability
        would wipe out our assets and resources.



Permits
        for drilling at the Moss Property (see below Item 2, entitled “Properties”)
        have been



10



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obtained
        from the Arizona Department of Water Resources, Phoenix, Arizona. The “Intention to
        Drill Wells” permits were issued February 5, 2004.



In
        October 2004, we received the approval of a Notice of Intent for Exploration Drilling, and
        an environmental bond filed with the Nevada office of the Bureau of Land Management. With
        the proper approvals in place, we began drilling on the Bruner property on December 20,
        2004 and completed the program in March 2005. This approval will be relied upon by the
        Company for its planned drilling program for the Bruner property later in 2007.



Employees



We have
        commenced only limited operations. Therefore, we have no full time employees. Our sole
        officer and three directors provide planning and organizational services for us on a
        part-time basis.



Subsidiaries



We do
        not have any subsidiaries and we are not part of a group.



Factors that May Affect Future Results



1. We
        will require additional funds in the future to achieve our current business strategy and
        our inability to obtain funding will cause our business to fail.



Based upon
        current plans we expect to incur operating losses in future periods. This will happen
        because there are expenses associated with the acquisition and exploration of natural
        resource properties. While we have sufficient cash on hand to fund our operating needs to
        May 31, 2008, we will need to raise additional funds in the future through public or
        private debt or equity sales in order to fund our future operations and fulfill contractual
        obligations. These financings may not be available when needed. Even if these financings
        are available, it may be on terms that we deem unacceptable or are materially adverse to
        your interests with respect to dilution of book value, dividend preferences, liquidation
        preferences, or other terms. Our inability to obtain financing would have an adverse effect
        on our ability to implement our current exploration in Arizona and Nevada, and as a result,
        could require us to diminish or suspend our operations and possibly cease our existence.
        Obtaining additional financing would be subject to a number of factors, including the
        market prices for the mineral property and silver and copper. These factors may make the
        timing, amount, terms or conditions of additional financing unavailable to us.



2. If
        we do not complete the required option payments and capital expenditure requirements
        mandated in our respective agreements with MinQuest, we will lose our interest in that
        respective property and our business may fail.



If we do
        not make all of the property payments to MinQuest or incur the required expenditures in
        accordance with the respective property option agreements we will lose our option to
        purchase the respective property for which we have not made the payments and may not be
        able to continue to execute our business objectives if we are unable to find an alternate
        exploration interest. Since our payment obligations are non-refundable, if we do not make
        any payments, we will lose any



11



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payments
        previously made and all our rights to the properties.



3.
        Because of our reliance on MinQuest our operations would be severely impacted should our
        relationship with MinQuest be terminated for any reason.



A
        portion of our Moss property was acquired from MinQuest and we optioned the Bruner and
        Vernal properties from MinQuest. In addition, to date all of our exploration activity on
        these properties has been undertaken by MinQuest. As a result, MinQuest has significant
        knowledge about our properties and it would be very difficult for us to replace MinQuest
        should our relationship with them be terminated for any reason. To date, there have not
        been any conflicts between the Company and MinQuest.



4.
        Because our Directors serve as Officers and Directors of other companies engaged in mineral
        exploration, a potential conflict of interest could negatively impact our ability to
        acquire properties to explore and to run our business.



All of
        our Directors and Officers work for other mining and mineral exploration companies. Due to
        time demands placed on our Directors and Officers, and due to the competitive nature of the
        exploration business, the potential exists for conflicts of interest to occur from time to
        time that could adversely affect our ability to conduct our business. The Officers and
        Directors’ full-time employment with other entities limits the amount of time they
        can dedicate to us as a director or officer. Also, our Directors and Officers may have a
        conflict of interest in helping us identify and obtain the rights to mineral properties
        because they may also be considering the same properties. To mitigate these risks, we work
        with several geologists in order to ensure that we are not overly reliant on any one of our
        Directors to provide us with geological services. However, we cannot be certain that a
        conflict of interest will not arise in the future. To date, there have not been any
        conflicts of interest between any of our Directors or Officers and the Company.



5.
        Because of the speculative nature of exploration and development, there is a substantial
        risk that our business will fail.



The
        search for valuable natural resources as a business is extremely risky. We can provide
        investors with no assurance that the properties we have in Arizona and Nevada contain
        commercially exploitable reserves. Exploration for natural reserves is a speculative
        venture involving substantial risk. Few properties that are explored are ultimately
        developed into producing commercially feasible reserves. Problems such as unusual or
        unexpected formations and other conditions are involved in mineral exploration and often
        result in unsuccessful exploration efforts. In such a case, we would be unable to complete
        our business plan.



6.
        Because we have not commenced business operations, we face a high risk of business failure
        due to our inability to predict the success of our business



We are
        in the initial stages of exploration of our mineral claims and thus have no way to evaluate
        the likelihood that we will be able to operate our business successfully. To date have been
        involved primarily in organizational activities, and the acquisition and exploration of the
        mineral claims. We have not earned any revenues as of the date of this report.



12



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7.
        Because of the unique difficulties and uncertainties inherent in mineral exploration and
        the mining business, we face a high risk of business failure



Potential investors should be aware of the difficulties normally encountered
        by early-stage mineral exploration companies and the high rate of failure of such
        enterprises. The likelihood of success must be considered in light of the problems,
        expenses, difficulties, complications and delays encountered in connection with the
        exploration of the mineral properties that we plan to undertake. These potential problems
        include, but are not limited to, unanticipated problems relating to exploration, and
        additional costs and expenses that may exceed current estimates.



In
        addition, the search for valuable minerals involves numerous hazards. As a result, we may
        become subject to liability for such hazards, including pollution, cave-ins and other
        hazards against which we cannot insure or against which we may elect not to insure. The
        payment of such liabilities may have a material adverse effect on our financial
        position.



8.
        Because we anticipate our operating expenses will increase prior to our earning revenues,
        we may never achieve profitability



Prior to
        completion of our exploration stage, we anticipate that we will incur increased operating
        expenses without realizing any revenues. Therefore, we expect to incur significant losses
        into the foreseeable future. We recognize that if we are unable to generate significant
        revenues from the exploration of our mineral claims we will not be able to earn profits or
        continue operations. There is no history upon which to base any assumption as to the
        likelihood that we will prove successful, and we can provide investors with no assurance
        that we will generate any operating revenues or ever achieve profitable operations. If we
        are unsuccessful in addressing these risks, our business will most likely fail.



9.
        Because access to our mineral claims may be restricted by inclement weather, we may be
        delayed in our exploration



Access to
        our mineral properties may be restricted through some of the year due to weather in
        the

area. As a
        result, any attempt to test or explore the property is largely limited to the times when
        weather permits such activities. These limitations can result in significant delays in
        exploration efforts. Such delays can have a significant negative effect on our results of
        operations.



10.
        Because our President has only agreed to provide his services on a part-time basis, he may
        not be able or willing to devote a sufficient amount of time to our business operations,
        causing our business to fail



Mr.
        Coale, our sole officer, provides his management services to a number of companies. Because
        we are in the early stages of our business, Mr. Coale will not be spending a
        significant amount of time working for the Company. Mr. Coale expects to expend
        approximately five hours per week on our business. Later, if the demands of our business
        require the full business time of Mr. Coale, he is prepared to adjust his timetable to
        devote more time to our business. However, it still may not be possible for Mr. Coale
        to devote sufficient time to the management of our business, as and when needed, especially
        if the demands of Mr. Coale’s other interests increase. Competing demands on
        Mr. Coale’s time may lead to a divergence between his interests and the
        interests of other shareholders.



13



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Risks
        Related To Legal Uncertainty and Regulations



11.
        As we undertake exploration of our mineral claims, we will be subject to compliance with
        government regulation that may increase the anticipated cost of our exploration
        programs



There
        are several governmental regulations that materially restrict mineral exploration. We will
        be subject to the federal, state and local laws of the United States, Arizona, and Nevada
        as we carry out our exploration program. We may be required to obtain work permits, post
        bonds and perform remediation work for any physical disturbance to the land in order to
        comply with these laws. While our planned exploration program budgets for regulatory
        compliance, there is a risk that new regulations could increase our costs of doing business
        and prevent us from carrying out our exploration programs.



Item
        2. Description of Properties.



We do
        not lease or own any real property. We currently maintain our corporate office on a
        month-to-month basis at an amount of CDN $1,650 per month at #501-1775 Bellevue Avenue,
        West Vancouver, British Columbia, Canada, V7V 1A9. Management believes that our office
        space is suitable for our current needs.



In the
        following discussion relating to our interests in real property, there are references to
        “patented” mining claims and “unpatented” mining claims. A patented
        mining claim is one for which the U.S. government has passed its title to the claimant,
        giving that person title to the land as well as the minerals and other resources above and
        below the surface. The patented claim is then treated like any other private land and is
        subject to local property taxes. An unpatented mining claim on U.S. government lands
        establishes a claim to the locatable minerals (also referred to as stakeable minerals) on
        the land and the right of possession solely for mining purposes. No title to the land
        passes to the claimant. If a proven economic mineral deposit is developed, provisions of
        federal mining laws permit owners of unpatented mining claims to patent (to obtain title
        to) the claim. If one purchases an unpatented mining claim that is later declared invalid
        by the U.S. government, one could be evicted.



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Bruner and Vernal Properties







Map of
        our Bruner and Vernal properties located in western Nevada.



Acquisition of Interest



Pursuant
        to a Property Option Agreement, dated as of July 25, 2003, with MinQuest, Inc., a Nevada
        corporation (“MinQuest”), we have the option to earn a 100% interest in the
        Bruner and Vernal mineral exploration properties located in Nevada. Together, these two
        properties consist of 28 mining claims on a total of 560 acres in the northwest trending
        Walker Lane located in western Nevada, as further described below.



Simultaneous with the execution and delivery of the Property Option
        Agreement, we paid MinQuest $12,500. In order to earn a 100% interest in these two
        properties, we must pay MinQuest, Inc. and incur expenditures relating to mining operations
        in accordance with the following schedule: (i) on or before July 25, 2004, $20,000 to
        MinQuest and $75,000 in expenditures; (ii) on or before July 25, 2005, $20,000 to MinQuest
        and an additional $100,000 in expenditures; (iii) on or before July 25, 2006, $20,000 to
        MinQuest and an additional $100,000 in expenditures; (iv) on or before July 25, 2007,
        $20,000 to MinQuest and an additional $100,000 in expenditures; and (v) on or before July
        25, 2008, an additional $125,000 in expenditures. If we



15



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have not
        incurred the requisite expenditures to maintain our option in good standing, we have a
        60-day period subsequent to July 25th to make such payment along with such
        amount which shall be deemed to have been an expenditure incurred by us during such period.
        Since our payment obligations are non-refundable, if we do not make any payments, we will
        lose any payments made and all our rights to the properties. If all said payments are made,
        then we will acquire all mining interests in the property, subject to MinQuest retaining a
        3% royalty of the aggregate proceeds received by us from any smelter or other purchaser of
        any ores, concentrates, metals or other material of commercial value produced from the
        property, minus the cost of transportation of the ores, concentrates or metals, including
        related insurance, and smelting and refining charges, including penalties.



Pursuant
        to the Property Option Agreement, we have a one-time option to purchase up to 2% of
        MinQuest’s royalty interest at a rate of $1,000,000 for each 1%. We must exercise our
        option 90 days following completion of a bankable feasibility study of the Bruner and
        Vernal properties, which, as it relates to a mineral resource or reserve, is an evaluation
        of the economics for the extraction (mining), processing and marketing of a defined ore
        reserve that would justify financing from a banking or financing institution for putting
        the mine into production.



On July
        25, 2003, we paid MinQuest $12,500 with respect to the properties, and we owed an
        additional $80,000 which was due in four equal annual installments commencing on July 25,
        2004. With the approval of MinQuest, we paid the first installment on August 27, 2004 and
        we paid the second installment on September 20, 2005. On July 25, 2006 and 2007
        respectively we made the third and fourth installments of $20,000. The payment made on July
        25, 2007 was the final payment due under the property option agreement for the Bruner and
        Vernal properties. By July 25, 2007, we were to have spent $375,000 on exploration, and by
        that date we had spent an aggregate of approximately $280,000 on exploration of the two
        properties resulting in a shortfall of $95,000. By way of letter agreement dated July 24,
        2007 between the Company and MinQuest, MinQuest has agreed to extend the due date of the
        shortfall of $95,000 at July 25, 2007 until July 25, 2008. We are obligated to spend
        another $125,000 July 25, 2008. The effect of the change is that the Company is now
        obligated to incur $220,000 by July 25, 2008.



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Bruner Property



Description and Location of the Bruner Property





17



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The
        property is located approximately 130 miles east-southeast of Reno, Nevada at the northern
        end of the Paradise Range. Access from Fallon, the closest town of any size, is by 50 miles
        of paved highway and 16 miles of gravel roads. We hold the property via 16 unpatented
        mining claims (320 acres).



Exploration History of the Bruner Property



The
        original operators at the Bruner Property are unknown. Prospecting at the property began in
        the early 1900’s while mining was occurring on other properties located to the west.
        However, modern exploration of the property began in 1983 and included the following
        work:



o

                    In 1983, Kennecott drilled fifteen RC holes (holes left
                        after the process of reverse circulation drilling) on the
                        property.




o

                    In 1988-1990, Newmont Exploration Ltd. drilled approximately
                        10 RC drill holes; conducted detailed geologic mapping (producing a plan
                        map of the rock types, structure and alteration), geochemical surveys
                        (which is sampling of rocks or soil and determination of the absolute
                        abundances of elements), air and ground magnetic surveys (recording
                        variations in the earth’s magnetic field and plotting same), and
                        ground radiometric survey (a survey of radioactive materials on the land
                        surface).




o

                    In 1990-1995, Miramar Mining Corp. drilled 5 RC drill holes
                        and conducted BLEG (bulk leach extractable gold) sampling and air photo
                        interpretation. BLEG sampling involves a large sample of soil or rock that
                        is leached using cyanide to determine gold and silver content down to a
                        detection limit of as little as 1.0 parts per billion.




Geology of the Bruner Property Mineral Claims



The
        Bruner mining district is underlain by a sequence of intermediate to felsic Tertiary
        volcanic rocks (which are quartz-rich rocks derived from volcanoes and deposited between
        two and sixty-five million years ago), including ash flow tuffs, tuffaceous sediments, and
        flows. A volcanic center, the origin of major volcanic activity, is thought to underlay the
        district, with associated silicic domes (a convex landform created by extruding quartz-rich
        volcanic rocks) and plugs (landform similar to a dome, but smaller). intruding the volcanic
        section. The exposed stratigraphic section measures over 2,500 feet in thickness. The
        “Duluth Tuff”, a variably crystal rich ash flow tuff is the host for gold and
        silver mineralization. Flow banded silicic volcanics, volcanoclastics (coarse, unsorted
        sedimentary rock formed from volcanic rocks) and andesite underlie the tuff and flow-banded
        rhyolite overlies the host unit. Two generations of intrusive rocks have been described
        within the district. Ore in the Bruner district is hosted by vuggy, fractured,
        quartz-adularia (potassium-rich alternation mineral) -veined and/or stockworked tuff.
        Mineralization is primarily fault controlled, although some disseminated values do
        occur.



Current State of Exploration



The
        Bruner claims presently do not have any mineral reserves. The property that is the subject
        of our mineral claims is undeveloped and does not contain any open-pit or underground
        mines. There



18



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is no
        mining plant or equipment located on the property that is the subject of the mineral
        claims. Currently, there is no power supply to the mineral claims. Our planned exploration
        program is exploratory in nature and no mineral reserves may ever be found.



Geological Exploration Program

In July
        2003, members of our Board of Directors and geology team made an onsite inspection of
        Bruner Property. From this visit, an exploration plan was determined and a schedule to
        begin work on the properties was organized to commence in the month of September 2003. The
        company completed an exploration program consisting of geologic mapping, surface
        geochemical sampling, and a Global Positioning System geophysical survey (electrical,
        magnetic and other means used to detect features, which may be associated with mineral
        deposits) was also conducted. Such a survey measures the magnetic variations within the
        underlying rocks.



Since
        then, a ground magnetics survey and detailed mapping and rock sampling of the western
        portion of the claim block on the Bruner Property has been completed. The rock sampling is
        a collection of a series of small chips over a measured distance, which is then submitted
        for a chemical analysis, usually to determine the metallic content over the sampled
        interval. The magnetics indicate the presence of northwesterly and northerly trending
        faults under the pediment cover that may host gold mineralization. Faults, which are breaks
        in the rock along which the movement has taken place, are often the sites for the
        deposition of metallic rich fluids. A pediment cover is a broad, gently sloping surface at
        the base of a steeper slope. Geologic mapping of rocks exposed in the western portion of
        our claims shows several small quartz bearing structures trending northwest and dipping
        steeply to the northeast. These small structures are thought to be related to a much larger
        vein, often filled with quartz, contained within a fault or break in the rock (a
        fault-hosted vein system) under gravel cover in the broad valley south of the mapping.
        Approximately 1 square mile of ground magnetics was completed at Bruner. The survey was
        done on 50 meter spaced lines, run north-south using a GPS controlled Geometrics
        magnetometer, which is the geophysical instrument used in collecting magnetic data with an
        attached GPS that allows the operator to more precisely determine the location of each
        station where the magnetic signature is taken.



The
        interpretation shows numerous northwest and north-south trending magnetic lows associated
        with faults. Magnetic lows are an occurrence that may be indicative of a destruction of
        magnetic minerals by later hydrothermal (hot water) fluids that have come up along these
        faults. These hydrothermal fluids may in turn have carried and deposited precious metals
        such as gold and/or silver. A much more continuous northwest trending feature that has not
        been drill tested is located to the southeast, under gravel cover (where there is no
        exposure of rock at the surface). Data are sufficiently encouraging that an expanded CSMT
        survey is recommended to trace these structures in the third dimension. Three or four
        north-south lines of CSMT are scheduled and further work is ongoing.



Our
        exploration program to date at Bruner has included:



o

                    geologic mapping (producing a plan map of the rock types,
                        structure and alteration);


o

                    rock chip geochemical sampling (sample of soil, rock, silt,
                        water or vegetation analyzed to detect the presence of valuable metals or
                        other metals which may accompany them (e.g., Arsenic may indicate the
                        presence of gold);




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o

                    a ground magnetic survey; and


o

                    a Controlled Source Magneto-telluric survey (recording
                        variations in a generated electrical field using sophisticated survey
                        methods).




In
        October 2004, we received the approval of a Notice of Intent for Exploration Drilling, and
        an environmental bond filed with the Nevada office of the Bureau of Land Management. A
        total of 18 drill sites were located to target both extensions of the gold intercepts in
        previous drilling and in geophysical anomalies found by a CSMT survey. A CSMT survey is an
        electromagnetic method used to map the variation of the Earth’s resistance to conduct
        electricity by measuring naturally occurring electric and magnetic fields at the
        Earth’s surface. With the proper approvals in place, we began drilling on the Bruner
        property on December 20, 2004. This drilling program was completed in March 2005 at a total
        cost of approximately $153,800, with a total of 3,200 feet of reverse circulation (RC)
        drilling in 7 holes. The depths of the holes ranged from 300 to 750 feet. We have received
        assays for all holes and the results are encouraging enough that additional drilling was
        conducted.



Because
        of the favorable drilling results from the drilling program we began on December 20, 2004,
        we decided to conduct additional drill testing on the Bruner property, including both
        reverse circulation and core drilling. In April 2005, we filed an amended drilling plan
        with the Bureau of Land Management that allowed three fences of drill holes with the fences
        spaced 400 feet apart along the apparent trend of the mineralization. This program was
        completed in the fall of 2005 with 11 holes totaling 4,205 feet being drilled.



The
        Board of Directors has approved a 2007 exploration budget of approximately $120,000 for the
        Bruner Property. The program will include a 3-hole, 3,000 feet, RC drill program. The goal
        of this program is to follow up on the previous results from the programs completed in
        2005. Planning for this program is currently ongoing.



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Vernal Project



Description and Location of the Vernal Property





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Exploration History of the Vernal Property



Historical work includes several short adits constructed on the property
        between 1907 and 1916. There appears to have been little or no mineral
        production.



Geology of the Vernal Mineral Claims



The
        Vernal Property is underlain by a thick sequence of Tertiary age rhyolitic volcanic rocks
        including tuffs, flows and intrusives. A volcanic center is thought to underlie the
        district, with an intruding rhyolite plug dome (a domal feature formed by the extrusion of
        viscous quartz-rich volcanic rocks) thought to be closely related to mineralization
        encountered by the geologists of Amselco, the U.S. subsidiary of a British company, who
        explored the Vernal Property back in the 1980’s, and who in 1983 mapped, sampled and
        drilled the Vernal Property. Amelsco has not been involved with the Vernal Property over
        the last 20 years and isnot associated with our option on the property or the exploration
        work we are doing there. A 225 foot wide zone of poorly outcropping quartz stockworks (a
        multi-directional quartz veinlet) and larger veining trends exists northeast from the
        northern margin of the plug. The veining consists of chalcedony containing 1-5% pyrite.
        Clay alteration of the host volcanics is strong. Northwest trending veins are also present,
        but very poorly exposed. Both directions carry gold values. Scattered vein float is found
        over the plug. The most significant gold values in rock chips come from veining in
        tuffaceous rocks north of the nearly east-west contact of the plug. This area has poor
        exposure, but sampling of old dumps and pits show an open-ended gold anomaly that measures
        630 feet by 450 feet.



Current State of Exploration



The
        Vernal claims presently do not have any mineral reserves. The property that is the subject
        of our mineral claims is undeveloped and does not contain any open-pit or underground
        mines. There is no mining plant or equipment located on the property that is the subject of
        the mineral claim. Currently, there is no power supply to the mineral claim. Our planned
        exploration program is exploratory in nature and no mineral reserves may ever be found.
        There is no drilled resource on our claims.



Geological Exploration Program

In July
        2003, members of our Board of Directors and geology team made an onsite inspection of
        Vernal. At the Vernal Property, mapping (the process of laying out a grid on the land for
        area identification where samples are taken) and sampling (the process of taking small
        quantities of soil and rock for analysis) have been completed. In March 2005, we initiated
        the process to secure the proper permits for trenching and geochemical sampling from the
        U.S. Forest Service. As a result of the Company not having immediate plans to conduct
        drilling on the Vernal Property in 2005, the Company stopped the permitting process before
        receiving permits for the Vernal Property.



Our
        exploration of the Vernal Property to date has consisted of geologic mapping and rock
        chip



22



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geochemical sampling. The Board of Directors has approved a budget of
        approximately $55,000 (including the refundable bond of $15,000) for the Vernal Property.
        The program will include trenching and mapping. Permitting for this program is currently
        ongoing.



Moss Property





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Moss Property



The Moss
        Property consists of 63 unpatented claims and 15 patented claims located in the Oatman
        District of Mohave County, Arizona. The Company acquired these claims in a series of
        transactions during fiscal 2004 and 2005.



Acquisition of Interest



Gintoff Claim



On
        November 14, 2003 the Company entered into a letter of intent to acquire a single patented
        claim from Gregory Gintoff. The total purchase price of $50,000 was made in two
        installments of $10,000 in December 2003 and $40,000 in February 2004.



MinQuest Claims



We hold
        the MinQuest claims via 62 unpatented mining claims that were acquired from MinQuest. On
        March 4, 2004, we signed the agreement that earned us a 100 percent interest in these
        claims by paying MinQuest a one-time lease fee of $50,000. The fee of $50,000 was paid on
        July 7, 2004. A three percent NSR production royalty is retained by MinQuest.



Williams Property



The
        property is comprised of six patented claims, which as a group, we call the Williams
        Property. These claims were held collectively by as many as 23 owners within an extended
        family who were represented by Barbara Williams, a realtor, and a member of this extended
        family, who put together the letter of intent and arranged for the signing of the agreement
        by the numerous owners. None of these owners, including Barbara Williams, has or has had
        any relationship or affiliation with us prior to the agreement for the Williams
        Property.



In
        October 2003, our director Robert Sibthorpe (who is a geologist by training) had evaluated
        the proposal for the purchase of the Williams Property. His recommendation was to visit the
        site, and if the visual inspection supported the information presented in the proposal,
        then an offer to purchase should be drawn up. In November 2003 we executed a letter of
        intent to purchase a 100% interest in Williams Property owned by the extended family. This
        property is unrelated to and separate from the MinQuest Claims. The sellers delivered to us
        all information in their possession regarding the Williams Property. During the six-month
        period after the signing of the letter of intent we had the right to conduct our due
        diligence on the Williams Property and if we decided not to proceed we had to give the
        sellers and escrow agent notice no less than 10 days prior to the six-month anniversary of
        our intention not to close. During this period we could not perform mining or remove any
        ore from the property. We were responsible for all costs and expenses associated with the
        purchase of the Williams Property, including escrow fees, cost of feasibility study,
        charges resulting from any tests, environmental assessments reports or surveys, and any
        exploration activity costs. Once we had concluded our analysis and had determined that it
        is feasible to close on the purchase of the Williams Property, doing so would give us full
        rights to begin mining operations.



24



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At the
        recommendation of Mr. Sibthorpe, in January, 2004, Mr. Robert Coale (P.E.),
        another one of our directors and our current President, visited the site to see the overall
        geological setting and occurrence of mineralization and evaluated the drilling program
        proposed by MinQuest, the company that we would contract to co-ordinate any work programs
        undertaken. At that time, the metallurgical data and reports that had been collected from
        the sellers were reviewed. Mr. Coale’s analysis revealed that reagent (liquid
        chemicals used for leaching) consumptions are acceptable and deleterious compounds (things
        present in the ore that would be difficult to work with) were not apparent. He recommended
        bulk sampling at a selected location in the future once the definition of the ore body was
        further advanced through drilling. On January 31, 2004 Robert Sibthorpe wrote a report with
        a summary of the property, a review of the draft budget supplied by Richard Kern, our work
        program contractor, and a layout of the drilling program planned for the
        property.



The
        drilling was conducted throughout the spring and early summer of 2004, and in June 2004,
        Mr. Sibthorpe wrote a report incorporating the results of the drill program which
        encouraged us to pursue the project. Also in June 2004, Mr. Kern sent a memo to the
        Company regarding the potential at the Williams property. Mr. Kern’s
        recommendation was that we should proceed with the purchase of the Williams
        Property.



On
        February 19, 2004, we executed a formal agreement to purchase the Williams Property for
        $350,000. On February 27, 2004 we deposited $25,000 with the title company, which was
        acting as escrow agent, and three months after signing, on June 14, 2004, we deposited an
        additional $25,000. When the title company, acting as escrow agent, received the signature
        pages from the various sellers, the initial $25,000 deposit was to be delivered to the
        sellers. On the three-month anniversary after we signed the definitive agreement, the
        second $25,000 was to be delivered to the sellers. By mid-July, 2004, the escrow agent had
        received 19 of the 23 signatures, which under Arizona law was enough to complete the
        transaction, and on July 24, 2004, the first and second deposits of $25,000 each were
        released to the sellers. On or before the 6-month anniversary after we signed the
        definitive agreement, the balance of $300,000 was due to the sellers. As a result of our
        due diligence, we decided to complete the purchase of the Williams Property. On August 27,
        2004 we paid the final $300,000 to the escrow agent for the closing of the sale. On
        November 11, 2004, the escrow agent released the $300,000 to the sellers for the closing of
        the sale, and, as a result, we now own 100% interest in the Williams Property.



Greenwood Claim



On
        January 18, 2005 the Company completed the acquisition of a single patented claim from an
        individual for $150,000.



Martinez Claims



The
        Company acquired five patented claims from Ramon and Edna Martinez for a total of $150,000.
        The Company made one payment of $75,000 on November 8, 2004 and made the final payment of
        $75,000 on February 14, 2005.



25



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Ruth
        and Rattan Claims



On
        January 18, 2005, the Company made a single payment of $25,000 to acquire two patented
        claims known as the Ruth and Rattan claims.



Description and Location of the Moss Property



The Moss
        Property is located in Mohave County, Arizona in the historic Oatman District, and
        is located some 5 miles northwest of the town of Oatman, with Kingman, Arizona to the
        east, Laughlin, Nevada to the west and Las Vegas, Nevada to the north. Access is via gravel
        roads from Bullhead City.



Exploration History of the Moss Property



Discovered in 1864, the Moss Mine was the first gold discovery made in the
        Oatman district. Historical records show that the Oatman District produced up to two
        million ounces of gold mostly from underground mines. The Moss Mine was worked
        intermittently through the 1930’s but produced only minor amounts of gold. The mine
        lay idle until the early 1980’s when a number of mining companies explored the
        district. These companies included Billiton Minerals, Magma Copper, Golconda Resources and
        Addwest Minerals.



Work
        already completed on the Williams Property includes a pre-feasibility study as well as
        36,000 feet of primarily reverse circulation drilling which was conducted over twenty years
        ago. Reverse circulation drilling is a less expensive form of drilling that does not allow
        for the recovery of a tube or core of rock, in which the material is brought up from depth
        as a series of small chips of rock that are then bagged and sent in for analysis. Though
        this is a quicker and cheaper method of drilling, reverse circulation drilling does not
        give as much information about the underlying rocks.



Geology of the Moss Property



The
        project area is underlain by Tertiary quartz monzonite (a coarsely crystalline rock
        composed primarily of the minerals quartz, plagioclase and orthoclase) intruding tertiary
        volcanics. Precambrian basement rocks underlie the volcanics. The veins consist of
        quartz-calcite and lesser adularia. The principal vein is up to 45 feet thick and can be
        followed on surface for over 5,000 feet. The hanging wall of the veins commonly have
        several tens of feet of stockwork veining. Gold values are somewhat erratic, but appear to
        be highest in the thicker and deeper parts of the vein explored to date.



Current State of Exploration



The Moss
        Property presently does not have any mineral reserves. The property that is the subject to
        our mineral claims is undeveloped and does not contain any open-pit or underground mines.
        There is no mining plant or equipment located on the property that is the subject of the
        mineral claim. Currently, there is no power supply to the mineral claim. Our planned
        exploration program is exploratory in nature and no mineral reserves may ever be found.
        There is no drilled resource on our claims.



26



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Geological Exploration Program



Our
        exploration of the Moss Property has consisted of geologic mapping, vein geochemical
        sampling and drill testing of the identified veins. The Moss Property contains the site of
        the former Moss Mine. The most significant historic mining at Moss Mine occurred on narrow
        veins that trend sub-parallel to the Moss Mine vein and dip steeply northerly. These veins
        should intersect the Moss Mine vein at depth. The deepest vein intercepts at Moss are less
        than 400 feet. The Ruth vein should intersect the Moss Mine vein at 800-900 feet below the
        surface. If the Moss Mine vein is the feeder for the Ruth vein it must contain similar gold
        values at that level. The Moss Mine vein needs drill testing to a depth of 900 feet to
        determine its potential to contain high-grade gold mineralization.



Phase 1
        drilling has been completed at the Moss Property. A total of 36 holes were drilled totaling
        8,807 feet. Thirty holes were drilled on the Gintoff Claim on the Moss Property, and six
        holes were drilled on one of the adjacent parcels of land. The easternmost section of the
        Property, which was mostly untested by drilling, was drilled with thirty reverse
        circulation holes. This allowed accurate cross-sections to be made for this area. The
        coverage on this section is generally two or three holes on 100 foot sections testing
        grades and widths from 50-250 feet down dip. In the western area, limited confirmation
        drilling was carried out and the results obtained were generally in line with the values
        obtained by previous operators. Geological information obtained may now provide a
        structural explanation for the lack of success obtained here to date by previous
        operators.



A study
        of all drilling results at the Moss Property indicates a tendency for total gold content to
        increase with intercept depth. Roughly 60% of the deeper holes have better intercepts than
        shallow holes. An example from our drilling tests the vein over a vertical extent of 300
        feet. In this example the gold content nearly doubles between AR-5 and AR-23.



An expanded
        program of drilling began in April 2005, and was expected to be completed by May 2006.
        Approximately 12,000 feet of reverse circulation (RC) drilling was planned to be done to
        test for possible high-grade (0.30 ounces per ton or above) down-dip extensions of the Moss
        vein. We planned to drill 10 to 15 holes. The depths of these holes were to have ranged
        from 500 to 1,300 feet. The program budget for this program was $643,700.



The
        first portion of this expanded drilling program was expected to be completed by the fall of
        2005. However, after eight holes were attempted, drilling was halted because of difficulty
        in drilling through the granite, because the drilling rig that we contracted to use was too
        light to penetrate the rock. We had sought to contract a heavier rig to continue the
        program, which we had expected to happen by December 2005. The remainder of the program was
        completed when the Company completed 6 core holes from November 2006 to February 2007 for a
        total drilled amount drilled of 3,917 feet. The exploration program failed to find higher
        grades but it did show that the vein system continues to at least 800 feet below the
        surface and appears to be thickening.



Encouraging
        drilling results from earlier programs warrant an initial Scoping Study level
        investigation, which is the determination of the indicated size and grade of the deposit
        and possible methods of mining and recovering the gold and silver. Tonnage and grade will
        be determined by outlining the mineralization on sections constructed every 100 feet across
        the deposit and using the average grade of the drilling intersections. An open pit is then
        designed that would allow



27



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extraction
        of the mineral in deposit. The option of underground mining is also considered. Tests are
        conducted to determine the best method of extracting the gold and silver. These tests would
        include the amenability of “heap leaching”. Heap leaching is the piling of ore
        on an impermeable liner, circulating gold/silver-dissolving solutions (normally cyanide)
        through the pile or “heap” and recovering the gold/silver from the circulating
        solution using carbon.  Another method that would be tested is “milling”
        to recover the gold and silver. Milling involves crushing and grinding the ore into tiny
        particles that allow the gold/silver to be removed by simple gravity separation techniques
        or by using chemicals in solution. Determination of the best methods of mining and recovery
        of the precious metals then allows production costs to be calculated.



The
        Company will submit core samples to a laboratory in September 2007 where leach testing will
        be conducted. The results of these tests will determine the next phase of the exploration
        of the Moss Property.



Item 3.

                    Legal Proceedings.




There
        are no pending legal proceedings to which the Company is a party or in which any director,
        officer or affiliate of the Company, any owner of record or beneficially of more than 5% of
        any class of voting securities of the Company, or security holder is a party adverse to the
        Company or has a material interest adverse to the Company. The Company’s properties
        are not the subject of any pending legal proceedings.



Item 4.

                    Submission of Matters to a Vote of Security
                        Holders.




No
        matters were submitted to a vote of security holders during the fourth quarter of the
        fiscal year covered by this report.



PART
        II



Item 5.

                    Market for Registrant’s Common Equity, Related
                        Stockholder


Matters, and Issuer Purchases of Equity
                        Securities.




Market Information.



Our
        common stock is traded on the National Association of Securities Dealers Over The Counter
        Bulletin Board (“OTCBB”) under the symbol “PGOL.OB.” The OTCBB does
        not have any quantitative or qualitative standards such as those required for companies
        listed on the Nasdaq Small Cap Market or National Market System. The following table sets
        forth the range of quarterly high and low closing bid prices of the common stock as
        reported on http://finance.yahoo.com during the years ending May 31, 2007 and May 31,
        2006:



28



---





Financial Quarter

                    Bid Price
                        Information*Year

                    Quarter

                    High Bid Price

                    Low Bid Price2007

                    Fourth Quarter

                    $0.21

                    $0.09Third Quarter

                    $0.17

                    $0.09Second Quarter

                    $0.23

                    $0.06First Quarter

                    $0.26

                    $0.112006

                    Fourth Quarter

                    $0.30

                    $0.21Third Quarter

                    $0.41

                    $0.19Second Quarter

                    $0.58

                    $0.36First Quarter

                    $0.60

                    $0.34






















*The
        quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and
        may not represent actual transactions.



Holders.



On August
        24, 2007, there were approximately 75 holders of record of the Company’s common
        stock.



Dividends.



The
        Company has not declared or paid any cash dividends on its common stock nor does it
        anticipate paying any in the foreseeable future. Furthermore, the Company expects to retain
        any future earnings to finance its operations and expansion. The payment of cash dividends
        in the future will be at the discretion of its Board of Directors and will depend upon its
        earnings levels, capital requirements, any restrictive loan covenants and other factors the
        Board considers relevant.



Warrants or Options.



No
        warrants, options or other securities convertible or exchangeable into equity securities
        were issued during the fiscal year ending May 31, 2007.



Securities Authorized for Issuance under Equity Compensation
        Plans



We do
        not have any equity compensation plans that were approved by our shareholders. Set forth
        below is certain information as of May 31, 2007, the end of our most recently completed
        fiscal year, regarding equity compensation plans that have not been approved by our
        stockholders.



29



---





Equity compensation plans not approved by stockholders
                        – as of May 31, 2007Plan Category

                    

                    Number of securities to beissued upon exercise ofoutstanding options, warrants and rights

                    

                    Weighted average exerciseprice of outstanding options,warrants and rights

                    

                    Number of securitiesremaining available forfuture issuance2003 Stock Option Plan

                    

                    5,546,000

                    (1)

                    

                    $0.26

                    

                    506,0002005 Stock Option Plan

                    

                    2,000,000

                    

                    

                    $0.25

                    

                    1,000,000Share Purchase Warrants

                    

                    3,456,000

                    

                    

                    $1.48

                    

                    N/A




(1)
        
        Since the plan provides for appropriate adjustments in the event of stock
        splits and other similar events, when our common stock was forward split on June 17, 2003,
        a corresponding adjustment was made to the option plan. Accordingly, as of June 17, 2003
        there were 2,546,000 shares available for issuance under the Stock Option Plan. On
        September 22, 2003, we amended our Stock Option Plan by increasing the number of shares
        available for issuance under the plan to 5,546,000 shares



As of
        May 31, 2007, there were a total of 5,040,000 options granted under the 2003 Plan with
        exercise prices ranging from $0.05 per share to $1.50 per share. There were also a total of
        1,000,000 options granted under the 2005 Plan with an exercise price of $0.25 per
        share.



The following discussion describes material terms of grants made pursuant to
        the stock option plans:



Pursuant
        to the 2003 and 2005 Stock Option Plans, grants of shares can be made to employees,
        officers, directors, consultants and independent contractors of non-qualified stock options
        as well as for the grant of stock options to employees that qualify as incentive stock
        options under Section 422 of the Internal Revenue Code of 1986 (“Code”) or as
        non-qualified stock options. The Plan is administered by the Option Committee of the Board
        of Directors (the “Committee”), which has, subject to specified limitations,
        the full authority to grant options and establish the terms and conditions for vesting and
        exercise thereof. Currently the entire Board functions as the Committee.



In order
        to exercise an option granted under the Plan, the optionee must pay the full exercise price
        of the shares being purchased. Payment may be made either: (i) in cash; or (ii) at the
        discretion of the Committee, by delivering shares of common stock already owned by the
        optionee that have a fair market value equal to the applicable exercise price; or (iii)
        with the approval of the Committee, with monies borrowed from us.



Subject
        to the foregoing, the Committee has broad discretion to describe the terms and conditions
        applicable to options granted under the Plan. The Committee may at any time discontinue
        granting options under the Plan or otherwise suspend, amend or terminate the Plan and may,
        with the consent of an optionee, make such modification of the terms and conditions of such
        optionee’s



30



---



option
        as the Committee shall deem advisable.



Recent Sales of Unregistered Securities; Use
        of Proceeds from Registered Securities.



None
        during the fiscal year ended May 31, 2007.



Purchases of equity securities by the issuer and affiliated
        purchasers.



None.



Item 6.

                    Management’s Discussion and Analysis or Plan of
                        Operation.




Overview



As a
        natural resource exploration company our focus is to locate prospective properties that may
        host mineral reserves that could eventually be put into mining production. With this in
        mind, we have to this date identified and secured interests in several mining claims with
        respect to properties in the Walker Lane area of Nevada and the historic Oatman mining
        district of Arizona. We have adequate funding to meet all our obligations on our current
        projects until at least May 31, 2008.



We do
        not intend to use any employees, with the exception of part-time clerical assistance on an
        as-needed basis. Outside advisors, attorneys or consultants will only be used if they can
        be obtained for a minimal cost or for a deferred payment basis. Management is confident
        that it will be able to operate in this manner and continue during the next twelve
        months.



Plan of
        Operation



During
        the twelve-month period ending May 31, 2008, our objective is to continue to explore the
        properties subject to our mining claims. The funds in our treasury are sufficient to meet
        all planned activities as outlined below, with a significant contingency margin. As a
        result of this, we do not expect to enter into any new financing arrangements during the
        twelve months ending May 31, 2008.



We
        continue to run our operations with the use of contract operators, and as such do not
        anticipate a change to our company staffing levels. We remain focused on keeping the staff
        compliment, which currently consists of our three directors and one investor relations
        person, at a minimum to conserve capital. Our staffing in no way hinders our operations, as
        outsourcing of necessary operations continues to be the most cost effective and efficient
        manner of conducting the business of the company.



We do
        not anticipate any equipment purchases in the twelve months ending May 31, 2008.



The
        following is an overview of the project work to date, as well as anticipated work for the
        next twelve months. Specific dates when work will begin, and how long it will take to
        complete each step is subject to change due to the variables of weather, availability of
        work crews for a particular type of work, and the results of work that is planned, the
        outcome of which will determine what the next step on that project will be.



31



---



Bruner
        and Vernal Projects.



As of
        May 31, 2007, we have fulfilled our exploration and property option commitments with
        respect to the Bruner and Vernal projects. To May 31, 2007, we made total property option
        payments of $60,000 and have incurred approximately $280,000 of property expenditures. On
        July 25, 2007 we made the final property option installment of $20,000. Under the property
        agreement we were to have spent $375,000 by July 25, 2007 with an additional amount of
        $125,000 to be spent by July 25, 2008. As of July 25, 2007 there is a shortfall in
        expenditures of $95,000. The Company’s Board of Directors has approved exploration
        budgets, net of reclamation bonds, of $120,000 and $40,000 respectively for the Bruner and
        Vernal properties. Both of these programs are to commence immediately. By way of letter
        agreement dated July 24, 2007 between the Company and MinQuest, MinQuest has agreed to
        extend the due date of the current shortfall of $95,000 to July 25, 2008. Therefore, the
        Company is currently required to incur $220,000 by July 25, 2008. The current exploration
        programs will address approximately $160,000 of this amount.



Moss
        Property



The Moss
        Property agreements do not require on-going property payments nor minimum annual
        exploration expenditure.



Results of Operations



The
        Twelve Months Ended May 31, 2007 compared to the Twelve Months Ended May 31,
        2006



The
        Company had no revenues during the fiscal years ended May 31, 2007 and May 31, 2006 because
        it was in the exploration state during such fiscal years. The net loss from operations for
        fiscal 2007 was $423,488 compared to $401,847 in fiscal 2006. While the total net loss from
        operations was consistent between the two years, the components of the loss were different.
        Exploration expenses increased to $250,634 in 2007 from $187,407 in 2006, an increase of
        $63,227. In 2007, the Company undertook a drill program on the Moss while the majority of
        the costs for the previous Moss drill program were incurred at the end of fiscal 2005
        resulting in only a small portion of exploration costs being incurred in the twelve months
        ended May 31, 2006. Partially offsetting the increased spending on the Moss property in
        2007 was a large reduction in spending on the Bruner property. Other than making the
        required property option payment, the Company did not incur any significant expenditures
        related to the Bruner or Vernal properties in the twelve months ended May 31, 2007. The
        previous drill program on the Bruner property began in fiscal 2005 and concluded in the
        first portion of fiscal 2006. As a result, in the twelve months ended May 31, 2006, the
        Company incurred exploration costs relating to the Bruner property.



General
        and administrative expenses were $172,854 in 2007 compared to $214,440 in 2006, a decrease
        of $41,586. The decrease was largely due to the recognition in 2006 of $86,483 in
        stock-based compensation relating to stock options granted during 2006. No stock options
        were granted in 2007 but $26,611 in stock-based compensation was recognized in 2007
        relating to the revaluation and amortization of unvested stock options from the 2006 grant.
        Partially offsetting the effect of lower stock-based compensation in 2007 was higher
        management fees paid to the



32



---



Company’s President. He began receiving $2,500 a month in November
        2005 so for fiscal 2006 he received $17,500 while he received $30,000 for 2007.



Interest
        income increased from $102,921 in 2006 to $127,059 in 2007. The increase is largely due to
        an increase in interest rates on invested cash balances.



The
        Twelve Months Ended May 31, 2006 compared to the Twelve Months Ended May 31,
        2005



The
        Company had no revenues during the fiscal years ended May 31, 2006 and May 31, 2005 because
        it had no business operations during such fiscal years. The net loss from operations for
        fiscal 2006 was $401,847 compared to $1,140,453 in fiscal 2005. The decrease of $738,606 is
        primarily due to the reduction in exploration expenses in 2006 compared to 2005. The
        reduction in exploration expenses from $1,208,170 in 2005 to $187,407 in 2006 was largely
        due to timing. The bulk of the costs for the recent drill programs on the Bruner and Moss
        properties took place in 2005 while in 2006 both of these programs were completed early in
        the year. As a result, a larger portion of the exploration expenses were recognized in 2005
        compared to 2006. General and administrative expenses were $214,440 in 2006 compared to
        $112,283 in 2005, an increase of $102,157. The increase was due to a variety of factors
        including monthly fees of $2,500 being paid to our President beginning in November 2005,
        legal and filing fees related to the filing our SB-2 registration form and the recognition
        of $86,483 in stock-based compensation relating to stock options granted during
        2006.



Interest
        income increased from $67,120 in 2005 to $102,921 in 2006. The increase is partially due to
        an increase in interest rates on invested cash balances. In addition, higher average cash
        balances were realized in 2006. In 2005 a significant portion of the Company’s cash
        from financing was received part way through the period while most of that cash was
        available for investing throughout 2006.

Liquidity and capital resources



We had
        total assets of $3,032,552 at May 31, 2007 consisting of cash of $3,029,331, prepaid
        expenses of $1,472 and net office equipment of $1,749. We have total liabilities of $2,084
        at May 31, 2007 all of which are current liabilities consisting of accounts
        payable.



We
        anticipate that we will incur the following to May 31, 2008:



-

                    $20,000 in connection with property option payments under
                        the Company’s Bruner and Vernal option agreement. This amount was
                        paid on July 25, 2007;




-

                    $236,000 in property exploration expenses and claim payments
                        in order to meet the requirements of the Company’s property option
                        agreements;




-

                    $155,000 for operating expenses, including working capital
                        and general, legal, accounting and administrative expenses associated with
                        reporting requirements under the Securities Exchange Act of
                        1934.






33



---



Cash
        used in operations was $233,693 for the year ended May 31, 2007 while it was $246,531 for
        2006. While cash used in operations was consistent between 2007 and 2006, the components
        were different. The loss in 2007 was $295,288 compared to $290,042 in 2006. Included in the
        losses for 2007 and 2006 was $26,611 and $86,483 respectively of stock-based compensation.
        Cash inflows of $30,528 relating to the recovery of prepaid expenses occurred in 2007 while
        an outflow of $44,481 from the paying down of accounts payable took place in
        2006.



Cash
        from operations from inception to date has not been sufficient to provide the operating
        capital necessary to operate. In November 2003 we issued 864,000 shares of common stock and
        864,000 Class A warrants, 864,000 Class B warrants, 864,000 Class C warrants and 864,000
        Class D warrants. This private offering generated gross proceeds of $1,080,000.00. The
        Class A-1 warrants are exercisable on November 27, 2004 for a period of five years at an
        exercise price of $1.40 per share of common stock; the Class B-1 warrants are exercisable
        on November 27, 2005 for a period of four years at an exercise price of $1.45; the Class
        C-1 warrants are exercisable on November 27, 2006 for a period of three years at an
        exercise price of $1.50; and the Class D-1 warrants are exercisable on November 27, 2007
        for a period of two years at an exercise price of $1.55. The Company has the right, in its
        sole discretion, to accelerate the exercise date of the warrants, to decrease the exercise
        price of the warrants and/or extend the expiration date of the warrants.



There
        were no investing or financing activities in 2007. In 2006, the Company redeemed 3,000,000
        common shares owned by its former president for $30,000. Investing activities in 2006
        consisted of the purchase of office equipment of $4,193.



Going
        Concern Consideration



Management believes that the gross proceeds from the private placements and
        from the exercise of stock options will be sufficient to continue our planned activities
        until May 31, 2008, the end of our next fiscal year. However, we anticipate generating
        losses and therefore we may be unable to continue operations in the future as a going
        concern. No adjustment has been made in the accompanying financial statements to the
        amounts and classification of assets and liabilities that could result should we be unable
        to continue as a going concern.



We
        currently have no agreements, arrangements or understandings with any person to obtain
        funds through bank loans, lines of credit or any other sources.



Accordingly, our independent auditors included an explanatory paragraph in
        their report on the accompanying financial statements regarding concerns about our ability
        to continue as a going concern. Our financial statements contain additional note
        disclosures describing the circumstances that lead to this disclosure by our independent
        auditors.



Off-balance sheet arrangements



We have
        no off-balance sheet arrangements.



34



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|**Item 7.** | **Financial
                Statements.**
|----------- | -----------------------------------------



The
        financial statements are set forth immediately preceding the signature page.



Item 8.

                    Changes In and Disagreements with Accountants on
                        Accounting and


Financial Disclosure.




None.



Item 8A.

                    Controls and Procedures.




Based on
        an evaluation under the supervision and with the participation of the Company’s
        management as of a date within the end of the period covered by this Annual Report on Form
        10-KSB, the Company’s chief executive officer and chief financial officer has
        concluded that the Company’s disclosure controls and procedures (as defined in Rules
        13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended (Exchange
        Act) are effective to ensure that information required to be disclosed by the Company in
        reports that it files or submits under the Exchange Act is recorded, processed, summarized
        and reported within the time periods specified in Securities and Exchange Commission rules
        and forms.



There
        were no significant changes in the Company’s internal controls or in other factors
        that could significantly affect these controls subsequent to the date of their evaluation.
        There were no significant deficiencies or material weaknesses, and therefore there were no
        corrective actions taken. However, the design of any system of controls is based in part
        upon certain assumptions about the likelihood of future events and there is no certainty
        that any design will succeed in achieving its stated goal under all potential future
        considerations, regardless of how remote.



Internal Controls Over Financial Reporting



There
        have not been any changes in the Company’s internal controls over financial reporting
        (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
        during the Company’s most recent fiscal year that have materially affected, or are
        reasonably likely to materially affect, the Company’s internal controls over
        financial reporting.





|**Item 8B.** | **Other
                Information.**
|------------ | --------------------------------------



None



35



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PART
        II



Item 9.

                    Directors, Executive Officers, Promoters, Control
                        Persons, and Corporate


Governance; Compliance with Section 16(a) of the Exchange
                        Act.




Directors and Officers.



All
        directors of our company hold office until the next annual general meeting of the
        stockholders or until their successors are elected and qualified. The officers of our
        company are appointed by our board of directors and hold office until their earlier death,
        retirement, resignation or removal. Our directors, executive officers and other significant
        employees, their ages, positions held and duration each person has held that position, are
        as follows:



Name

                    Position Held with the Company

                    Age

                    Date First AppointedRobert Coale

                    Chairman, President, Chief Executive Officer, Chief
                        Operating Officer, Secretary, and Director

                    67

                    June 23, 2003(1)Robert A. Sibthorpe

                    Director

                    57

                    June 23, 2003Duncan Budge

                    Director

                    56

                    October 13, 2005




(1) Mr.
        Coale was first appointed as a Director on June 23, 2003. On October 13, 2005, Mr. Ronald
        Blomkamp resigned as the Company’s Chairman, President, Chief Executive and Operating
        Officer, and Secretary. On that date, Mr. Coale was appointed to the positions vacated by
        Mr. Blomkamp and Mr. Budge was appointed as a Director of the Company.



Business
        Experience



The
        following is a brief account of the education and business experience of each director,
        executive officer and key employee during at least the past five years, indicating each
        person’s principal occupation during the period, and the name and principal business
        of the organization by which he was employed.



Robert Coale has been a Director since June
        2003 and our Chairman, President, and Chief Executive and Operating Officer and Secretary
        since October 2005. Since April 2004 he has also been the Chairman, President, and Chief
        Executive and Operating Officer and Secretary of Giant Oil & Gas Inc., a publicly
        traded natural gas exploration company. He is a Professional Engineer with two engineering
        degrees (1963 - MetE. - Colorado School of Mines, 1971 - MSc. - University of the
        Witwatersrand in South Africa) and an MBA from the University of Minnesota (1982). He has
        over 40 years of resource related business and management experience. Mr. Coale is
        currently an independent consulting engineer specializing in mineral processing and natural
        gas fueling systems including development of projects for converting low-grade or stranded
        natural gas sources into liquefied natural gas.



Robert A. Sibthorpe has been a director since
        June 23, 2003, and is an exploration Geologist and Financial Analyst with more than 30
        years of multi-disciplinary experience in many aspects of the natural resource sector.
        Since the beginning of 2003 he has acted as an independent consultant and director. From
        March 2003, to November 2003 Mr. Sibthorpe sat on the Board of Freegold



36



---



Ventures
        Corp., a Canadian listed public company that is an exploration stage mining company, and
        since June of 2001 has provided independent consulting services to Rare Earth Metals Corp.,
        another Canadian listed public company that is an exploration stage mining company. From
        January 2003 to March 2003 Mr. Sibthorpe was involved with project generation and
        review for Olympus Pacific Minerals Ltd., a company listed on the Toronto Venture Exchange
        that is an exploration stage mining company. From January, 2001 to January of 2003
        Mr. Sibthorpe acted as Senior Vice President of Business Development in Vancouver for
        Ivanhoe Mines Ltd., a Toronto Stock Exchange listed public company that is a reserve stage
        mid-tier copper and iron ore producer, where he was responsible for evaluating new
        opportunities, and for advancing properties of merit already held by the company. By
        forming and running a “Small Mines Unit”, he was directly responsible for
        placing into commercial production, an epithermal gold deposit in Korea and advancing two
        other Asian gold properties to the Feasibility Study level. From May of 1999 to January of
        2001 Mr. Sibthorpe was Senior Mining Analyst for Canaccord Capital Corp. (Vancouver),
        a private Canadian brokerage house. In 1997 and 1998 Mr. Sibthorpe acted as an
        independent consultant and director based out of Phoenix, Arizona, and from May 1997 to
        August of 2000 acted as an outside director for InnovaCom Inc., a U.S. public developmental
        stage technology company that focuses on video compression technology. Mr. Sibthorpe
        also acts as a Director for Madison Enterprises, a Toronto listed public company that is an
        exploration stage mining company, and has done so since October of 1996. From June of 1986
        to September of 1996 Mr. Sibthorpe acted as Director and Senior Analyst Corporate
        Finance (Canada), working in Toronto and Vancouver for Yorkton Securities Inc., a private
        brokerage house that directly or through syndication raised some $3 billion in equity
        capital for the mining sector during that ten year period. From June of 1979 to May of 1986
        he worked at Midland Doherty Ltd., a brokerage house, as Institutional Mining Analyst and
        was appointed a Director and Head of Research for that firm. A graduate of the University
        of Toronto in 1971, he began his career as a geologist conducting exploration programs for
        mining companies in Canada, the Middle East and the Republic of South Africa for ten years,
        and in 1978 completed an MBA at the University of Toronto.



Duncan
        Budge has served on our Board of Directors since October 2005. He
        is a professional accountant who since 2001 has worked as an independent financial
        consultant to firms in a variety of industries. He owned and operated his own Chartered
        Accounting firm from 1990 to 2001 until his retirement. Mr. Budge has a Bachelor of
        Commerce degree from the University of British Columbia and obtained his Chartered
        Accountant designation in 1977. Subsequent to his retirement in 2001, Mr. Budge resigned
        his Chartered Accountant designation. Mr. Budge does not currently hold a Chartered
        Accountant designation but is in the process of renewing his designation. Mr. Budge is also
        on the Board of Directors of Strata Oil & Gas Inc., Giant Oil & Gas Inc., and
        Liberty Petroleum Inc., all of which are publicly traded oil and gas exploration
        companies.



There
        are no family relationships among our directors or officers. None of our directors or
        officers has been affiliated with any company that has filed for bankruptcy within the last
        five years. We are not aware of any proceedings to which any of our officers or directors,
        or any associate of any such officer or director, is a party adverse to our company or has
        a material interest adverse to it. Other than the Shareholders Agreement among Mr. Coale
        and Mr. Sibthorpe which is discussed below, there are no agreements with respect to the
        election of Directors. Other than described in Section 10 below, we have not compensated
        our Directors for service on our Board of Directors,



37



---



any
        committee thereof, or reimbursed for expenses incurred for attendance at meetings of our
        Board of Directors and/or any committee of our Board of Directors.



Audit
        Committee Financial Expert.



The
        Board of Directors has not established an audit committee and does not have an audit
        committee financial expert. The Board is seeking additional Board members whom it hopes
        will qualify as such an expert.



Section 16(a) Beneficial Ownership Reporting
        Compliance.



Section
        16(a) of the Securities Exchange Act of 1934 requires officers and Directors of the Company
        and persons who own more than ten percent of a registered class of the Company’s
        equity securities to file reports of ownership and changes in their ownership with the
        Securities and Exchange Commission, and forward copies of such filings to the Company.
        During the most recent fiscal year, none of the directors, officers, and beneficial owners
        of more than ten percent of the equity securities of the Company registered pursuant to
        Section 12 of the Exchange Act has failed to file such forms on a timely basis.



Code
        of Ethics.



The
        Company has not adopted a Code of Ethics.



Changes to Procedures for Recommendations of Director
        Nominees.



During
        the fiscal year ended May 31, 2007, there were no material changes to the procedures by
        which security holders may recommend nominees to our board of directors.



Item 10.

                    Executive Compensation.




Summary Compensation



Since
        November 1, 2005, we have paid $2,500 per month to Mr. Robert Coale, our Chairman,
        President, Chief Executive Officer, Chief Operating Officer, Secretary, and a director,
        pursuant to a service agreement dated of such date. The service agreement shall be for an
        indefinite term, cancellable in writing by either party with 30 days written notice. For
        the year ended May 31, 2007, the Company paid $30,000 pursuant to this agreement. For the
        year ended May 31, 2006, the Company paid $17,500 pursuant to this agreement. The agreement
        has indefinite term but can be cancelled by either party with 30 days written notice. The
        agreement does not provide for severance or termination benefits of any kind. We have no
        other officers.



The
        following table sets forth information concerning the compensation paid or earned during
        the fiscal years ended May 31, 2007 and 2006 for services rendered to our Company in all
        capacities by the following persons: (i) all individuals who served as the principal
        executive officer or acting in a similar capacity during the fiscal year ended May 31,
        2007, regardless of compensation level; (ii) all individuals who served as officers at May
        31, 2007 and whose total compensation during the fiscal year ended May 31, 2007 exceeded
        $100,000; and (iii) up to two additional individuals



38



---



who
        served as officers during the fiscal year ended May 31, 2007 and whose total compensation
        during the fiscal year ended May 31, 2007 exceeded $100,000, regardless of whether they
        were serving as officers at the end of such fiscal year.



SUMMARY COMPENSATION TABLEName and principal position(a)

                    Year(b)

                    Salary ($)(c)

                    Bonus ($)(d)

                    Stock Awards ($)(e)

                    Option Awards ($)(f)

                    Non-Equity Incentive Plan Compensation ($)(g)

                    Nonqualified Deferred Compensation Earnings ($)(h)

                    All Other Compensation ($)(i)

                    Total ($)(j)Robert Coale(1)

                    2007

                    30,000

                    0

                    0

                    0

                    0

                    0

                    0

                    30,0002006

                    17,500

                    0

                    0

                    200,000

                    0

                    0

                    0

                    17,500




(1) Mr.
        Coale is our Chairman, President, Chief Executive Officer, Chief Operating Officer,
        Secretary, and Director. He is our only officer.



Outstanding Equity Awards



The
        table set forth below presents certain information concerning unexercised options, stock
        that has not vested, and equity incentive plan awards for each named executive officer
        above outstanding as of May 31, 2007.



OUTSTANDING EQUITY AWARDS AT FISCAL
                        YEAR-ENDOPTION AWARDS

                    STOCK AWARDSName(a)

                    Number of Securities Underlying Unexercised
                        Options(#)Exercisable(b)

                    Number of Securities Underlying Unexercised
                        Options(#)Unexer-

                        cisable(c)

                    Equity Incentive Plan Awards: Number of Securities
                        Underlying Unexercised Unearned Options(#)(d)

                    Option Exer-

                        cise Price($)(e)

                    Option Expira-

                        tion Date(f)

                    Number of Shares or Units of Stock That Have Not
                        Vested(#)(g)

                    Mark-

                        et Value of Shares or Units of Stock That Have Not
                        Vested($)(h)

                    Equity Incentive Plan Awards: Number of Unearned Shares,
                        Units or Other Rights That Have Not Vested(#)(i)

                    Equity Incentive Plan Awards: Market or Payout Value of
                        Unearned Shares, Units or Other Rights That Have Not Vested(#)(j)Robert Coale

                    100,000(1)

                    0

                    0

                    0.05

                    __

                    0

                    0

                    0

                    066,667(2)

                    133,333(2)

                    0

                    0.25

                    __

                    0

                    0

                    0

                    0






39



---



(1) On
        June 23, 2003 Mr. Coale was granted the right to purchase an aggregate of 100,000 common
        shares at an exercise price of $0.05 per option pursuant to the 2003 Stock Option Plan.
        These options have fully vested.



(2) On
        March 10, 2006, Mr. Coale was granted the right to purchase an additional 200,000 common
        shares at an exercise price of $0.25 per option pursuant to the 2005 Stock Option Plan. The
        $0.25 options vest in equal installments of 33,333 commencing September 10, 2006 and ending
        March 10, 2009.



Compensation of Directors



Except as
        described above under the section entitled “Summary Compensation,” none of our
        directors received any compensation during the fiscal year ended May 31, 2007.



Item 11.

                    Security Ownership of Certain Beneficial Owners and
                        Management


and Related Stockholder Matters.




The
        following table lists, as of August 24, 2007, the number of shares of common stock of the
        Company beneficially owned by (i) each person or entity known to the Company to be the
        beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and
        director of the Company; and (iii) all officers and directors as a group. Information
        relating to beneficial ownership of common stock by our principal stockholders and
        management is based upon information furnished by each person using “beneficial
        ownership” concepts under the rules of the Securities and Exchange Commission. Under
        these rules, a person is deemed to be a beneficial owner of a security if that person has
        or shares voting power, which includes the power to vote or direct the voting of the
        security, or investment power, which includes the power to vote or direct the voting of the
        security. The person is also deemed to be a beneficial owner of any security of which that
        person has a right to acquire beneficial ownership within 60 days. Under the Securities and
        Exchange Commission rules, more than one person may be deemed to be a beneficial owner of
        the same securities, and a person may be deemed to be a beneficial owner of securities as
        to which he or she may not have any pecuniary beneficial interest. Except as noted below,
        each person has sole voting and investment power.



The
        percentages below are calculated based on 26,224,400 shares of Common Stock which are
        issued and outstanding as of August 24, 2007. Unless indicated otherwise, all addresses
        below are c/o Patriot Gold Corp., #501-1775 Bellevue Avenue, West Vancouver, British
        Columbia, Canada, V7V 1A9.



Name of Beneficial Owner

                    

                    Amount and Nature of Beneficial Ownership

                    

                    Percentage

                        of ClassAlmir Ramic

                    

                    1,730,000

                    (1)

                    6.3%Colin Bruce Worth

                    

                    1,600,000

                    (2)

                    5.8%Robert A. Sibthorpe

                    

                    3,400,000

                    (3)

                    12.8%Robert D. Coale

                    

                    3,300,000

                    (4)

                    12.4%Duncan Budge

                    

                    100,000

                    (5)

                    --Directors and Officers as a Group (3 individuals)

                    

                    6,800,000

                    

                    25.2%






40



---





(1)

                    Includes 1,280,000 shares of our common stock issuable upon
                        the exercise of warrants held by Mr. Ramic. Because we may accelerate
                        the exercise date of the warrants issued in the November 2003 private
                        placement, such warrants are included in Mr. Ramic’s beneficial
                        ownership.


(2)

                    Includes 1,280,000 share of our common stock issuable upon
                        the exercise of warrants held by Mr. Worth. Because we may accelerate
                        the exercise date of the warrants issued in the November 2003 private
                        placement, such warrants are included in Mr. Worth’s beneficial
                        ownership.


(3)

                    Includes 200,000 options pursuant to the 2003 Stock Option
                        Plan to purchase common stock at a purchase price of $0.05 per share and
                        200,000 options pursuant to the 2005 Stock Option Plan to purchase common
                        stock at a purchase price of $0.25 per share.


(4)

                    Includes 100,000 options pursuant to the 2003 Stock Option
                        Plan to purchase common stock at a purchase price of $0.05 per share and
                        200,000 options pursuant to the 2005 Stock Option Plan to purchase common
                        stock at a purchase price of $0.25 per share.


(5)

                    Includes 100,000 options pursuant to the 2005 Stock Option
                        Plan to purchase common stock at a purchase price of $0.25 per
                        share.




Shareholders’ Agreement



Messrs. Blomkamp, Sibthorpe and Coale are party to a
        Shareholders’ Agreement dated as of January 22, 2004. The agreement provides that for
        so long as the person holds any of the 3,000,000 shares which he received from Bruce
        Johnstone, the directors shall vote such shares to maintain three persons on our board.
        Upon any vote to appoint representatives to the Board, each shareholder agreed that he
        shall vote his shares for the other two shareholders. If one of the three shareholders is
        no longer a shareholder, or if the Board or our shareholders decided to remove one of the
        Board members, or the shareholder no longer holds any of the 3,000,000 shares which he
        received from Mr. Johnstone, then the other two shareholders agreed to vote their
        shares together to either maintain the number of Board members as two or to nominate and
        appoint a third Board member. The agreement also provides that for all other matters in
        which shares are voted, the three shareholders shall vote their 3,000,000 shares together
        as determined by the decision of two of the three shareholders. These three shareholders
        had determined that such agreement would be beneficial in maintaining control among
        themselves over the shares that they had received from Mr. Johnstone.



The
        shareholders also agreed that he will not, directly or indirectly, sell, pledge, gift or in
        any other way dispose of any of the 3,000,000 shares which he received from
        Mr. Johnstone. This transfer restriction shall apply to such shares in all situations
        during all times that such individual holds any of the 3,000,000 shares. Although the
        shareholders’ agreement restricts transfers of the shares received from
        Mr. Johnstone and held by the directors, a director can no longer hold the shares
        which he received from Mr. Johnstone if he dies or if the agreement is amended by the
        parties to permit a transfer. The Company is not aware of any such amendment being
        contemplated by the parties.





41



---



Buyback Agreements



On March
        10, 2006 the Company granted stock options to Mr. Robert Coale, who is the Chairman,
        President, Chief Executive Officer, Chief Operating Officer, Secretary, and a director and
        to Mr. Robert Sibthorpe who is a director of the Company. In consideration therefor, Mr.
        Coale, Mr. Sibthorpe and the Company entered into a Buy-Back Option Agreements, pursuant to
        which Messrs. Coale and Sibthorpe granted to the Company the option to purchase all or any
        portion of the 3,000,000 shares of the Company’s common stock that are owned by each
        of Mr. Coale and Mr. Sibthorpe respectively for a purchase price of $0.01 per
        share.



Also on
        March 10, 2006, the Registrant entered into a Redemption Agreement with Ronald Blomkamp,
        the Company’s former President and Chief Executive Officer pursuant to which the
        Company purchased from Mr. Blomkamp the 3,000,000 shares of the Company’s common
        stock that were owned by Mr. Blomkamp. The purchase price for such shares paid to Mr.
        Blomkamp by the Company was $0.01 per share, which amounted to an aggregate of $30,000. The
        3,000,000 common shares purchased from Mr. Blomkamp were cancelled by the
        Company.



We are
        unaware of any other contract or other arrangement the operation of which may at a
        subsequent date result in a change in control of our company.



Securities Authorized for Issuance under Equity Compensation
        Plans



Information
        regarding our equity compensation plans is set forth above under Part II, Item
        5.



Item 12.

                    Certain Relationships and Related Transactions, and
                        Director Independence.




Related Transactions



On March
        10, 2006, we entered into a Stock Option Agreement with Robert Coale, who is our Chairman,
        President, Chief Executive Officer, Chief Operating Officer, Secretary, and a director.
        Pursuant to such agreement, Mr. Coale was issued 200,000 options, each entitling him to
        purchase one share of common stock at a price of $0.25 until March 10, 2016. In
        consideration therefor, Mr. Coale and our company entered into a Buy-Back Option Agreement,
        pursuant to which Mr. Coale granted to our company the option to purchase all or any
        portion of the 3,000,000 shares of our common stock that are owned by Mr. Coale for a
        purchase price of $0.01 per share.



On March
        10, 2006, we entered into a Stock Option Agreement with Robert Sibthorpe, who is our
        director. Pursuant to such agreement, Mr. Sibthorpe was issued 200,000 options, each
        entitling him to purchase one share of common stock at a price of $0.25 until March 10,
        2016. In consideration therefor, Mr. Sibthorpe and our company entered into a Buy-Back
        Option Agreement, pursuant to which Mr. Sibthorpe granted to our company an option to
        purchase all or any portion of the 3,000,000 shares of our common stock that are owned by
        Mr. Sibthorpe for a purchase price of $0.01 per share.



Also on
        March 10, 2006, we entered into a Redemption Agreement with Ronald Blomkamp, the
        Company’s former President and Chief Executive Officer pursuant to which the Company
        purchased from Mr. Blomkamp the 3,000,000 shares of the Company’s common stock that
        were



42



---



owned by
        Mr. Blomkamp. The purchase price for such shares paid to Mr. Blomkamp by the Company was
        $0.01 per share, which amounted to an aggregate of $30,000. The 3,000,000 common shares
        purchased from Mr. Blomkamp were cancelled by the Company.



There
        are no promoters associated or involved with the company. We have a single individual,
        Mr. Brian Uppal, who acts as our investor relations person to answer questions
        received from phone callers. Mr. Uppal has been compensated by a grant of 250,000
        stock options under our stock option plan. These options were granted on October 14, 2003,
        with an exercise price of $1.50, and because the option price was above fair market value
        of $1.47, we did not record any compensation expense. We have also hired Shareholder.com, a
        fulfillment service provider, to handle the logistics of mailing out an informational
        pamphlet prepared by us to those investors who have requested more information about us
        through our Web site. Under our agreement with Shareholder.com, Shareholder.com performs
        mail order fulfillment service to persons who request an investor package through our Web
        site. The investor enters the required information on our Website. The information is then
        transmitted to Shareholder.com, which then mails the investor package to the person
        requesting it. The investor and Shareholder.com do not communicate with each other and
        Shareholder.com adds no materials of their own to the mailings to our investors.
        Shareholder.com acts only as a collation and mailing service provider to us so that we do
        not have to spend time doing this work.



Under
        the Shareholder.com agreement, which has a month-to-month term, we are responsible for the
        preparation and contents of the investor package. The pamphlet we provided to
        Shareholder.com consisted of basic information about us, the members of our management team
        and our business, and the information is taken from our Web site.



Under
        the Shareholder.com agreement, Shareholder.com acted solely as a transmitter of information
        to investors that we provided to them for which we paid;



•

                    an initial start up fee of $495,


•

                    a monthly fee of $195 for the mail order fulfillment
                        service,


•

                    a processing fee of $0.95 per request


•

                    and the cost of postage and handling of investor packages
                        mailed by Shareholder.com.




Director Independence



We are
        not subject to the listing requirements of any national securities exchange or national
        securities association and, as a result, we are not at this time required to have our board
        comprised of a majority of “independent directors.” We do not believe that any
        of our directors currently meet the definition of “independent” as promulgated
        by the rules and regulations of the American Stock Exchange.



43



---





|**Item 13.** | **Exhibits.**
|------------ | -------------



EXHIBIT

                        NUMBER

                    

                    DESCRIPTION3.1

                    

                    Articles of Incorporation of Registrant. (1)3.2

                    

                    Registrant’s Restated Articles of Incorporation.
                        (2)3.3

                    

                    By-Laws of Registrant. (1)4.1

                    

                    Specimen common stock certificate. (1)4.2

                    

                    Form of Class A Warrant. (3)4.3

                    

                    Form of Class B Warrant. (3)4.4

                    

                    Form of Class C Warrant. (3)4.5

                    

                    Form of Class D Warrant. (3)4.6

                    

                    Warrant Agreement – July 2003 private placement.
                        (3)4.7

                    

                    Form of Class A-1 Warrant. (6)4.8

                    

                    Form of Class B-1 Warrant. (6)4.9

                    

                    Form of Class C-1 Warrant. (6)4.10

                    

                    Form of Class D-1 Warrant. (6)4.11

                    

                    Warrant Agreement – November 2003 private placement.
                        (8)10.1

                    

                    Property Option Agreement dated as of July 25, 2003 between
                        MinQuest Inc. and Patriot Gold Corporation. (9)10.2

                    

                    2003 Stock Option Plan. (4)10.3

                    

                    Agreement dated as of September 2, 2003 by and between
                        Patriot Gold Corp. and Bruce Johnstone. (5)10.4

                    

                    Shareholders’ Agreement dated as of January 22, 2004,
                        among Patriot Gold Corp., Ron Blomkamp, Robert Sibthorpe and Robert Coale.
                        (6)10.5

                    

                    Agreement dated January 22, 2004 executed by Bruce Johnstone
                        with respect to registration rights. (8)10.6

                    

                    Letter of Intent dated November 13, 2003 between Patriot
                        Gold Corp. and Ms. Barbara Williams. (9)10.7

                    

                    Purchase Contract dated February 19, 2004 between the
                        Company, the parties identified therein as the Seller and First American
                        Title Insurance Company of Yavapai County, as escrow agent. (7)10.8

                    

                    Binding Letter Agreement, dated March 4, 2004, by and
                        between the Company and MinQuest, Inc. (8)10.9

                    

                    Agreement with Shareholder.com (10)10.10

                    

                    2005 Stock Option Plan (11)10.11

                    

                    Buy-Back Option Agreement, dated March 10, 2006, between the
                        Company and Robert Coale (12)10.12

                    

                    Buy-Back Option Agreement, dated March 10, 2006, between the
                        Company and Robert Sibthorpe (12)10.13

                    

                    Redemption Agreement, dated March 10, 2006, between the
                        Company and Ronald C. Blomkamp (12)10.14

                    

                    Letter Agreement, dated July 24, 2007, between MinQuest Inc.
                        and Patriot Gold Corporation (attached hereto)31

                    

                    Rule 13a-14(a)/15d14(a) Certifications (attached
                        hereto)32

                    

                    Section 1350 Certifications (attached hereto)






44



---



(1)
        Previously filed with the Company’s Form 10SB12g submitted to the SEC on June 25,
        2001, SEC file number 0-32919.

(2)
        Previously filed as an exhibit to the Company’s Information Statement submitted to
        the SEC on May 21, 2003.

(3)
        Previously filed as exhibits to the Company’s May 31, 2003 Form 10-KSB submitted to
        the SEC on August 26,
        2003.

(4)
        Previously filed as Exhibit 4.1 to the Company’s Form S-8 on May 30, 2003, SEC File
        Number 333-105691, as amended by the Company’s Post-Effective Amendment of Form S-8
        filed on September 23, 2003.

(5)
        Previously filed as an exhibit to the Company’s August 31, 2003 Form 10-QSB submitted
        to the SEC on October 14, 2003.

(6)
        Previously filed with the Company’s registration statement on Form SB-2, Registration
        No. 333-112424, submitted to the SEC on February 2, 2004.

(7)
        Previously filed as an exhibit to the Company’s February 29, 2004 Form 10-QSB
        submitted to the SEC on April 9, 2004.

(8)
        Previously filed with the amendment No. 2 to the Company’s registration statement on
        Form SB-2/A, Registration No. 333-112424, submitted to the SEC on July 16, 2004.

(9)
        Previously filed with the amendment No. 3 to the Company’s registration statement on
        Form SB-2/A, Registration No. 333-112424, submitted to the SEC on October 6,
        2004.

(10)
        Previously filed with the amendment No. 4 to the Company’s registration statement on
        Form SB-2/A, Registration No. 333-112424, submitted to the SEC on December 27,
        2004.

(11)
        Previously filed as Exhibit 4.1 to the Company’s Form S-8 filed on November 18, 2005
        File Number 333-129840.

(12)
        Previously filed with the Company’s Form 8-K submitted to the SEC on March 10,
        2006.



Item 14.

                    Principal Accountant and Fees.




Robison
        Hill & Co. is currently serving as the Company’s principal independent
        accountant. The accountant’s pre-approved fees billed to the Company are set forth
        below:





Fiscal year endedMay 31, 2007

                    

                    

                    

                    Fiscal year endedMay 31, 2006Audit Fees

                    

                    

                    

                    $

                    25,105

                    

                    

                    

                    $

                    28,015Audit Related Fees

                    

                    

                    

                    $

                    —

                    

                    

                    

                    $

                    —Tax Fees

                    

                    

                    

                    $

                    —

                    

                    

                    

                    $

                    —All Other Fees

                    

                    

                    

                    $

                    —

                    

                    

                    

                    $

                    —




As of
        May 31, 2007, the Company did not have a formal documented pre-approval policy for the fees
        of the principal accountant.



45



---











(An
        Exploration State Company)

-:-

INDEPENDENT AUDITOR’S REPORT

May 31,
        2007 and 2006







---





Contents

                    

                    PageReport of Independent Registered Public
                        Accountants

                    

                    F - 1Balance SheetsMay 31, 2007 and 2006

                    

                    F - 2Statements of Operations for theYear Ended May 31, 2007 and 2006 and the Cumulative
                        PeriodJune 1, 2000 (Inception of Exploration State) to May 31,
                        2007

                    

                    F - 3Statement of Stockholders’ EquitySince November 30, 1998 (Inception) to May 31,
                        2007

                    

                    F - 4Statements of Cash Flows for theYear Ended May 31, 2007 and 2006 and the Cumulative
                        PeriodJune 1, 2000 (Inception of Exploration State) to May 31,
                        2007

                    

                    F – 11Notes to Financial Statements

                    

                    F - 13








---







ROBISON, HILL &
                        CO.

                    

                    

                    

                    Certified Public AccountantsA PROFESSIONAL CORPORATIONBRENT M. DAVIES, CPADAVID O. SEAL, CPAW. DALE WESTENSKOW, CPABARRY D. LOVELESS, CPASTEPHEN M. HALLEY, CPA




REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

Patriot
        Gold Corp.

(An
        Exploration State Company)

We have audited the accompanying balance sheet of Patriot Gold Corp. (An
        Exploration State Company) as of May 31, 2007 and 2006, and the related statements of
        operations and cash flows for the two years ended May 31, 2007 and 2006 and the cumulative
        period June 1, 2000 (inception of exploration state) to May 31, 2007, and the statements of
        stockholders’ equity since November 30, 1998 (inception) to May 31, 2007. These
        financial statements are the responsibility of the Company’s management. Our
        responsibility is to express an opinion on these financial statements based on our
        audits.

We conducted our audits in accordance with the standards of the Public
        Company Accounting Oversight Board (United States). Those standards require that we plan
        and perform the audit to obtain reasonable assurance about whether the financial statements
        are free of material misstatement. The Company is not required to have, nor were we engaged
        to perform, an audit of its internal control over financial reporting. Our audit included
        consideration of internal control over financial reporting as a basis for designing audit
        procedures that are appropriate in the circumstances, but not for the purpose of expressing
        an opinion on the effectiveness of the company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit also includes examining, on a
        test basis, evidence supporting the amounts and disclosures in the financial statements. An
        audit also includes assessing the accounting principles used and significant estimates made
        by management, as well as evaluating the overall financial statement presentation. We
        believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
        in all material respects, the financial position of Patriot Gold Corp. (An Exploration
        State Company) as of May 31, 2007 and 2006, and the results of its operations and its cash
        flows for the years ended May 31, 2007 and 2006 and the cumulative period June 1, 2000
        (inception of exploration state) to May 31, 2007, in conformity with accounting principles
        generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
        Company will continue as a going concern. As discussed in Note 1 to the financial
        statements, the Company has suffered recurring losses from operations and has no source of
        revenue that raise substantial doubt about its ability to continue as a going concern.
        Management’s plans in regard to these matters are also described in Note 1. The
        financial statements do not include any adjustments that might result from the outcome of
        this uncertainty.



/S/ Robison, Hill & Co.

Certified Public Accountants

Salt Lake
        City, Utah

August 20,
        2007



F -
        1



MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC
                        ACCOUNTANTS


MEMBERS OF THE SEC PRACTICE SECTION and THE PRIVATE
                        COMPANIES PRACTICE SECTION




1366 East Murray-Holladay Road, Salt Lake City, Utah
                        84117-5050


Telephone 801/272-8045, Facsimile
                    801/277-9942






---



PATRIOT GOLD CORP.

(An
        Exploration State Company)

BALANCE
        SHEETS



May 31,

                    

                    

                    

                    May 31,2007

                    

                    

                    

                    2006ASSETS:Current Assets:Cash

                    

                    $

                    3,029,331

                    

                    

                    

                    $

                    3,263,024Prepaid Expense

                    

                    

                    1,472

                    

                    

                    

                    

                    32,000GST Receivables

                    

                    

                    -

                    

                    

                    

                    

                    2,538Total Current Assets

                    

                    

                    3,030,803

                    

                    

                    

                    

                    3,297,562Office Equipment, Net

                    

                    

                    1,749

                    

                    

                    

                    

                    3,146Total Assets

                    

                    $

                    3,032,552

                    

                    

                    

                    $

                    3,300,708LIABILITIES & STOCKHOLDERS’ EQUITY:Current Liabilities:Accounts Payable

                    

                    $

                    2,084

                    

                    

                    

                    $

                    1,563Total Current Liabilities

                    

                    

                    2,084

                    

                    

                    

                    

                    1,563Stockholders’ Equity:Preferred Stock, Par Value $.001Authorized 20,000,000 shares,No shares issued at May 31, 2007 and 2006

                    

                    

                    —

                    

                    

                    

                    

                    —Common Stock, Par Value $.001Authorized 100,000,000 shares,Issued 26,224,400 shares atMay 31, 2007 (May 31, 2006 – 26,279,400)

                    

                    

                    26,224

                    

                    

                    

                    

                    26,279Paid-In Capital

                    

                    

                    26,383,636

                    

                    

                    

                    

                    26,435,970Subscription Receivable

                    

                    

                    -

                    

                    

                    

                    

                    (79,000

                    )Currency Translation Adjustment

                    

                    

                    (16,361

                    )

                    

                    

                    

                    (16,361

                    )Deficit Accumulated Since Inception of Exploration
                        State

                    

                    

                    (23,321,949

                    )

                    

                    

                    

                    (23,026,661

                    )Retained Deficit

                    

                    

                    (41,082

                    )

                    

                    

                    

                    (41,082

                    )Total Stockholders’ Equity

                    

                    

                    3,030,468

                    

                    

                    

                    

                    3,299,145Total Liabilities and Stockholders’ Equity

                    

                    $

                    3,032,552

                    

                    

                    

                    $

                    3,300,708




The
        accompanying notes are an integral part of these financial statements.

F -
        2



---



PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENTS OF OPERATIONS



CumulativeSinceJune 1, 2000For the Year Ended

                    

                    

                    

                    Inception ofMay 31,

                    

                    

                    

                    Exploration2007

                    

                    

                    

                    2006

                    

                    

                    

                    StateRevenues

                    

                    $

                    —

                    

                    

                    

                    $

                    —

                    

                    

                    

                    $

                    —Cost of Revenues

                    

                    

                    —

                    

                    

                    

                    

                    —

                    

                    

                    

                    

                    —Gross Margin

                    

                    

                    —

                    

                    

                    

                    

                    —

                    

                    

                    

                    

                    —Expenses:Mining Costs

                    

                    

                    250,634

                    

                    

                    

                    

                    187,407

                    

                    

                    

                    

                    1,816,759General and Administrative

                    

                    

                    172,854

                    

                    

                    

                    

                    214,440

                    

                    

                    

                    

                    21,792,163Net Loss from Operations

                    

                    

                    (423,488

                    )

                    

                    

                    

                    (401,847

                    )

                    

                    

                    

                    (23,608,922

                    )Other Income (Expense)Interest

                    

                    

                    127,059

                    

                    

                    

                    

                    102,921

                    

                    

                    

                    

                    297,100Currency Exchange

                    

                    

                    1,141

                    

                    

                    

                    

                    8,884

                    

                    

                    

                    

                    (10,127

                    )Net Other Income (Expense)

                    

                    

                    128,200

                    

                    

                    

                    

                    111,805

                    

                    

                    

                    

                    286,973Net Loss

                    

                    $

                    (295,288

                    )

                    

                    

                    $

                    (290,042

                    )

                    

                    

                    $

                    (23,321,949

                    )Basic and Diluted loss perShare

                    

                    $

                    (0.01

                    )

                    

                    

                    $

                    (0.01)Weighted Average SharesOutstanding

                    

                    

                    26,258,455

                    

                    

                    

                    

                    28,605,427




The
        accompanying notes are an integral part of these financial statements.

F -
        3



---









PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENT
        OF STOCKHOLDERS’ EQUITY



DeficitCumulative

                    

                    

                    

                    

                    

                    AccumulatedSubscription

                    

                    

                    Currency

                    

                    

                    

                    

                    

                    DuringPreferred Stock

                    

                    

                    Common Stock

                    

                    

                    Paid-In

                    

                    

                    Stock

                    

                    

                    Translation

                    

                    

                    Retained

                    

                    

                    ExplorationShares

                    

                    

                    Par Value

                    

                    

                    Shares

                    

                    

                    Par Value

                    

                    

                    Capital

                    

                    

                    Receivable

                    

                    

                    Adjustment

                    

                    

                    Deficit

                    

                    

                    StateBalance at November 30, 1998(inception)

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —November 30, 1998 Issuance ofStock for services and paymentof accounts payable

                    

                    —

                    

                    

                    

                    —

                    

                    

                    1,000,000

                    

                    

                    

                    1,000

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —April 1, 1999 Issuance of Stockfor cash pursuant to privateplacement

                    

                    —

                    

                    

                    

                    —

                    

                    

                    1,004,000

                    

                    

                    

                    1,004

                    

                    

                    

                    49,196

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —Net Loss

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (38,305

                    )

                    

                    

                    —Currency Translation Adjustment

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (15,996

                    )

                    

                    

                    —

                    

                    

                    

                    ——Balance at May 31, 1999

                    

                    —

                    

                    

                    

                    —

                    

                    

                    2,004,000

                    

                    

                    

                    2,004

                    

                    

                    

                    49,196

                    

                    

                    

                    —

                    

                    

                    

                    (15,996

                    )

                    

                    

                    (38,305

                    )

                    

                    

                    —Retroactive Adjustment for 1:7.6Stock Split June 17, 2003

                    

                    —

                    

                    

                    

                    —

                    

                    

                    13,226,400

                    

                    

                    

                    13,226

                    

                    

                    

                    (13,226

                    )

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —Restated Balance May 31, 1999

                    

                    —

                    

                    

                    

                    —

                    

                    

                    15,230,400

                    

                    

                    

                    15,230

                    

                    

                    

                    35,970

                    

                    

                    

                    —

                    

                    

                    

                    (15,996

                    )

                    

                    

                    (38,305

                    )

                    

                    

                    —Net Loss

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (2,777

                    )

                    

                    

                    —Currency Translation Adjustment

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (489

                    )

                    

                    

                    —

                    

                    

                    

                    —Balance at May 31, 2000

                    

                    —

                    

                    

                    

                    —

                    

                    

                    15,230,400

                    

                    

                    

                    15,230

                    

                    

                    

                    35,970

                    

                    

                    

                    —

                    

                    

                    

                    (16,485

                    )

                    

                    

                    (41,082

                    )

                    

                    

                    —






F -
        4



---



PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENT
        OF STOCKHOLDERS’ EQUITY

(Continued)



DeficitCumulative

                    

                    

                    

                    

                    

                    AccumulatedSubscription

                    

                    

                    Currency

                    

                    

                    

                    

                    

                    DuringPreferred Stock

                    

                    

                    Common Stock

                    

                    

                    Paid-In

                    

                    

                    Stock

                    

                    

                    Translation

                    

                    

                    Retained

                    

                    

                    ExplorationShares

                    

                    

                    Par Value

                    

                    

                    Shares

                    

                    

                    Par Value

                    

                    

                    Capital

                    

                    

                    Receivable

                    

                    

                    Adjustment

                    

                    

                    Deficit

                    

                    

                    StateContributed Capital

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    3,788

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —Net Loss

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (3,811

                    )Currency Translation Adjustment

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    172

                    

                    

                    

                    —

                    

                    

                    

                    —Balance at May 31, 2001

                    

                    —

                    

                    

                    

                    —

                    

                    

                    15,230,400

                    

                    

                    

                    15,230

                    

                    

                    

                    39,758

                    

                    

                    

                    —

                    

                    

                    

                    (16,313

                    )

                    

                    

                    (41,082

                    )

                    

                    

                    (3,811

                    )Contributed Capital

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    2,080

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —Net Loss

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (2,630

                    )Currency Translation Adjustment

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (48

                    )

                    

                    

                    —

                    

                    

                    

                    —Balance at May 31, 2002

                    

                    —

                    

                    

                    

                    —

                    

                    

                    15,230,400

                    

                    

                    

                    15,230

                    

                    

                    

                    41,838

                    

                    

                    

                    —

                    

                    

                    

                    (16,361

                    )

                    

                    

                    (41,082

                    )

                    

                    

                    (6,441

                    )Contributed Capital

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    3,972

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —Net Loss

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (11,215

                    )Balance at May 31, 2003

                    

                    —

                    

                    

                    

                    —

                    

                    

                    15,230,400

                    

                    

                    

                    15,230

                    

                    

                    

                    45,810

                    

                    

                    

                    —

                    

                    

                    

                    (16,361

                    )

                    

                    

                    (41,082

                    )

                    

                    

                    (17,656

                    )






F -
        5



---



PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENT
        OF STOCKHOLDERS’ EQUITY

(Continued)



DeficitCumulative

                    

                    

                    

                    

                    

                    AccumulatedSubscription

                    

                    

                    Currency

                    

                    

                    

                    

                    

                    DuringPreferred Stock

                    

                    

                    Common Stock

                    

                    

                    Paid-In

                    

                    

                    Stock

                    

                    

                    Translation

                    

                    

                    Retained

                    

                    

                    ExplorationShares

                    

                    

                    Par Value

                    

                    

                    Shares

                    

                    

                    Par Value

                    

                    

                    Capital

                    

                    

                    Receivable

                    

                    

                    Adjustment

                    

                    

                    Deficit

                    

                    

                    StateJune 11, 2003 Issuances of

                        Preferred Shares for Services

                    

                    13,500,000

                    

                    

                    

                    13,500

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —Shares from Former Officer/Directors

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    (5,320,000

                    )

                    

                    $

                    (5,320

                    )

                    

                    $

                    5,320

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —July 25, 2003, Shares andWarrants Issued for Cash

                    

                    —

                    

                    

                    

                    —

                    

                    

                    350,000

                    

                    

                    

                    350

                    

                    

                    

                    367,150

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —July, 2003 Compensation fromIssuance of Stock OptionsBelow Fair Market Value

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    235,354

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —September 2, 2003, PreferredShares Converted to Common

                    

                    (13,500,000

                    )

                    

                    

                    (13,500

                    )

                    

                    13,500,000

                    

                    

                    

                    13,500

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —September 12, 2003, StockOptions Exercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    200,000

                    

                    

                    

                    200

                    

                    

                    

                    9,800

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —September 17, 2003, StockOptions Exercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    930,000

                    

                    

                    

                    930

                    

                    

                    

                    45,570

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —September 22, 2003, StockOptions Exercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    525,000

                    

                    

                    

                    525

                    

                    

                    

                    25,725

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —September 23, 2003, StockOptions Exercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    105,000

                    

                    

                    

                    105

                    

                    

                    

                    8,895

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —






F -
        6



---





PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENT
        OF STOCKHOLDERS’ EQUITY

(Continued)



DeficitCumulative

                    

                    

                    

                    

                    

                    AccumulatedSubscription

                    

                    

                    Currency

                    

                    

                    

                    

                    

                    DuringPreferred Stock

                    

                    

                    Common Stock

                    

                    

                    Paid-In

                    

                    

                    Stock

                    

                    

                    Translation

                    

                    

                    Retained

                    

                    

                    ExplorationShares

                    

                    

                    Par Value

                    

                    

                    Shares

                    

                    

                    Par Value

                    

                    

                    Capital

                    

                    

                    Receivable

                    

                    

                    Adjustment

                    

                    

                    Deficit

                    

                    

                    StateSeptember 26, 2003, StockOptions Exercised

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    465,000

                    

                    

                    $

                    465

                    

                    

                    $

                    602,785

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —September, 2003 CompensationFrom Issuance of StockOptions Below Fair MarketValue

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    1,458,240

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —October 1, 2003, Stock OptionsExercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    5,000

                    

                    

                    

                    5

                    

                    

                    

                    3,995

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —October 15, 2003, StockOptions Exercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    625,000

                    

                    

                    

                    625

                    

                    

                    

                    900,625

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —November 12, 2003, StockOptions Exercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    220,000

                    

                    

                    

                    220

                    

                    

                    

                    109,780

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —November 27, 2003, CommonStock and Warrants Issued forCash

                    

                    —

                    

                    

                    

                    —

                    

                    

                    864,000

                    

                    

                    

                    864

                    

                    

                    

                    1,079,136

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —






F -
        7



---



PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENT
        OF STOCKHOLDERS’ EQUITY

(Continued)



DeficitCumulative

                    

                    

                    

                    

                    

                    AccumulatedSubscription

                    

                    

                    Currency

                    

                    

                    

                    

                    

                    DuringPreferred Stock

                    

                    

                    Common Stock

                    

                    

                    Paid-In

                    

                    

                    Stock

                    

                    

                    Translation

                    

                    

                    Retained

                    

                    

                    ExplorationShares

                    

                    

                    Par Value

                    

                    

                    Shares

                    

                    

                    Par Value

                    

                    

                    Capital

                    

                    

                    Receivable

                    

                    

                    Adjustment

                    

                    

                    Deficit

                    

                    

                    StateNovember 2003, CompensationFrom Issuance of StockOptions Below Fair MarketValue

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    290,818

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —December 2, 2003 StockOptions Exercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    5,000

                    

                    

                    

                    5

                    

                    

                    

                    3,995

                    

                    

                    

                    (4,000

                    )

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —December 22, 2003, StockOptions Exercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    20,000

                    

                    

                    

                    20

                    

                    

                    

                    20,580

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —December 2003, CompensationFrom Issuance of StockOptions Below Fair MarketValue

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    346,412

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —January 2, 2004, Stock OptionsExercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    220,000

                    

                    

                    

                    220

                    

                    

                    

                    164,780

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —January 24, 2004, CapitalContributed for DirectorCompensation

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    16,254,000

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —February 2004, CompensationFrom Issuance of StockOptions Below Fair MarketValue

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    1,949,522

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —






F -
        8



---



PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENT
        OF STOCKHOLDERS’ EQUITY

(Continued)



DeficitCumulative

                    

                    

                    

                    

                    

                    AccumulatedSubscription

                    

                    

                    Currency

                    

                    

                    

                    

                    

                    DuringPreferred Stock

                    

                    

                    Common Stock

                    

                    

                    Paid-In

                    

                    

                    Stock

                    

                    

                    Translation

                    

                    

                    Retained

                    

                    

                    ExplorationShares

                    

                    

                    Par Value

                    

                    

                    Shares

                    

                    

                    Par Value

                    

                    

                    Capital

                    

                    

                    Receivable

                    

                    

                    Adjustment

                    

                    

                    Deficit

                    

                    

                    StateMarch 2004, CompensationFrom Issuance of StockOptions Below Fair MarketValue

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    612,030

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —March 5, 2004, Stock OptionsExercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    1,285,000

                    

                    

                    

                    1,285

                    

                    

                    

                    1,761,215

                    

                    

                    

                    (1,597,500

                    )

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —April 2, 2004, Stock OptionsExercised

                    

                    —

                    

                    

                    

                    —

                    

                    

                    50,000

                    

                    

                    

                    50

                    

                    

                    

                    74,950

                    

                    

                    

                    (75,000

                    )

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —Net Loss

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (21,625,478

                    )Balance May 31, 2004

                    

                    —

                    

                    

                    

                    —

                    

                    

                    29,279,400

                    

                    

                    

                    29,279

                    

                    

                    

                    26,376,487

                    

                    

                    

                    (1,676,500

                    )

                    

                    

                    (16,361

                    )

                    

                    

                    (41,082

                    )

                    

                    

                    (21,643,134

                    )Cash from SubscriptionReceivable

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    1,597,500

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —Net Loss

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (1,093,485

                    )Balance May 31, 2005

                    

                    —

                    

                    

                    

                    —

                    

                    

                    29,279,400

                    

                    

                    

                    29,279

                    

                    

                    

                    26,376,487

                    

                    

                    

                    (79,000

                    )

                    

                    

                    (16,361

                    )

                    

                    

                    (41,082

                    )

                    

                    

                    (22,736,619

                    )March 2006, Redemption of3,000,000 common shares

                    

                    —

                    

                    

                    

                    —

                    

                    

                    (3,000,000

                    )

                    

                    

                    (3,000

                    )

                    

                    

                    (27,000

                    )

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —March 2006, CompensationFrom the Issuance of StockOptions at Fair Market Value.

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    86,483

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —Net Loss

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (290,042

                    )Balance May 31, 2006

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    26,279,400

                    

                    

                    $

                    26,279

                    

                    

                    $

                    26,435,970

                    

                    

                    $

                    (79,000

                    )

                    

                    $

                    (16,361

                    )

                    

                    $

                    (41,082

                    )

                    

                    $

                    (23,026,661

                    )






F -
        9



---





PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENT
        OF STOCKHOLDERS’ EQUITY

(Continued)



DeficitCumulative

                    

                    

                    

                    

                    

                    AccumulatedSubscription

                    

                    

                    Currency

                    

                    

                    

                    

                    

                    DuringPreferred Stock

                    

                    

                    Common Stock

                    

                    

                    Paid-In

                    

                    

                    Stock

                    

                    

                    Translation

                    

                    

                    Retained

                    

                    

                    ExplorationShares

                    

                    

                    Par Value

                    

                    

                    Shares

                    

                    

                    Par Value

                    

                    

                    Capital

                    

                    

                    Receivable

                    

                    

                    Adjustment

                    

                    

                    Deficit

                    

                    

                    StateJanuary 12, 2007, CancellationOf 55,000 common shares

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    (55,000

                    )

                    

                    $

                    (55

                    )

                    

                    $

                    (78,945

                    )

                    

                    $

                    79,000

                    

                    

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —Compensation From theRevaluation of StockOptions Granted in Prior Years

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    26,611

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —Net Loss

                    

                    —

                    

                    

                    

                    —

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    —

                    

                    

                    

                    (295,288

                    )Balance May 31, 2007

                    

                    —

                    

                    

                    $

                    —

                    

                    

                    26,224,400

                    

                    

                    $

                    26,224

                    

                    

                    $

                    26,383,636

                    

                    

                    $

                    —

                    

                    

                    $

                    (16,361

                    )

                    

                    $

                    (41,082

                    )

                    

                    $

                    (23,321,949

                    )




The
        accompanying notes are an integral part of these financial statements.



F -
        10



---







PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENTS OF CASH FLOWS



CumulativeSinceJune 1, 2000For the Year Ended

                    

                    

                    

                    Inception ofMay 31,

                    

                    

                    

                    May 31,

                    

                    

                    

                    Exploration2007

                    

                    

                    

                    2006

                    

                    

                    

                    StateCASH FLOWS FROM OPERATING ACTIVITIES:Net Loss

                    

                    $

                    (295,288

                    )

                    

                    

                    $

                    (290,042

                    )

                    

                    

                    $

                    (23,321,949

                    )Adjustments to Reconcile Net Loss to NetCash Used in Operating Activities:Compensation Expense of Stock Options

                    

                    

                    26,611

                    

                    

                    

                    

                    86,483

                    

                    

                    

                    

                    5,005,495Stock Issued for Services

                    

                    

                    —

                    

                    

                    

                    

                    —

                    

                    

                    

                    

                    16,267,500Depreciation

                    

                    

                    1,397

                    

                    

                    

                    

                    1,047

                    

                    

                    

                    

                    2,444Change in Operating Assets and Liabilities:(Increase) Decrease in Receivables

                    

                    

                    2,538

                    

                    

                    

                    

                    (2,538)

                    

                    

                    

                    

                    —(Increase) Decrease in Prepaid Expenses

                    

                    

                    30,528

                    

                    

                    

                    

                    3,000

                    

                    

                    

                    

                    (1,472

                    )Increase (Decrease) in Accounts Payable

                    

                    

                    521

                    

                    

                    

                    

                    (44,481)

                    

                    

                    

                    

                    (4,159)Net Cash Used in Operating Activities

                    

                    

                    (233,693

                    )

                    

                    

                    

                    (246,531)

                    

                    

                    

                    

                    (2,052,141

                    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of Office Equipment

                    

                    

                    —

                    

                    

                    

                    

                    (4,193)

                    

                    

                    

                    

                    (4,193)Net Cash Used in Investing Activities

                    

                    

                    —

                    

                    

                    

                    

                    (4,193)

                    

                    

                    

                    

                    (4,193)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from Sale of Common Stock

                    

                    

                    —

                    

                    

                    

                    

                    —

                    

                    

                    

                    

                    5,105,825Redemption of Common Shares

                    

                    

                    —

                    

                    

                    

                    

                    (30,000)

                    

                    

                    

                    

                    (30,000)Proceeds from Contributed Capital

                    

                    

                    —

                    

                    

                    

                    

                    —

                    

                    

                    

                    

                    9,840Net Cash Provided by Financing Activities

                    

                    

                    —

                    

                    

                    

                    

                    (30,000)

                    

                    

                    

                    

                    5,085,665Net (Decrease) Increase inCash and Cash Equivalents

                    

                    

                    (233,693)

                    

                    

                    

                    

                    (280,724)

                    

                    

                    

                    

                    3,029,331Cash and Cash Equivalentsat Beginning of Period

                    

                    

                    3,263,024

                    

                    

                    

                    

                    3,543,748

                    

                    

                    

                    

                    —Cash and Cash Equivalentsat End of Period

                    

                    $

                    3,029,331

                    

                    

                    

                    $

                    3,263,024

                    

                    

                    

                    $

                    3,029,331






F -
        11



---



PATRIOT
        GOLD CORP.

(An
        Exploration State Company)

STATEMENTS OF CASH FLOWS

(Continued)



CumulativeSinceJune 1, 2000For the Year Ended

                    

                    

                    

                    Inception ofMay 31,

                    

                    

                    

                    May 31,

                    

                    

                    

                    Exploration2007

                    

                    

                    

                    2006

                    

                    

                    

                    StateSUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the year for:Interest

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —Income taxes

                    $

                    —

                    

                    

                    $

                    —

                    

                    

                    $

                    —SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
                        ACTIVITIES:




Settlement of Subscription Receivable

                        By the Cancellation of Common Stock

                    $

                    79,000

                    

                    

                    $

                    —

                    

                    

                    $

                    79,000




During the
        year ended May 31, 2006, the Company granted 1,000,000 stock options to various directors
        and consultants for an exercise price of $0.25 per share. Consulting expense of $86,483 was
        recorded. The vesting period for some of these options is up to three years. As a result,
        the unvested portions of the options have been revalued at May 31, 2007 resulting in an
        additional option expense of $26,611 due to the amortization of the fair value of the
        options as determined by the Black-Scholes model between the date of grant and May 31,
        2007.



The
        accompanying notes are an integral part of these financial statements.



F -
        12



---



NOTE 1
        – NATURE OF BUSINESS AND OPERATIONS

The Company
        has no products or services as of May 31, 2007. The Company operated from November 30, 1998
        through approximately May 31, 2000 in the production of ostrich meat. On June 1, 2000, the
        Company ceased operations.

In June
        2003, Management decided to change the direction of the Company and has decided to become a
        natural resource exploration company and will seek opportunities in this field. The Company
        is currently engaging in the acquisition, exploration, and if warranted and feasible,
        development of natural resource properties. Since June 1, 2000, the Company has been in the
        exploration state.

NOTE 2
        – ABILITY TO CONTINUE AS A GOING CONCERN

The
        accompanying financial statements have been prepared in US dollars and in accordance with
        accounting principles generally accepted in the United States on a going concern basis,
        which contemplates the realization of assets and the satisfaction of liabilities and
        commitments in the normal course of business. Since June 1, 2000 the Company has been in
        the exploration state. The Company has not realized any revenue from its present
        operations. During the year ended May 31, 2007, the Company incurred a loss of $295,288 and
        has an accumulated deficit of $23,321,949 at May 31, 2007. These conditions raise
        substantial doubt about the Company's ability to continue as a going concern.

The
        Company's ability to continue as a going concern is dependent on its ability to develop its
        natural resource properties and ultimately achieve profitable operations and to generate
        sufficient cash flow from financing and operations to meet its obligations as they become
        payable. The Company expects that it will need approximately $411,000 to fund its
        operations during the next twelve months which will include property option payments,
        exploration of its properties as well as the costs associated with maintaining an office.
        The Company currently has sufficient cash to fund its planned operations for the next
        twelve months. However, in order to develop its properties, the Company will need to obtain
        financing in the future. Management plans to seek additional capital through private
        placements and public offerings of its common stock. Although there are no assurances that
        management’s plans will be realized, management believes that the Company will be
        able to continue operations in the future. Accordingly, no adjustment relating to the
        recoverability and classification of recorded asset amounts and the classification of
        liabilities has been made to the accompanying financial statements in anticipation of the
        Company not being able to continue as a going concern.

NOTE 3
        – SIGNIFICANT ACCOUNTING POLICIES

Management’s Estimates and Assumptions

The
        preparation of financial statements in conformity with generally accepted accounting
        principles requires management to make estimates and assumptions that affect the reported
        amounts of assets and liabilities and disclosure of contingent assets and liabilities at
        the date of the financial statements and the reported amounts of revenues and expenses
        during the reporting period. Actual results could differ from those estimates.



F -
        13



---



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 to the
        extent the funds are not being held for investment purposes.

Foreign
        Currency

Prior to
        the quarter ending August 31, 2003, the Company’s primary functional currency was the
        Canadian dollar. During, the quarter ended August 31, 2003, the Company underwent
        significant changes in its operations. Prior to May 31, 2000, the company was in the
        business of producing ostrich meat in Canada. Subsequently, on June 1, 2000, the Company
        ceased operations and remained dormant until June 2003, when the Company decided to enter
        the mining industry in the United States. Due to the change in direction of the Company the
        majority of its operations and transactions would be located in the United States and the
        majority of the transaction would be in U.S. dollars. This was considered “a
        significant change in economic facts and circumstances” per SFAS 52, Appendix A and
        thus the Company changed its functional currency from the Canadian dollar to the U.S.
        dollar.

The
        Company’s functional currency is the U.S. dollar. However, the Company still has a
        few transactions with Canadian suppliers. Transaction gains and losses are included in
        income.

Concentration of Credit Risk

The Company
        has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts,
        options contracts or other foreign hedging arrangements. The Company maintains the majority
        of its cash balances with one financial institution in the form of demand
        deposits.

Loss per
        Share

Net income
        (loss) per share is computed by dividing the net income by the weighted average number of
        shares outstanding during the period. As of May 31, 2007, the company has outstanding
        options and warrants of 1,385,000 and 3,456,000, respectively of which 1,051,667 and
        2,592,000 are exercisable. The effects of the Company’s common stock equivalents are
        anti-dilutive for May 31, 2007 and 2006 and are thus not presented.

Comprehensive Income

The Company
        has adopted SFAS No. 130, “Reporting Comprehensive Income”, which establishes
        standards for reporting and display of comprehensive income, its components and accumulated
        balances. The Company has disclosed this information on its Statement of Operations.
        Comprehensive income is comprised of net income (loss) and all changes to capital deficit
        except those resulting from investments by owners and distribution to owners.

Stock
        Options



Effective
        June 1, 2006, the company adopted the provisions of SFAS No. 123(R). SFAS
        No. 123(R) requires employee equity awards to be accounted for under the fair value
        method. Accordingly, share-based compensation is measured at grant date based on the fair
        value of the award. Prior to June 1, 2006, the company accounted for awards granted to
        employees under its equity incentive plans under the intrinsic value method prescribed by
        Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock
        Issued to Employees” (APB 25), and related interpretations, and provided the required
        pro forma disclosures prescribed by SFAS No. 123, “Accounting for Stock-Based
        Compensation” (SFAS No. 123), as amended. No stock options were granted to
        employees during the years ended May 31, 2007 or 2006 and accordingly, no compensation
        expense was recognized under APB No. 25 for the years ended May 31, 2007 or 2006. In
        addition, no compensation expense is required to be recognized under provisions of SFAS No.
        123(R) with respect to employees.



Under the
        modified prospective method of adoption for SFAS No. 123(R), the compensation cost
        recognized by the company beginning on June 1, 2006 includes (a) compensation cost for
        all equity incentive awards granted prior to, but not yet vested as of June 1, 2006,
        based on the grant-date fair value estimated in accordance with the original provisions of
        SFAS No. 123, and (b) compensation cost for all equity incentive awards granted
        subsequent to June 1, 2006, based on the grant-date fair value estimated in accordance
        with the provisions of SFAS No. 123(R). The



F -
        14



---



company
        uses the straight-line attribution method to recognize share-based compensation costs over
        the service period of the award. Upon exercise, cancellation, forfeiture, or expiration of
        stock options, or upon vesting or forfeiture of restricted stock units, deferred tax assets
        for options and restricted stock units with multiple vesting dates are eliminated for each
        vesting period on a first-in, first-out basis as if each vesting period was a separate
        award. To calculate the excess tax benefits available for use in offsetting future tax
        shortfalls as of the date of implementation, the company followed the alternative
        transition method discussed in FASB Staff Position No. 123(R)-3.



During the
        year ended May 31, 2007 no stock options were granted to non-employees. Accordingly, no
        stock-based compensation expense was recognized for new stock option grants in the
        Statement of Operations and Comprehensive Loss at May 31, 2007.



Compensation expense for unvested options granted to non-employees in
        previous periods is revalued at each period end and is being amortized over the vesting
        period of the options. As a result of amortizing and revaluing common stock option expense
        for unvested options granted in the year ended May 31, 2006, an additional $26,611 in
        stock-based compensation has been recognized in the Statement of Operations at May 31,
        2007.

Exploration and Development Costs

On June 1,
        2000, the Company ceased operations and until June 2003 conducted minimal administrative
        activities. The Company has been in the exploration state since that time and has not yet
        realized any revenue from its planned operations. It is primarily engaged in the
        acquisition, exploration and development of mining properties. Mineral exploration costs
        and payments related to the acquisition of the mineral rights are expensed as incurred.
        When it has been determined that a mineral property can be economically developed as a
        result of establishing proven and probable reserves, the costs incurred to acquire and
        develop such property will be capitalized. Such costs will be amortized using the
        units-of-production method over the estimated life of the probable reserve.

Advertising Costs

Advertising
        costs are expensed as incurred. There were no advertising expenses for the years ended May
        31, 2007 and 2006.



Office Equipment and Furniture



Equipment and furniture are recorded at cost and depreciated using the
        straight-line method over the estimated useful lives of the assets which range from three
        to five years.



Equipment and Furniture consist of the following:

                    

                    May 31,2007

                    

                    

                    2006Equipment

                    $

                    645

                    

                    $

                    645Furniture

                    

                    3,548

                    

                    

                    3,5484,193

                    

                    

                    4,193Less accumulated depreciation

                    

                    (2,444

                    )

                    

                    (1,047)Total

                    $

                    1,749

                    

                    $

                    3,146




Depreciation expense for the years ended May 31, 2007 and
                        2006 was $1,397 and $1,047, respectively.




Fair
        Value of Financial Instruments



The
        carrying value of the Company's financial instruments, including receivables, prepaids,
        accounts payable, and accrued liabilities, at May 31, 2007 and 2006 approximates their fair
        values due to the short-term nature of these financial instruments.



New
        Accounting Pronouncements



SFAS
        No. 155



F -
        15



---



In
        February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial
        Instruments — an Amendment of FASB Statements No. 133 and 140”. Among other
        things, SFAS No. 155 permits the election of fair value re-measurement for certain hybrid
        financial instruments that would otherwise require bifurcation under Statement 133,
        Accounting for Derivative Instruments and Hedging Activities. These hybrid financial
        instruments would include both assets and liabilities. SFAS No. 155 is effective for
        fiscal years beginning after September 15, 2006. The Company has determined the adoption of
        this pronouncement will not have a material impact on the Company’s financial
        statements.



SFAS
        No. 154



In June
        2005, the FASB issued Statement of Financial Accounting Standard 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”). The Statement applies to all
        voluntary changes in accounting principle, and changes the requirements for accounting for
        and reporting of a change in accounting principle. SFAS 154 requires retrospective
        application to prior periods’ financial statements of a voluntary change in
        accounting principle unless it is impracticable. SFAS 154 requires that a change in method
        of depreciation, amortization, or depletion for long-lived, non-financial assets be
        accounted for as a change in accounting estimate that is affected by a change in accounting
        principle. Opinion 20 previously required that such a change be reported as a change in
        accounting principle. SFAS 154 is effective for accounting changes and corrections of
        errors made in fiscal years beginning after December 15, 2005. The Company has
        determined the adoption of this pronouncement did not have a material impact on the
        Company’s financial statements.



SFAS
        No. 157



In
        September 2006, the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standard (“SFAS”) No. 157, “Fair Value
        Measurements” (“FAS 157”). FAS 157 defines fair value, establishes a
        framework for measuring fair value in accordance with generally accepted accounting
        principles, and expands disclosures about fair value measurements. The provisions of FAS
        157 are effective fiscal years beginning after November 15, 2007. The Company has
        determined the adoption of this pronouncement will not have a material impact on the
        Company’s financial statements.



FIN
        48



In June
        2006, FASB issued interpretation No. 48, “Accounting for Uncertainty in Income
        Taxes-an interpretation of FASB Statement No. 109 (FAS No. 109)” (“FIN
        48”). This interpretation prescribes a recognition threshold and measurement
        attribute for tax positions taken or expected to be taken in a tax return. This
        interpretation also provides guidance on de-recognition, classification, interest and
        penalties, accounting in interim periods, disclosure and transition. FIN 48 uses a two-step
        approach for evaluating tax positions. The first step, recognition, occurs when an
        enterprise concludes that a tax position, based solely on its technical merits, is more
        likely than not to be sustained upon examination. The second step, measurement, is only
        addressed if the recognition threshold is met; under this step, the tax benefit is measured
        as the largest amount of the benefit, determined on a cumulative probability basis, that is
        more likely than not to be realized upon settlement. FIN 48’s use of the term
        “more likely than not” represents a greater than 50 percent likelihood of
        occurrence. The cumulative effect of applying the provisions of this Interpretation shall
        be reported as an adjustment to the opening balance of retained earnings for fiscal year in
        which the enterprise adopts the Interpretation. FIN 48 is effective for fiscal years
        beginning after December 15, 2006. Earlier application is permitted if the reporting
        enterprise has not publicly issued financial statements, including interim financial
        statements, for that fiscal year. Accordingly, the Company will adopt the provisions of
        this Interpretation in its fiscal 2007 year. The implementation of FIN 48 is not expected
        to have a material impact on its financial statements.



SAB
        108



In
        September 2006, the SEC issued Staff Accounting Bulletin No. 108, "Considering the Effects
        of Prior Year Misstatements when quantifying Misstatements in Current Year Financial
        Statements" ("SAB 108"). SAB 108 requires companies to evaluate the materiality of
        identified unadjusted errors on each financial statement and related financial statement
        disclosure using both the rollover approach and the iron curtain approach. The rollover
        approach quantifies misstatements based on the amount of the error in the current year
        financial statements whereas the iron



F -
        16



---



curtain
        approach quantifies misstatements based on the effects of correcting the misstatement
        existing in the balance sheet at the end of the current year, irrespective of the
        misstatement’s year(s) of origin. Financial statements would require adjustment when
        either approach results in quantifying a misstatement that is material. Correcting prior
        year financial statements for immaterial errors would not require previously filed reports
        to be amended. SAB 108 is effective for fiscal years ending after November 15, 2006. The
        Company has determined that SAB 108 did not have a material impact on its financial
        statements.



In February
        2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and
        Financial Liabilities" ("SFAS 159"). SFAS 159 provides companies with an option to report
        selected financial assets and liabilities at fair value. The objective of SFAS 159 is to
        reduce both complexity in accounting for financial instruments and the volatility in
        earnings caused by measuring related assets and liabilities differently. Generally accepted
        accounting principles have required different measurement attributes for different assets
        and liabilities that can create artificial volatility in earnings. The FASB has indicated
        it believes that SFAS 159 helps to mitigate this type of accounting-induced volatility by
        enabling companies to report related assets and liabilities at fair value, which would
        likely reduce the need for companies to comply with detailed rules for hedge accounting.
        SFAS 159 also establishes presentation and disclosure requirements designed to facilitate
        comparisons between companies that choose different measurement attributes for similar
        types of assets and liabilities. SFAS 159 does not eliminate disclosure requirements
        included in other accounting standards, including requirements for disclosures about fair
        value measurements included in SFAS 157 and SFAS No. 107, "Disclosures about Fair Value of
        Financial Instruments." SFAS 159 is effective for years beginning after November 15, 2007.
        The adoption of this pronouncement is not expected to have an impact on the Company's
        financial position, results of operations or cash flows.

NOTE 4 -
        INCOME TAXES

As of May
        31, 2007, the Company had a net operating loss carryforward for income tax reporting
        purposes of approximately $6,700,000 that may be offset against future taxable income
        through 2026. Current tax laws limit the amount of loss available to be offset against
        future taxable income when a substantial change in ownership occurs. Therefore, the amount
        available to offset future taxable income may be limited. No tax benefit has been reported
        in the financial statements, because the Company believes there is a 50% or greater chance
        the carryforwards will expire unused. Accordingly, the potential tax benefits of the loss
        carryforwards are offset by a valuation allowance of the same amount.

NOTE 5
        – EXPLORATION STATE COMPANY

The Company
        has not begun principal operations and as is common with a company in the exploration
        state, the Company has had recurring losses. Continuation of the Company as a going concern
        is dependent upon obtaining the additional working capital necessary to be successful in
        its planned activity, and the management of the Company has developed a strategy, which it
        believes will accomplish this objective through additional equity funding and long term
        financing, which will enable the Company to operate for the coming year.

NOTE 6 -
        RELATED PARTY TRANSACTIONS

As of May
        31, 2007, all activities of the Company have been conducted by corporate officers from
        either their homes or business offices. There are no commitments for future use of the
        facilities.



On November
        1, 2005, the Company signed a service agreement with its President, Robert Coale. Pursuant
        to the agreement the Company will pay Mr. Coale, beginning November 2005, $2,500 per month
        for his expertise to identify and acquire certain exploration style properties that fit the
        parameters of the Company’s business plan, oversee and manage, as directed by the
        Company, the Company’s exploration programs that will be undertaken from
        time-to-time, and perform all of the duties normally associated with serving as the
        President and Chief Executive Officer of a publicly traded mining company. The service
        agreement shall be for an indefinite term, cancellable in writing by either party with 30
        days written notice. For the years ended May 31, 2007 and 2006 the Company paid $30,000 and
        $17,500 respectively pursuant to this agreement.

NOTE 7 -
        STOCK OPTIONS

Pursuant to
        the 2005 and 2003 Stock Option Plans, grants of shares can be made to employees, officers,
        directors, consultants and independent contractors of non-qualified stock options as well
        as for the grant of stock options to



F -
        17



---



employees
        that qualify as incentive stock options under Section 422 of the Internal Revenue Code of
        1986 (“Code”) or as non-qualified stock options. The Plan is administered by
        the Option Committee of the Board of Directors (the “Committee”), which has,
        subject to specified limitations, the full authority to grant options and establish the
        terms and conditions for vesting and exercise thereof. Currently the entire Board functions
        as the Committee.

In order to
        exercise an option granted under the Plan, the optionee must pay the full exercise price of
        the shares being purchased. Payment may be made either: (i) in cash; or (ii) at the
        discretion of the Committee, by delivering shares of common stock already owned by the
        optionee that have a fair market value equal to the applicable exercise price; or (iii)
        with the approval of the Committee, with monies borrowed from us.

Subject to
        the foregoing, the Committee has broad discretion to describe the terms and conditions
        applicable to options granted under the Plan. The Committee may at any time discontinue
        granting options under the Plan or otherwise suspend, amend or terminate the Plan and may,
        with the consent of an optionee, make such modification of the terms and conditions of such
        optionee’s option as the Committee shall deem advisable.

On May 26,
        2003, the Board of Directors approved a stock option plan whereby 2,546,000 common shares
        have been set aside for employees and consultants to be distributed at the discretion of
        the Board of Directors. On September 22, 2003, the Board of Directors amended the stock
        option plan to allow 3,000,000 additional options. As of May 31, 2007, 5,040,000 stock
        options have been granted to various directors and consultants for an exercise price
        ranging from $.05 to $1.50 per share. An additional 506,000 remain available to be granted
        under the 2003 Plan. In most cases the fair value of the stock issued was higher than the
        exercise price. Compensation expense of $4,892,401 has been recorded in connection with the
        granting of the stock options as of May 31, 2004. No options have been granted under the
        2003 Plan subsequent to May 31, 2004.

On November
        18, 2005, the Board of Directors approved the 2005 stock option plan whereby 2,000,000
        common shares have been set aside under the plan. No options were granted under the 2005
        Plan for the year ended May 31, 2007. For the year ended May 31, 2006, 1,000,000 were
        granted to various directors and consultants for an exercise price of $0.25 per share. The
        Black-Scholes option pricing model was used to calculate to estimate the fair value of the
        options granted. The following assumptions were made:



Risk Free Rate

                    4.24%Expected Life of Option

                    10 yearsExpected Volatility of Stock (Based on Historical
                        Volatility)

                    80.43%Expected Dividend yield of Stock

                    0.00




The
        following table sets forth the options outstanding under the 2003 Plan as of May 31,
        2007:



Available for Grant

                    Options Outstanding

                    Weighted Average Exercise PriceBalance, May 31, 2005

                    256,000

                    635,000

                    $ 0.16Options granted

                    -

                    -

                    -Options cancelled

                    200,000

                    (200,000)

                    $ 0.05Options exercised

                    -

                    -

                    -Balance, May 31, 2006

                    456,000

                    435,000

                    $ 0.24Options granted

                    -

                    -

                    -Options cancelled

                    50,000

                    (50,000)

                    $ 0.05Options exercised

                    -

                    -

                    -Balance, May 31, 2007

                    506,000

                    385,000

                    $ 0.26






F -
        18



---



The
        following table sets forth the options outstanding under the 2005 Plan as of May 31,
        2007:



Available for Grant

                    Options Outstanding

                    Weighted Average Exercise PriceBalance, May 31, 2005

                    -

                    -

                    -Approval of Plan

                    2,000,000

                    -

                    -Options granted

                    (1,000,000)

                    1,000,000

                    $0.25Options forfeited

                    -

                    -

                    -Options exercised

                    -

                    -

                    -Balance, May 31, 2007 and 2006

                    1,000,000

                    1,000,000

                    $0.25




The
        following table summarizes information concerning outstanding and exercisable common stock
        options under the 2003 and 2005 Plans at May 31, 2007:



Exercise Prices

                    Options Outstanding

                    Remaining Contractual Life

                        (in years)

                    Weighted

                        Average

                        Exercise Price

                    Number of Options Currently Exercisable

                    Weighted

                        Average

                        Exercise Price$ 0.05

                    300,000

                    6.08

                    $ 0.05

                    300,000

                    $ 0.05$ 0.25

                    1,000,000

                    8.75

                    $ 0.25

                    666,667

                    $ 0.25$ 0.80

                    5,000

                    6.17

                    $ 0.80

                    5,000

                    $ 0.80$ 1.03

                    80,000

                    6.17

                    $ 1.03

                    80,000

                    $ 1.031,385,000

                    

                    $ 0.25

                    1,051,667

                    $ 0.25




The
        aggregate intrinsic value of stock options outstanding and exercisable at May 31, 2007 were
        each $30,000. No stock options were exercised in 2007.



As of May
        31, 2007, there was a total of $14,490 in unrecognized compensation cost related to all
        options granted and outstanding. This unrecognized compensation cost is expected to be
        recognized over a weighted-average period of approximately 1.75 years.



A
        summary of status of the Company’s unvested stock options as of May 31, 2007 under
        all plans is presented below:



Number

                        of Options

                    Weighted

                        Average

                        Exercise

                        Price

                    Weighted Average

                        Grant Date Fair ValueUnvested at June 1,
                        2005

                    -

                    $       -

                    $        -Granted

                    1,000,000

                    0.25

                    0.21Vested

                    (250,000)

                    0.25

                    0.21Unvested at May 31,
                        2006

                    750,000

                    0.25

                    0.21Granted

                    -

                    -

                    -Vested

                    (416,667)

                    0.25

                    0.21Cancelled

                    -

                    -

                    -Unvested at May 31,
                        2007

                    333,333

                    $       0.25

                    $        0.21






F -
        19



---





NOTE 8 -
        WARRANTS

On July 25,
        2003, the Company issued 350,000 Class A warrants, 350,000 Class B warrants, 350,000 Class
        C warrants, and 350,000 Class D warrants. Each warrant is exercisable, commencing October
        25, 2003, for a period of three years at a price of $1.40, $1.45, $1.50 and $1.55,
        respectively, for one share of common stock. The warrants were determined to have no value
        at the time of their issuance. The shares and warrants were issued to three non-US
        residents.

On November
        27, 2003, the Company issued 864,000 Class A warrants, 864,000 Class B warrants, 864,000
        Class C warrants, and 864,000 Class D warrants. The Class A warrants are exercisable on
        November 27, 2004 for a period of five years at an exercise price of $1.40 per share of
        common stock; the Class B warrants are exercisable on November 27, 2005 for a period of
        four years at an exercise price of $1.45; the Class C warrants are exercisable on November
        27, 2006 an at exercise price of $1.50; and the Class D warrants became exercisable on
        November 27, 2007 at an exercise price of $1.55. The Company has the right, in its sole
        discretion, to accelerate the exercise date of the warrants, to decrease the exercise price
        of the warrants and/or extend the expiration date of the warrants. The warrants were
        determined to have no value at the time of their issuance. The shares and warrants were
        issued to three non-US residents.



The following table sets forth common share purchase warrants outstanding as
        of May 31, 2007:



Warrants OutstandingBalance, May 31, 2006 and 2005

                    

                    4,856,000Warrants granted

                    

                    -Warrants expired

                    

                    (1,400,000)Balance, May 31, 2007

                    

                    3,456,000




The following table lists the common share warrants outstanding at May 31,
        2007. Each warrant is exchangeable for one common share.



Number Outstanding

                    Exercise

                        Price

                    Weighted Average Contractual Remaining Life
                        (years)

                    Number Currently Exercisable

                    Exercise

                        Price864,000

                    $ 1.40

                    2.50

                    864,000

                    $ 1.40864,000

                    $ 1.45

                    2.50

                    864,000

                    $ 1.45864,000

                    $ 1.50

                    2.50

                    864,000

                    $ 1.50864,000

                    $ 1.55

                    2.50

                    -

                    $ 1.553,456,000

                    

                    

                    2,592,000




NOTE 9 -
        COMMON STOCK TRANSACTIONS

The Company
        was incorporated to allow for the issuance of up to 100,000,000 shares of $.001 par value
        common stock (as amended). At inception, the Company issued 7,600,000 shares of common
        stock to its officers and directors for services performed and payments made on the
        Company’s behalf during its formation. This transaction was valued at approximately
        $.001 per share or an aggregate approximate $1,000.

On February
        8, 1999, to provide initial working capital, the Company authorized a private placement
        sale of an aggregate of 7,600,000 (1,000,000 pre-split) shares of common stock at
        approximately $.05 per share. The private placement was completed April 1, 1999 and
        7,630,400 shares were issued for approximately $50,200 in proceeds to the Company which
        were primarily used to pay operating expenses.

On June 12,
        2003, the previous President of the Company, returned 5,320,000 (700,000 pre-split) shares
        of common stock to the Company.



F -
        20



---



On July 25,
        2003, the Company issued 350,000 shares of common stock and 1,400,000 warrants for $367,500
        in cash to three individuals. Shares and warrants were issued for $1.05 per share. The
        warrants were determined to have no fair value at the time of their issuance and thus none
        of the proceeds were allocated to the warrants.

On
        September 2, 2003, the Company’s previous president converted his 13,500,000 shares
        of preferred stock into 13,500,000 shares of common stock. On January 24, 2004,
        Mr. Johnstone transferred 3,000,000 common shares to each of the three directors.
        Compensation expense of $16,254,000 was record in connection with the transfer.

During
        September, October and November 2003, 3,075,000 common shares were issued to various
        directors and consultants in connection with the exercising of stock options for $1,710,225
        in cash. The exercise price ranged from $0.05 to $1.50.

On November
        27, 2003, the Company issued 864,000 shares of common stock and 3,456,000 warrants for
        $1,080,000 in cash to three individuals. Shares and warrants were issued for $1.25 per
        share. The warrants were determined to have no fair value at the time of their issuance and
        thus none of the proceeds were allocated to the warrants.

During the
        quarter ending February 29, 2004, 245,000 common shares were issued in connection with the
        exercising of stock options for cash of $189,600. The exercise price ranged from $0.75 to
        $1.03.

During
        March and April 2004, 1,335,000 common shares were issued in connection with the exercising
        of stock options for cash of $1,837,500. The exercise price ranged from $0.75 to
        $1.50.



On March
        10, 2006 the Company granted stock options to Mr. Robert Coale, who is the President, Chief
        Executive Officer, Secretary, and Treasurer, and a director and to Mr. Robert Sibthorpe who
        is a director of the Company. In consideration therefor, Mr. Coale, Mr. Sibthorpe and the
        Company entered into a Buy-Back Option Agreements, pursuant to which Messrs. Coale and
        Sibthorpe granted to the Company the option to purchase all or any portion of the 3,000,000
        shares of the Company’s common stock that are owned by each of Mr. Coale and Mr.
        Sibthorpe respectively for a purchase price of $0.01 per share.



Also on
        March 10, 2006, the Registrant entered into a Redemption Agreement with Ronald Blomkamp,
        the Company’s former President and Chief Executive Officer pursuant to which the
        Company purchased from Mr. Blomkamp the 3,000,000 shares of the Company’s common
        stock that were owned by Mr. Blomkamp. The purchase price for such shares paid to Mr.
        Blomkamp by the Company was $0.01 per share, which amounted to an aggregate of $30,000. The
        purchased shares were returned to treasury and cancelled.



On January
        12, 2007 the Company settled the outstanding balance of its Subscriptions Receivable of
        $79,000. The two shareholders returned the underlying 55,000 shares of common stock to the
        Company in settlement of the balance of $79,000. The shares were then cancelled by the
        Company.

NOTE 10 -
        PREFERRED STOCK

The Company
        has authorized a total of 20,000,000 shares of Preferred Stock with a par value of $.001.
        As of May 31, 2007, there are no preferred shares outstanding.

The
        Corporation is under no obligation to pay dividends on the Series A Redeemable Preferred
        Stock, and the stock is redeemable at the option of the Company.

In the
        event of any liquidation, dissolution or winding-up of the Corporation, the holders of
        outstanding shares of Series A Preferred shall be entitled to be paid out of the assets of
        the Corporation available for distribution to shareholders, before any payment shall be
        made to or set aside for holders of the Common Stock, at an amount of $.001 plus any unpaid
        and accrued dividends per share.

A holder of
        Series A Preferred has the right to one vote per share in the case of matters provided for
        in the General Corporation Law of the State of Nevada or the Amended and Restated Articles
        of Incorporation or Bylaws to be voted on by the holders of the Series A Preferred Stock as
        a separate class. In the case of matters to be voted on by the holders of Common Stock and
        the holders of Series A Preferred voting together as a single class, each share of Series A
        Preferred, has full voting rights and powers equal to the voting rights and powers of the
        holders of the Common Stock.



F -
        21



---



On June 11,
        2003, the Company issued 13,500,000 Series A shares of preferred stock to its president for
        services rendered and recorded $13,500 in consulting expenses. The Series A shares have
        non-cumulative dividends of 7% of the redemption price when declared by the Board. On
        September 2, 2003, the Company’s previous president converted his 13,500,000 shares
        of preferred stock into 13,500,000 shares of common stock.

NOTE 11 -
        STOCK SPLITS

On June 17,
        2003, the Company approved a forward split at a rate of one for seven and six-tenths so
        that each share of common stock was equal to 7.6 shares. All references to shares in the
        accompanying financial statements have been adjusted for the stock split.



On November
        17, 2006, the Company held a special meeting (the "Meeting") of the shareholders, pursuant
        to a proxy statement that it filed with the Securities and Exchange Commission and that it
        had furnished to holders of record of the outstanding shares of its common stock as of
        October 20, 2006. At the Meeting, the Board of Directors received approval from a majority
        of the Company’s shareholders of the following matters: (1) grant of discretionary
        authority to the Board of Directors to implement either of the following: (a) a reverse
        stock split of the common stock on the basis of one post-consolidation share for up to each
        ten pre-consolidation shares to occur at some time within twelve months of the date of the
        shareholders’ meeting, with the exact time of the reverse split to be determined by
        the Board of Directors, or (b) a forward stock split of the common stock on the basis of up
        to three post-split shares for each one pre-split share to occur at some time within twelve
        months of the date of the shareholders’ meeting, with the exact time of the forward
        split to be determined by the Board of Directors; and (3) the increase of the number of
        authorized shares of the common stock from 100,000,000 shares, par value $0.001, to
        200,000,000 shares, par value $0.001, should the Board of Directors implement a forward
        stock split as previously described. Our Directors believe that shareholder approval of a
        range for the exchange ratio of the reverse or forward splits (as contrasted with approval
        of a specified ratio of the split) provides the Board of Directors with maximum flexibility
        to achieve the purposes of a stock split, and, therefore, is in the best interests of our
        shareholders. The actual ratio for implementation of the reverse or forward split would be
        determined by our Board based upon its evaluation as to what ratio of pre-split shares to
        post-split shares would be most advantageous to our shareholders. Our Board of Directors
        also believes that, should it determine to implement a forward stock split as described
        above, it would be necessary to increase the number of authorized shares of common stock in
        order to provide the Company with the flexibility to issue common stock without further
        action by the Company's stockholders. As of the date of this report, the Board of Directors
        has not yet decided on what action, if any, to take.

NOTE 12 -
        MINERAL PROPERTIES

Bruner
        and Vernal Properties

The Company
        has an agreement with Minquest, Inc. which gives them the right to purchase 100% of the
        mining interests of two Nevada mineral exploration properties currently controlled by
        MinQuest, a natural resource exploration company. Together, these two properties consist of
        28 mining claims on a total of 560 acres in the northwest trending Walker Lane located in
        western Nevada.

In order to
        earn a 100% interest in these two properties, the Company must pay MinQuest, Inc. and incur
        expenditures relating to mining operations in accordance with the following schedule: (i)
        on or before July 25, 2004, $20,000 to MinQuest and $75,000 in expenditures; (ii) on or
        before July 25, 2005, $20,000 to MinQuest and an additional $100,000 in expenditures; (iii)
        on or before July 25, 2006, $20,000 to MinQuest and an additional $100,000 in expenditures;
        (iv) on or before July 25, 2007, $20,000 to MinQuest and an additional $100,000 in
        expenditures; and (v) on or before July 25, 2008, an additional $125,000 in expenditures.
        If the Company has not incurred the requisite expenditures to maintain the option in good
        standing, the Company has a 60-day period subsequent to July 25th to make such
        payment along with such amount which shall be deemed to have been an expenditure incurred
        by us during such period. Since the payment obligations are non-refundable, if the Company
        does not make any payments, it will lose any payments made and all our rights to the
        properties. If all said payments are made, then the Company will acquire all mining
        interests in the properties, subject to MinQuest retaining a 3% royalty of the aggregate
        proceeds. The Company has the right at any time to discontinue making the payments if the
        exploration is determined to be unfeasible.

Moss
        Property



F -
        22



---



The Moss
        Property consists of 63 unpatented claims and 15 patented claims. The property has been
        acquired from various individuals and on various dates as noted below.



On
        November 14, 2003 the Company entered into a letter of intent to acquire a single patented
        claim from Gregory Gintoff. The total purchase price of $50,000 was made in two
        installments of $10,000 in December 2003 and $40,000 in February 2004.

On February
        19, 2004, the Company executed a formal agreement to purchase 100% mining interest in six
        patented mining claims making up the Williams portion of the Moss Property located in the
        historic Oatman gold mining district for $350,000. On February 27, 2004, $25,000 was paid
        in connection with this agreement and three months after signing, on June 14, 2004, an
        additional $25,000 was paid. On or before the 6-month anniversary from when we signed the
        definitive agreement, the balance of $300,000 was due to the sellers. On August 27, 2004,
        the Company paid the final $300,000 to the sellers.

On March 4,
        2004, the Company signed an agreement that allowed it to acquire a 100 percent interest in
        62 unpatented claims contiguous to the 15 patented claims at the Moss Property. The Company
        acquired these claims from MinQuest Inc for a one time lease fee of $50,000. The fee of
        $50,000 was paid on July 7, 2004.



On
        January 18, 2005 the Company completed the acquisition of a single patented claim from an
        individual for $150,000.



The
        Company acquired five patented claims from Ramon and Edna Martinez for a total of $150,000.
        The Company made one payment of $75,000 on November 8, 2004 and made the final payment of
        $75,000 on February 14, 2005.



On
        January 18, 2005, the Company made a single payment of $25,000 to acquire two patented
        claims known as the Ruth and Rattan claims.

As of May
        31, 2007, these properties are unproven and all amounts paid in connection with the
        acquisition of these rights and for expenditures in exploration of these properties have
        been expensed.



F -
        23









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SIGNATURES



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



PATRIOT GOLD CORP.Dated: August 24, 2007

                    By: /s/ Robert CoaleName: Robert CoaleTitle: Chairman, President, Chief Executive Officer, Chief
                        Operating Officer, Secretary, and Director












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