---

|SECURITIES AND EXCHANGE COMMISSION
|----------------------------------
|Washington, D.C. 20549            
|FORM 20-F                         

(Mark One)

_  Registration statement
pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934

or

xAnnual
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934

For the fiscal year endedMarch 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 0-30462

VANNESSA VENTURES LTD.(Exact Name of
Registrant as Specified in its Charter)

NOT APPLICABLE(Translation of Registrants Name into English)

British Columbia, Canada(Jurisdiction of Incorporation or Organization)

Suite 220, 1010 - 1st Street SW, Calgary, Alberta, Canada,
T2R 1K4(Address of Principal Executive Offices)

Securities registered or to be registered pursuant to
Section 12(b) of the Act:

|                    | Name of Each Exchange
|------------------- | ---------------------
|Title of Each Class | on Which Registered  
|                    |                      
|N/A                 | N/A                  

Securities registered or to be registered pursuant to
Section 12(g) of the Act:

Common Shares Without Par Value(Title of
Class)

Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act:

|N/A             
|----------------
|(Title of Class)

Indicate the number of outstanding shares of each of the
issuers classes of capital stock as of March 31, 2007:

97,364,353 Common Shares

---



Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.

YES X     NO
__

Indicate by check mark which financial statement item the
registrant has elected to follow.

ITEM 17 X    
ITEM 18 __

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.

NOT APPLICABLE

---



TABLE OF CONTENTS

|PART
      I   |                                                                                    | PAGE
|-------------- | ---------------------------------------------------------------------------------- | ----
|ITEM
      1   | Identity
      of Directors, Senior Management and Advisors                        | 1   
|ITEM
      2   | Offer
      Statistics and Expected Timetable                                      | 1   
|ITEM
      3   | Key
      Information                                                              | 2   
|ITEM
      4   | Information
      on the Company                                                   | 9   
|ITEM
      5   | Operating
      and Financial Review and Prospects                                 | 33  
|ITEM
      6   | Directors,
      Senior Management and Employees                                   | 42  
|ITEM
      7   | Major
      Shareholders and Related Party Transactions                            | 51  
|ITEM
      8   | Financial
      Information                                                        | 56  
|ITEM
      9   | The
      Offer and Listing                                                        | 58  
|ITEM
      10  | Additional
      Information                                                       | 60  
|ITEM
      11  | Quantitative
      and Qualitative Disclosure about Market Risk                    | 73  
|ITEM
      12  | Description
      of Securities Other than Equity Securities                       | 73  
|PART
      II  |                                                                                    | PAGE
|ITEM
      13  | Defaults,
      Dividend Arrearages and Delinquencies                              | 73  
|ITEM
      14  | Material
      Modifications to the Rights of Security Holders and Use of Proceeds | 73  
|ITEM
      15  | Controls
      and Procedures                                                      | 74  
|ITEM
      16A | Audit
      Committee Financial Expert                                             | 74  
|ITEM
      16B | Code
      of Ethics                                                               | 74  
|ITEM
      16C | Principal
      Accountant Fees and Services                                       | 74  
|ITEM
      16D | Exemptions
      from the Listing Standards for Audit Committees                   | 75  
|ITEM
      16E | Purchases
      of Equity Securities by the Issuer and Affiliated Purchasers       | 75  
|PART
      III |                                                                                    | PAGE
|ITEM
      17  | Financial
      Statements                                                         | 76  
|ITEM
      18  | Financial
      Statements                                                         | 77  
|ITEM
      19  | Exhibits                                                                           | 77  

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The information contained in this
Annual Report on Form 20-F for the fiscal year ended March 31, 2007 (the 2007
Form 20-F) of Vannessa Ventures Ltd. (the Company) is current at August 28,
2007 except where a different date is specified.

Unless otherwise specified, all monetary amounts are expressed
in Canadian dollars.

Financial information is
presented in accordance with accounting principles generally accepted in Canada.
Differences between accounting principles generally accepted in Canada and in
the United States, as applicable to the Company, are set forth in Note 15 to the
accompanying audited consolidated financial statements of Vannessa Ventures
Ltd.

The following table sets forth
certain standard conversions from the International System of Units (metric
units) to the Standard Imperial Units:

Conversion TableMetric
    
    Imperial1.0
      millimetre (mm)
    =
    0.039
      inches (in)1.0
      metre (m)
    =
    3.28
      feet (ft)1.0
      kilometre (km)
    =
    0.621
      miles (mi)1.0
      hectare (ha)
    =
    2.471
      acres (ac)1.0
      gram (g)
    =
    0.032
      troy ounces (oz)1.0
      metric tonne (t)
    =
    1.102
      short tons (ton)1.0
      g/t
    =
    0.029
      oz/ton


i

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Glossary of Terms

acanthite is a mineral. It is the most important
  silver ore next to galena.

alluvial means of or pertaining to material
  deposited by a stream along its course.

alluvium refers to a deposit of sediment left
  by a stream on the streams channel or floodplain.

amphibolite refers to a metamorphic rock composed
  mainly of amphibole, generally with an oriented fabric.

andesite refers to a dark-colored, fine-grained
extrusive rock that when porphyritic, contains phenocrysts composed primarily of
zoned acid plagioclase (especially andesine) and one or more of the mafic
minerals (e.g., biotite, hornblende, pyroxene) and a groundmass composed
generally of the same minerals as the phenocrysts.

anomaly refers to a geological, geochemical or
geophysical event that is considered prospective and appreciably different from
the surrounding background.

Archean refers to the period of time from the
consolidation of the Earths crust to the base of the Cambrian. The terms
Precambrian, Proterozoic and Azoic have been used either as synonyms or partial
synonyms.

Au refers to gold.

auger is any of various hand tools, typically having a
threaded shank and cross handle, used for boring holes in wood or ice.

auriferous means gold-bearing.

basal means of, relating to, located at, or forming a
base.

basalt refers to a fine-grained, sometimes glassy
basic volcanic rock. Basalts are generally found in the form of lava flows which
may be extensive and are often erupted from fissures and sometimes from
central-type vents.

BCA refers to the British Columbia Business
Corporations Act which became effective on March 29, 2004 and replaced the
British Columbia Company Act.

brecciarefers to a rock consisting of sharp fragments
embedded in a fine-grained matrix (such as sand or clay).

chalcopyrite is a mineral whose formal name is copper
iron sulfide. It is a major ore of copper. Chalcopyrite is a common mineral and
is found in almost all sulfide deposits.

clasticsare made up of fragments of pre-existing
rocks.

cmrefers to centimetres.

colluvial or colluvium is a general term
applied to any loose, heterogenous and incoherent mass of soil material or rock
fragments deposited chiefly by mass-wasting, usually at the base of steep slope
or cliff.

Commission refers to the British Columbia
  Securities Commission.

common shares refers to the common shares
  in the capital of the Company.

Company refers to Vannessa Ventures Ltd. or
  its predecessor companies, as applicable.

ii

---



covellite is a mineral whose formal name is copper
sulfide. Its uses are as a minor ore of copper and as mineral specimens.

ct refers to carats, a unit of weight for diamonds
equivalent to 0.2 of a gram (0.007054 of an ounce).

CVG refers to Corporación Venezolana de Guyana,
Venezuelas state-run mining and minerals company.

dacite is a light gray volcanic rock containing a
mixture of plagioclase and other crystalline minerals in glassy silica, similar
in appearance to rhyolite.

deposit ormineralized material refers to a
mineralized body which has been delineated by appropriately drilling and/or
underground sampling to support a sufficient tonnage and average grade of
metal(s). Under SEC standards, such a deposit does not qualify as a reserve
until a comprehensive evaluation based upon unit cost, grade, recoveries and
other factors conclude economic feasibility.

diabase is a dark-gray to black, fine-textured igneous
rock composed mainly of feldspar and pyroxene and used for monuments and as
crushed stone.

diamond refers to a cubic variety or crystalline
carbon which may be of gem quality.

diamondiferous refers to rock or alluvial material
containing or yielding diamonds.

epidoteis a mineral with the formal name of calcium
aluminum iron silicate hydroxide. Its uses are typically that of a mineral
specimen and rarely as a gemstone. Epidote, while not general known for
exceptional crystals can produce some magnificent specimens. Its unique green
color which is often described as pistachio, is quite striking in well colored
specimens.

exploration stage refers to the stage where a company
is engaged in the search for minerals deposits (reserves) which are not in
either the development or production stage.

felsic pertains to or containing a group of
light-colored silicate minerals that occur in igneous rocks.

gabbro refers to a rock that is coarse grained igneous
rock and the plutonic equivalent of the volcanic basalts.

goethite is a mineral known as hydrated iron oxide.
Its chemical formula is FeO(OH). It is an important ore of iron.

granite is a common, coarse-grained, light-colored,
hard igneous rock consisting chiefly of quartz, orthoclase or microcline, and
mica, used in monuments and for building.

g/t refers to grams per tonne.

ilmenite refers to a usually massive iron-black
mineral composed of iron, titanium, and oxygen that is a titanium ore.

lapilli is a small, solidified fragment of lava.

laterite refers to the hard subsurface deposit of
oxides of aluminum and iron found in tropical soils where the water table
fluctuates with seasonal changes in precipitation.

m refers to metres.

magnetite is a natural magnet. Its chemical formula is
Fe3O4, also known as iron oxide. It forms a major
component of iron ore.

metamorphic refers to a process through which a rock
undergoes chemical or structural changes. Heat, pressure, or a chemical reaction
may cause such changes.

iii

---



mineralogy is the study of naturally occurring,
usually inorganic, solid consisting of either a single element or a compound,
and having a definite chemical composition and a systematic internal arrangement
of atoms.

Miocene refers to the geologic time, rock series, or
sedimentary deposits of the fourth epoch of the Tertiary Period, characterized
by the development of grasses and grazing mammals.

muscovite refers to a miceous mineral occurring as
plates which are flexible and elastic.

NSR refers to net smelter return which is calculated
based on the gross revenue of a tonne of metal less smelting and transportation
cost.

Oligocene refers to the geologic time, rock series, or
sedimentary deposits of the third epoch of the Tertiary Period, characterized by
further development of modern mammalian fauna, including the rise of the true
carnivores and their gradual replacement of the creodonts.

paleochannel refers to an old watercourse, usually
buried.

phyllite refers to an argillaceous rock commonly
formed by regional metamorphism and intermediate in metamorphic grade between
slate and mica schist.

Precambrian refers to the geologic time period between
Hadean Time and the Cambrian Period, often subdivided into the Archean and
Proterozoic eras, comprising most of the earths history and marked by the
appearance of primitive forms of life.

Proterozoic refers to the latter of the two divisions
of Precambrian time, from approximately 2.5 billion to 570 million years ago, a
period marked by the buildup of oxygen and the appearance of the first
multicellular eukaryotic life forms.

pyrite is a mineral whose formal name is iron
sulfide. Its chemical composition is FeS2. Its uses are as a very minor ore of sulfur for sulfuric acid.

pyroclastic means of or pertaining to rock fragments
formed in a volcanic eruption.

pyroclastics refer to particles and chunks of igneous
rock ejected from a volcanic vent during an eruption.

regolith is the layer of loose rock resting on
bedrock, constituting the surface of most land.

saprolite refers to surface rock which has undergone
various changes as a result of weathering, including changes in volume and loss
of other minerals in the original rock structure.

schist refers to a regionally metamorphosed rock
characterized by a parallel arrangement of the bulk of the constituent
minerals.

stockworks refers to a mineral deposit in
  the form of a network of veinlets diffused in the country rock.

stratigraphy is the study of rock strata,
  especially the distribution, deposition, and age of sedimentary rocks.

tailings are refuse or dross remaining after
  ore has been processed.

tetrahedrite is a grayish-black mineral known as
copper antimony sulfide. It often contains other elements and is used as an ore
of copper.

tuff is a rock composed of compacted volcanic ash
varying in size from fine sand to coarse gravel.

turbidite is a sedimentary deposit formed by a
turbidity current.

iv

---



unconformity refers to a boundary separating two or more rocks of markedly different ages, marking a gap in the geologic record.

veinlet is a small or secondary vein.

v

---



Forward-Looking Statements

This Annual Report on Form 20-F
of Vannessa Ventures Ltd. (the Company) contains forward-looking statements
within the meaning of Section 27A of the U.S. Securities Act of 1933, as
amended, and 21E of the U.S. Securities Exchange Act of 1934, as amended, and
applicable Canadian law, that are intended to be covered by the safe harbor
created by such laws. All statements, other than statements of historical facts,
included in this document, the Companys other filings with the U.S. Securities
and Exchange Commission and Canadian and other regulatory authorities, and in
press releases and public statements by the Companys officers or
representatives, that address activities, events or developments that the
Company expects or anticipates will or may occur in the future, including such
things as financial and operating results and estimates; future business
strategy and plans; legal proceedings involving the Companys Las Cristinas
Project in Venezuela; performance and results of the ongoing feasibility study
at the Companys Cerro Crucitas Project in Costa Rica; the Companys application
to receive environmental approvals to mine the hard rock material at the Cerro
Crucitas Project; estimated completion dates; estimated exploration
expenditures; operations; estimates of reserves and resources; Cerro Crucitas
feasibility study estimates including estimates of cash operating costs, capital
costs, future gold production, cash flows, rates of return, net present value,
pay back periods and other such matters, are forward-looking statements. The
words estimate, plan, anticipate, expect, intend, believe and
similar expressions are intended to identify forward-looking statements. These
statements involve known and unknown risks, uncertainties, assumptions and other
factors which may cause the Companys actual results, performance or
achievements, to be materially different from any results, performance or
achievements expressed or implied by such forward-looking statements. These
factors include, among others, risks related to the Companys status as an
exploration company without operating history; limited experience in placing
mineral deposit properties into production; history of net losses to date and
dependence on outside financing to fund operations; risks arising because the
Company does not hold interests in land or other form of property interest or
title in its properties; the inherently risky nature of exploration activities;
uncertainties concerning reserve and resource estimates; political and other
risks related to the Companys foreign operations including risks from political
and economic instability in Venezuela, Guyana and Costa Rica; risks relating to
the Companys dispute with a Venezuelan state-owned corporation with respect to
the Las Cristinas Project; risks that the Companys interest in the Exploration
Concessions adjacent to the Cerro Crucitas Project in Costa Rica may be impaired
by decree of a national moratorium on new open pit mining; risks relating to the
Companys application for environmental approvals to mine the hard rock material
at the Cerro Crucitas Project; risks relating to fluctuations in the price of
gold; and risks relating to the Companys shares reserved for future issuance
and potential resulting dilution to current stockholders. Please see Item 3.
Key Information  D. Risk Factors. Although the Company has attempted to
identify important factors that could cause actual results to differ materially
from those described in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended. The Company
assumes no obligation to publicly update any forward-looking statements, whether
as a result of new information, future events or otherwise.

PART I

|ITEM 1 | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
      ADVISORS
|------ | -----------------------------------------------------------

This Form 20-F is being filed as
an Annual Report under the Securities Exchange Act of 1934 (the Exchange Act)
and, as such, there is no requirement to provide any information under this
Item.

|ITEM 2 | OFFER STATISTICS AND EXPECTED TIMETABLE
|------ | ---------------------------------------

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

1

---



|ITEM 3 | KEY INFORMATION
|------ | ---------------

|A. | Selected Financial Data
|-- | -----------------------

The following selected financial
data for the Company on the following page should be read in conjunction with
the audited consolidated financial statements and notes attached as a part
hereof. These financial statements have been prepared in accordance with
accounting principles generally accepted in Canada (Canadian GAAP), which
differ in certain respects from those principles that the Company would have
followed had its consolidated financial statements been prepared in accordance
with accounting principles generally accepted in the United States (U.S.
GAAP). The major differences between Canadian GAAP and U.S. GAAP that would
affect the measurement of the Companys financial position, loss or cash flows
are set forth in Note 15 to the accompanying audited consolidated financial
statements of the Company.

Selected Financial Data(CDN$)

|                                                      |   |             |   |   | YEARS ENDED MARCH 31, |   |   |             |  
|----------------------------------------------------- | - | ----------- | - | - | --------------------- | - | - | ----------- | -
|                                                      |   | 2007        |   |   | 2006                  |   |   | 2005        |  
|Interest Income                                       |   | 1,631       |   |   | 4,504                 |   |   | 42,159      |  
|Net Loss                                              |   | (5,376,793  | ) |   | (7,473,975            | ) |   | (5,342,673  | )
|Loss Per Share                                        | $ | (0.06       | ) | $ | (0.09                 | ) | $ | (0.07       | )
|                                                      |   |             |   |   |                       |   |   |             |  
|Cash Used in
      Operating Activities               |   | (4,315,568  | ) |   | (1,787,591            | ) |   | (1,851,932  | )
|Cash Provided by
      (Used in) Investing Activities |   | (5,585,644  | ) |   | (4,324,150            | ) |   | 634,569     |  
|Cash Provided from
      Financing Activities         |   | 8,506,200   |   |   | 6,724,375             |   |   | 2,047,600   |  
|                                                      |   |             |   |   |                       |   |   |             |  
|Total Assets                                          |   | 13,959,261  |   |   | 10,641,877            |   |   | 8,382,237   |  
|Current Liabilities                                   |   | 7,157,516   |   |   | 2,612,481             |   |   | 888,816     |  
|Mineral Properties
      (included in Total Assets)   |   | 9,521,407   |   |   | 7,000,771             |   |   | 6,533,625   |  
|Deficit at End of
      Period                        |   |             |   |   | (45,163,512           | ) |   | (37,689,537 | )
|                                                      |   | (50,540,305 | ) |   |                       |   |   |             |  
|Share Capital ($)                                     |   | 48,976,420  |   |   | 45,470,220            |   |   | 43,100,845  |  
|                                                      |   |             |   |   |                       |   |   |             |  
|Weighted Shares Outstanding at End of Year (#)        |   | 91,716,042  |   |   | 87,258,853            |   |   | 81,471,353  |  

The Company has not declared or paid
any cash dividends during the periods indicated.

Selected Financial Data Adjusted for US
GAAP(CDN$ )

YEARS ENDED MARCH 31,2007
    
    
    2006
    
    
    2005Net Loss
    
    (7,885,193
    )
    
    (7,663,901
    )
    
    (5,406,694
    )Weighted Average
      Number of Shares
    
    91,716,042
    
    
    86,129,983
    
    
    76,875,180Loss Per Share
    $
    (0.09
    )
    $
    (0.09
    )
    $
    (0.07
    )Cash Used in
      Operating Activities
    
    (7,699,916
    )
    
    (4,911,275
    )
    
    (5,311,076
    )Cash Provided by
      (Used in) Investing Activities
    
    (2,201,297
    )
    
    (1,200,466
    )
    
    4,093,715Cash Provided by
      Financing Activities
    
    8,506,200
    
    
    6,724,375
    
    
    2,047,600Mineral Properties
    
    3,950,355
    
    
    4,140,690
    
    
    4,405,626Shareholders Equity
    
    3,388,763
    
    
    755,438
    
    
    4,839,266


2

---



Currency and Exchange Rates

All dollar amounts set forth in this report are in Canadian
dollars, except where otherwise indicated.

1. On August 28, 2007, the noon
buying rate in New York City for cable transfer in Canadian dollars as certified
for customs purposes by the Federal Reserve Bank of New York was $0.9421 U.S. =
$1.00 Canadian.

All exchange rate calculations in
#2 and #3 below are based on the noon buying rate in New York City for cable
transfers in Canadian dollars as certified for customs purposes by the Federal
Reserve Bank of New York.

2. The following table sets forth
the high and low exchange rates for each month during the previous six
months.

| | Month     | 3/07  | 2/07  | 1/07  | 12/06 | 11/06 | 10/06
| | --------- | ----- | ----- | ----- | ----- | ----- | -----
| | High Rate | .8674 | .8632 | .8584 | .8759 | .8868 | .8965
| | Low Rate  | .8467 | .8437 | .8457 | .8581 | .8715 | .8783

3. The following table sets forth
the average exchange rates for each of the past 5 fiscal years, calculated by
using the average of the exchange rates in effect on the last day of each month
during the period indicated.

| |                            |       | Year Ended March 31, |      
| | -------------------------- | ----- | -------------------- | -----
| |                            | 2007  | 2006                 | 2005 
| | Average Rate During Period | .8783 | .8386                | .7872

|B. | Capitalization and
Indebtedness
|-- | -------------------------------

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

|C. | Reasons for the Offer and Use of
  Proceeds
|-- | -------------------------------------------

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

|D. | Risk Factors
|-- | ------------

The following is a brief
discussion of those distinctive or special characteristics of the Companys
operations and industry which may have a material impact on, or constitute risk
factors in respect of, the Companys future financial performance. Due to the
nature of the Companys business and the present stage of exploration on the
Companys properties, the following risk factors apply:

The Company is a mineral exploration
company without operating history.

To date, the Company has had no
revenue from the exploration activities on its properties; the Companys
exploration activities have disclosed a commercially viable mineral deposit.
Studies have identified a reserve at the Companys Crucitas gold project in
Costa Rica and the Company is continuing approval and development activities on
this project. However, even if the Company does continue this activity or
undertake additional development activity on any of its other properties, the
Company may continue to incur losses beyond the period of commencement of such
activity. There is no certainty that the Company will produce revenue, operate
profitably or provide a return on investment in the future.

Depending on the price of any
natural resources produced, the Company may determine that it is impractical to
commence or continue commercial production. There is no certainty that the
expenditures to be made by the Company in the exploration of any of its
properties as described herein will result in discoveries of commercial
quantities of ore. Most exploration projects do not result in the discovery of
commercially mineable deposits of ore.

3

---



The Company has incurred net losses
to date and is dependent on outside financing to fund its operations.

The Company has experienced, on a
consolidated basis, losses in all years of its operations. At March 31, 2007,
the Companys deficit was $50,540,305 (March 31, 2006 - $45,163,512). The
Companys operations do not provide any cash flow. In the past, the Company has
relied on sales of equity securities, loans from its controlling shareholder,
Exploram Enterprises Ltd. (Exploram) and payments from joint venture partners
to meet its cash requirements.

At March 31, 2007, the Company
had a working capital deficiency of $6,628,328 (at March 31, 2006, the Company
had working capital of $709,685).

The exploration of the Companys
properties depends upon the Companys ability to obtain financing through any or
all of the joint venturing of projects, debt financing, equity financing or
other means. Failure to obtain additional financing on a timely basis could
cause the Company to forfeit its interest in its properties or reduce or
terminate its operations on such properties.

Other than property associated
with the Crucitas project in Costa Rica, the Company does not hold interests in
land, or any other form of property interest or title in any properties.

Other than property purchased on,
or near, the Crucitas project in Costa Rica, the Company does not hold interests
in land, or any other form of property interest or title in any of its
properties. The Companys interests in its properties are comprised of exclusive
rights under government licenses and contracts to conduct operations in the
nature of exploration, development and, in due course if warranted, mining, on
the concession areas. Maintenance of the Companys exclusive rights to conduct
operations on its various foreign concessions is subject to ongoing exploration
and development expenditures. The Companys rights with respect to these
concessions are also limited as to time. The Company must develop and mine on a
concession within specified periods in order to maintain its rights with respect
to that concession. Should the Company determine that a property has no economic
merit, then the property is abandoned, all identifiable property costs are
written off and the property reverts back to the government and in Costa Rica
land would be sold.

The Companys exploration activities are inherently
risky.

The business of resource
exploration and extraction involves a high degree of risk. Few properties that
are explored are ultimately developed into production. At present, only the
Companys Crucitas gold project in Costa Rica has a known body of commercial
ore, which the Company is in the process of developing. Unusual or unexpected
formations, formation pressures, fires, power outages, labor disruptions,
flooding, explosions, cave-ins, landslides and the inability to obtain suitable
or adequate machinery, equipment or labor are other risks involved in the
conduct of exploration programs, particularly in the later stages of
exploration. The Company may become subject to liability for pollution, cave-ins
or hazards against which it cannot insure or against which it may elect not to
insure. The Company maintains liability insurance coverage of $2,000,000 per
occurrence with respect to its mineral exploration operations, but no assurance
can be made that such coverage will be sufficient in all situations.

The Company has relied and may
continue to rely on consultants and others for construction and operating
expertise. The economics of developing mineral deposit properties is affected by
many factors, including the cost of operations, variations of the material
extracted, fluctuating natural resource markets, costs of processing equipment
and such other factors as native claims, government regulations, including
regulations relating to royalties, allowable production, importing and exporting
of natural resources and environmental protection. Depending on the price of any
natural resources produced, the Company may determine that it is impractical to
commence or continue commercial production.

The Company is at the
exploration stage and has limited experience in placing mineral deposit
properties into production.

The Company has limited
experience in placing mineral deposit properties into production, and its
ability to do so will be dependent upon using the services of appropriately
experienced personnel or entering into agreements with other major resource
companies that can provide such expertise. There can be no assurance that

4

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the Company will have available to it the necessary expertise
when and if the Company places its mineral deposit properties into
production.

Reserve and resource
calculations are estimates only, subject to uncertainty due to factors including
metal prices, inherent variability of the ore, and recoverability of metal in
the mining process.

There is a degree of uncertainty
attributable to the calculation of reserves and corresponding grades dedicated
to future production. Until reserves are actually mined and processed, the
quantity of ore and grades must be considered as an estimate only. In addition,
the quantity of reserves and ore may vary depending on metal prices. Any
material change in the quantity of reserves, mineralization, grade or stripping
ratio may affect the economic viability of the Companys properties. In
addition, there can be no assurance that gold recoveries or other metal
recoveries in small-scale laboratory tests will be duplicated in larger scale
tests under on-site conditions or during production.

The Companys foreign
operations, including its operations in Venezuela, are subject to additional
inherent risks.

The Companys operations in
Venezuela, Guyana and Costa Rica are subject to political and other risks. Its
mining exploration and development activities may be affected in varying degrees
by the extent of political stability and the nature of various government
regulations relating to the mining industry. Any changes in regulations or
shifts in political conditions are beyond the control of the Company and may
adversely affect its business and/or its holdings. Operations may be affected in
varying degrees by government regulations with respect to restrictions on
production, price controls, export controls, income taxes, expropriation of
property, environmental legislation and safety factors. The Companys material
operations in Venezuela, Guyana and Costa Rica entail significant governmental,
economic, social, medical and other factors common to all developing
countries.

In Venezuela, the Company is
currently in dispute with a state-owned corporation with respect to the Las
Cristinas Project. See  -- The Company is pursuing an interest in the Las
Cristinas Project  below. As well, Venezuela has recently experienced
political unrest in the form of street marches and demands that the current
president hold a referendum to determine whether to remove him from office. An
approximate two-month long general strike commenced in December 2002 and
continued into February 2003. The result of the strike included shortages of oil
and gas supplies in Venezuela and a severe economic downturn. The general strike
in Venezuela ended in early February 2003 but while this had no effect on the
Companys operations in Venezuela, no assurance can be provided that the
Companys operations would be unaffected by future strikes.

A referendum on Hugo Chavezs
presidency was held in Venezuela on August 14, 2005. It marked the latest stage
in an increasingly bitter opposition campaign to unseat the president, who has
already survived a coup, a two-month general strike and a previous attempt to
force a vote on his leadership.

The Company is pursuing a
defense against what the Company believes was an expropriation of its Las
Cristinas Project where the ownership rights are in doubt and in
dispute.

The Company is pursuing a defense
of its ownership rights in the Las Cristinas Project in Venezuela and the
ownership rights are in doubt and in dispute. See Item 4. Information on the
Company -- D. Property, Plant and Equipment -- Venezuela -- Las Cristinas
Project -- Title Dispute and Legal Proceedings -- International Arbitration.
Over the past two years a number of legal actions undertaken by the Company in
defense of its rights to the Las Cristinas project have been either filed in
Venezuelan Court or have been followed up in court proceedings. Although some
rulings were obtained in July of 2004 no significant progress was made during
fiscal year 2004. Consequently, on July 8, 2004 the Company commenced a process
of International Arbitration by filing a document to initiate the process, or
Request (the Request), with the International Centre for Settlement for
Investment Disputes (ICSID) in Washington D.C. The Request claimed that the
Government of Venezuela expropriated the property without compensation and
Vannessa is seeking remedies under the Bilateral Investment Treaty between
Canada in Venezuela. On October 28, 2004, the Secretary-General of the ICSID
registered the Companys Request against the Bolivarian Republic of Venezuela
with respect to the Las Cristinas property. As part of the Arbitration process
the Company suspended all ongoing legal actions with respect to the matter under
Arbitration in Venezuela.

5

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The Company submitted its
Memorial to ICSID setting out its argument and written evidence on January 13,
2006. Venezuela raised objections regarding the tribunals jurisdiction in this
matter and the Tribunal scheduled a hearing to address Venezuelas objections in
May 2007. At this hearing the chairman of the tribunal removed himself from the
proceedings due to a potential conflict of interests and the hearings were
suspended. Following the resignation of the chairman of the Tribunal the
arbitrator appointed by Venezuela also resigned as an arbitrator. The process
going forward will be for Venezuela to select a replacement arbitrator, which
has been done, and then both parties will select a third arbitrator to chair the
tribunal. Failing agreement, ICSID will appoint the chairman. Following
selection of the complete Tribunal the arbitration on the jurisdictional
competency of the Tribunal to arbitrate the merits of the case will resume with
no additional filings by the parties, who will utilize the material prepared for
the hearing that had originally been scheduled for May 2007.

Counsel has advised the Company
that jurisdictional objections are not uncommon in arbitration cases of this
kind. The Company remains confident in its position that the Tribunal has
jurisdiction to arbitrate this dispute although there can be no assurance that
the jurisdictional dispute will be resolved in the Companys favor. A hearing on
the merits of the claim will be scheduled if the Tribunal rules in the Companys
favor on the jurisdictional objection.

Substantial uncertainty exists as
to the ultimate resolution of the Companys rights and title issues and the
level of compensation, if any, which may be received through the ICSID process.
The dispute is likely to be protracted and may take several years to resolve.
Accordingly, as of February 10, 2005, the Company had divested itself of its
remaining Venezuelan properties.

Although the Company is
confident in the validity of its claims, there can be no assurance that it will
be successful in all, or part, of its claims.

The Companys property
interest on exploration lands adjacent to the Crucitas exploitation concession
in Costa Rica may be impaired by a decree of a national moratorium on new open
pit mining.

The Companys interest in the
Cerro Crucitas Property may be impaired by the Government of Costa Ricas decree
of a national moratorium on open pit mining. See Item 4. Information on the
Company -- D. Property, Plant and Equipment -- Costa Rica -- Cerro Crucitas
Project -- Proposed Exploration Program. The decree states that any rights
legally acquired prior to the decree will be respected. The Company holds
exploitation rights with approvals obtained prior to the decree. In October
2002, the Supreme Court of Costa Rica confirmed the Cerro Crucitas project is
exempt from the legislation prohibiting open pit mining. However, in December
2004 the Company learned that the Supreme Court of Costa Rica, in responding to
an injunction filed against the Ministry of the Environment or SETENA and the
President of the Republic, ruled that the resolution that awarded the
Exploitation Permit on Cerro Crucitas to the Company be annulled because it
violated Article 50 of the Constitution of Costa Rica. The ruling also indicated
that the environmental approval process should not be impacted by the decision
and ordered the State to pay costs, damages and compensation to the concession
holder, which is the Companys subsidiary in Costa Rica. The ruling does not go
into effect until the parties are formally notified at which time details for
the decision are expected. In the absence of other explanations for the ruling,
the Companys counsel speculates that the ruling may be a misunderstanding of
the conditions that apply to the Mining Title. The Exploitation Permit was
issued in full compliance with all applicable laws and regulations in place at
the time which in 2001 required that the Exploitation Permit be issued before
the developer could apply for the required Environmental Permits. With the
change of law in 2002, the developer now requires environmental approval prior
to receiving an Exploitation Permit. Since changes in the law are not
retroactive, the Company believes the status of its Exploitation Permit should
not be impacted. In late June 2007 a further ruling from the Supreme Court was
received and the Companys local counsel has indicated that the Supreme Court
has now said that responsibility for determining if the Company has complied
with all of the environmental requirements for Crucitas lies with the government
agency of Mines Energy and the Environment (MINAE) of which SETENA is a part.
MINAE has not cancelled the Companys Exploitation Permit and the Company
continues to believe it has complied with all legal requirements in the
development of Crucitas and can see no legal reason why the Exploitation Permit
will be cancelled.

On September 1, 2005, the
Company, through percent owned subsidiary, Industrias Infinito S.A. (Industrias
Infinito), received a Resolution from SETENA approving the Companys
Environmental Impact Statement (EIS) dealing with the Crucitas gold project. The
SETENA approval of the EIS means that the Company

6

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has now complied with all of the requisites of the 2001 Mining
License. The approval is for the mining of the saprolite which is weathered and
soft material overlying the unaltered rock below. The saprolite makes up
approximately one third of the resource and, the environmental approval to mine
the underlying hardrock will be requested in fiscal 2008.

Work continued on expansion of
the Companys environmental impact assessment from SETENA to incorporate the
mining of hard-rock reserves into the already approved saprolite, or soft-rock
reserves.

On December 12, 2005, the
Company, through Industrias Infinito, successfully concluded the environmental
permitting process for its Crucitas gold project. The final resolution
(Resolución No 3638-2005-SETENA), was issued by SETENA on December
12, 2005. The final resolution specified the amount of the required
Environmental Performance Bond as US$ 600,000. The Company made arrangements for
bonding to be put into place and $635,580 (US$ 600,000) was deposited in a bank
in Costa Rica as security for the placement of an environmental bond for the
Crucitas gold project.

Although the Company believes
that to date it has fulfilled all of the requirements of the regulatory body,
MINAE, in the approval and development process at Crucitas. The Company is
confident that MINAE will confirm that the Company has complied with all
requirements associated with obtaining and maintaining the Exploitation
Concession at Crucitas. This belief is supported by an expert legal opinion
which maintains the Company has fulfilled all of its regulatory obligations with
respect to the Exploitation Concession and that MINAE, the regulatory body
exercising authority over the project, should thereby ultimately support this
position.

The Company filed a Feasibility
Study in February of 2007 which is NI 43-101 compliant which means it meets
standards set by the Canadian Securities Administrators for the disclosure of
mineral projects. A detailed summary of this study is available to the public on
SEDAR (a security related electronic information system for Canadian Public
Companies  see www.sedar.com) dated February 26, 2007.

The Company is continuing to
prepare material that will be required to receive environmental approvals for
the mining of the hard-rock material at Crucitas. The Company has already
received Environmental Approval to mine the saprolite or soft-rock material on
the surface of the deposit. The Company continues to be involved in several
major social development programs in the communities close to the Crucitas
project including computer and tailoring training, fish farming, and organic
agriculture. A new section of road and a bridge to provide improved access to
the mine site and the small local village of Crucitas is being completed.

The Company continues to work
with the small communities near the mine in Alejuela Province to ensure that
community needs and concerns are addressed and to fulfill the commitments made
in the Environmental Impact Statement and during the extensive Public
Involvement Process.

The Company competes with other
companies for the acquisition of new properties

Increasing competition exists for
the limited number of mineral acquisition opportunities available. As a result
of this competition, some of which is with large established mining companies
with substantial capabilities and greater financial and technical resources than
the Company has, the Company may be unable to acquire additional attractive
properties for exploration on terms it considers acceptable.

The Company is a Passive
Foreign Investment Company for United States federal income tax purposes which
may have adverse consequences for U.S. investors.

The Company believes that it is a
passive foreign investment company for United States federal income tax purposes
because it earns 75% or more of its gross income from passive sources. As a
result, a United States holder of common shares could be subject to increased
tax liability, possibly including an interest charge, upon the sale or other
disposition of the United States holders common shares or upon receipt of
excess distributions, unless such holder of common shares elect to be taxed
currently on his or her pro rata portion of the Companys income, whether or not
the income was distributed in the form of dividends or otherwise. The election
requires certain conditions be met such as filing on or before the due date, as
extended, for filing the shareholders income tax return for the first taxable
year to which the election will apply. Otherwise, the election may only
partially apply. Further,

7

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the elections will increase the administrative and regulatory burden on the Company. See Item 10. Additional Information -- E.  Taxation -- United States Federal Income Tax Consequences --  Passive Foreign Investment Company.

The Companys potential profitability is subject in part to matters over which it has no control. including volatility in the price of gold..

The mining industry in general is intensely competitive and, even if commercial quantities of mineral deposits are discovered, a profitable market may not exist for the sale of the minerals produced. Factors beyond the
control of the Company may affect the marketability of any substances discovered. For example, the prices of gold and diamonds have experienced significant movement over short periods of time. The gold price fell to a 20-year low of US$ 253 in
July 1999 and recovered significantly since that time to reach a level of US$ 436 by December 31, 2004, US$ 517 at December 31, 2005 and US$ 662 at August 28, 2007. Such prices are affected by numerous factors beyond the control of the
Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production due to improved
mining and production methods. The supply of and demand for minerals are affected by various factors, including political events, economic conditions and production costs in major producing regions. Mineral deposits discovered on the Companys
properties may not be economic.

The Company depends on a number of key directors and employees and the loss of any one of the key directors or employees could have an adverse effect on the Company.

The Company depends on a number of key directors and employees, in particular Steven G. Dean, Chairman and a director of the Company; and John R. Morgan, President, CEO and director of the Company. The loss of any of
these directors or employees could have an adverse effect on the Company. There are currently no management contracts outstanding with the key directors and employees and the Company does not maintain key man insurance on any of its management. See
Item 6 -- Directors, Senior Management and Employees.

The directors of the Company may have conflicts of interest in negotiating and concluding agreements.

Certain of the Companys directors and officers serve as directors or officers of other reporting companies or have significant shareholdings in other reporting companies. To the extent that such other companies
may participate in ventures in which the Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. See Item 6 -- Directors, Senior
Management and Employees.

The Company is subject to risks in connection with currency fluctuations.

The Company incurs costs and expenses in a variety of international currencies, primarily Canadian dollars, U.S. dollars, Costa Rican colons, Venezuelan bolivares and Guyanese dollars. Historical exchange rates of the
latter three currencies against the Canadian dollar, the Companys functional currency is set forth in the table below. All the Companys financings to date have been in Canadian dollars and will continue to be in Canadian dollars for the
foreseeable future.  Accordingly, the Company is subject to the risk of fluctuations in the relative values of the Canadian dollar as compared to the foreign currencies in which it transacts business. The Company is required to recognize foreign
currency translation gains or losses in the determination of net earnings and losses, except for exchange gains or losses relating to non monetary assets or liabilities. The Company does not engage in any activities to hedge against currency
fluctuations.

8

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Foreign Currency Conversion Rates of
$1 Canadian

| |                     |         | March 31, |         |        
| | ------------------- | ------- | --------- | ------- | -------
| |                     | 2007    | 2006      | 2005    | 2004   
| |                     |         |           |         |        
| | Costa Rica (Colon)  | 466.4   | 414.9     | 384.4   | 335.1  
| | Venezuela (Bolivar) | 1,859.7 | 1,837.8   | 1,762.1 | 1,468.5
| | Guyana (Dollar)     | 164.4   | 162.7     | 146.6   | 136.9  

The Companys share price has been
volatile in recent years.

In recent years, the securities
markets in the United States and Canada have experienced a high level of price
and volume volatility, and the market price of securities of many mineral
exploration companies have experienced wide fluctuations in price which have not
necessarily been related to the operating performance, underlying asset values
or prospects of such companies. In particular, the per share price of the
Companys common shares on the TSX Venture Exchange fluctuated from a high of
$0.59 to a low of $0.255 within the twelve month period preceding the date of
this Annual Report on Form 20-F.

The Company has shares
reserved for future issuance which presents a risk of dilution to current and
future shareholders and possible downward pressure on the share price.

As at March 31, 2007, the Company
had 97,364,353 common shares outstanding. Also at that date, there were
5,295,000 (March 31, 2006  5,785,000) stock options and 15,044,000 (March 31,
2006  13,130,000) share purchase warrants outstanding pursuant to which common
shares may be issued in the future, which could result in further dilution to
the Companys shareholders and pose a dilutive risk to potential investors. At
August 28, 2007, 4,475,000 stock options and 20,630,185 share purchase warrants
were outstanding. As well, 7,874,016 shares would be issuable upon conversion of
the entire principal amount of the secured convertible debenture in the amount
of $5,000,000. See B. Related Party Transactions. If all of these stock
options and warrants are exercised and the debenture converted, the number of
the Companys currently outstanding shares would increase by approximately 31%,
to 119,929,558. The impact of the issuance of a significant amount of common
shares from these option and warrant exercises may place substantial downward
pressure on the market price of the Companys common shares.

The Company has not paid any
dividends since incorporation and has no plans to pay dividends for the
foreseeable future.

The Company has not paid any
dividends since incorporation and it is not anticipated that dividends will be
declared in the short or medium term. The directors of the Company will
determine if and when dividends should be declared and paid in the future based
on the Companys financial position at the relevant time.

|ITEM 4 | INFORMATION ON THE COMPANY
|------ | --------------------------

|A. | History and Development of the
  Company
|-- | ----------------------------------------

Organization; Registered Office;
Etc.

The Company was incorporated
under the laws of British Columbia on January 22, 1981 under the name Ida-May
Resources Ltd. with an authorized capital of 10,000,000 shares. It changed its
name to Limoges Porcelaines Ltd. on October 9, 1985 and increased its authorized
capital to 20,000,000 shares. On October 20, 1988, it changed its name to Boch
& Limoges Ltd. and consolidated its share capital on the basis of one new
share for every 10 old shares and increased its authorized capital to 20,000,000
shares. On July 21, 1994, it changed its name to Vannessa Ventures Ltd. and
consolidated its share capital on the basis of one new share for every 2.2 old
shares and increased its authorized capital to 100,000,000 shares. On January
15, 2004, the Company increased its authorized capital to 250,000,000
shares.

9

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The Company is a reporting issuer
in British Columbia and Alberta. The common shares trade on the TSX Venture
Exchange under the symbol VVV and on the Berlin Stock Exchange under the
symbol VVT. From January 1, 1999 to November 12, 2004, the Companys common
shares were quoted on the Over-the-Counter Bulletin Board Electronic Quotation
System (the OTC-BB) under the symbol VNVNF. Since November 2004, the
Companys common shares have not been quoted on the OTC-BB because the Company
had not filed its Annual Report on Form 20-F for its fiscal year ended March 31,
2004 (the 2004 Form 20-F). Pursuant to comments received from the Commission
on the Companys Annual Report on Form 20-F for its 2003 fiscal year,
concerning, among other matters, auditor independence issues, the Company, which
replaced its former auditors during its 2004 fiscal year, retained its current
auditors in October 2004 to undertake re-audits of the Companys financial
statements for its fiscal years 2002 through 2003 inclusive. These re-audits
were completed and the 2004 Form 20-F was filed with the U.S. Securities and
Exchange Commission on December 6, 2005. The Companys Annual Report on Form
20-F for the fiscal year ended March 31, 2005 was filed with the Commission on
April 12, 2006 and its subsequent Annual Reports on Form 20-F have been timely
filed with the Commission.

The address of the head office of
the Company is Suite 220, 1010  1st Street S.W., Calgary, Alberta,
Canada, T2R 1K4. The telephone number of the head office of the Company is (403)
444-5191 or toll free 1 888 339-6339. The address for service and the registered
and records office is located at DuMoulin Black, 10th Floor, 595 Howe
Street, Vancouver, British Columbia, Canada V6C 2T5. The Companys website is
www.vannessaventures.com and its e-mail address is info@vannessa.com.

Principal Capital
Expenditures/Divestitures Over Last Three Fiscal Years

The Companys principal capital
expenditures since April 1, 2004 were all related to its mineral properties as
outlined in the table below and were incurred in the following countries:

Vannessa Ventures Ltd. Capital Expenditures($ in
Thousands)Years Ended March 31,

2007
    2006
    2005BrazilBrazil Concessions
    $ 4
    $ 4
    $ 4Costa RicaCrucitas Gold Project
    2,520
    1,938
    1,262GuyanaMaple Creek Concessions
    512
    598
    1,194Potaro Concessions
    170
    205
    53Marudi Gold Project
    204
    298
    820South Guyana Concessions
    -
    13
    -VenezuelaLa Fe\Yuruan\Kilometer 88
    -
    -
    329Las Cristinas
    332
    534
    582TOTAL
    $ 3,742
    $ 3,590
    $ 4,244


After reviewing the Companys
interest in the projects, management, as appropriate, records an impairment
charge for current expenditures incurred during the year even though there has
been advancement of the mining and development process.

Expenditures were financed
through equity financings and loans from the Companys controlling shareholder,
Exploram Enterprises Ltd. See Item 5. Operating and Financial Review and
Prospects -- B. Liquidity and Capital Resources.

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Current and Planned Capital
Expenditures/Divestitures

Planned capital expenditures for
the year ending March 31, 2008, are expected to be approximately $15 million.
These expenditures will mostly be to maintain and advance the Companys mining
and development activities in the Crucitas gold project in Costa Rica. The
Company will be utilizing available working capital and proceeds from equity
financings and loans to finance 2008 planned capital expenditures.

Public Takeover Offers

During the current and previous
fiscal year, the Company has not received any public takeover offers from third
parties nor has the Company made any such takeover offers.

|B. | Business Overview
|-- | -----------------

Summary

Since 1994, the Companys
principal focus has been the acquisition and exploration of mineral properties
in Central and South America, principally in Costa Rica, Venezuela, Brazil and
Guyana. The Company has interests in the following properties: the Potaro
Concessions (Guyana), the Marudi Mountain Property (Guyana) and the Cerro
Crucitas Property (Costa Rica). The Company is also pursuing in defense of its
interest in the Las Cristinas Project in Venezuela; however, the ownership
rights are in doubt and in dispute. See Item 4. Information on the Company --
D. Property, Plant and Equipment -- Venezuela -- Las Cristinas Project -- Title
Dispute and Legal Proceedings; -- International Arbitration. At March 31, 2007
and August 28, 2007, all of the Companys mineral interests were at the
exploration stage other than the Cerro Crucitas property on which the Company is
conducting development activities.

Exploration on the Companys
properties is not significantly affected by seasonal changes. To conduct its
exploration, the Company is dependent on sub-contractors for equipment and
supplies. These are generally available but vary in price and immediacy of
availability subject to demand.

The Company does not earn any
revenues from its operations although for the years ended March 31, 2007, 2006
and 2005, the Company earned interest of $1,631, $4,504 and $42,159,
respectively, on deposits. At March 31, 2007, the Company had working capital
(deficiency) of (6,628,328) (March 31, 2006 - $706,095). The exploration of the
Companys properties depends upon the Companys ability to obtain financing
through any or all of the joint venturing of projects, debt financing, equity
financing or other means. The Company has financed its operations principally
through the sale of its equity securities and through joint ventures and also
through loans from its controlling shareholder, Exploram Enterprises Ltd.. Its
ability to continue operations is dependent on the ability of the Company to
obtain additional financing. Failure to obtain additional financing on a timely
basis could cause the Company to forfeit its interest in its properties or
reduce or terminate its operations on such properties. See Item 3. Key
Information -- D. Risk Factors.

At August 28, 2007, the Companys
outstanding stock options and share purchase warrants represented a total of
25,105,185 common shares issuable for a maximum of $12,427,258 if these options
and warrants are ultimately exercised in full. The exercise of options and
warrants are completely at the discretion of the respective holders.

Applicable Government
Regulation

The Company currently operates in
Venezuela, Guyana and Costa Rica. Operations entail significant governmental
regulatory and other factors common to mining ventures. More particularly,
mining operations are subject to government regulation under which operations
may be affected in varying degrees by legislation, policies and controls
relating to prospecting, development, production, environmental protection,
mining taxes, labor standards or changes in conditions under which minerals may
be extracted and marketed. The effect of these factors cannot be accurately
determined.

As a company moves through
advanced exploration to production, the scope of its activities increases and so
does the potential for significant environmental effects. A key regulatory
factor during these stages is the Environmental Impact Statement (EIS). To
proceed, a company must submit an EIS to the respective government

11

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authorities and approval of the EIS means that the company has
complied with all of the initial environmental requisites in the mine
development and approval process.

|C. | Organizational Structure
|-- | ------------------------

The chart illustrates the
corporate structure of the Company, including all subsidiaries, the respective
jurisdictions of incorporation and the percentage of voting securities held
directly or indirectly by the Company as at March 31, 2007.

ORGANIZATIONAL STRUCTURE




12

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|D. | Property, Plant and
Equipment
|-- | -----------------------------

The Company is a mineral
exploration company engaged in the acquisition and exploration of mineral
properties in Central and South America, principally in Costa Rica, Venezuela,
Brazil and Guyana. The Company has interests in the following properties: the
Potaro Concessions (Guyana), the Marudi Mountain Property (Guyana) and the Cerro
Crucitas Property (Costa Rica). The Company is also pursuing in defense of its
interest in the Las Cristinas Project in Venezuela; however, the ownership
rights are in doubt and in dispute as discussed under  --Venezuela -- Las
Cristinas Project -- Title Dispute and Legal Proceedings; -- International
Arbitration.

The following is a map of the
Companys current project locations. These properties, excluding Cerro
Crucitas, are without a known body of commercial ore, and the Companys
activities on such properties to date have been exploratory in nature.

|Name of Property | % Ownership | Type of
      Exploration            | Minerals          | Results/Actions                                                 
|---------------- | ----------- | ------------------------------------ | ----------------- | ----------------------------------------------------------------
|                 |             |                                      |                   |                                                                 
|VENEZUELA       
|                
|Las Cristinas    | in dispute  | Inactive                             | gold              | ICSID Arbitration                                               
|                 |             |                                      |                   |                                                                 
|GUYANA          
|                
|Potaro           | 100%        | Care
      and Maintenance           | diamonds and gold | Ongoing exploration agreement with Shoreham
      Resources Ltd.
|Marudi Mountain  | 100%        | Infrastructure work and geochemistry | gold              | Ongoing exploration agreement with Shoreham
      Resources Ltd.
|COSTA RICA      
|                
|Cerro Crucitas   | 100%        | Mine
      development               | gold              | Feasibility study issued                                        

VANNESSA VENTURES LTD. EXPLORATION PROPERTIESCentral /
South America




13

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Venezuela

Las Cristinas Project

Acquisition

Pursuant to an agreement dated
July 13, 2001 (the Original Transaction Agreement) between Placer B-V Limited
(PBV), an indirect subsidiary of Placer Dome Inc. (Placer Dome), the Company
and Vannessa Holdings Corporation (VHC), VHC agreed to acquire all of the
issued and outstanding shares of Placer Dome de Venezuela C.A. (PDV), a
corporation organized under the laws of Venezuela which holds a 95% interest in
Minera Las Cristinas C.A. (Minca), a corporation organized under the laws of
Venezuela. Minca was organized to explore and, if economic feasibility was
established, to exploit the copper and gold deposits on the Las Cristinas
Project located near Kilometre 88 in the Bolivar State of the Republic of
Venezuela (the Las Cristinas Project).

The Las Cristinas Project
consists of four contiguous concessions known as Las Cristinas 4, 5, 6 and 7.
Each concession covers an area of 5 km x 2 km. The four concessions cover a
total of 40 km2 or 4,000 hectares. On July 25, 1991, Placer Dome
entered into a Shareholders Agreement with Corporacion Venezolana de Guayana
(CVG) to explore and, if economically feasible, produce gold from the Las
Cristinas 4, 5, 6 & 7 concessions. Pursuant to the agreement, two Venezuelan
companies were formed in January 1992: Minca has a renewable mining lease giving
it the sole right to mine alluvial and vein gold on the Las Cristinas Project
for a period of 20 years while Relaves Mineros Las Cristinas, C.A. (Reminca),
51% owned by PDV and 49% by CVG, was formed to explore and exploit tailing
material.

The Original Transaction
Agreement was subsequently formalized by an amended and restated transaction
agreement dated July 25, 2001 (the Las Cristinas Agreement) between PBV, the
Company and VHC, pursuant to which PBV agreed to sell its shares of PDV to VHC
for the sum of US $25, its loan obligations for the sum of US $50, and all
indebtedness of PDV to PBV for the sum of US $25. As a result, the Company
assumed loans due to Placer Dome affiliates and the continuing obligations of
PDV under the work contract governing the development of the Las Cristinas
Project.

The property is the subject of a
title dispute and legal proceedings. The Company is requesting remedies under
the Bilateral Investment Treaty and asking the Arbitration Tribunal to award
restitution of the Companys contractual rights to develop the Las Cristinas
project and the return of all property of Minca confiscated by the CVG and the
Government of Venezuela and monetary damages. See  -- Title Dispute and Legal
Proceedings and  -- International Arbitration, below.

PBV will be paid an amount equal
to 2% of the net smelter return on all copper sales multiplied by the Companys
equity interest in Minca. PBV will also be entitled to a participation in
revenues from gold sales at a rate of 1% if the average gold price for the
relevant fiscal quarter is below US $276, 3% if such gold price is US $276 or
more but is less than US $350, or 5% if such gold price is US $350 or more,
multiplied in each case by the Companys percentage equity interest in Minca
which is presently 95%.

Placer Dome has a back-in right
to repurchase all assets whenever PDV has made a production decision based on a
feasibility study which demonstrates that the project is economically viable to
sustain an operation in excess of 4 million ounces of gold at a production rate
of at least 250,000 ounces of gold per year (subject to adjustment). If the
back-in right is exercised, Placer Dome will pay the Company the equivalent of
110% of the Companys capital costs and pre-production soft costs (subject to
certain adjustments including those for debt incurred, remedying any of the
Companys defaults, if applicable, and fair market valuations).

Provided the Company has expended
at least US $2 million in capital costs on the project, or has maintained the
mineral and mining rights for a continuous period in excess of one year (annual
cost estimated to be US $300,000), then the Company will be paid by PBV a
participation equivalent to 2% of gold sales and 2% of net smelter returns on
copper sales, multiplied in each case by Placer Domes percentage equity
interest in Minca. PDV became a wholly owned subsidiary of the Company which is
now named Vannessa de Venezuela C.A. (Vannessa Venezuela).

14

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Location and Access

The Las Cristinas Project is
located in the southeast corner of Venezuela in Bolivar State, approximately 760
km southeast of Caracas. The approximate geographical coordinates are N 006 12
and W 061 29. The Guyana border is approximately 30 km to the east, while the
border with Brazil is about 250 km south of the Las Cristinas site. The project
area is 390 km by highway south-southeast of Puerto Ordaz. Access is by a
four-lane highway to Upata, a distance of 55 km, and then by a well-maintained
two lane paved road to the camp turn-off at Kilometre 84. The two-lane highway
continues south to the Brazilian border. From the turn off at Kilometre 84 a
wide gravel/dirt road leads to the Las Cristinas concessions. The distance from
the highway to the camp is about six kilometres. Under normal conditions the
drive from Puerto Ordaz to the camp takes five hours. Puerto Ordaz is a port
city on the Orinoco River with access to the Caribbean Sea. The city of Puerto
Ordaz is served by Aeropostal and Aserca airlines, with numerous daily flights
to Caracas and other major Venezuelan cities. The nearest public airstrip is at
El Dorado, approximately one hour by highway north of the camp. A charter flight
from Puerto Ordaz to El Dorado takes about one hour. Helicopters are available
at Kilometre 32 and Kilometre 33, a forty-minute drive north of the site.

Geology

The Las Cristinas concessions are
located in a granite-greenstone terrain known as the Guyana Shield. The terrain
has been exposed to an intense tropical weathering process which has produced a
lateritic profile (saprolite) 30 to 100 m thick. The most prominent regional
feature at Las Cristinas is the strong north-northeast trending direction of
gold occurrences. Gold commonly occurs as free grains in quartz and as
fracture-fillings in sulphide. Gold is spatially associated with chalcopyrite
and/or pyrite and is coincident with an epidote-carbonate alteration event.

Although there are numerous gold
occurrences within the concessions, the two pre-feasibility and four feasibility
studies completed by Placer Dome focused on two zones: the Conductora/Cuatro
Muertos Zone and the Mesones/Sofia Zone.

Exploration History

Gold was first discovered in the
Las Claritas area in 1910 by General Fernandez Amparan. At that time, gold
nuggets were found in the Quebrada Amarilla. Today, the entire Kilometre 88 area
is well known for the occurrence of gold nuggets. Sporadic mining activity was
reported until the gold rush in the early 1980s. While a plethora of miners has
extracted gold from the property, no systematic modern exploration work had been
completed in the area prior to the work by CVG and Placer Dome, now part of
Barrick Gold Corporation..

The only organized mining
activity was carried out by the English at the Carabobo mine, in the Hoffman pit
area. It was developed around 1934 and operated until just before the Second
World War began in 1939. An attempt to establish a mine took place in 1981,
however the project did not prosper. This was followed by the uncontrolled and
erratic development of the area by 5,000 to 7,000 garimpeiros. The miners worked
alluvial and saprolitic gold by hydraulic mining. Square kilometres of jungle
have been stripped, with the soil, lateritic and saprolitic portion of the
regolith being washed and processed using mercury and sluice boxes. The amount
of gold recovered to date is unknown. Much of the Kilometre 88 area, and
particularly Las Cristinas concessions 4 and 5, is now virtually covered with
tailings.

Placer Dome conducted extensive
exploration work from 1991 through 1997 including over 155,000 meters of diamond
drilling and extensive testing in addition to geotechnical, environmental and
other studies required for mine developments.

Placer Dome commenced
construction of the US $600 million Las Cristinas gold mine in August 1997 but
the project was suspended in January 1998 pending resolution of an ownership
dispute before the Supreme Court of Venezuela relating to the gold and copper
mining rights at Cristinas 4 and 6. In June 1998, the Supreme Court of Venezuela
ruled in favour of Minca, confirming that it had the sole and exclusive mining
rights over all Las Cristinas concessions including 4 and 6. Construction
activities resumed in May 1999 but were suspended on July 15, 1999 due to
changed gold market conditions and lower prices. Since 1991, Minca has expended
in excess of US

15

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$170 million, including US $25 million in capital
infrastructure and community support, to determine reserves and the economic
viability of the Las Cristinas deposit.

The Las Cristinas Project has
been the focus of a significant amount of exploration, test work and engineering
studies carried out primarily between 1991 to 1997 by Placer Dome. The work
culminated in the definition of a resource estimate, two pre-feasibility
studies, and four feasibility studies, the most recent completed by Minca in
collaboration with Placer Dome Technical Services in April 2000. The studies
evaluated large-scale open pit plans that contemplated mining hard rock and
saprolite ore.

Given gold prices and the
Companys understanding of the Las Cristinas deposit, the Company was
recommending a new direction for the project, focusing on a staged approach for
the development of the deposit. The intention was to reduce the up-front capital
exposure, and hence risk, to allow the learning that inevitably occurs to be of
benefit to the construction of the later stages. Stage one development would
have focused on the smaller, saprolite resource, which is estimated to be less
expensive to mine and to process. Saprolite is a term that describes
near-surface, oxidized and heavily weathered rock. Saprolites are often found in
tropical environments and other areas that have not been glaciated. Saprolites
exhibit the in situ structure of the original rock but have much reduced
strengths, similar to those of a soil. The Las Cristinas saprolite also has
well-defined mineral content, and given that the material requires no blasting,
minimum comminution and contains oxidized free-gold, it represents an
attractive deposit. The Company had been compiling, integrating and interpreting
existing data and studies to build-on and develop a saprolite-based bankable
feasibility study. This was discontinued in November 2001 when the CVG took over
control of the property and no further work has been done by the Company on the
Las Cristinas Project pending resolution of the title dispute described
below.

Title Dispute and Legal
Proceedings

Since August 2001, the Venezuelan
government and CVG board members have refused to recognize the Companys status
in Minca and have not attended meetings or acted on corporate matters.

In November 2001, the Venezuelan
government and CVG cancelled the mining rights held by Minca and took possession
of the properties. On April 29, 2002, President Chavez issued a Presidential
Decree reserving Las Cristinas for direct exploitation by the Government of
Venezuela. A number of legal applications, proceedings and jurisdictional
disputes have arisen between the Company CVG and government authorities over the
concessions.

International Arbitration

On July 9, 2004 the Company
commenced a process of international arbitration with the International Centre
for Settlement of Investment Disputes (ICSID) in Washington, D.C. Accordingly,
the proceedings relating directly to the dispute between the Venezuelan
government, CVG and the Company have been waived. The Company and its Venezuelan
subsidiaries are claiming:

 CVG and
other government authorities had no basis contractually or in law to cancel
Mincas rights to the concessions without an independent arbitration
process.

 Certain
decrees, court applications and government decisions to extinguish Mincas
rights, or grant possible rights to another company are either inappropriate,
contrary to agreements and rights granted to Minca, or without legal status.

 It has,
or should have continuing rights to all concessions or be compensated for all
expenditures incurred to date as well as compensated for lost future
profits.

Substantial uncertainty exists as
to the ultimate resolution of Mincas rights and title issues. There is also
uncertainty as to the scope of future legal and administrative costs required to
continue legal proceedings.

The current political and economic
climate in Venezuela may further impact resolution of these issues.

16

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On October 28, 2004, the
Secretary-General of the International Centre for Settlement of Investment
Disputes (ICSID) in Washington, D.C. registered the Companys Request For
Arbitration against the Bolivarian Republic of Venezuela with respect to the Las
Cristinas gold and copper property.

The acceptance of the Companys
Request by ICSID initiated the formal arbitration process against Venezuela for
the alleged expropriation of Vannessas contractual rights to develop the Las
Cristinas gold deposit located in Bolivar State, Venezuela. The rights to
develop the property are held by Minca, a 95 percent owned subsidiary of
Vannessa de Venezuela.

Due to the Companys ongoing
disputes outlined above, management is continuing to record impairment charges
equal to the carrying costs incurred for its Las Cristinas interest. During the
Companys fiscal year ended March 31, 2007, the carrying costs related to
Mincas mineral interests amounted to $332,103 (2006 - $533,761).

The Company submitted its
Memorial to ICSID setting out its argument and written evidence on January 13,
2006. Venezuela raised objections regarding the tribunals jurisdiction in this
matter and the Tribunal scheduled a hearing to address Venezuelas objections in
May 2007. At this hearing the chairman of the tribunal removed himself from the
proceedings due to a potential conflict of interests and the hearings were
suspended. Following the resignation of the chairman of the Tribunal the
arbitrator appointed by Venezuela also resigned as an arbitrator. The process
going forward will be for Venezuela to select a replacement arbitrator, which
has been done, and then both parties will select a third arbitrator to chair the
tribunal. Failing agreement, ICSID will appoint the chairman. Following
selection of the complete Tribunal the arbitration on the jurisdictional
competency of the Tribunal to arbitrate the merits of the case will resume with
no additional filings by the parties, who will utilize the material prepared for
the hearing that had originally been scheduled for May 2007.

Once a third arbitrator is
selected and approved by ICSID, the tribunal will schedule a hearing to
recommence the hearing on the jurisdictional competency of the tribunal in this
case. A hearing on the merits of the claim will then be scheduled if the
Tribunal rules in the Companys favor on the jurisdictional objection.

The Company is requesting
remedies under the Bilateral Investment Treaty and asking the Arbitration
Tribunal to award restitution of the Companys contractual rights to develop the
Las Cristinas project and the return of all property of Minca confiscated by the
CVG and the Government of Venezuela and monetary damages of US $50 million plus
interest or in lieu of restitution, monetary damages in the amount of US $1,045
million plus interest which includes out of pocket expenses of approximately US
$180 million and lost profits of approximately US $865 million. Any awards
arising from the claim will be shared with other shareholders or royalty holders
of Minca and Vannessa de Venezuela according to pre-existing contractual rights.

Although the Company is
confident in the validity of its claims, there can be no assurance that it will
be successful in all, or part, of its claims.

See also Item 5. Operating and
Financial Review and Prospects -- B. Liquidity and Capital Resources
--Subsequent Events.

Guyana

Potaro Concessions

Location, Description and
Acquisition

Through agreements with various
landowners, the Company has acquired exploitation rights to concessions in the
Potaro Mining District of Guyana outlined below: the Ewang River Block, Uewang
Permits, Queen of Diamonds Block and the Pepper Creek Property. The Potaro
Concessions are accessible by highway and by riverboat from Mahdia. The Company
also completed construction of an airstrip which enables twin engine aircraft to
fly to the Potaro Concessions in 1.5 hours from Georgetown.

17

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Ewang River Block

Pursuant to the terms of a joint
venture agreement dated September 16, 1996 and a financing agreement dated
September 18, 1996 (the Ewang Agreement) between Vannessa Guyana and Edward
Garnet Hopkinson of Georgetown, Guyana (Hopkinson), Vanessa Guyana was granted
an option to acquire up to an 80% interest in eleven exploration licences known
as the Ewang River Block with Hopkinson retaining a 20% interest. In
consideration of Vannessa Guyana financing 100% of the exploration costs,
Hopkinson has agreed to convert his 20% interest into graduated participating
royalties based on the value per cubic metre of alluvial diamonds and gold
recovered from the Ewang River Block as follows:

Value Per Cubic Metre AveragedOver Three Month Operating Period (US $)
    Percentage of Production Paid$0-$3
    2%$31-$40
    3%$41-$50
    6%$51-$70
    8%$70-$100
    10%Over $100
    20%


Vannessa Guyana has the option to
buy out the foregoing royalties for US $3 million (the Buy-Out Option) which
can be a combination of royalty and lump-sum payments at any time but not after
Hopkinson has received US $1.5 million in royalties. If the Buy-Out Option has
not been completed by the time US $1.5 million in royalty payments have been
made, then the royalty payments set out in the table above shall continue for
the duration the Ewang Agreement is in effect.

Vannessa Guyana has also agreed
to pay Hopkinson a 0.5% net smelter royalty on all gold produced by hard-rock
mining operations. Vannessa Guyana has the option to buy out the 0.5% net
smelter royalty at any time for a one-time payment of US $1 million.

The Ewang River Block encompasses
11,758 acres in the Potaro Mining District #2, Potaro River Area, Guyana. It
contains no known body of commercial ore.

Uewang Permits

Pursuant to the terms of a joint
venture agreement dated October 17, 1997, as amended September 20, 1998 (the
Uewang Agreement) between Vannessa Guyana and Michael Viera of Georgetown,
Guyana (Viera), Viera agreed to assign to Vannessa Guyana the exclusive
exploration rights of two medium scale exploration licences, known as the Uewang
Permits, for consideration as follows:

| | 1. | US $3,000 payable in advance for the first
year;                                                                                                                        
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                         
| | 2. | US $10,000 payable in each of the second, third, fourth
      and fifth years, due on the respective anniversary dates on the signing of
      the Uewang Agreement; and

US $50,000 payable in advance for the sixth year and each
subsequent year, due on the respective anniversary dates of the signing of the
Uewang Agreement. The Company is current with its required payments as of the
date of this Annual Report on Form 20-F

On May 11, 2006, an addendum was
entered into by the respective parties wherein the minimum annual royalty
payment effective October 16, 2006 would be reduced from US$ 50,000 to US$
10,000.

Vannessa Guyana has also agreed
to pay Viera 7.5% of gross production for both gold and diamonds produced by
alluvial mining operations so long as the 7.5% royalty exceeds US $3,000 in the
first year, US $10,000 in the second, third, fourth and fifth years and US
$10,000 in the sixth and subsequent years. Viera is entitled to a 0.75% net
smelter return derived from hard rock mining operations. Vannessa Guyana has the
option to purchase at any time the alluvial rights for the sum of US $500,000
and the 0.75% net smelter return for US $1.5 million. Upon

18

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receipt of a mining permit on the Uewang Permits, Vannessa
Guyana shall become the sole and exclusive mining operator on the property.

The Uewang Permits, issued as
PPMS/051/95 and PPMS/052/95, total 2,255 acres located in the Potaro Mining
District #2, Upper Potaro River area in the vicinity of the Uewang River.

The Uewang property contains no known
body of commercial ore.

Queen of Diamonds Block

Pursuant to an agreement dated
December 10, 1998 (the Queen of Diamonds Agreement) between Vannessa Guyana
and Hopkinson, Hopkinson has agreed to sell to Vannessa Guyana 100% interest in
nine exploration licences for a property known as the Queen of Diamonds Block in
the Potaro River area, Guyana, totaling approximately 9,918 acres.

Consideration payable by Vannessa
Guyana to Hopkinson is as follows:

| | 1. | During exploration under prospecting permits, Vannessa
      Guyana has agreed to pay Hopkinson a 7.5% royalty on gold and diamond
      production from the Queen of Diamonds Block, net of any government
      royalties payable;                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | 2. | Operating under mining permit or mining license, Vannessa
      Guyana has agreed to pay Hopkinson the same 7.5% royalty as stipulated in
      the foregoing paragraph, however Vannessa Guyana has the option to buy out
      the 7.5% royalty for US $3.0 million. Any royalty paid under paragraph 1
      or 2 will be applied to the US $3.0 million buy-out. This arrangement will
      stay in effect until Hopkinson has received US $1.5 million at which time
      Vannessa Guyana will have the option of buying out Hopkinson by paying the
      balance of US $1.5 million or by continuing to pay the 7.5% royalty to
      Hopkinson as long as Vannessa Guyana mines on the property.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | 3. | At the anniversary of receiving a mining permit or mining
      license, Vannessa is obliged to pay Hopkinson a minimum US $30,000 annual
      royalty, which amount is applied to the overall royalty payable for the
      year from production. The minimum royalty is payable in cash or common
      shares, at Vannessa Guyanas option.                                                                                                                                                                                                                                                                                                                                                           

Upon Vannessa Guyana supplying
sufficient exploration to convert the prospecting permits to a mining license,
Hopkinson agrees to execute an assignment of its interest in and to the Queen of
Diamonds Block to Vannessa Guyana and Hopkinson agrees to execute transfers of
title to Vannessa Guyana.

The Queen of Diamonds Block contains
no known body of commercial ore.

Pepper Creek Property

Pursuant to the terms of a letter
agreement dated July 21, 1999, as amended March 14, 2000 (the Pepper Creek
Agreement) between Vannessa Guyana and Viera, Viera agreed to sell to Vannessa
Guyana eleven prospecting permits, known as the Pepper Creek Property, for US
$3,000 (paid).

During exploration, Vannessa
Guyana has also agreed to pay Viera a 7.5% royalty, to a maximum of US $4
million, on gold and diamond production, net of any government royalties
payable, subject to a 1% NSR for all other minerals recovered during
exploration. At Vannessa Guyanas request, and once sufficient exploration data
has been accumulated, Viera will apply for a mining permit or conversion to
mining license. At the anniversary date of receiving a mining permit or mining
license, Vannessa Guyana is obliged to pay Viera a minimum of US$30,000 annual
royalty which is applied against the overall royalty payable for the year from
production. The minimum royalty is payable in cash or common shares at the
Companys option.

19

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The eleven prospecting permits
comprising the Pepper Creek Property total approximately 12,500 acres located in
the Potaro Mining District #2, Potaro River area.

The Pepper Creek Property contains no
known body of commercial ore.

Joint Venture

Pursuant to a letter of intent
dated April 19, 1999, as amended August 31, 1999 and November 15, 1999 (the
Jamshidi Agreement) between the Company and Nazinine Jamshidi of Amman, Jordan
(Jamshidi), the parties agreed to a joint venture for the exploration of
certain Potaro Concessions referred to as the Maple Creek Concessions. On
February 28, 2000, Jamshidi paid the Company a non-refundable sum of US $250,000
for an accelerated phase II exploration program which was completed on February
28, 2000.

On February 29, 2000, Jamshidi
exercised its option and Vannessa (Aruba) A.V.V. (Vannessa Aruba), a wholly
owned subsidiary of the Company, and Jamshidi entered into a formal agreement
for the joint exploration of certain of the Potaro Concessions. The Jamshidi JV
superseded all prior agreements and understandings between the Company and
Jamshidi. Pursuant to the terms of the joint venture agreement, Vannessa Aruba
and Jamshidi agreed to form a joint venture company, Vanarde Mining Corporation
(VMC). Vannessa Aruba has agreed to assign 100% of its mining rights to
certain of the alluvial diamond concessions in the Potaro District to VMC in
return for 60% of the outstanding shares of VMC. In return for 40% of the
outstanding shares of VMC, Jamshidi has agreed to invest US $2.2 million into
VMC which is payable on demand by the Company during the mine
construction/exploration period which began March 1, 2000 and which was to end
on or before December 31, 2000. Jamshidi has the right to acquire 100% of all
diamonds recovered, however VMC shall receive the highest cash value based on
two independent appraisals. Jamshidi has also committed to accept and market
100% of future production runs in exchange for a marketing fee equal to 10% of
the gross proceeds from each sale. In addition, Jamshidi shall have the right of
first refusal to participate in the exploration of the Ewang River Block.

Pursuant to this agreement,
advances totaling $2,999,304 have been received from Jamshidi, net of finders
fees. This advance was designated to acquire specific capital assets and to
undertake exploration programs. Accordingly, for accounting purposes, capital
assets acquired for the agreed upon exploration programs have been allocated to
the exploration costs for the concessions and advances have been recorded as a
recovery of exploration expenditures.

No gain has been recognized by
the Company on effective transfer of its joint venture participation of 40% of
the mining rights as the Company can only recover its investment through future
mining profits or proceeds from disposition.

The Maple Creek concessions are
alluvial diamond concessions which are contiguous to the Potaro Concessions.
During the fiscal year ended March 31, 2003, the Company initiated a program
under the joint venture to do bulk sampling and determine a mining plan. Based
on results from this program, management determined the areas tested were not
economic. Accordingly, the Company recorded a current period impairment charge
relating to current expenditures equal to costs incurred during the year. In the
fiscal year ended March 31, 2004, management evaluated the current program and
determined the remaining carrying value of the concessions had not been
impaired.

Upon commencement of commercial
production, the accumulated acquisition and exploration costs will be amortized
based on production and profit distribution.

On July 14, 2005, the Company
reached an agreement to acquire the 40% minority interest in VMC for 1,500,000
common shares

Geology

The area lies within a fractured
system of northeasterly trending groove-like rectilinear valleys and joints. One
major fracture runs in a northeasterly direction essentially parallel to the
Potaro River up to the Uewang River mouth and swings into an eastern direction.
This fractured system seems to have affected both the Roraima sediments and the
underlying volcanics.

20

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The variation of the level of the
underlying suite of rocks suggests possible folding before the Roraima formation
was deposited. Essentially flat-lying and horizontal beds of gravely and pebbly
sandstone form an unconformity with the crystalline basement.

Workings for diamonds and gold
are ubiquitous within the Maple Creek area. Several parts of the creek have been
diverted in its course for the purpose of working the streambeds. Workings for
the colluvium are also evident. Most of the past mining activities were
concentrated around the confluences of ravines where alluvial flats have
developed. One kilometre up the Maple Creek where there is an ox-bow bend, old
workings are extensive.

Some workings for gold were
observed within the laterite environment that marks an absence of white sands
and angular quartz fragments. This indicates that the gold is most likely
derived from the laterite. Exposure of quartz veins or veinlets were absent
which leaves unknown the style of mineralization present in the area.

Rounded gold nuggets, as well as
fine gold, were recovered from alluvium and from the white sand cover and
sandstone formation, exposed in the ravine heads on the right bank of the creek.
Heavy mineral concentrates produced from the Roraima Formation derivatives show
an associated abundance of black sand, magnetite and ilmenite.

Exploration History

The Maple Creek alluvial diamond
and gold deposit is located in central Guyana in the Potaro mining district.

The Maple Creek deposit is
situated within a large, ancient riverbed, or paleochannel, that was discovered
by the Company through the use of ground penetrating radar (GPR). Ground
penetrating radar is the general term applied to high-resolution techniques
which employ radio waves to detail and map subsurface features. This discovery
marked the uncovering of a hidden, unexploited river channel that remains open
to both the north and south. Along its northern trace, the channel widens and
deepens with limits yet to be determined. Thus the volume of mineable gravels
may increase as more information is available.

Through GPR and trenching, a 4.2
kilometre segment of the channel has been well defined, however satellite
imagery reveals that the channel likely continues north for a considerably
greater distance. Within the mapped area, the average width has been measured at
327 metres with the average depth at 19 metres. The deepest point measured to
date is 45 metres.

Bulk sampling from 32 sites
recovered 2,347 carats which were sold at an average price of $206/carat. The
diamonds were of excellent quality, being 70% octahedron, mostly white and with
very few inclusions. The largest stone recovered weighed 5.65 carats. Eight of
the bulk sample sites were also tested for gold, resulting in the recovery of 80
ounces. Further exploration is ongoing.

The Company is also exploring the
Potaro I, II and III claims, where mapping, ground-penetrating radar surveys,
trenching and bulk sampling identified an unexploited diamondiferous and
gold-bearing paleochannel that hosts the Maple Creek deposit.

Three phases of GPR surveys have
been completed on the claims to date, the last included 3 long reconnaissance
outside of the Potaro 1 claim boundaries. Preliminary interpretation of these
lines suggests sections of alluvial channel material. More detailed GPR
surveying and bulk testing of these channels is recommended.

Proposed Exploration Program

At the Maple Creek Property, bulk
sampling work and regional exploration work is continuing although the results
to date have not identified any significant volumes of material that would be
economic to mine on a large scale basis processing the majority of channel
sediments. Exploration work and bulk sampling during the current year were
focused on a previously unexplored part of the channel but again with
sub-economic results. Continuing exploration will focus on new target areas
potentially suitable for smaller scale concentrated excavation near existing
drainages.

21

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After a review of plans and
operations in this area during the fiscal year ended March 31, 2004, management
of the Company determined impairment charges totaling $1,201,819 were required
on the Potaro Concessions to reduce the carrying value to estimated recoverable
value.

Marudi Mountain Property

Acquisition

Pursuant to the terms of a letter
agreement dated December 8, 1998 (the Romanex Agreement) between the Company
and Sutton Resources Ltd. (Sutton), Sutton agreed to sell to the Company a
100% interest in its wholly owned subsidiary, Romanex (Guyana) Exploration Ltd.
(Romanex) which holds a 100% interest in an exploration license to the Marudi
Mountain Gold Project in southern Guyana. Consideration payable by the Company
to Sutton is as follows:

| | 1.    | Pay to Sutton:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (i)   | 100,000 common shares on closing (issued on April 29,
      1999);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (ii)  | While the Romanex Agreement is in good standing on each
      anniversary of closing to and including the fifth anniversary, 50,000
      additional common shares. All 250,000 common shares have been issued, at a
      deemed price of $0.40 per share;                                                                                                                                                                                                                                                                                                                              
| | (iii) | Sutton agrees to offer the common shares to the Company
      at market price for 10 days prior to selling them on the open
    market.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 2.    | Conduct such programs as are necessary to keep the Marudi
      Mountain Property in good standing;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 3.    | Within 36 months of closing, complete a pre-feasibility
      study to bring the Marudi Mountain Property to production (this has been
      done);                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 4.    | Subject to electing to proceed to production, agree to
      pay Sutton quarterly out of production US $10.00 per ounce of gold
      produced. Such payment may be at the Companys election, be satisfied by
      the issuance of the Companys shares to Sutton based upon the average
      trading price of the Companys shares on the principal Canadian stock
      exchange on which such shares are traded for the thirty days preceding the
      date of said production. If the common shares are not then trading, then
      the payment to Sutton shall be made in cash;
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 5.    | Romanex Management Ltd. shall retain a net profits
      royalty of 3% (up to a maximum of US $3 million) if the Marudi Mountain
      Property goes into production after Suttons Tanzania Kabanga Nickel
      Project or a 5% net profits royalty (up to a maximum of US $5 million) if
      the Marudi Mountain Property goes into production prior to Suttons
      Tanzania Kabanga Nickel Project.                                                                                                                                                                             

The Government of Guyana will, at
the time a feasibility study recommending production on the Marudi Mountain
Property is delivered to the Government of Guyana, initially receive a 10%
equity interest in Romanex at no cost. After eight years of production, the
Government of Guyana may purchase an additional 10% equity interest in Romanex
at fair market value. After ten years but before the expiration of the twelfth
year of production, the Government of Guyana may purchase an additional 15%
equity interest in Romanex at fair market value. The Government of Guyana will
retain a 5% net smelter royalty which is reduced to 3% during the period in
which the Company is recovering its costs of putting the Marudi Mountain
Property into production.

Pursuant to a finders fee
agreement dated April 25, 1998 between the Company and A-Q Marketing Corporation
(A-Q), a finders fee of 10,000 common shares was issued to A-Q on April 29,
1999 in connection with the Companys acquisition of the Marudi Mountain
Property.

22

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Location and Description

The Marudi Mountain Property
consists of one exploration license covering 5,574 hectares located in the
Rupununi Mining District of southwestern Guyana. The property is centred on
Marudi Mountain in extreme southwestern Guyana at 2°15N latitude and 59°10W
longitude. It is 35 kilometres southeast of Aishalton. Surface access to
Aishalton is possible via Lethem from Boa Vista in Brazil and from Georgetown.

The surface route from Georgetown
to Lethem, about 500 km, has been used to mobilize equipment and vehicles and
provide drilling supplies to the Marudi project since 1991. This route was
significantly upgraded during 1991 and 1992 from Lethem northward to Karupukari
- the crossing point on the Essequibo River.

At the Georgetown end, the road
has benefited from the Omai development and offers good access to Maburi Hill.
The Maburi Hill to Karupukari section, which is about 100 kilometres, is very
difficult and can be impassable during wet periods. Diesel and gasoline have
been supplied to the project by truck from Boa Vista, Brazil through the border
at Lethem and then southeast for 120 km through Dadanaw to Aishalton.

A good track leads southeast from
Aishalton over 10 km of savanna to the forest edge at Bush Mouth. From Bush
Mouth to Marudi Mountain, another 27.5 km, the track gradually deteriorates.
Four-wheel drive is essential and during rainy season, a farm tractor and
trailer, sometimes assisted by a caterpillar tractor, is the dependable means of
supply.

A camp that can accommodate up to
25 people is maintained throughout the year. Other than the Companys camp,
there is no infrastructure to the property and no access to power transmission
lines.

Joint Venture

On March 23, 2002, the Company
entered into a joint venture agreement with Nazinine Jamshidi & Associates
(Jamshidi), a private company related to the Maple Creek deposit, to explore,
develop and mine gold resources at the Marudi Mountain property. Under terms of
the agreement, the Company would assign specific areas of its mining rights to
an operating company to be formed. Jamshidi agreed to contribute a total of $1.2
million to the Company to provide funds for the acquisition of capital assets
and operating infrastructure in return for a 45% interest in the operating
company. In addition, Jamshidi would receive a 3% interest in Romanex. A
finders fee of 10% was payable to a non-related third party.

The joint venture was entered
into with the intent to start a small scale, high grade operation near the main
mineralized area in order to gain information about the deposit while generating
positive cash flow. Management decided however that the benefit would not be
sufficient for a public company and instead put in place an exploration program
to better define and potentially enlarge the existing mineralized areas. This
program was completed and was budgeted to cost US $500,000. Due in part to the
change in plans, the joint venture partner agreed to dissolve the joint venture
on the condition that the original deposit of US $80,000 would be refunded. This
was done and the joint venture was cancelled by mutual agreement in September
2003.

Regional Geology

Marudi Mountain is near the
geographic centre of the Precambrian Guyana Shield. The oldest rocks at Marudi
are assigned to the Marudi Formation, one of five belts or large rafts (hundreds
of square kilometres each) of metamorphosed sediments and volcanics included in
the Kwitaro Group. These rafts or enclaves are separated from each other by
granitic rocks of the Southern Guyana Granite Complex.

Phyllites, biotite-muscovite
schists, quartzites and amphibolite are the main components of all the Kwitaro
Group formations. Quartzite as used in this document is a pseudoquartzite
resulting from the metamorphic crystallization of siliceous exhalite. Near
Marudi, there is a small stock called the Marudi Granodiorite. It is considered
to be post tectonic and is thought be associated with the gold
mineralization.

23

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Local Geology and
Mineralization

The geology of the concessions
consists of steeply dipping, auriferous, magnetite-bearing pseudoquartzites
sandwiched between formations of metamorphosed sediments (muds) and volcanics
(andesite). The pseudoquartzites, which show gold mineralization to the maximum
depth tested of over 220 meters, may have been mineralized by a near-by granitic
stock (Marudi Granite). The upper twenty to fifty meters of the rocks in the
area have been weathered to saprolite.

The Mazoa Hill deposit is the
most important concentration of gold identified to date on the Marudi Mountain
property. Gold occurs within a stratigraphic unit of quartz-magnetite iron
formation (called quartzite) which strikes north 40 to 50 degrees west and dips
about 75 degrees southwest. The gold-bearing block of quartzite is limited to
the northeast by a stratigraphic and structural footwall of meta-andesite. Thin
bedded iron formation lies unconformably on the southeast contact. A steep
northeast-trending fault truncates the northwest end of the quartzite block and
several faults of similar attitude are suspected in the area of difficult
drilling at the southeast end of the drilled area.

At surface the rectangular
outline of the gold zone is 70 to 80 metres wide, 170 metres long is oriented
northwest, and forms a prominent topographic knob at the northwest end of a
narrow linear ridge. The ridge extends to the south southeast for 900 metres and
is suggestive that the quartzite zone may act as a spine of the ridge.

The other concentration of gold
is centred at Marudi Ridge. The stratigraphy is represented by three distinct
subsections, including a footwall of andesite flows, a middle section of
carbonate and quartzite which contains the gold mineralization, and an upper
section of fine clastics. The general strike of the quartzite zone is
approximately east-west although the zone appears to be folded in a wide
arch.

Exploration History

The Marudi Mountain Property was
first investigated in the late 1930s. However, considerable exploration was done
in the late 1940s, the early 1980s and in the 1990s. The latest work programs
were conducted in 1994 by Romanex Management Ltd. of behalf of Sutton and
included some 14,322 lineal meters of diamond drilling in 72 holes.

Although many auriferous
pseudoquartzite showings and gold soil/boulder anomalies have been located,
only, two gold mineralized zones have been tested to date; the Mazoa Hill and
Marudi Ridge deposits.

The majority of the recent
drilling (43 holes) has been conducted on the Mazoa Hill deposit, which averages
some eighty meters wide and 160 meters long. Drilling by Sutton has outlined a
mineral deposit with 7,500,000 tonnes with an average grade of 1.83 grams gold
per tonne. For the most part, the amount of drilling on the Mazoa Hill has been
adequate to assess its potential within close limits. A major exception to this
is the lack of testing on the thick weathered portion of the deposit.

Nineteen diamond drill holes were
drilled by Sutton on the Marudi Ridge deposit and Sutton outlined gold
mineralization of approximately 1,400,000 tons grading 1.82 g Au/tonne. This
zone which has an average width of some twenty to twenty-five meters has been
tested over a length of 220 m. The Marudi quartzite zone, which may constitute
the spine of Marudi Ridge, remains open to depth and along strike for a distance
of 1,000 meters. Possible secondary zones of enrichment in the weathered portion
of the deposit have not been adequately tested.

Additional work to define
additional quartzite in areas other than Mazoa Hill and Marudi Ridge was carried
out by Sutton at various times during past exploration programs. Five other
prospects have been identified on the property but only limited exploration has
been conducted.

Various companies have conducted
metallurgical testwork. The work to date shows good to excellent gold
recoveries, ranging from 65% gold recovery in just 26 days on a simulated
cyanide heap-leach test, to 98% for a standard grinding, jigging, and CIP
cyanide process.

24

---



Exploration conducted by the
Company during its 2001 fiscal year included establishing property lines,
reinterpretation of existing data, mapping and sampling of alluvial workings.
Further evaluation was completed during the Companys fiscal year ended March
31, 2002. Emphasis was put on improving the access to the property. Activities
during the fiscal 2003 and 2004 years were limited to care and maintenance.

Proposed Exploration Program

The Company completed initial
preparatory work on road repairs and bridge building in preparation for a
drilling program. The drilling program was suspended due to the onset of the
rainy season but has recently recommenced with actual drilling commencing in
October 2004 and completed in April 2005. The goal of the approximately 2,500
metre program is to better define the existing resource areas and to identify
potential extensions and additions to areas of gold mineralization.

The Marudi drilling program was
completed in mid-April 2005 and analysis of data and geological interpretation
is ongoing. Line cutting is also ongoing on parts of the Marudi concession that
was not included in the drilling program and on the adjacent Paint Mountain
property.

Marudi Mountain and Paint Mountain

Effective March 6, 2007, the
Company executed Agreements with Shoreham Resources Ltd. (Shoreham) for the
acceleration of the exploration and development of the Marudi Mountain and Paint
Mountain prospects in Guyana.

Under the terms of the first
agreement, the Company granted Shoreham the option to earn an initial 50%
working interest in the Marudi Mountain Gold project by completing US$ 2,000,000
in exploration and qualified project management expenditures during a period of
three years or less. Shoreham may earn a further 25% by completing an additional
US$ 2,000,000 in exploration and development work prior to the fourth
anniversary of the Agreement. The Company has the option to retain a 25%
interest in the property going forward.

Under Shoreham's direction and
supervision, exploration will focus on expanding known gold occurrences at both
the Marudi and Paint Mountain prospects with a view to identifying additional
mining opportunities in this large under-explored gold producing area and to
provide a resource report compliant with Canadian National Instrument 43-101.
The Company is of the view that this course of action provides the best
opportunity for early expansion, definition and development of the Marudi and
Paint Mountain gold projects. This has reduced the Companys costs with respect
to operations in Guyana while retaining an interest in the development potential
of Marudi and Paint Mountain.

The second agreement provides for
the sale to Shoreham of 100% of the Companys Potaro assets in consideration of
payment to the Company of an aggregate sum of US$ 1,200,000 over four years.

The transaction and execution of
the Agreements between the Company and Shoreham, is expected to provide the
Company the opportunity to focus on the Crucitas gold mine development in Costa
Rica that is currently in the predevelopment phase.

25

---



Costa Rica

Cerro Crucitas Project

Acquisition, Location and
Description

Pursuant to the terms of a Share
Purchase Agreement dated May 15, 2000 (the Crucitas Agreement) between the
Company, Lyon Lake Mines (Barbados) Ltd. (LLMB) and Lyon Lake Mines Ltd.
(Lyon Lake), the Company purchased 100% of the issued and outstanding shares
of LLMB which is the ultimate beneficial owner of the Cerro Crucitas Project in
Costa Rica. The Company purchased all of the shares of LLMB for the following
consideration to Lyon Lake:

| | (1) | Cash payment of US $25,000 (paid);                                                                                                                                                          
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                             
| | (2) | The issuance of 250,000 common shares at a deemed price
      of $1.15 per share (issued June 9, 2000);                                                                                     
| |     |                                                                                                                                                                                             
| | (3) | Payment of certain payables of Lyon Lake totaling US
      $357,606 (paid);                                                                                                                 
| |     |                                                                                                                                                                                             
| | (4) | Payment by Lyon Lake of all indebtedness and payables of
      LLMB and its subsidiaries not exceeding US $142,000 (paid);                                                                  
| |     |                                                                                                                                                                                             
| | (5) | Assumption of Lyon Lakes obligation to pay a 1% royalty
      to a maximum of US $3,000,000 from the date an exploitation permit is
      granted in respect of any of the concessions; and
| |     |                                                                                                                                                                                             
| | (6) | Payment of a net smelter royalty of 1% on all production
      from start-up to a maximum of US $20 million.                                                                                

On June 9, 2000, the Company also
issued 80,000 common shares at a deemed price of $1.15 per share to Yorkton
Securities Inc. as a finders fee for the Cerro Crucitas Property.

The Cerro Crucitas Project is an
advanced exploration project consisting of 10 mining concessions covering an
area of 176 square kilometres in north-central Costa Rica, 105 km north of San
Jose and 16 km northeast of the small town of Coopevega, in the province of
Alajuela. The San Juan River that forms the border with Nicaragua is located 5km
north of the Cerro Crucitas site.

Access to the site from San Jose
is via paved highway to Santa Rosa. From Santa Rosa there are two routes to the
site, each of about 40 km in length. Both routes are gravel and clay-packed
secondary roads that can be in very poor condition after heavy rains. Under
normal conditions, the drive from San Jose to the project site can take about
five hours. A nearby private airstrip, located some 12 km from the property, has
been used and is still available.

An exploration camp has been
constructed at the site that accommodates about 80 people. The camp structures
were built with concrete brick walls and concrete floors, and have been under
care and maintenance since exploration was suspended by Lyon Lake.

Geology

The Crucitas gold deposits are
contained within altered rocks of felsic dome complexes of probable Middle
Miocene age, or within altered trachyandesite to dacite flows with interbedded
lapilli tuffs and breccias. The basement to this succession is composed of
distal marine turbidites, probably Oligocene, that were faulted and folded
before deposition of andesitic and basaltic volcanic rocks lying immediately
below the felsic pyroclastic and dome and breccia units. Younger basalts
originally covered the entire felsic sequence and are locally preserved,
possibly masking additional dome complexes. Late-stage diabase dyke complexes
cut the felsic units.

Gold occurs within altered felsic
volcanic rocks. The most important alteration event is a pervasive
quartz-adularia-pyrite overprint on earlier alteration, probably including in
some areas intense silicification. The picture is complicated by local intense
clay alteration. Gold in the unweathered rocks was deposited in at least two
pulses; an early disseminated phase with quartz-adularia-pyrite, followed by at
least two stages of veining. The earlier veins appear to have been
quart-adularia-pyrite; these were then cut by veins with pyrite and minor
amounts of quartz.

26

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The observed metallic mineralogy
in the un-oxidised rock is simple. Pyrite is most common, with subordinate
amounts of chalcopyrite, covellite, Ag-bearing tetrahedrite, acanthite and
argentian gold. The gold occurs as rounded inclusions in pyrite or as angular
grains in quartz-adularia veins. In the weathered material, pyrite has been
altered to goethite, with inclusions of gold. The fineness of the gold does not
appear to vary from place to place, suggesting that there has been no
relocation of the gold during weathering. However, there is a distinct
tendency for the silver content to be markedly less above the weathering
contact, suggesting a breakdown of silver-bearing species and migration of
silver during weathering.

Structural controls on
mineralisation are not clearly understood, but it appears that there are
conjugate sets of fractures in generally northwest and northeast directions. It
has been conjectured that the intersections of these zones may have acted as
locii for mineralizing fluids.

Weathering of the various rock
types has resulted in the development of a variable thickness of saprolite, with
a relatively thin layer of lesser weathered material known as saprock between
the saprolite and the unweathered bedrock. In many cases, the definition of
these units, and also of the surficial overburden, is somewhat subjective. In
general in the area drilled, the overburden unit ranges from 0 to about 20
metres, averaging about 2 metres; saprolite ranges from 0 to about 60 metres,
averaging about 13 metres; and saprock ranges from 0 to about 50 metres,
averaging about 6 metres.

There are two well-defined
gold-bearing zones, Fortuna and Botija, and a third less well-defined zone known
as Fuentes to the south-west of Fortuna. Other zones may be present, given the
scattered intersections observed in areas where drilling is sparse.

The larger zones are both
centered on felsic dome and flow complexes in a thick pile of intermediate flows
and pyroclastic rocks; Fuentes is in slightly less acid flow rocks.

Exploration History

The Crucitas Project was
initially explored in 1992 by a small geological consulting firm, who recognized
the geological potential of the area and who later applied for the mineral
concession. The basis of this initial exploration was that prospective volcanic
rocks and structural features suitable for the formation or epithermal deposits
underline the area. The property was optioned to Placer Dome in 1992 and
regional stream sampling by Placer Dome led to the initial discovery of
anomalous gold values.

In 1993, further stream sediment
sampling, soil geochemistry, and geologic mapping were carried out to define
drill targets. Diamond drilling commenced in October 1993 when the mineral
concessions were legally granted. The first hole intersected what is now known
to be the central part of the Botija Zone. Drilling and other exploration work
continued each year until 1996 by which time sufficient data was available to
complete a resource estimate and a pre-feasibility study in late 1996.

Exploration work by Placer Dome
and Lyon Lake totaled approximately US $32 million. This includes 247 diamond
drill holes, 16 geotechnical holes, and 138 auger holes which combine to provide
a total of 36,300 metres of drilling. The bulk of the drilling was carried out
by Placer Dome and gold assay data is available for most of this drilling.
Silver assays were taken for most, but coverage is not complete.

In November 1998, Placer Dome
sold the project to Lyon Lake who completed a 100 trado auger drill hole program
and commissioned Cambior Project and Construction Group Ltd. (Cambior), along
with several consultants, to prepare a new feasibility study that was completed
(and revised) in August 1999. The Company acquired the Crucitas Project from
Lyon Lake in May 2000 and has been collecting the various studies and data sets
from the authors over time.

Between April 2001 and March
2002, the Company directed its resources towards completing a number of
environmental impact studies in advance of obtaining all necessary permits for
the mining of the gold-enriched saprolite portion deposit.

27

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Proposed Exploration Program

The Company has advanced the
Cerro Crucitas Property to a stage where full production is intended. The
Company was awaiting receipt of an environmental permit when the Government of
Costa Rica announced a proposed decree for a national moratorium on open pit
mining on June 7, 2002. The proposed decree stated that any rights legally
acquired prior to the proposed decree will be respected. The Company holds
exploitation rights with approvals prior to the proposed decree. In October
2002, the Supreme Court of Costa Rica confirmed Vannessas Crucitas project is
exempt from the proposed legislation prohibiting open pit mining.

On October 27, 2003, the Company
announced that it had been advised by the Costa Rican Minister of Environment
that the resolution of Costa Ricas Environmental Protection Agency (Secretaria
Tecnica Nacional Ambiental or SETENA) calling the Companys Environmental
Impact Statement insufficient in scope was legally flawed and that he had
annulled SETENAs ruling. His ruling, based on existing Costa Rican law, allowed
the Company (which has already received its exploitation license) to resume its
application process for the development of the Crucitas gold project. This
latest development was encouraging and Vannessa withdrew its request to annul
the controversial SETENA resolution from the legal proceedings currently in
process in the Supreme Court.

The process with SETENA to have
the Environmental Impact Statement approved has advanced and is ongoing. During
the first quarter of fiscal 2005, the Company continued to work with SETENA to
advance the process of approval of the EIS. Several experts in biology, zoology,
hydro-geological studies and other disciplines visited the site to provide input
to SETENA prior to the public meeting at the end of July 2004. Also in June 2004
a group from SETENA visited the site and the surrounding communities together
with Vannessa staff to see the property and area first hand. An archeological
study, focusing on a small part of the concession was completed. The intensive
series of public meetings, informational meetings, and technical meetings with
SETENA and other groups culminated with a Public Meeting held in a community
near the project site called Coopevega. The Public Meeting was held on Saturday
July 31, 2004 and was an official meeting chaired by staff from SETENA. The
meeting was well attended with over 1,200 people at the event from local
communities, from surrounding towns and from many other locations. The meeting
lasted the entire day and all interested parties were allowed to state their
opinions for, or against, the project and to ask questions of the Company
regarding the technical aspects of the project. Although there was opposition to
the project from various groups the project also had strong support from many
individuals and organizations from the local communities who felt the Company
could develop the project in a safe and environmentally acceptable manner as
laid out in the environmental impact assessment. The local people also expressed
an interest in the employment, economic development, and other opportunities
that would flow from the project in this underdeveloped and under-serviced area
of the country. This meeting was a key step in advancing the process with SETENA
to receive approval of the Companys environmental impact assessment.

At June 30, 2004, the Technical
Review Committee of the Ministry of Environment had not approved the
Environmental Assessment Study for the project. The Ministry of Environment
which is ultimately responsible for approval of the license, had not made a
decision, and has the Companys application under consideration. The receipt of
the Environmental Permit is not assured. Should the permit not be received the
reported carrying value may not reflect actual value. The Company has notified
the Canadian Government and Costa Rican Government it will maintain the
Arbitration Process under the Financial Investment Protection Agreement (FIPA)
signed between the two countries.1

______________________________________1The Canadian government initiated a bilateral investment protection
agreement program in 1989, resulting in the development of the Foreign
Investment Protection Agreement, or FIPA. This program reflected the needs of
Canadian business for instruments to protect their direct investments in
countries not yet covered by international agreements on investment issues.
These treaties provide guarantees, transparency and access for Canadian
investors in specific priority and emerging economies. From 1990 to 1993, Canada
negotiated five Foreign Investment Protection Agreements (FIPAs) modelled on the
OECD model. After 1994, a new Canadian FIPA was developed based on the
investment protection standards of the NAFTA investment chapter, and since that
time eleven FIPAs have been signed and are in force. Six other FIPAs, including
one with Costa Rica, have been signed but are not yet in force.

28

---



During the Companys fiscal year
ended March 31, 2004, after reviewing the Companys interest in the project,
management decided to record an impairment charge of $1,629,869. The Company has
continued to record impairment charges for expenditures subsequent to March 31,
2004 until such time as the Company receives from the Government of Costa Rica
definitive approval to build the Crucitas gold mine.

In December 2004 the Company
learned that the Supreme Court of Costa Rica, in responding to an injunction
filed against the Minister of the Environment or SETENA and the President of the
Republic, ruled that the resolution that awarded the Exploitation Permit on
Cerro Crucitas to the Company be annulled because it violated Article 50 of the
Constitution of Costa Rica. The ruling also indicated that the environmental
approval process should not be impacted by the decision and ordered the State to
pay costs, damages and compensation to the concession holder, which is the
Companys subsidiary in Costa Rica. The ruling does not go into effect until the
parties are formally notified at which time details for the decision is
expected. In the absence of other explanations for the ruling, the Companys
counsel speculates that the ruling may be a misunderstanding of the conditions
that apply to the Mining Title. The Exploitation Permit was issued in full
compliance with all applicable laws and regulations in place at the time which
in 2001 required that the Exploitation Permit be issued before the developer
could apply for the required Environmental Permits. With the change of law in
2002, the developer now requires environmental approval prior to receiving an
Exploitation Permit. Since changes in the law are not retroactive, the Company
believes the status of its Exploitation Permit should not be impacted.

On January 19, 2005, the Company
received a request from SETENA to file responses to questions identified during
the review of the Companys Environmental Impact Statement and during the public
involvement process. The Companys response was in the form of an Annex to the
Environmental Impact Statement.

On September 1, 2005, the
Company, through its 100 percent owned subsidiary, Industrias Infinito S.A.
(Industrias Infinito), received a Resolution from SETENA approving the
Companys Environmental Impact Statement (EIS) dealing with the Crucitas gold
project. The SETENA approval of the EIS means that the Company has now complied
with all of the requisites of the 2001 Mining License. The approval is for the
mining of the saprolite which is weathered and soft material overlying the
unaltered rock below. The saprolite makes up approximately one third of the
resource, and the environmental approval to mine the underlying hardrock will be
requested in fiscal 2008.

On December 12, 2005, the
Company, through Industrias Infinito, successfully concluded the environmental
permitting process for its Crucitas gold project. The final resolution
(Resolución No 3638-2005-SETENA), was issued by SETENA on December
12, 2005. The final resolution specified the amount of the required
Environmental Performance Bond as US$ 600,000. The Company has made preliminary
arrangements for bonding to be put into place and this will be finalized now
that the exact amount of the bond has been identified.

Following the approval of the
Environmental Impact Statement in early September 2005 the Company commenced
working towards producing a feasibility study to secure project financing
building upon the extensive work already completed on the project by Placer Dome
and later Cambior Project & Construction Group for Industrias Infinito. On
March 1, 2006, the Company published a news release announcing results of a
study, prepared in accordance with Canadian National Instrument 43-101 (NI
43-101) reporting resource estimates for the Crucitas project. The study was
prepared by Geostat International Inc. under the direction of Pierre-Jean
Lafleur, P.Eng., who is an independent Qualified Person as defined under NI
43-101. The report was filed and is available to the public on SEDAR dated April
10, 2006.

The Geostat report reviewed the
diamond drilling information completed by Placer Dome Inc. between 1994 and 1996
and the auger drilling completed in 1999 by Lyon Lake Mines Ltd., which
controlled the property at that time. In total 251 diamond drill holes plus 27
geotechnical or ground water holes have been drilled plus 90 auger holes. Total
drilling exceeds 36,000 meters. Geostat conducted a site visit in October of
2005 and had full access to Industrias Infinito technical staff, and all
available data including drilling logs, core, assay information, etc. Geostat
performed its own independent verification of the existing core samples using 21
samples of re-split core, including 3 standards. The correlation between Geostat
assays and those of Industrias Infinito was found to be very good.

29

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The geology of the Crucitas
deposit has been re-interpreted by Carl Caumartin, Vannessas Manager of
Exploration and Development, and his staff at Industrias Infinito. Geostat
reviewed and approved this interpretation in which gold mineralization is
concentrated in vein-controlled structures that are, parallel and largely
sub-vertical and which contain the bulk of the higher grade gold values.

Crucitas Estimated
      ResourcesCut
      Off Grade
    tonnes
    Gold
    Silverg/tonne
    (,000)
    g
      Au/tonne
    g
      Ag/tonneIndicated(1)
    0.5
    25,086
    1.21
    3.17Inferred(2)
    0.5
    12,567
    1.23
    3.14


The resources listed above
include gold and silver contained in hard rock and weathered rock (saprolite) or
partially weathered near saprolite. Indicated gold resource totals include
approximately 20 percent in saprolite, or near saprolite, material and inferred
gold resource totals include approximately 25 percent in saprolite, or near
saprolite, material.

(1) Cautionary Note to U.S. Investors concerning estimates
of Indicated Resources:This table uses the term indicated resources.
The Company advises U.S. investors that while this term is recognized and
required by Canadian regulations, the U.S. Securities and Exchange Commission
does not recognize it. U.S. investors are cautioned not to assume that any
part or all of mineral deposits in this category will ever be converted into
reserves.

(2) Cautionary Note to U.S. Investors concerning estimates
of Inferred Resources:This table uses the term inferred resources. The
Company advises U.S. investors that while this term is recognized and required
by Canadian regulations, the U.S. Securities and Exchange Commission does not
recognize it. Inferred resources have a great amount of uncertainty as to
their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of a feasibility
study or prefeasibility studies, except in rare cases. U.S. investors are
cautioned not to assume that any part or all of an inferred resource exists or
is economically or legally minable.

In March 2006, the Company also
announced it had secured a 1,750 Hp SAG mill and a 3,000 Hp ball mill for US$ 1
million which are suitable for milling 5,000 tonnes per day of hard rock feed
and serves the purposes required at Crucitas. These assets were originally
purchased in January 2006 secured by a deposit and as of June 30, 2006 payments
have been made and the mills are in storage awaiting shipment to Costa Rica.

The Company has in place an
Exploitation Permit which provides the rights to mine the Crucitas Exploitation
Concession comprising 1,200 hectares. The Company has Environmental Approval to
mine the saprolite material and is currently in the process of preparing
material required to apply for Environmental Approval to mine the hard rock
material as well.

In January of 2007 the Company
announced the results of a Feasibility Study on the Crucitas Gold Property. The
Feasibility Study is compliant with National Instrument 43-101 which means it
meets standards set by the Canadian Securities Administrators for the disclosure
of mineral projects. A detailed summary of this study is available to the public
on SEDAR dated February 26, 2007. The study was completed by Micon International
Limited, Geostat Systems International Inc, and Golder Associates Ltd. and the
Qualified Persons in those organizations, as defined by NI 43-101, have
certified their qualifications for the portions of the study for which they have
responsibility , and those certifications are included in the report filed on
SEDAR. (See Item 19. Exhibits 4.16, 4.17, and 4.18. )

30

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The study was for mining both the
saprolite and hard rock material and was based on costing and quotes obtained in
the last half of 2006. The gold price used in the study was US$ 550 per
ounce.

The key tables and findings of the
Feasibility Study are shown below:

Estimated Indicated Mineral Resources (1) at Las Crucitas at 0.5
g Au/tonne

Material/Zone
    Tonnes
    Gold (g/t)
    Silver (g/t)SaproliteTotal Structure
    3,528,630
    1.6
    1.91Total Outvein
    638,472
    0.64
    1.00Total Saprolite
    4,167,102
    1.45
    1.77RockTotal Structure
    16,540,075
    1.32
    3.51Total Outvein
    4,378,546
    0.63
    3.25Total Rock
    20,918,621
    1.18
    3.45Total
    25,085,723
    1.22
    3.17


(1) Cautionary Note to U.S. Investors concerning estimates
of Indicated Resources:This table uses the term indicated resources.
The Company advises U.S. investors that while this term is recognized and
required by Canadian regulations, the U.S. Securities and Exchange Commission
does not recognize it. U.S. investors are cautioned not to assume that any
part or all of mineral deposits in this category will ever be converted into
reserves.

Estimated Mineable Reserve (2) for Las Crucitas Fortuna and
Botija Open Pits

**Ore Tonnes(Kt)**
    GoldGrade
      (g/t)
    Silver Grade
      **(g/t)**
    Waste(Kt)
    StripRatio
    TotalTonnes**(Kt)**Saprolite
    2,270.4
    1.46
    1,76
    3,001.7
    1.6
    5,802.4Hard Rock
    7,681.6
    1.43
    3.58
    9,307.9
    1.2
    17,098.4Total
    9,951.9
    1.44
    3.20
    12,309.6
    1.3
    22,900.8Saprolite
    1,316.1
    1.51
    1.93
    1,669.9
    1.5
    3,258.1Hard Rock
    3,645.9
    1.40
    3.85
    6,137.2
    1.7
    9,883.0Total
    4,962.0
    1.43
    3.36
    7,807.1
    1.6
    13,141.1Total
    14,914.0
    1.43
    3.25
    20,116.7
    1.4
    36,042.0


Notes on Reserves:

| | 1) | Mineable reserves were calculated by applying 5% dilution
      to ore tonnes of waste tonnes at the average waste gold grade, and
      subtracting 4.76% of diluted ore tonnes as ore losses. This equates to a
      factor of 96% on the grade of the ore but has no effect on
  tonnage.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                              
| | 2) | Some 1.01 Mt of Inferred Resource at a grade of 1.23 g/t
      lies within the boundaries of the final pit shell, are included in the
      total tonnes shown, and will be extracted during mining. This material
      should be stockpiled at the plant and sampled.                      
| |    |                                                                                                                                                                                                                                                                                              
| | 3) | The strip ratio is calculated as total ore tonnes divided
      by waste plus inferred ore tonnes. The total of inferred resource within
      the final design amounts to 7% of the total indicated
  reserves.                                                                             

(2) Cautionary Note to U.S. Investors concerning estimates
of Proven and Probable Reserves:The estimates of mineral reserves shown on
this page have been prepared in accordance with Canadian National Instrument
43-101. The definitions of proven and probable reserves used in NI 43-101 differ
from the definitions in SEC Industry Guide 7. Accordingly, the Companys
disclosure of mineral reserves herein may not be comparable to information from
U.S. companies subject to the SECs reporting and disclosure requirements.

31

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Economic Evaluation (Summarized from Study Dated February 26,
2007)

Contract MiningTotal ore
    Saprolite onlyLife of mine operating cost, $/t ore
    13.15
    12.05Pre-production capital cost, $
    47,031,000
    47,031,000Total Gold Produced, oz
    636,530
    165,340Cash Cost (LOM Average) $/oz Au with Ag credit
    299.48
    254.18Ore Mined tonnes
    14,914,000
    3,586,000Average Grade g/t
    1.43
    1.49Stripping Ratio (Mine Life)
    1.42
    0.82Gold Price $/oz
    550
    550Cashflow pre-tax $
    84,935,000
    -3,247,000Cashflow after tax $
    61,179,000
    -5,842,000IRR , after tax
    26.0
    -6.8NPV 10%, after tax
    24,528,000
    -11,132,000Payback period years
    3.0
    NA


The summary results of this analysis as presented in the table
above are for the base case which utilizes contract mining. The base case
assumes mining of the saprolite ore plus the economic hard rock ore, with the
alternative case of saprolite-only production. The cash cost of gold production
includes the credit for silver sales applied as a deduction from the total
operating cost, with the result expressed as net operating cost per ounce of
gold sold.

The Feasibility Study, completed by MICON, Geostat, and Golder,
estimates that the Crucitas project would have an internal rate of return after
tax of approximately 26 percent based on gold at US$ 550 per ounce, with
estimates exchange rates and costs based on those in place in the last half of
2006, and the mining of both saprolite and hard-rock material.

The Company is working with
consultants in Costa Rica and Canada to prepare the additional information
required in order to submit an amended Environmental Impact Study to SETENA to
include mining of both the hard-rock material in addition to the approved mining
of surficial saprolite material. The mining of hard-rock material involves
deepening of the mine with no change to the anticipated processing plant, mine
equipment selection or infrastructure requirements. The major differences from
mining saprolite to saprolite plus the deeper hard-rock material will be the use
of explosives, greater mining depth, and the disposal of waste hard-rock in the
tailings dam area. Disposing of waste hard-rock in the tailings dam area means
that any potentially acid generating material in the waste rock will be buried
and maintained below the surface of the water in the tailings dam which will
eliminate any potential for harmful acid generation.

In addition to the Exploitation
Permit on the 1,200 hectares associated with the Crucitas project, the Company
holds fifteen times this amount of ground, or 18,000 hectares, in Exploration
Concessions adjacent to the Crucitas Concession.

The Exploration Concessions are
currently impacted by a Presidential Decree which places a Moratorium on
open-pit gold mining in Costa Rica which was put in place in June of 2002. This
does not impact the Exploitation Concession which includes the Crucitas deposit
which was exempt from the Moratorium. Although the Moratorium allows underground
gold mining the inability to surface mine impacts the potential of these
concessions. Although earlier exploration conducted by Placer Dome including
diamond drilling, resulted in identification of gold mineralization on the
Exploration Concessions south of Crucitas at Conchudita, no additional work has
been conducted to improve the historical estimates of grade and volume estimated
by Placer at the time.

The Company believes that to date
it has fulfilled all of the requirements of the regulatory body responsible for
Mining, Energy and the Environment, (MINAE) in the approval and development
process at Crucitas. The Company is confident that MINAE will confirm that the
Company has complied with all requirements associated with obtaining and
maintaining the Exploitation Concession at Crucitas. This belief is supported by
an expert legal opinion which maintains the Company has fulfilled all of its
regulatory obligations with respect to the Exploitation

32

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Concession and that MINAE, the regulatory body exercising
authority over the project, should thereby ultimately support this position.

The Company is continuing to
prepare material that will be required to receive environmental approvals for
the mining of the hard-rock material at Crucitas. The Company has already
received Environmental Approval to mine the saprolite or soft-rock material on
the surface of the deposit. The Company continues to be involved in several
major social development programs in the communities close to the Crucitas
project including computer and tailoring training, fish farming, and organic
agriculture. A new section of road and a bridge to provide improved access to
the mine site and the small local village of Crucitas is being completed.

The Company continues to work
with the small communities near the mine in Alejuela Province to ensure that
community needs and concerns are addressed and to fulfill the commitments made
in the Environmental Impact Statement and during the extensive Public
Involvement Process.

|ITEM 5 | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------ | --------------------------------------------

Introduction

The Company is an exploration
company engaged in the search for economic deposits of precious metals and
stones primarily in Central and South America. The Company also evaluates
properties available for acquisition.

The following Management
Discussion and Analysis (MD&A) contains assumptions, estimates and other
forward looking statements regarding future events. Such forward-looking
statements involve inherent risks and uncertainties and are subject to factors,
many of which are beyond the Companys control that may cause actual results or
performance to differ materially from those currently anticipated in such
statements. Important factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements
include among others gold price volatility and economic and political events,
and other risk factors as discussed above under Item 3. Key Information -- D.
Risk Factors. Readers are cautioned not to put undue reliance on these
forward-looking statements.

The MD&A provides an analysis
of the Companys business and compares its fiscal year 2007 financial results
with those of the previous 2006 fiscal year. The MD&A should be read in
conjunction with the audited consolidated financial statements and related notes
filed herewith. The Company prepares and files its financial statements and
MD&A in Canadian (CDN) dollars.

The Companys financial
statements have been prepared in accordance with accounting principles generally
accepted in Canada (Canadian GAAP), which differ in certain respects from
those principles that the Company would have followed had its consolidated
financial statements been prepared in accordance with accounting principles
generally accepted in the United States (U.S. GAAP). Differences between
Canadian GAAP and U.S. GAAP, as applicable to the Company, are set forth in Note
15 to the accompanying audited consolidated financial statements of the
Company.

Critical Accounting Policies

The Companys accounting policies
are set out in Note 2 of the accompanying audited consolidated financial
statements. All of the Companys mineral property interests are at the
exploration stage. Costs incurred for exploration or development are capitalized
together with the cost of acquisition until such time as a property is in
commercial production, sold or abandoned. Capital assets which are dedicated to
use for specific properties are capitalized together with costs incurred to the
property to which they relate. Carrying values as reported on the balance sheet
($9,521,407 at March 31, 2007 and $7,000,771 at March 31, 2006) may not
necessarily reflect actual present or future value. Recovery of carrying costs
is ultimately dependent upon future commercial success or proceeds from
disposition of the mineral interests.

The Company holds all of its
mineral property interests outside of Canada. Exploration and development
expenditures are deferred and are charged to a specific mineral property
interest if identifiable. Where an area of interest is defined encompassing
multiple interests, costs are allocated on a systematic basis over the
properties in

33

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the identified area. Where the carrying value of a specific
interest within an area of interest is impaired, the accumulated acquisition and
deferred costs relating to that interest are either reallocated to the remaining
interests in the area or are written down directly if identifiable.

The Company reviews the carrying value
of mineral property interests on a periodic basis for impairment.

Use of Estimates

The preparation of financial
statements in conformity with Canadian generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Significant areas requiring
the use of management estimates relate to the determination of impairment of
assets, useful lives for depreciation and amortization and allocation of cost to
specific mineral interests. Financial results as determined by actual events
could differ from those estimates.

The carrying value of mineral
property interests is based on costs incurred and managements estimate of net
recoverable value. Estimates may not necessarily reflect actual recoverable
value as this will be dependent on the development program, the nature of the
mineral deposit, commodity prices, adequate funding and the ability of the
Company to achieve commercial production.

| | A. | Operating Results
| | -- | -----------------

The financial statements have
been prepared in accordance with Canadian generally accepted accounting
principles ("GAAP") on a "going concern" basis, which presumes the Company will
realize its assets and discharge its liabilities in the normal course of
business for the foreseeable future. As at March 31, 2007 the Company had
incurred an accumulated deficit from operations of approximately $51 million and
had a working capital deficiency of approximately $6.6 million. Funding for
operations is raised primarily through public and private share offerings and
debt financing, of which significant amounts have been provided by the Company's
controlling shareholder (see B. Liquidity and Capital Resources -- Subsequent
Events -- Financings subsequent to March 31, 2007).

There is considerable uncertainty
regarding the Companys ability to operate as a going concern without the
continued support of the Companys major shareholders and future operations are
dependent on raising sufficient funding through share offerings, debt financing,
joint venture participations or from profitable operations.

Fiscal Year Ended March 31, 2007
Compared to Fiscal Year Ended March 31, 2006

The Company incurred a net loss
of $5,376,793 or $0.06 per share for the fiscal year ended March 31, 2007
(Fiscal 2007) compared to a net loss of $7,473,975 or $0.09 per share for the
fiscal year ended March 31, 2006 (Fiscal 2006). The major components of the
net loss in Fiscal 2007 were general and administrative expenses of $993,208 net
of interest income of $1,631, project development expenditures of $1,908,686,
impairment of mineral property interests totaling $921,152, interest and
financing expenditures of $1,360,441 and stock-based compensation of $193,306.
In comparison, the net loss in Fiscal 2006 consisted of general and
administrative expenses of $1,327,458 net of interest income of $4,504, project
development expenditures of $1,937,244, impairment of mineral interests totaling
$3,378,614 interest and financing expenditures of $302,054 and stock-based
compensation of $528,605.

Administrative Expenses

Administrative expenses incurred
in Canada for the fiscal year ended March 31, 2007 decreased by $672,422 to
$1,188,145 in Fiscal 2007 from $1,860,567 in 2006. Expense categories showing
decreases included professional fees which decreased by $82,025 to $242,140 in
Fiscal 2007 from $324,165 in Fiscal 2006 and office wages and services which
decreased by $111,956 from Fiscal 2006 of $499,061 to $387,105 in Fiscal 2007.
Stock option compensation decreased by $335,299 from $528,605 in Fiscal 2006 to
$193,306 in Fiscal 2007.

34

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Project Development Expenses

Project development expenses in
Fiscal 2007 decreased by $28,558 to $1,908,686 from Fiscal 2006 expenses of
$1,937,244 primarily reflecting consulting fees for the Crucitas gold project in
Costa Rica and decreased legal fees relating to the Companys international
arbitration process with respect to Las Cristinas. The consulting fee increase
of $271,733 is mainly attributable to the professional services associated with
continued work on the bankable feasibility study that started in Fiscal 2006
including a test program to evaluate cyanide destruction options and treatment
of leach effluents and review of the geological resources mine planning and
costing and other activities all associated with the Crucitas gold project in
Costa Rica. Offsetting the consulting fee increase, $300,291 in arbitration fees
was due to the legal and technical support fees reduction associated with the
international arbitration process pertaining to Las Cristinas.

During Fiscal 2007, the Company
granted 1,430,000 (2006 - 1,525,000) stock options to directors, consultants and
employees. Using the Black-Scholes fair value based option pricing method, stock
options granted have been valued at $0.18 (2006 - $0.40) per stock option for a
total value of $234,792 (2006 - $610,698) of which $193,306 (2006 - $528,605)
was charged to operations and $41,486 (2006 - $82,093) was allocated to mineral
interests.

Mineral property costs deferred,
net of impairment charges, during Fiscal 2007 totaled $2,520,635 compared to
$467,146 in Fiscal 2006. Capital assets increased from $1,738,312 for Fiscal
2006 to $3,908,666 for Fiscal 2007 mainly attributable to the purchase of the
land and expenditures associated with the processing plant at the Costa Rica
gold mine project.

The Company currently is not
adversely affected by foreign currency fluctuations. The Company incurs costs
and expenses in a variety of international currencies, primarily Canadian
dollars, U.S. dollars, Costa Rican colons and Venezuelan bolivares, and Guyanese
dollars. The Companys functional currency is the Canadian dollar. All the
Companys financings to date have been in Canadian dollars and will continue to
be in Canadian dollars for the foreseeable future. Accordingly, the Company is
subject to the risk of fluctuations in the relative values of the Canadian
dollar as compared to the foreign currencies in which it transacts business.
Although this has not had a materially adverse affect on the Companys results
of operations to date, this may have a materially adverse affect on the
Companys results of operations in the future. The Company is required to
recognize foreign currency translation gains or losses in the determination of
net earnings and losses, except for exchange gains or losses relating to non
monetary assets or liabilities. The Company does not engage in any activities to
hedge against currency fluctuations. For the years ended March 31, 2007 and
2006, net gain/loss resulting from foreign currency fluctuations was immaterial.
The Company is not aware of any government currency policies or regulations
which may affect the Companys operations.

Management periodically evaluates
the economic viability of its mineral properties by reference to exploratory
results generated both internally and by independent mining engineers. Decisions
to abandon, reduce or expand exploration efforts are based upon many factors
including general and specific assessments of mineral deposits, the likelihood
of increasing or decreasing those deposits, land costs, estimates of future
mineral prices, potential extraction methods and cost, the likelihood of
positive or negative changes to the environment, permitting, taxation, labour
and capital costs. There cannot be a predetermined hold period for any property
as geological or economic circumstances render each property unique.

35

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Fiscal Year Ended March 31, 2006
Compared to Fiscal Year Ended March 31, 2005

The Company incurred a net loss
of $7,473,975 or $0.086 per share for Fiscal 2006 compared to a net loss of
$5,342,673 or $0.07 per share for the fiscal year ended March 31, 2005 (Fiscal
2005). The major components of the net loss in Fiscal 2006 were general and
administrative expenses of $1,327,458 net of interest income of $4,504, project
development expenditures of $1,937,244, impairment of mineral property interests
totaling $3,378,614, interest and financing expenditures of $302,054 and
stock-based compensation of $528,605. In comparison, the net loss in Fiscal 2005
consisted of general and administrative expenses of $1,148,795 net of interest
income of $42,159, project development expenditures of $523,906, impairment of
mineral interests totaling $2,824,335 and stock-based compensation of
$624,736.

Administrative Expenses

Administrative expenses incurred
in Canada for the fiscal year ended March 31, 2006 increased by $44,877 from
$1,815,690 in Fiscal 2005 to $1,860,567 in 2006. Increases included professional
fees which increased by $127,832 to $324,165 in Fiscal 2006 from $196,333 in
Fiscal 2005, offset by stock option compensation which decreased by $96,131 from
$624,736 in Fiscal 2005 to $528,605 in Fiscal 2006.

Project Development Expenses

Project development expenses in
Fiscal 2006 increased by $1,413,338 to $1,937,244 from Fiscal 2005 expenses of
$523,906 primarily reflecting consulting fees for the Crucitas gold project in
Costa Rica and increased legal fees relating to the Companys international
arbitration process with respect to Las Cristinas. The consulting fee increase
is mainly attributable to the engagement of professional services associated
with producing a bankable feasibility study including a test program to evaluate
cyanide destruction options and treatment of leach effluents and review of the
geological resources mine planning and costing and other activities all
associated with the Crucitas gold project in Costa Rica. The increase in
arbitration fees was due to increases in legal and technical support fees
associated with the international arbitration process pertaining to Las
Cristinas.

During Fiscal 2006, the Company
granted 1,525,000 (2005 - 1,630,000) stock options to directors, consultants and
employees. Using the Black-Scholes fair value based option pricing method, stock
options granted have been valued at $0.40046 (2005 - $0.42212) per stock option
for a total value of $610,698 (2005 - $688,053) of which $528,605 (2005 -
$624,736) was charged to operations and $82,093 (2005 - $63,317) was allocated
to mineral interests.

Mineral property costs deferred,
net of impairment charges, during Fiscal 2006 totaled $467,146 compared to
$712,564 in Fiscal 2005. Capital assets increased from $553,362 for Fiscal 2005
to $1,738,312 for Fiscal 2006 mainly attributable to the purchase of the SAG and
Ball Mills for the Costa Rica gold mine project.

|B. | Liquidity and Capital
Resources
|-- | -------------------------------

The Company has relied upon
external financing, through the issuance of equity securities, through joint
ventures and loans from the Companys controlling shareholder, Exploram
Enterprises Ltd. (Exploram), a subsidiary of Coril Holdings Ltd. (Coril), to
fund its activities to date. The Company plans to continue to rely upon such
forms of financing for the foreseeable future.

The working capital of the
Company is a direct result of funds raised from the sale of equity shares and
from loan proceeds over the outflow into acquisition and exploration costs as
well as administrative expenses. The Companys working capital balance (deficit)
at the end of the following periods was as follows: March 31, 2007
($6,628,328); March 31, 2006 - $709,685; March 31, 2005  $406,434. The
fluctuations stem from timing differences between when money is raised from
equity issues and when expenditures are committed on the acquisition or
exploration of mineral property interests.

The Companys cash at March 31,
2007 was $280,338 compared to cash of $1,675,350 at March 31, 2006 and cash and
short term investments of $1,062,716 at March 31, 2005. Aside from cash and term
deposits, the Company had no material unused sources of liquid assets. The
Companys cash and cash equivalents were derived

36

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primarily from the issue of equity securities for proceeds of
$3,506,200 and the issue of demand notes aggregating $5,000,000 in Fiscal 2007;
the issue of a convertible debenture for $5,000,000 and the issue of equity
securities for proceeds of $1,724,375 in Fiscal 2006 and the issue of equity
securities for proceeds of $2,047,600 in Fiscal 2005.

Financings Fiscal 2007

During Fiscal 2007, 4,805,500
warrants were exercised by Exploram at a price of $0.40 per warrant for net
proceeds of $1,922,200 and 300,000 stock options were exercised by a Director at
a price of $0.28 for net proceeds of $84,000. Pursuant to the convertible
debenture, (see Financings  Fiscal 2006 below) 5,000,000 warrants were issued
to Exploram on March 1, 2007.

Pursuant to a non-brokered
private placement with Exploram on February 22, 2007, 5,000,000 units were
issued at a price of $0.30 per unit for net proceeds of $1,500,000. Each unit
consisted of one common share and one-half of one warrant entitling the holder
to purchase one additional share at a price of $0.40 per share for a period of
twelve months and at a price of $0.50 for a period thereafter until twenty four
months from the date of closing.

During Fiscal 2007, the Company
issued to Exploram an aggregate of $5,000,000 in demand notes bearing interest
at 9.5% compounded annually and payable monthly to Exploram. Following the end
of Fiscal 2007, the Company repaid an aggregate of $2,500,000 of these notes
(see Subsequent Events  Financings Subsequent to March 31, 2007). The Company
paid debt financing structuring fees of $ 150,000 (2006 - $150,000) related to
$5 million (2006 - $3 million) of short term financing (bearing interest at
9.5%) and related to the convertible debenture. These fees were expensed during
Fiscal 2007 and 2006 as interest and financing costs.

On August 11, 2006, the Company
(i) extended the expiry date and reduced the exercise price of 2,000,000
outstanding share purchase warrants exercisable at $0.89 per share and expiring
on August 28, 2006, such that the warrants will become exercisable at $0.60 per
share until August 28, 2007, subject to earlier expiry if the Company's closing
share price exceeds $0.72 for 10 consecutive trading days; and (ii) extended the
expiry date and reduced the exercise price of 1,700,000 outstanding share
purchase warrants exercisable at $1.06 per share and expiring on August 26,
2006, such that the warrants will become exercisable at $0.60 per share until
August 26, 2007 subject to earlier expiry if the Companys closing share price
exceeds $0.72 for 10 consecutive trading days.

On December 22, 2006, the Company
extended the expiry date of 1,344,500 share purchase warrants issued on January
11, 2005 entitling the holders to acquire one additional common share of the
Company at a price of $0.40 per share from January 11, 2007 to January 11, 2008
with no other terms of those warrants being amended.

On February 1, 2007, the Company
extended the expiry date of 2,500,000 share purchase warrants issued on February
18, 2004 entitling the holders to acquire one additional common share of the
Company at a price of $0.66 per share from February 18, 2007 to February 18,
2008 with no other terms of those warrants being amended.

Financings Fiscal 2006

Coril advanced the following
monies to the Company: $250,000 on October 5, 2005, $325,000 on November 4, 2005
and $250,000 on December 9, 2005 pursuant to non interest bearing promissory
notes payable on demand (see Item 7 -- Major Shareholders and Related Party
Transactions). On December 21, 2005, the Company repaid Coril all of the
aforementioned notes in full. On February 9, 2006, Coril advanced $500,000
pursuant to a non interest bearing promissory note payable on demand. On March
1, 2006, the Company repaid the note in full.

On May 20, 2005, Exploram
exercised 2,900,000 warrants of the Company at a price of $0.40 per share for
proceeds of $1,160,000.

On December 20, 2005 Exploram
advanced $2,000,000 to the Company pursuant to a Secured Debenture payable on
demand at any time after February 15, 2006, bearing interest at 9.5% compounded
annually and payable monthly. The Company agreed to pay a 3% structuring fee for
the financing. On March 2, 2006, the Company repaid these funds to Exploram.

On March 1, 2006, the Company
issued a collateralized convertible debenture with a principal amount of $5
million, in a non-brokered private placement. The purchaser in this private
placement was Exploram. The convertible debenture matures on January 31, 2009
and interest is payable on the outstanding principal amount at a rate of 9.5%
per annum, payable semi-annually on July 31 and January 31. At the option of the
holder, the principal

37

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amount outstanding under the convertible debenture may be converted into common shares any time after January 31, 2007 until maturity at a price of $0.635 per share (which is 20% over the average closing price over the last 10 trading days prior
to March 1, 2006). The principal amount outstanding may be repaid at the option of the Company at any time before January 31, 2007 upon payment of a 5% prepayment penalty, or thereafter upon thirty days notice (within which period Exploram may
convert) without payment of a prepayment penalty.  In addition, for every dollar of principal outstanding on February 1, 2007, the Company was to issue one common share purchase warrant to Exploram, each warrant entitling Exploram to acquire one
common share at any time up to March 1, 2008 at $0.635 per share. On February 1, 2007, the full principal amount of the convertible debenture remained outstanding and accordingly the Company issued to Exploram 5,000,000 warrants having the
foregoing terms. See Financings  Fiscal 2007 above. The Company's obligations under the convertible debenture are secured by a general security agreement over the Company's assets and a pledge of the shares of each of its
subsidiaries. The Company agreed to pay Exploram a structuring fee of $90,000 in respect of the placement. This amount has been charged to financing expenses.

The Company has deemed the fair market value of the liability portion of the convertible debenture upon issuance to be approximately $3.5 million which amount will be accreted to its face value of $5.0 million
through interest expense charges computed at 25% per annum through to January 31, 2009. The balance of the convertible debenture approximating $1,500,000 has been credited to equity and represents the values ascribed to the obligation to issue
warrants and the convertible feature of the debenture.

Financings Fiscal 2005

During Fiscal 2005, the Company completed non-brokered private placements totaling 6,420,000 units at prices ranging from $0.28 to $0.32 per unit for net proceeds of $2,047,600. In the first private
placement, 4,805,500 units were issued at a price of $0.32 per unit. Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one additional share at a price of $0.40 per share until December 22,
2006. The purchaser in this private placement was Exploram. During Fiscal 2007, Exploram exercised its 4,805,500 warrants at the exercise price of $0.40 per share for proceeds of $1,922,200 (see FinancingsFiscal 2007
above). In the second private placement, 1,444,500 units were issued at a price of $0.32 per unit. Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one additional share at a price of
$0.40 per share until January 7, 2007. Also during Fiscal 2005, stock options totaling 170,000 were exercised at a price of $0.28 for proceeds of $47,600.

Working Capital

At March 31, 2007 the Company had working capital (deficiency) of ($6,628,328) (March 31, 2006 ($709,685)). The Company does not currently anticipate any deficiencies in long-term liquidity but if any such
deficiencies arise, the Company would expect to raise additional funds through private placements of its shares as it has in the past, or through borrowings if share placements are not feasible.  The Company might also farm out interests in certain
of its properties to other exploration companies that would assume some of the exploration costs.

Administration, maintenance of properties and exploration can materially affect the Companys liquidity and capital resources. Failure to obtain additional financing on a timely basis may cause the Company to
forfeit its interest in its properties and/or reduce or terminate its operations. The Company continuously reviews its properties to determine whether to increase or curtail exploration, to reduce projects to a care and maintenance
status or to relinquish properties.

38

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The projected expenditures for
the fiscal year ending March 31, 2008 are forecast to be $15 million and can be
summarized as follows:

Item
    TotalGeneral and administrative and project development expenses
      (1)
    $3,000,000ExplorationBrazil
      (2)
    4,000Costa Rica
      (3)
    11,746,000Venezuela
      (4)
    100,000Guyana
    50,000New Property
      Evaluation/Development
    100,000Total estimated expenditures for April 1, 2007  March 31,
      2008:
    $15,000,000


| | (1) | Not including non-cash items, stock-based compensation
      and amortization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (2) | The sole expenditures are an option maintenance fee,
      corporate registration fees and a consultant.                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (3) | After initially refusing the Companys environmental
      study, the government of Costa Rica agreed to continue the permitting
      process. The Company will continue to fund the process. Additional funding
      will be needed once the permitting process is completed; however, no
      decision has been made at this stage whether the development will be
      funded by equity financing or debt/joint venture financing. Projected
      expenditures of $26 million include feasibility studies and an
      environmental bond.
| |     | The Company has an indicative conditional offer for
      project financing for approximately $US 15 million to $US 20 million from
      a financial institution subject to permitting.                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (4) | The bulk of the costs in Venezuela relate to the expected
      arbitration costs dealing with the Las Cristinas
  property.                                                                                                                                                                                                                                                                                                                                                                                                                      

See also Subsequent Events,
below.

Subsequent Events

Properties

Subsequent to March 31, 2007, the
Company reported the following developments concerning its Las Cristinasproperty:

As described under Item 4.
Information on the Company -- D. Property, Plant and Equipment --Venezuela --
Las Cristinas Project -- International Arbitration, on October 28, 2004, the
Secretary-General of the International Centre for Settlement of Investment
Disputes (ICSID) in Washington, D.C. registered the Companys Request For
Arbitration against the Bolivarian Republic of Venezuela with respect to the Las
Cristinas gold and copper property.

The Company submitted its
Memorial to ICSID setting out its argument and written evidence on January 13,
2006. Venezuela raised objections regarding the tribunals jurisdiction in this
matter and the Tribunal scheduled a hearing to address Venezuelas objections in
May 2007. At this hearing the chairman of the tribunal removed himself from the
proceedings due to a potential conflict of interests and the hearings were
suspended. Following the resignation of the chairman of the Tribunal the
arbitrator appointed by Venezuela also resigned as an arbitrator. The process
going forward will be for Venezuela to select a replacement arbitrator, which
has been done, and then both parties will select a third arbitrator to chair the
tribunal. Failing agreement, ICSID will appoint the chairman. Following
selection of the complete Tribunal the arbitration on the jurisdictional
competency of the Tribunal to arbitrate the merits of the case will resume with
no additional filings by the parties, who will utilize the material prepared for
the hearing that had originally been scheduled for May 2007.

39

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Counsel has advised the Company
that jurisdictional objections are not uncommon in arbitration cases of this
kind. The Company remains confident in its position that the Tribunal has
jurisdiction to arbitrate this dispute although there can be no assurance that
the jurisdictional dispute will be resolved in the Companys favor. A hearing on
the merits of the claim will be scheduled if the Tribunal rules in the Companys
favor on the jurisdictional objection.

Substantial uncertainty exists as
to the ultimate resolution of the Companys rights and title issues and the
level of compensation, if any, which may be received through the ICSID process.
Any awards arising from the claim will be shared with other shareholders or
royalty holders of Minca and Vannessa de Venezuela according to pre-existing
contractual rights.

Financings Subsequent to March 31,
2007

|(a) | On May 15, 2007, the Company issued 18,571,371 units (the
      "Units") at the price of $0.35 per Unit for gross proceeds of $6.5
      million, each Unit consisting of one common share and one-half of one
      share purchase warrant (a "Unit Warrant"). Each whole Unit Warrant
      entitles the holder to purchase one additional common share of the Company
      at a price of $0.45 per share until May 15, 2009. Exploram, the
      controlling shareholder of the Company, purchased 4,285,714 Units under
      the private placement and Auro Investments Pty Ltd. (Auro), a private
      company associated with Steven G. Dean, purchased 5,714,285 Units under
      the private placement. In connection with the sale of the Units, the
      Company paid a cash finder's fee of $296,850 and issued share purchase
      warrants (the "Finder's Warrants") allowing the finders to purchase an
      aggregate of 1,413,566 common shares of the Company. Each Finder's Warrant
      is exercisable to acquire one share of the Company at a price of $0.45
      until May 15, 2008.                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company also raised $3 million under a non-brokered
      private placement of a $3 million unsecured convertible note (the "Note")
      issued to Auro. The Note matures May 15, 2009, bears interest at 8%,
      payable at maturity, and is convertible at any time up to maturity into
      units of the Company at $0.41 per unit (a "Note Unit"). Each Note Unit
      consists of one share and one half of one common share purchase warrant (a
      "Note Warrant") and each Note Warrant is exercisable to acquire one share
      of the Company at $0.45 per until May 15, 2009. The Issuer has the right
      to prepay the Note at any time after May 15, 2008, subject to Auro's right
      to convert before prepayment. Auro has the right to elect to receive
      interest payments in cash or in shares of the Company at a price equal to
      the market price on the date the interest is payable. The Note includes
      negative covenants, events of default and conversion right adjustment
      provisions that are standard for transactions of this nature. A cash
      structuring fee of $90,000 was paid by the Company.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On May 15, 2007, in conjunction with this financing, Mr.
      Steven G. Dean was appointed to the Companys Board of Directors and as
      Chairman. Mr. Dean succeeds Manfred Peschke as Chairman of the Company.
      Mr. Peschke is continuing as a director and Chairman of the Audit
      Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(b) | On May 15, 2007, 20,000 stock options were exercised by
      an employee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(c) | On May 31, 2007, the Company repaid two demand loans
      payable to Exploram for a total of $2,500,000. The Company and Exploram
      have agreed that an additional demand loan for $1,500,000, that was
      payable on demand after August 31, 2006, be extended such that it is now
      payable on demand after June 15, 2008. This leaves one Exploram loan for
      $1,000,000 that remains payable on demand as of February 28,
  2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | All of the loans carry interest at a rate of 9.5 percent
      per annum, payable monthly, and are secured by a general security
      agreement over the Companys assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(d) | On July 4, 2007, 790,000 stock options expired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(e) | 1,700,000 and 2,000,000 warrants with expiry dates August
      26, 2007 and August 28, 2007 with an exercise price of $0.60 per share
      expired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(f) | On September 27, 2007, the Company granted incentive
      options under its Stock Option Plan to directors, officers, employees and
      consultants entitling them to purchase up to 1,910,000 shares in its
      capital. Directors and officers received 1,350,000 of the incentive
      options and employees and consultants received                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

40

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560,000. The shares are exercisable on or before September 27,
2012 at a price of $0.40 per share. All of the options vest upon grant except
for 100,000 of the options granted to each of the President and the Vice
President of Operations. These options vest in two tranches upon the achievement
of milestones within certain timeframes, the first tranche of 50,000 options to
each officer upon commencement of full scale mine construction and the second
tranche of 50,000 options to each officer upon the Company obtaining full scale
commercial gold production from the Companys Crucitas gold property located in
Costa Rica.

|C. | Research and Development, Patents and
    Licenses
|-- | --------------------------------------------------

As the Company is a mineral
exploration company, the information required by this section is
inapplicable.

|D. | Trend Information
|-- | -----------------

The Company has incurred losses
in each of the last five fiscal periods due to the lack of an operating property
or other revenue generating activity. Management anticipates that net losses of
the Company will continue for at least the next few years as a result of ongoing
corporate general and administrative expenses, exploration write-downs of
mineral properties and deferred costs. Presently, the Company is in the
exploration stage and there is no assurance that there exists a commercially
viable ore deposit on any of its properties until further exploration is done
and a comprehensive economic evaluation based upon that work concludes economic
and legal feasibility. As well, a number of significant events must occur before
commercial production at any property can begin. These include, but are not
limited to, receipt of certain permits necessary to continue construction of a
mine and commence operations. Even if the Company does commence production on
any of its properties, there is no assurance that such mining activities will be
profitable.

|E. | Off-Balance Sheet
Arrangements
|-- | ------------------------------

The Company has no off-balance
sheet arrangements required to be disclosed in this Annual Report on Form
20-F.

|F. | Tabular Disclosure of Contractual
    Obligations
|-- | -------------------------------------------------

The Companys contractual
obligations for future payments are summarized as follows, as of March 31,
2007:

Contractual Obligations
    Payments due by periodTotal
    < 1 Year
    1
       3 Years
    3
       5 Years
    >
      5 YearsCalgary office
      premises lease
    $
      160,703
    $
      87,602
    $
      73,101
    $ -
    $ -Guyana office
      premises lease
    3,520
    3,520
    -
    -
    -Costa Rica office
      premises lease
    75,075
    46,200
    28,875Total
    $
      239,298
    $
      137,322
    $
      101,976
    $ -
    $ -


Convertible Debenture

On March 1, 2006, the Company
issued a non-brokered private placement of a collateralized convertible
debenture for $5 million to Exploram Enterprises Ltd. ("Exploram"), its
controlling shareholder. The convertible debenture matures on January 31, 2009
and interest is payable on the outstanding principal amount at a rate of 9.5%
per annum, payable semi-annually on July 31 and January 31. At the option of the
holder, the principal amount outstanding under the convertible debenture may be
converted into common shares any time after January 31, 2007 until maturity at a
price of $0.635 per share (which is 20% over the average closing price over the
last 10 trading days prior to March 1, 2006). The principal amount outstanding
may be repaid at the option of the Company at any time before January 31, 2007
upon payment of a 5% prepayment penalty, or thereafter upon thirty days notice
(within which period Exploram may convert) without payment of a prepayment
penalty. In addition, for every dollar of principal outstanding on February 1,
2007, the Company will issue one common share purchase warrant to Exploram, each
warrant entitling Exploram to acquire one common share at any time up to March
1, 2008 at $0.635 per share. The Company's obligations under the convertible
debenture are secured by a general security agreement over the Company's assets
and a pledge of the shares of each of its subsidiaries. The Company agreed to
pay

41

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Exploram a structuring fee of $90,000 in respect of the
placement. This amount has been charged to financing expenses.

The Company has deemed the fair
market value of the liability portion of the convertible debenture upon issuance
to be approximately $3.5 million which amount will be accreted to its face value
of $5 million through interest expense charges computed at 25% per annum through
to January 31, 2009. The balance of the convertible debenture approximating $1.5
million has been credited to equity and represents the values ascribed to the
obligation to issue warrants and the convertible feature of the debenture.

On January 31, 2007, the full
principal amount of the convertible debenture remained outstanding and
accordingly the Company issued to Exploram 5,000,000 warrants having the
foregoing terms. See Financings Fiscal 2007 above.

Convertible Note

The Company raised $3 million
under a non-brokered private placement of a $3 million unsecured convertible
note (the Note) issued to Auro Investments Pty Ltd. (Auro), a private
company associated with Mr. Dean, a Director of the Company. The Note matures
May 15, 2009, bears interest at 8%, payable at maturity, and is convertible at
any time up to maturity into units of the Company at $0.41 per unit (a Note
Unit). Each Note Unit consists of one share and one half of one common share
purchase warrant (a Note Warrant) and each Note Warrant is exercisable to
acquire one share of the Company at $0.45 per until May 15, 2009. The Issuer has
the right to prepay the Note at any time after May 15, 2008, subject to Auros
right to convert before prepayment. Auro has the right to elect to receive
interest payments in cash or in shares of the Company at a price equal to the
market price on the date the interest is payable. The Note includes negative
covenants, events of default and conversion right adjustment provisions that are
standard for transactions of this nature.

|ITEM 6 | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------ | ------------------------------------------

|A. | Directors and Senior
Management
|-- | -------------------------------

The following table sets forth
the names and addresses of the directors and members of senior management of the
Company, their positions and offices with the Company and their terms of office.
Each director is elected at the annual shareholders meeting to serve until the
earlier of his replacement or election of a successor at a subsequent annual
shareholders meeting.

The following named individuals
are not related by blood or marriage. There are no arrangements or
understandings with major shareholders, customers, suppliers or others, pursuant
to which any person referred to below was selected as a director or member of
senior management.

Name, Position and Jurisdiction of
      Residence
    Principal Occupation or Employment
      and other Directorships
    Date AppointedSTEVEN G. DEAN (1) Chairman and Director
      Vancouver, British Columbia
    President Teck Cominco Limited (1999 to July
      2002) Sirocco Advisory Services Ltd
    Chairman and Director May 15, 2007MANFRED PESCHKE (1) Director Whitehorse,
      Yukon Territory
    Self-employed consultant, Resource
      Intertrade
    Director - December 1994 Chairman -
      January 2004  May 2007JOHN R. MORGAN President, CEO and
      Director Calgary, Alberta
    President and CEO of Vannessa
      Ventures Ltd. Vice President Operations for Carbones del Guasane
      S.A.
    Director - December 2003
      President and CEO - January 2004GEORGE D. CHAPEL (1) Director
    Retired; Director of Coril Holdings
      Ltd., a private asset management company
    September 2000


42

---



Name, Position and
      Jurisdiction of Residence
    Principal Occupation or
      Employment and other Directorships
    Date AppointedCalgary, AlbertaJOHN THOMAS Director Vancouver,
      British Columbia
    Independent mining consultant; Vice
      President, Operations of Vannessa Ventures Ltd. effective January
      1, 2006 Vice President, Operations, Bolivar Gold Corp.
    September 2002JOHN AMUNDRUD Director Calgary,
      Alberta
    President & CEO of Coril Holdings
      Ltd.; Director of Coril and its subsidiary companies
    September 2004CAMERON B. BOYER Controller
      Calgary, Alberta
    Controller of Vannessa Ventures Ltd.
    February 2004


(1) Member of the Audit Committee

Steven G. Dean. Chairman and Director

Mr. Dean was appointed to the
Companys Board of Directors and as Chairman on May 15, 2007, in conjunction
with the completion of the Companys private placement in which it raised gross
proceeds of $9.5 million. Mr. Dean succeeded Manfred Peschke as Chairman of the
Company. Mr. Peschke is continuing as a director of the Company (see below). In
the May 2007 private placement, the Company issued 18,571,371 Units at a price
of $0.35 per Unit, of which 5,714,285 Units were purchased by Auro Investments
Pty Ltd. (Auro), a private company associated with Mr. Dean. Also as part of
that private placement, the Company issued to Auro a $3 million unsecured
convertible note maturing May 15, 2009. See Item 5. Operating and Financial
Review and Prospects -- B. Liquidity and Capital Resources  Subsequent Events
Financings Subsequent to March 31, 2007.

Mr. Dean has extensive experience
in the gold mining business, including serving as President of Teck Cominco Ltd.
to July 2002. He was also the Executive Director and Chief Financial Officer of
the Australian gold group Normandy Mining Ltd. from 1987 to 1994. Mr. Dean is
based in Vancouver, Canada and is a director and Chairman of a number of public
companies, is a Fellow of the Institute of Chartered Accountants of Australia, a
Fellow of the Australian Institute of Mining and Metallurgy and a Member of the
Canadian Institute of Mining, Metallurgy and Petroleum.

Manfred Peschke, Director

Mr. Peschke has over 25 years
experience as a public accountant and was a full partner in an accounting and
data processing firm responsible for managing the day-to-day operations for
public accounting and heavy equipment companies and the management of both
private and publicly financed mining/exploration companies. Mr. Peschke began
his career in the Yukon Territory as an Accountant for the Keno Hill Mines
Transportation Division. He later joined Caterpillars Yukon dealership as an
accountant and soon became the companys Controller, a position he held for nine
years. Following his experience with Caterpillar, Mr. Peschke founded his own
consulting company for the mining industry and at the same time co-founded Data
Systems Processing. DSP produced information systems for municipal, territorial
and federal governments as well as large mining companies including Keno Hill
Mines, Cantung and Anvil Mines.

From 1979 to 1981, Mr. Peschke
was Managing Director during the development phase of a $15 million dollar
alluvial mining company. In 1980, he formed a private company dedicated to
mining and exploration. After years of successful operations, the company moved
its operations to South America.

Mr. Peschke was a director of
Carson Gold Corporation from August 1991 to March 1993 and a director of Ballad
Enterprises Ltd. from March 1994 to March 1995. As a director for Carson Gold
Mines Inc. in 1991, Mr. Peschke oversaw the exploration of a number of gold
projects in Venezuela until a larger mining company purchased the firm. He and
two partners took over Vannessa Ventures Ltd. in 1994 and brought it public in
1996.

43

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Mr. Peschke, who served as President, CEO and CFO of the
Company since 1994, was appointed to the position of Chairman effective January
13, 2004, a position he held until May 15, 2007.

John R. Morgan, President, CEO and Director

Mr. Morgan, who has a B.Sc. in
geology, acquired extensive operational and administrative experience over 23
years with Manalta Coal Ltd., which at the time was the largest coal mining
company in Canada, including several years as V.P. and General Manager. More
recently, he served for four years as Vice President Operations in charge of a
large tonnage coal operation in Venezuela, the Paso Diablo mine. This mine was
operated by Carbones del Guasare, a joint venture between RAG of Germany, Anglo
Coal of South Africa and Petroleos de Venezuela, the Venezuelan state owned oil
company.

George D. Chapel, Director

Mr. Chapel brings over 40 years
of resource engineering, capital cost estimation/evaluation and senior
management experience to the Board where he also acts as technical advisor to
the company. Most notably Mr. Chapels career includes four years as Vice
President of Operations, three years as Vice President and General Manager and
eight years as CEO and President of Manalta Coal Ltd. from 1991 to 1998. Mr.
Chapel also served for three years as a director of Pembina Resources Ltd., an
oil and gas exploration, production and pipeline company.

Mr. Chapel holds a B.Sc. in Civil
Engineering from the University of Manitoba and is a member of the Association
of Professional Engineers, Geologists and Geophysicists of Alberta. Mr. Chapel
is a civil engineer with a proven track record in the development of large
resource projects.

John Thomas, Director and Vice President,
Operations

Mr. Thomas is an independent
mining consultant with over 25 years experience in South America, Russia,
Canada and Zambia. His experience covers a wide range of mining services, from
management of feasibility studies, construction, start up to operation. He is a
graduate of the University of Manchester Institute of Science and Technology
where he received a B.Sc. (Hons) in chemical engineering, an M.Sc. and Ph.D. He
also received a Diploma in Accounting and Finance from the U.K. Association of
Certified Accountants.

John Amundrud, Director

Mr. Amundrud is the President and
Chief Executive Office of Coril Holdings Ltd. and a director of Coril and its
subsidiary companies which include Exploram Enterprises Ltd., a major
shareholder of the Company. See Item 7. Major Shareholders and Related Party
Transactions -- A. Major Shareholders. Mr. Amundrud holds a Bachelor of Law,
from the University of Alberta and is a graduate of the University of Arkansas
as a B.Sc. in Business Administration. He served in increasingly senior
positions in Pembina Corporation including Corporate Counsel until 1995. From
1996 to 2000 Mr. Amundrud was Vice President, General Manager of Coril and its
predecessor company. He later became the President of CXE International Bank
Ltd. (Barbados), a Coril subsidiary, for four years until taking up his current
position with Coril Holdings Ltd in September 2004.

Cameron B. Boyer, Controller

Mr. Boyer graduated, in October
1983, with The Society of Management Accountants of Alberta accounting degree.
Since 1974, he has served with the Loram Group of Companies in various senior
positions responsible for the effective and efficient coordination of
accounting, information systems, financial controls and reporting, human
resources and office administration functions. Through his technical knowledge,
management and administrative experience as well as his communication skills, he
is adept in managing the principal activities of planning, organizing,
motivating and harmonizing all control functions.

44

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|B. | Compensation
|-- | ------------

Summary Compensation Table

The following table sets forth
all annual and long term compensation for services in all capacities to the
Company for the three most recently completed financial years in respect of each
of the individuals comprised of the Chief Executive Officer and the Chief
Financial Officer as at March 31, 2007, and the other three most highly
compensated executive officers of the Company as at March 31, 2007 whose
individual total salary and bonus for the most recently completed financial year
exceeded $150,000 and any individual who would have satisfied these criteria but
for the fact that individual was not serving as such an officer at the end of
the most recently completed financial year (collectively the Named Executive
Officers or NEOs).

Summary Compensation Table

NEO Name
      and Principal Position
    Year
    Annual Compensation
    Long Term Compensation
    All
      Other Compen- sation ($)Salary
      ($)
    Bonus
      ($)
    Other Annual
      Compen- sation ($)
    Awards
    PayoutsSecurities Under
      Option/SARs Granted (#)
    Shares/Units Subject
      to Resale Restrictions ($)
    LTIP Payouts ($)John R. Morgan(1)
      President, CEO & Director
    2007 2006 2005 2004
    150,000 150,000 150,000
      150,000
    Nil Nil Nil Nil
    Nil Nil Nil Nil
    300,000 300,000 250,000
      175,000
    Nil Nil Nil Nil
    Nil Nil Nil Nil
    Nil Nil Nil NilJohn A. Thomas Vice President,
      Operations & Director
    2007 2006
    180,000 180,000
    Nil Nil
    Nil Nil
    150,000 100,000
    Nil Nil
    Nil Nil
    Nil NilCameron B. Boyer(2)
      Controller
    2007 2006 2005 2004
    125,652 125,652 125,652
      125,652
    Nil Nil Nil Nil
    Nil Nil Nil Nil
    70,000 60,000 50,000
      Nil
    Nil Nil Nil Nil
    Nil Nil Nil Nil
    Nil Nil Nil Nil


| | (1) | John Morgan was appointed President and Chief Executive
      Officer of the Company on January 12, 2004. Prior to that date Manfred
      Peschke held the position of President and CEO.                                                                    
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                               
| | (2) | Cameron B. Boyer has not been appointed chief financial
      officer but, for the purposes of satisfying the Companys disclosure
      obligations has performed the functions of chief financial officer during
      the fiscal year ended March 31, 2007.

Long Term Incentive Plan
Awards

Long term incentive plan awards
(LTIP) means any plan providing compensation intended to serve as an
incentive for performance to occur over a period longer than one fiscal year
whether performance is measured by reference to financial performance of the
Company or an affiliate, or the price of the Companys shares but does not
include option or stock appreciation rights plans or plans for compensation
through restricted shares or units. The Company has not granted any LTIPs
during the past fiscal year.

Stock Appreciation Rights

Stock appreciation rights
(SARs) means a right, granted by an issuer or any of its subsidiaries as
compensation for services rendered or in connection with office or employment,
to receive a payment of cash or an issue or transfer of securities based wholly
or in part on changes in the trading price of the Companys shares. No SARs were
granted to or exercised by the Named Executive Officers or directors during the
fiscal year ended March 31, 2007.

45

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Option Grants in Last Fiscal
Year

The following table sets forth
stock options granted under the Companys Stock Option Plan or otherwise during
the fiscal year ended March 31, 2007 to each of the Named Executive
Officers.

SECURITIES
      UNDER OPTIONS
      GRANTED(1) (#)
    %OFTOTAL OPTIONS GRANTED
      TO EMPLOYEES IN FINANCIALYEAR
    EXERCISE OR
      BASEPRICE(2)
      ($/SECURITY)
    MARKETVALUE OF SECURITIES
      UNDERLYING OPTIONS ONDATE OFGRANT
      ($/SECURITY)
    EXPIRATION DATEJohn R. Morgan
    300,000
    22.6%
    $0.32
    $0.32
    DECEMBER 12, 2011John A. Thomas
    150,000
    11.3%
    0.32
    0.32
    December 12, 2011Cameron B. Boyer
    70,000
    5.3%
    0.32
    0.32
    DECEMBER 12, 2011


(1) The options for common shares become exercisable on the date of grant, subject to regulatory and shareholder approval.

(2) The exercise price of stock options is determined by the Board of Directors but shall in no event be less than the trading price of the common shares of the Company on the TSX Venture Exchange (the "TSX-V") at the time of the grant of the option, less the maximum discount permitted under the regulations of the TSX-V.

Options Exercised during the Fiscal Year Ended March 31, 2007 and Fiscal Year End Option Values

The following table sets forth details of all exercises of stock options during the fiscal year ended March 31, 2007 by each of the Named Executive Officers, the number of unexercised options held by the Named Executive Officers and the financial year-end value of unexercised options on an aggregated basis, held by the Named Executive Officers.

|NEO NAME         | Securities
      Acquired on Exercise (#)
      (a) | Aggregate
      Value Realized(1) ($)
      (b) | Unexercised Options/ SARs at
      Financial Year-End (#) Exercisable
      (c) | Value of Unexercised
      In-the-Money Options/SARs at Financial
      Year-End(1)($) Exercisable
      (d)
|---------------- | --------------------------------------------------- | ----------------------------------------------- | -------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------
|
|
|
|
|
|
|
|
|
|JOHN R. MORGAN   | Nil                                                 | Nil                                             | 1,025,000/Nil                                                                    | $ Nil                                                                                                        
|JOHN A. THOMAS   | Nil                                                 | Nil                                             | 450,000/Nil                                                                      | Nil                                                                                                          
|CAMERON B. BOYER | Nil                                                 | Nil                                             | 180,000/Nil                                                                      | Nil                                                                                                          

Dollar value is equal to column (c) times the difference between the market value of the securities underlying the options at exercise or financial year-end, respectively, and the exercise or base price of the options.

Pension Plans

The Company has no pension plan and does not provide retirement benefits for directors or executive officers.

46

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Termination of Employment, Change in Responsibilities and Employment Contracts

The Company does not have employment
  contracts with any Named Executive Officer.

The Company has no compensatory plan, contract or arrangement where a Named Executive Officer is entitled to receive more than $100,000 to compensate such officer in the event of resignation, retirement or other termination, a change of control of the Company or its subsidiaries or a change in responsibilities following a change in control.

Compensation of Directors

The Company, through its Compensation Committee, is currently reviewing Directors' compensation as the Company has no arrangements, standard or otherwise, pursuant to which directors are compensated by the Company or its subsidiaries for their services in their capacity as directors, or for committee participation, involvement in special assignments or for services as consultants or experts during the most recently completed financial year or subsequently, up to and including the date of this Annual Report on Form 20-F.  The directors are reimbursed for actual expenses reasonably incurred in connection with the performance of their duties as directors.

The Company has a stock option plan for the granting of incentive stock options to the officers, employees and directors.  The Company granted an aggregate of 800,000 stock options to the directors during the most recently completed financial year.  The purpose of granting such options is to assist the Company in compensating, attracting, retaining and motivating the directors of the Company and to closely align the personal interests of such persons to that of the shareholders.

The following table sets forth information concerning individual grants of options to purchase securities of the Company made during the fiscal year ended March 31, 2007 to the directors of the Company (excluding the Named Executive Officers):

Securities
      Under Options
      Granted**(#)(1)**
    % of Total
      Options Granted to All
      Employees in the Financial
      Year
    Exercise or
      Base Price ($/Securities)
    Market Value
      of Securities Underlying Options on
      the Date of Grant ($/Security)
    Date of
      Grant
    Expiration
      DateGEORGE CHAPEL
    100,000
    7.52%
    $0.32
    $0.32
    December 12, 2006
    December 12, 2011MANFRED PESCHKE
    150,000
    11.28%
    $0.32
    $0.32
    December 12, 2006
    December 12, 2011JOHN AMUNDRUD
    100,000
    7.52%
    $0.32
    $0.32
    December 12, 2006
    December 12, 2011


(1) The options generally become exercisable on the date of grant, subject to regulatory approval.

During the fiscal year ended March 31, 2007, a Director of the Company exercised 300,000 stock options at $0.28 per share for proceeds of $84,000.

In prior years the Company entered into management agreements with two companies controlled by two directors, Manfred Peschke and Erich Rauguth, for the provision of management, administrative services and certain fixed expenses in Canada and Venezuela totaling $5,000 and US$6,000 per month respectively and in fiscal 2006, the retention of a Director, Mr. John Thomas, to

47

---



provide professional project management services to the Crucitas gold project at $15,000 per month commencing in September 2005. Mr. Thomas became an employee of the Company commencing January 1, 2006.  In the past, the agreements were on a month-to-month basis and were to remain in force from year to year until such time as notice of termination is given by either party.  Effective December 31, 2006, consulting agreements with the respective Directors are no longer in place.

During May 2007, the Company paid a structuring fee of $90,000  to Sirocco Advisory Services Ltd. (Sirocco), which is associated with Chairman and Director Steven Dean, and executed a consulting advisory agreement with Sirocco for $120,000 per annum (See Audited Consolidated Financial Statements, March 31, 2007, Note 11 (a), Subsequent Events).

Expenditures pursuant to these contracts were allocated as follows:

|                  |                 | Fiscal Year Ended March 31, |                
|----------------- | --------------- | --------------------------- | ---------------
|                  | 2007            | 2006                        | 2005           
|                  |                 |                             |                
|Fees and services | $ 45,000        | $ 60,000                    | $ 60,000       
|(Manfred Peschke) |                 |                             |                
|Fees and services | 42,044          | 89,782                      | 89,280         
|(Erich Rauguth)   |                 |                             |                
|Fees and services | 180,000         | 55,125                      | -              
|(John Thomas)     |                 |                             |                
|Total             | $
      267,044 | $
      204,907             | $
      149,280

|C. | Board Practices
|-- | ---------------

The Board of Directors presently
consists of six directors. Each director is elected at the annual shareholders
meeting to serve until the earlier of his replacement or election of a successor
at a subsequent annual shareholders meeting, unless his office is earlier
vacated in accordance with the Articles of the Company, or with the provisions
of the British Columbia Business Corporations Act(BCA).

No director of the Company is
currently party to a service contract with the Company or any of its
subsidiaries that provides for benefits upon termination of employment.

Audit Committee

The Companys Audit Committee is
composed of Steven Dean, George Chapel and Manfred Peschke. Mr. Peschke acts as
Chairman of the Audit Committee. All members of the Audit Committee are
financially literate and two members, Mr. Dean and Mr. Peschke, are considered
to be financial experts and have been designated by the board as the Audit
Committee Financial Expert as that term is defined under Section 407 of the
Sarbanes-Oxley Act of 2002. The Audit Committee is appointed by the Board of
Directors and its members hold office until removed by the Board of Directors or
until the next annual shareholders meeting of the Company, at which time their
appointments expire and they are eligible for reappointment.

The primary function of the
Committee is to assist the Board of Directors in fulfilling its financial
oversight responsibilities by reviewing the financial reports and other
financial information provided by the Company to regulatory authorities and
shareholders, the Companys systems of internal controls regarding finance and
accounting and the Companys auditing, accounting and financial reporting
processes.

The principal responsibilities of
the Audit Committee include reviewing annual and quarterly financial statements,
ensuring that internal controls over accounting and financial systems are
maintained and that accurate financial information is disseminated to
shareholders, reviewing the results of internal and external audits and any
change in accounting procedures or policies, evaluating the performance of the
Companys auditors, pre-approving all audit and non-audit services provided by
the auditors and establishing the remuneration of the auditors.

48

---



Compensation Committee

The Companys Compensation
Committee is composed of John Amundrud and Steven Dean. Mr. Amundrud acts as
Chairman, and terms of reference for the Committee are currently being
developed.

|D. | Employees
|-- | ---------

At March 31, 2007, the Company
had 76 employees comprising 20 office employees and 56 field employees. In
comparison, the Company had 66 employees comprising 18 office employees and 48
field employees at March 31, 2006 and 19 office employees and another 67 field
employees as at March 31, 2005.

The Company and its subsidiaries
engage directors, officers and independent contractors to supply work on
specific corporate business and project exploration programs.

**2007**
    **2006**
    **2005**Canada Management Professional
      Administrative/support
    2 1 1
    3 1 1
    3 1 1Guyana Management Administrative/support
      Field
    3 1 24
    3 2 20
    1 4 56Venezuela Management
      Administrative/support
    1 2
    1 2
    2 2Costa Rica Management
      Administrative/support Field
    1 8 32
    1 4 28
    1 4 11Total
    76
    66
    86


49

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|. | Share Ownership
|- | ---------------

The following table sets forth
the share ownership of those persons listed as at August 28, 2007 (or whose
compensation is otherwise disclosed) in subsection 6.B above, and includes
details of all options to purchase shares of the Company held by such
persons:

|Name             | Number ofcommonshares(1) | Number ofOptions/Warrants                              | BeneficialOwnershipPercentage(2) | PurchasePrice ofOptions(if any) | ExercisePrice             | Expiry Date                                                                   
|---------------- | ------------------------ | ------------------------------------------------------ | -------------------------------- | ------------------------------- | ------------------------- | ------------------------------------------------------------------------------
|Manfred Peschke  | 1,523,178                | 300,000 250,000 200,000
      150,000900,000           | 2.05%                            | N/A                             | $0.28 0.45 0.60 0.32      | Aug. 25, 2008 Sept. 2, 2009
      Aug. 26, 2010 Dec. 12, 2011                 
|                 |                          |                                                        |                                  |                                 |                           |                                                                               
|John R. Morgan   | 220,000                  | 175,000 250,000 300,000 300,000
      150,0001,175,000 | 1.19%                            | N/A                             | $0.64 0.45 0.60 0.32 0.35 | Mar. 11, 2009 Sept. 2, 2009 Aug. 26,
      2010 Dec. 12, 2011 May 15, 2009 (3)
|                 |                          |                                                        |                                  |                                 |                           |                                                                               
|George D. Chapel | 10,000                   | 100,000 100,000 100,000300,000                         | *                                | N/A                             | $0.45 0.60 0.32           | Sept. 2, 2009 Aug. 26, 2010 Dec. 12,
      2011                               
|                 |                          |                                                        |                                  |                                 |                           |                                                                               
|John Thomas      | 77,600                   | 100,000 100,000 100,000 150,000
      75,000525,000    | *                                | N/A                             | $0.28 0.45 0.60 0.32 0.35 | Aug. 25, 2008 Sept. 2, 2009 Aug. 26,
      2010 Dec. 12, 2011 May 15, 2009 (3)
|                 |                          |                                                        |                                  |                                 |                           |                                                                               
|John Amundrud    | Nil                      | 100,000 100,000200,000                                 | *                                | N/A                             | $0.60 0.32                | Aug. 26, 2010 Dec. 12, 2011                                                   
|                 |                          |                                                        |                                  |                                 |                           |                                                                               
|Cameron B. Boyer | 107,500                  | 50,000 60,000 70,000 75,000255,000                     | *                                | N/A                             | $0.45 0.60 0.32 0.35      | Sept. 2, 2009 Aug. 26, 2010 Dec. 12,
      2011 May 15, 2009 (3)              

* Less than 1%.

|(1) | Includes beneficial, direct and indirect
      shareholdings.                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                 
|(2) | Beneficial ownership is determined in accordance with the
      rules of the Securities and Exchange Commission. In computing the number
      of shares owned by a person and the percentage ownership of that person,
      common shares subject to options or warrants (if any) held by that person
      that are currently

50

---



|    | exercisable or exercisable within 60 days of the
      ownership calculation date, are deemed outstanding. Such shares, however,
      are not deemed outstanding for the purposes of computing the percentage
      ownership of any other person. This table has been prepared based on
      115,955,723 common shares outstanding as of August 28, 2007.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                             
|(3) | Represents share purchase warrants held as of August 28,
      2007.                                                                                                                                                                                                                                                                                        

Stock Option Plan

On August 12, 2003, the Company
implemented a Stock Option Plan (the Plan) which was approved by the TSX
Venture Exchange (the TSX-V) and the shareholders of the Company. The number
of common shares which may be issued pursuant to options previously granted and
those granted under the Plan is a maximum of 10% of the issued and outstanding
common shares at the time of the grant. In addition, the number of shares which
may be reserved for issuance to any one individual may not exceed 5% of the
issued shares on a yearly basis or 2% if the optionee is engaged in investor
relations activities or is a consultant. Under the TSX-V policy, all such
rolling stock option plans which set the number of common shares issuable under
the plan at a maximum of 10% of the issued and outstanding common shares must be
approved and ratified by shareholders on an annual basis. The shareholders most
recently approved and ratified the Plan at the Companys Annual General Meeting
held on September 13, 2007.

The purpose of the Plan is to
allow the Company to grant options to directors, officers, employees and
consultants, as additional compensation, and as an opportunity to participate in
the success of the Company. The granting of such options is intended to align
the interests of such persons with that of the shareholders. Options will be
exercisable over periods of up to ten years as determined by the Board of
Directors of the Company and are required to have an exercise price no less than
the closing market price of the Companys shares prevailing on the day that the
option is granted less the applicable discount, if any, permitted by the
policies of the TSX-V and approved by the Board of Directors. Pursuant to the
Plan, the Board of Directors may from time to time authorize the issue of
options to directors, officers, employees and consultants of the Company or
employees of companies providing management or consulting services to the
Company or its subsidiaries. The Plan contains no vesting requirements, but
permits the Board of Directors to specify a vesting schedule in its discretion.
The Plan provides that if a change of control, as defined therein, occurs, all
shares subject to option shall immediately become vested and may thereupon be
exercised in whole or in part by the option holder.

|ITEM 7 | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|------ | -------------------------------------------------

|A. | Major Shareholders
|-- | ------------------

To the knowledge of management of
the Company, as of August 28, 2007, no shareholder beneficially owned five
percent (5%) or more of any class of the Companys voting securities, nor has
any shareholder owned 5% or more of any class of the Companys voting shares
during the previous three years, other than as shown below.

|Identity of Person or Group    | Number of common shares | Number of Warrants | Number of Shares Issuable on
      Debt Conversion | Beneficial Ownership Percentage
      (4)
|------------------------------ | ----------------------- | ------------------ | -------------------------------------------------- | -----------------------------------------
|                               |                         |                    |                                                    |                                          
|                               |                         |                    |                                                    |                                          
|Exploram Enterprises Ltd. (1)  | 49,368,776              | 9,642,857          | 7,874,016 (2)                                      | 57.1%                                    
|                               |                         |                    |                                                    |                                          
|Auro Investments Pty. Ltd. (3) | 5,714,285               | 6,515,679          | 7,317,073                                          | 15.1%                                    

51

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The following is a summary of the
significant changes in the percentage ownership held by Exploram during the past
three years. Auro Investments Pty. Ltd. acquired its shares, warrants and
convertible note in connection with the Companys May 2007 private placement. No
shareholder has any special rights with respect to its common shares beyond
those rights accorded all shareholders of the Companys common shares.

|                              |                | Number of  |            | Beneficial
|----------------------------- | -------------- | ---------- | ---------- | ----------
|                              |                | common     | Number of  | Ownership 
|Identity of Person or Group   | Date           | shares     | Warrants   | Percentage
|                              |                |            |            | (4)(5)    
|                              |                |            |            |           
|Exploram Enterprises Ltd. (1) | March 31, 2005 | 41,663,276 | 19,080,500 | 60.41%    
|                              | March 31, 2006 | 44,563,276 | 4,805,500  | 49.18%    
|                              | March 31, 2007 | 54,368,776 | 7,500,000  | 55.04%.   

Notes:

(1) Exploram Enterprises Ltd. is a wholly owned subsidiary of
Coril Holdings Ltd., a company controlled by Ron Mannix of Calgary, Alberta.

(2) Reflects 7,874,016 shares that would be issuable upon
conversion of the entire amount of the secured convertible debenture in the
amount of $5,000,000 (See B. Related Party Transactions.

(3) Auro Investments Pty Ltd. is a private company associated
with Steven G. Dean . Total includes 10,975,610 shares that would be issuable
upon conversion of the entire principal amount of the convertible note in the
amount of $3,000,000, which was issued to Auro as part of the Companys May 2007
private placement. At a conversion price of $0.41, the note is convertible into
units of the Company (each, a Note Unit). Each Note Unit consists of one
common share of the Company and one half of one common share purchase warrant
(each, a Note Warrant). Each whole Note Warrant is exercisable to purchase one
common share of the Company. Total shown reflects conversion of the convertible
note and exercise of all of the Note Warrants comprising the Note Units. See
Item 5.

Operating and Financial Review and Prospects -- B. Liquidity
and Capital Resources  Subsequent Events -- Financings Subsequent to March 31,
2007.

(4) Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission. In computing the number of
shares owned by a person and the percentage ownership of that person, common
shares subject to options or warrants (if any) held by that person that are
currently exercisable or exercisable within 60 days of the ownership calculation
date are deemed outstanding.

Such shares, however, are not deemed outstanding for the
purposes of computing the percentage ownership of any other person.

(5) This table has been prepared based on shares outstanding as
of March 31 of each of the respective years, as follows: Shares outstanding
at

March 31, 2005-- 81,471,353 common sharesMarch 31, 2006 -
87,258,853 common sharesMarch 31, 2007  97,364,353 common shares

As of March 31, 2007, 6,284,593
common shares were held by 54 registered holders in the United States. The
Company is not listed for trading on any securities exchange in the United
States. From January 1, 1999 to November 12, 2004, the Companys common shares
were quoted on the Over-the-Counter Bulletin Board Electronic Quotation System
maintained by the National Association of Securities Dealers, Inc. See Item 9.
The Offer and Listing -- C. Markets.

To the best of the Companys
knowledge, it is not directly or indirectly owned or controlled by another
corporation(s) except as set forth above, or by any foreign government.

The Company is not aware of any
arrangements the operation of which may at a subsequent date result in a change
of control of the Company.

52

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|B. | Related Party Transactions
|-- | --------------------------

Listed below are the only
material transactions that were effected within the past three years (or are
proposed) between the Company or any of its subsidiaries and:

| | (a) | enterprises that directly or indirectly through one or
      more intermediaries, control or are controlled by, or are under common
      control with, the Company;                                                                                                                                                                                                                                      
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                           
| | (b) | associates;                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | individuals owning, directly or indirectly, an interest
      in the voting power of the Company that gives them significant influence
      over the Company, and close members of any such individuals
  family;                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                           
| | (d) | key management personnel, that is, those persons having
      authority and responsibility for planning, directing and controlling the
      activities of the Company, including directors and senior management of
      companies and close members of such individuals families; and                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                           
| | (e) | enterprises in which a substantial interest in the voting
      power is owned, directly or indirectly, by any person described in (c) or
      (d) or over which such a person is able to exercise significant influence
      including enterprises owned by directors or major shareholders of the
      Company and enterprises that have a member of key management in common
      with the Company.

In prior years the Company
entered into management agreements with two companies controlled by two
directors, Manfred Peschke and Erich Rauguth, for the provision of management,
administrative services and certain fixed expenses in Canada and Venezuela
totaling $5,000 and $US6,000 per month respectively and in fiscal 2006, the
retention of a Director, Mr. John Thomas, to provide professional project
management services to the Crucitas gold project at $15,000 per month commencing
in September 2005. Mr. Thomas became an employee of the Company commencing
January 1, 2006. In the past, the agreements were on a month-to-month basis and
were to remain in force from year to year until such time as notice of
termination is given by either party. Effective December 31, 2006, consulting
agreements with the respective Directors are no longer in place.

In addition, the Company paid
$90,000 to Sirocco Advisory Services Ltd. (Sirocco), which is associated with
Chairman and Director Steven Dean, for structuring services provided in
connection with the Companys May 2007 private placement and executed a
consulting advisory agreement with Sirocco for $120,000 per annum

The Company incurred expenditures
for management fees, consulting, administrative services and certain fixed
expenses from companies controlled by Mr. Peschke, Mr. Rauguth and Mr. Thomas as
follows:

2007
    
    
    2006
    
    
    2005Manfred Peschke
    $
    45,000
    
    $
    60,000
    
    $
    60,000Erich Rauguth
    
    42,044
    
    
    89,782
    
    
    89,280John Thomas
    
    180,000
    
    
    55,125
    
    
    -$
    267,044
    
    $
    204,907
    
    $
    149,280


The foregoing services were paid
for at market rates, and on terms at least as favorable to the Company as those
that could have been obtained in arms-length transactions.

Stock-based compensation related
to options awarded to directors of the Company totaled $141,228 (2006 -$460,527;
2005 - $506,543). See Item 6. Directors, Senior Management and Employees -- B.
Compensation for further information about the above contractual arrangements.

Effective November, 2004, the
Company returned properties in the Kilometer 88 area in Venezuela to Boralis
Holdings A.V.V., a company in which Erich Rauguth, a former director of the
Company, has an interest. In consideration for the returned properties, Boralis
agreed to pay the Company 80% of all net benefits realized from these
properties.

53

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Transactions with Exploram Enterprises
Ltd.

Fiscal 2007 and Subsequent

.    During Fiscal 2007, 4,805,500 warrants were
exercised by the Companys controlling shareholder, Exploram Enterprises Ltd.
(Exploram), a subsidiary of Coril Holdings Ltd. (Coril), at a price of $0.40
per warrant for net proceeds of $1,922,200 and 300,000 stock options were
exercised by a Director at a price of $0.28 for net proceeds of $84,000.
Pursuant to the convertible debenture issued to Exploram in 2006 (see discussion
below), 5,000,000 warrants were issued to Exploram on March 1, 2007.

Pursuant to a non-brokered
private placement with Exploram on February 22, 2007, 5,000,000 units were
issued at a price of $0.30 per unit for net proceeds of $1,500,000. Each unit
consisted of one common share and one-half of one warrant entitling the holder
to purchase one additional share at a price of $0.40 per share for a period of
twelve months and at a price of $0.50 for a period thereafter until twenty four
months from the date of closing.

During Fiscal 2007, the Company
issued to Exploram an aggregate of $5,000,000 in demand notes bearing interest
at 9.5% compounded annually and payable monthly. The Company paid debt financing
structuring fees of $ 150,000 (2006 - $150,000) to Exploram related to $5
million (2006 - $3 million) of short term financing (bearing interest at 9.5%)
and related to the convertible debenture. These fees were expensed during Fiscal
2007 and 2006 as interest and financing costs.

On May 15, 2007, the Company
issued 18,571,371 units (the Units) at the price of $0.35 per Unit for gross
proceeds of $6.5 million, each Unit consisting of one common share and one-half
of one share purchase warrant (a Unit Warrant). Each whole Unit Warrant
entitles the holder to purchase one additional common share of the Company at a
price of $0.45 per share until May 15, 2009. Exploram purchased 4,285,714 Units
under the private placement and Auro Investments Pty Ltd., a private company
associated with Steven G. Dean, purchased 5,714,285 Units under the private
placement. See Transactions with Auro Investments Pty Ltd. below.

On May 31, 2007, the Company
repaid two of the above demand loans payable to Exploram for a total of
$2,500,000. The Company and Exploram have agreed that an additional demand loan
for $1,500,000, that was payable on demand after August 31, 2006, be extended
such that it is now payable on demand after June 15, 2008. This leaves one
Exploram loan for $1,000,000 that remains payable on demand as of February 28,
2007.

All of the loans carry interest
at a rate of 9.5 percent per annum, payable monthly, and are secured by a
general security agreement over the Companys assets.

Fiscal 2006

Coril advanced the following
monies to the Company: $250,000 on October 5, 2005, $325,000 on November 4, 2005
and $250,000 on December 9, 2005 pursuant to non interest bearing promissory
notes payable on demand. On December 21, 2005, the Company repaid Coril all of
the aforementioned notes in full. On February 9, 2006, Coril advanced $500,000
pursuant to a non interest bearing promissory note payable on demand. On March
1, 2006, the Company repaid the note in full.

On May 20, 2005, Exploram
exercised 2,900,000 warrants of the Company at a price of $0.40 per warrant for
proceeds of $1,160,000.

On December 20, 2005, Exploram
advanced $2,000,000 to the Company pursuant to a Secured Debenture. Interest was
payable on the loan at a rate of 9.5% per annum, payable monthly. A 3%
structuring fee was paid by the Company to Exploram. The loan was payable on
demand after February 15, 2006 and was secured by a general security agreement
over the Companys assets. On March 2, 2006, the Company repaid the loan.

On March 1, 2006, the Company
completed a non-brokered private placement of a secured convertible debenture in
the amount of $5,000,000 and a Special Right with Exploram. The convertible
debenture matures on January 31, 2009 and interest is payable on the outstanding
principal amount at a rate of 9.5% per annum, payable semi-annually on July 31
and January 31. The principal amount outstanding under the convertible debenture
may

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be: (i) converted into common shares at any time after January
31, 2007 at a price of $0.635 per share; and (ii) repaid by the Company at any
time before January 31, 2007 upon payment of a 5% prepayment penalty or
thereafter upon thirty days notice (within which period Exploram may convert)
without payment of a prepayment penalty. In addition, the Company issued a
Special Right under which, for every dollar of principal outstanding under the
convertible debenture on February 1, 2007, the Company was to issue one common
share purchase warrant to Exploram, each warrant entitling Exploram to acquire
one common share at any time up to March 1, 2008 at $0.635 per share. On January
31, 2007, the full principal amount of the convertible debenture remained
outstanding and accordingly the Company issued to Exploram 5,000,000 warrants
having the foregoing terms. See Financings Fiscal 2007 above.

The Company's obligations under
the convertible debenture are secured by a general security agreement over the
Company's assets and a pledge of the shares of its subsidiaries. The Company has
paid Exploram a structuring fee of $90,000 in respect of the placement.

The structuring fees paid to
Exploram in connection with the loan and the secured convertible debenture as
set forth above were expensed during Fiscal 2006 as interest and financing
costs.

On February 1, 2007, the full
principal amount of the convertible debenture remained outstanding and
accordingly the Company issued to Exploram 5,000,000 warrants having the
foregoing terms. See Financings Fiscal 2007 above.

Transactions with Auro Investments
Pty. Ltd.

Subsequent to Fiscal 2007

On May 15, 2007, the Company
issued 18,571,371 units (the Units) at the price of $0.35 per Unit for gross
proceeds of $6.5 million, each Unit consisting of one common share and one-half
of one share purchase warrant (a Unit Warrant). Each whole Unit Warrant
entitles the holder to purchase one additional common share of the Company at a
price of $0.45 per share until May 15, 2009. Exploram purchased 4,285,714 Units
under the private placement and Auro Investments Pty Ltd. (Auro), a private
company associated with Steven G. Dean, purchased 5,714,285 Units under the
private placement. In connection with the sale of the Units, the Company paid a
cash finders fee of $296,850 and issued share purchase warrants (the Finders
Warrants) allowing the finders to purchase an aggregate of 1,413,566 common
shares of the Company. Each Finders Warrant is exercisable to acquire one share
of the Company at a price of $0.45 until May 15, 2008.

The Company also raised $3
million under a non-brokered private placement of a $3 million unsecured
convertible note (the Note) issued to Auro. The Note matures May 15, 2009,
bears interest at 8%, payable at maturity, and is convertible at any time up to
maturity into units of the Company at $0.41 per unit (a Note Unit). Each Note
Unit consists of one share and one half of one common share purchase warrant (a
Note Warrant) and each Note Warrant is exercisable to acquire one share of the
Company at $0.45 per until May 15, 2009. The Issuer has the right to prepay the
Note at any time after May 15, 2008, subject to Auros right to convert before
prepayment. Auro has the right to elect to receive interest payments in cash or
in shares of the Company at a price equal to the market price on the date the
interest is payable. The Note includes negative covenants, events of default and
conversion right adjustment provisions that are standard for transactions of
this nature. A cash structuring fee of $90,000 was paid by the Company.

On May 15, 2007, in conjunction
with this financing, Mr. Steven G. Dean was appointed to the Companys Board of
Directors and as Chairman. Mr. Dean succeeds Manfred Peschke as Chairman of the
Company. Mr. Peschke is continuing as a director and Chairman of the Audit
Committee.

Please see also Item 5.
Operating and Financial Review and Prospects -- B. Liquidity and Capital
Resources -- Subsequent Events.

No officer or director of the
Company, or any associate of such person, was indebted to the Company at any
time during the fiscal years ended March 31, 2007, 2006 or 2005.

Certain directors of the Company
are officers and/or directors of, or are associated with, other natural resource
companies that acquire interests in mineral properties. Such associations may
give rise to conflicts of

55

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interest from time to time. The directors are required by law,
however, to act honestly and in good faith with a view to the best interests of
the Company and its shareholders and to disclose any personal interest which
they may have in any material transaction which is proposed to be entered into
with the Company and to abstain from voting as a director for the approval of
any such transaction. See Item 3. Key Information -- D. Risk Factors -- The
directors of the Company may have conflicts of interest in negotiating and
concluding agreements.

Related party transactions have been
recorded at their exchange amounts.

|C. | Interests of Experts and
Counsel
|-- | --------------------------------

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

|ITEM 8 | FINANCIAL INFORMATION
|------ | ---------------------

|A. | Audited Financial Statements and Other Financial
      Information
|-- | ------------------------------------------------------------------

This Annual Report contains the
audited consolidated financial statements of the Company for the years ended
March 31, 2007, 2006 and 2005, including an Independent Auditors Report dated
July 26, 2007. The following financial statements are included: Consolidated
Balance Sheets as at March 31, 2007 and 2006; Consolidated Statements of
Operations and Deficit for the Fiscal Years Ended March 31, 2007, 2006 and 2005;
and Consolidated Statements of Cash Flows for the Fiscal Years Ended March 31,
2007, 2006 and 2005. Also included are Notes to the Consolidated Financial
Statements for the Fiscal Years Ended March 31, 2007, 2006 and 2005. The
Companys audited financial statements have been prepared in accordance with
Canadian generally accepted accounting principles. Except as described in Note
15 to the audited financial statements, there are no material differences, for
the purposes of these financial statements, between accounting principles
generally accepted in Canada and the United States.

Legal Proceedings

The Company is involved in legal
proceedings that relate to its mining rights for the Las Cristinas project in
Venezuela. See Item 4. Information on the Company -- D. Property, Plant and
Equipment -- Venezuela -- Las Cristinas Project -- Title Dispute and Legal
Proceedings; -- International Arbitration. As described therein, in July 2004
the Company commenced a process of international arbitration with the
International Centre for Settlement of Investment Disputes (ICSID) in
Washington, D.C. Substantial uncertainty exists as to the ultimate resolution of
the rights and title issues. There is also uncertainty as to the scope of future
legal and administrative costs required to continue legal proceedings. Other
than the foregoing, no material legal proceedings are pending to which the
Company is a party or of which any of its properties is the subject.

Dividend Policy

The Company has not paid any
dividends on its common shares and has no dividend policy with respect to the
payment of dividends. Presently, the Company anticipates that it would retain
future earnings for use in its operations and the expansion of its business.

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|B. | Significant Changes
|-- | -------------------

Properties

Subsequent to March 31, 2007, the
Company reported the following developments concerning its Las Cristinas
property:

As described under Item 4.
Information on the Company -- D. Property, Plant and Equipment --Venezuela --
Las Cristinas Project -- International Arbitration, on October 28, 2004, the
Secretary-General of the International Centre for Settlement of Investment
Disputes (ICSID) in Washington, D.C. registered the Companys Request For
Arbitration against the Bolivarian Republic of Venezuela with respect to the Las
Cristinas gold and copper property.

The Company submitted its
Memorial to ICSID setting out its argument and written evidence on January 13,
2006. Venezuela raised objections regarding the tribunals jurisdiction in this
matter and the Tribunal scheduled a hearing to address Venezuelas objections in
May 2007. At this hearing the chairman of the tribunal removed himself from the
proceedings due to a potential conflict of interests and the hearings were
suspended. Following the resignation of the chairman of the Tribunal the
arbitrator appointed by Venezuela also resigned as an arbitrator. The process
going forward will be for Venezuela to select a replacement arbitrator, which
has been done, and then both parties will select a third arbitrator to chair the
tribunal. Failing agreement, ICSID will appoint the chairman. Following
selection of the complete Tribunal the arbitration on the jurisdictional
competency of the Tribunal to arbitrate the merits of the case will resume with
no additional filings by the parties, who will utilize the material prepared for
the hearing that had originally been scheduled for May 2007.

Counsel has advised the Company
that jurisdictional objections are not uncommon in arbitration cases of this
kind. The Company remains confident in its position that the Tribunal has
jurisdiction to arbitrate this dispute although there can be no assurance that
the jurisdictional dispute will be resolved in the Companys favor. A hearing on
the merits of the claim will be scheduled if the Tribunal rules in the Companys
favor on the jurisdictional objection.

Substantial uncertainty exists as
to the ultimate resolution of the Companys rights and title issues and the
level of compensation, if any, which may be received through the ICSID process.
Any awards arising from the claim will be shared with other shareholders or
royalty holders of Minca and Vannessa de Venezuela according to pre-existing
contractual rights.

Financings

On May 15, 2007, the Company
issued 18,571,371 units (the "Units") at the price of $0.35 per Unit for gross
proceeds of $6.5 million, each Unit consisting of one common share and one-half
of one share purchase warrant (a "Unit Warrant"). Each whole Unit Warrant
entitles the holder to purchase one additional common share of the Company at a
price of $0.45 per share until May 15, 2009. Exploram, the controlling
shareholder of the Company, purchased 4,285,714 Units under the private
placement and Auro Investments Pty Ltd. (Auro), a private company associated
with Steven G. Dean, purchased 5,714,285 Units under the private placement. In
connection with the sale of the Units, the Company paid a cash finder's fee of
$296,850 and issued share purchase warrants (the "Finder's Warrants") allowing
the finders to purchase an aggregate of 1,413,566 common shares of the Company.
Each Finder's Warrant is exercisable to acquire one share of the Company at a
price of $0.45 until May 15, 2008.

The Company also raised $3
million under a non-brokered private placement of a $3 million unsecured
convertible note (the "Note") issued to Auro. The Note matures May 15, 2009,
bears interest at 8%, payable at maturity, and is convertible at any time up to
maturity into units of the Company at $0.41 per unit (a "Note Unit"). Each Note
Unit consists of one share and one half of one common share purchase warrant (a
"Note Warrant") and each Note Warrant is exercisable to acquire one share of the
Company at $0.45 per until May 15, 2009. The Issuer has the right to prepay the
Note at any time after May 15, 2008, subject to Auro's right to convert before
prepayment. Auro has the right to elect to receive interest payments in cash or
in shares of the Company at a price equal to the market price on the date the
interest is payable. The Note includes negative covenants, events of default

57

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and conversion right adjustment provisions that are standard
for transactions of this nature. A cash structuring fee of $90,000 was paid by
the Company.

On May 15, 2007, in conjunction
with this financing, Mr. Steven G. Dean was appointed to the Companys Board of
Directors and as Chairman. Mr. Dean succeeds Manfred Peschke as Chairman of the
Company. Mr. Peschke is continuing as a director and Chairman of the Audit
Committee.

Please see also Item 5.
Operating and Financial Review and Prospects -- B. Liquidity and Capital
Resources -- Subsequent Events. Other than the foregoing, no significant change
has occurred since the date of the annual financial statements included in this
Annual Report on Form 20-F.

|ITEM 9 | THE OFFER AND THE LISTING
|------ | -------------------------

|A. | Offer and Listing Details
|-- | -------------------------

The common shares of the Company
are quoted for trading on the TSX Venture Exchange (the TSX-V) under the
symbol VVV and on the Berlin Stock Exchange under the symbol VVT. From
January 1, 1999 to November 12, 2004, the Companys common shares were quoted on
the Over-the-Counter Bulletin Board Electronic Quotation System (the OTC-BB)
under the symbol VNVNF.

Since November 2004, the
Companys common shares have not been quoted on the OTC-BB. Initially, this was
because the Company had not filed its Annual Report on Form 20-F for its fiscal
year ended March 31, 2004 (the 2004 Form 20-F). Pursuant to comments received
from the Commission on the Companys Annual Report on Form 20-F for its 2003
fiscal year, concerning, among other matters, auditor independence issues, the
Company, which replaced its former auditors during its 2004 fiscal year,
retained its current auditors in October 2004 to undertake re-audits of the
Companys financial statements for its fiscal years 2002 through 2003 inclusive.
These re-audits were completed and the 2004 Form 20-F was filed with the U.S.
Securities and Exchange Commission on December 6, 2005. The Companys Annual
Report on Form 20-F for its fiscal year ended March 31, 2005 was filed with the
Commission on April 12, 2006 and its subsequent Annual Reports on Form 20-F have
been timely filed with the Commission.

The following table sets forth
the annual high and low market prices for the five fiscal years ended March 31,
2007:

YEARS ENDED
      MARCH 31
    TSX-V High CDN $
    TSX-V Low CDN $
    US Market (1) High USD
      $
    US Market (1) Low USD
      $2007
    $0.56
    $0.255
    $0.50
    $0.192006
    $0.72
    $0.33
    $0.58
    $0.262005
    $0.66
    $0.32
    $0.41
    $0.202004
    $0.85
    $0.26
    $0.71
    $0.182003
    $3.10
    $0.30
    $2.03
    $0.13


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The following table sets forth
the high and low market prices for the common shares for each full quarterly
period within the within the two most recent fiscal years:

**PERIOD**
    **TSX-Vz**High CDN $
    **TSX-V**Low CDN $
    US Market(1) High USD $
    **US Market****(1)**
      Low USD $2007 Fourth Quarter Third Quarter Second
      Quarter First Quarter
    $0.475 $0.415 $0.51 $0.56
    $0.28 $0.255 $0.41 $0.40
    $0.44 $0.422 $0.50 $0.458
    $0.235 $0.19 $0.34 $0.3362006 Fourth Quarter Third Quarter Second
      Quarter First Quarter
    $0.61 $0.57 $0.72 $0.52
    $0.39 $0.33 $0.45 $0.38
    $0.49 $0.50 $0.58 $0.47
    $0.31 $0.26 $0.30 $0.28


The following table sets forth
the high and low market prices for the common shares for the most recent six
months:

MONTH
    TSX-V High CDN $
    TSX-V Low CDN $
    US Market(1) High USD
      $
    **US Market**(1) Low
      USD $August 2007 July 2007 June 2007 May 2007
      April 2007 March 2007
    $0.52 $0.54 $0.59 $0.59 $0.48
      $0.50
    $0.39 $0.45 $0.51 $0.46
      $0.415 $0.43
    $0.455 $0.53 $0.70 $0.525
      $0.46 $0.44
    $0.289 $0.43 $0.47 $0.405
      $0.32 $0.335


(1) Up until November 14, 2004,
the Companys shares were quoted on the OTC-BB under the ticker VNVNF.BB and
subsequent thereto, under the ticker VNVNF.PK on the Pink Sheets. (Please see 
-- A. Offer and Listing Details for further discussion.)

The closing price of the
Companys shares on August 28, 2007 was $0.475 on the TSX-V and US $0.375 in the
United States market.

|B. | Plan of Distribution
|-- | --------------------

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

|C. | Markets
|-- | -------

The Companys common shares are
listed for trading on the TSX-V under the symbol VVV and the Berlin Stock
Exchange under the symbol VVT. From January 1, 1999 to November 12, 2004, the
Companys common shares were quoted on the OTC-BB under the symbol VNVNF.
(Please see A. Offer and Listing Details for further discussion.)

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|D. | Selling Shareholders
|-- | --------------------

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

|E. | Dilution
|-- | --------

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

|F. | Expenses of the Issue
|-- | ---------------------

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

|ITEM 10 | ADDITIONAL INFORMATION
|------- | ----------------------

|A. | Share Capital
|-- | -------------

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

|B. | Memorandum and Articles of
  Association
|-- | ----------------------------------------

The Companys constating
documents are its Notice of Articles and Articles. For clarity, the Notice of
Articles is referred to herein as the Memorandum.

1. The Companys objects and
purposes as set forth in its Memorandum and Articles:

The Companys Memorandum and Articles
are silent as to the Companys objects and purposes.

2. Matters relating to Directors of
the Company:

(a)
Directors power to vote on a proposal, arrangement or contract in which the
director is materially interested:

Part 17 of the Companys Articles
deals with the directors involvement in transactions in which they have an
interest. Article 17.2 provides that a director who holds a disclosable interest
in a contract or transaction into which the Company has entered or proposes to
enter is not entitled to vote on any directors resolution to approve that
contract or transaction, unless all the directors have a disclosable interest in
that contract or transaction, in which case any or all of those directors may
vote on such resolution.

(b)
Directors power, in the absence of an independent quorum, to vote compensation
to themselves or any members of their body:

Part 13.5 of the Companys
Articles provides that The directors are entitled to the remuneration for
acting as directors, if any, as the directors may from time to time determine.
If the directors so decide, the remuneration of the directors, if any, will be
determined by the shareholders. That remuneration may be in addition to any
salary or other remuneration paid to any officer or employee of the Company as
such, who is also a director. Part 13.7 states If any director performs any
professional or other services for the Company that in the opinion of the
directors are outside the ordinary duties of a director, or if any director is
otherwise specially occupied in or about the Companys business, he or she may
be paid remuneration fixed by the directors, or, at the option of that director,
fixed by ordinary resolution, and such remuneration may be either in addition
to, or in substitution for, any other remuneration that he or she may be
entitled to receive. In addition, Part 13.8 of the Companys Articles provides
that Unless otherwise determined by ordinary resolution, the directors on
behalf of the Company may pay a

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gratuity or pension or allowance on retirement to any director
or to his or her spouse or dependents and may make contributions to any fund and
pay premiums for the purchase or provision of any such gratuity, pension or
allowance.

(c) Borrowing powers exercisable by
the directors and how such borrowing powers can be varied:

Part 8 of the Companys Articles
deals with borrowing powers. The Company, if authorized by the directors, may:
(i) borrow money in the manner and amount, on the security, from the sources and
on the terms and conditions that they consider appropriate; (ii) issue bonds,
debentures and other debt obligations either outright or as security for any
liability or obligation of the Company or any other person and at such discounts
or premiums and on such other terms as they consider appropriate; (iii)
guarantee the repayment of money by any other person or the performance of any
obligation of any other person; and (iv) mortgage, charge, whether by way of
specific or floating charge, grant a security interest in, or give other
security on, the whole or any part of the present and future assets and
undertaking of the Company.

(d) The Companys Memorandum and
Articles are silent with regard to the retirement or non-retirement of directors
under an age limit requirement.

(e) Number of shares, if any,
required for qualification:

Part 13.4 of the Companys
Articles states that A director is not required to hold a share in the capital
of the Company as qualification for his or her office but must be qualified as
required by the BCA to become, act or continue to act as a director.

3. Rights, preferences and
restrictions attaching to each class of shares:

(a) Dividend rights, including time
limit after which dividend entitlement lapses

All of the authorized shares of
common stock of the Company are of the same class and, once issued, rank equally
as to dividends. The Memorandum and Articles are silent as to lapse of dividend
entitlement.

(b) Voting rights; staggered
re-election intervals; cumulative voting

The holders of common shares are
entitled to one vote for each share on all matters to be voted on by the
shareholders. Shareholders of the Company do not have cumulative voting.

(c) Rights to share in surplus in
event of liquidation

All of the authorized shares of
common stock of the Company are of the same class and, once issued, rank equally
as to participation in assets and in all other respects, on liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, or
any other distribution of the assets of the Company among its shareholders for
the purpose of winding up its affairs after the Company has paid out its
liabilities.

(d) Other

The issued common shares are not
subject to call or assessment rights or any pre-emptive or conversion rights.
There are no provisions for redemption, purchase for cancellation, surrender or
purchase funds.

There are no provisions
discriminating against any existing or prospective holder of common shares of
the Company as a result of such shareholder owning a substantial number of
common shares.

4. Actions necessary to change the
rights of holders of the Companys stock:

The rights of holders of issued
shares of the Company may be altered only with the approval of the holders of
2/3 or more of the shares of the Company voted at a meeting of the shareholders
of the Company called and held in accordance with applicable law.

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5. Conditions governing manner in
which annual general meetings and extraordinary general meetings of
shareholders are convoked, including conditions of admission:

Part 10.1 of the Companys
Articles states that Unless an annual general meeting is deferred or waived in
accordance with the Business Corporations Act, the Company must hold an annual
general meeting at least once in each calendar year and not more than 15 months
after the last annual reference date at such time and place as may be determined
by the directors.

The directors may convene an
extraordinary general meeting of the shareholders. All meetings of the
shareholders may be attended by registered shareholders or persons who hold
powers of attorney or proxies given to them by registered shareholders.

6. Limitations on rights to own
securities of the Company

Except as provided in the
Investment Canada Act (the IC Act), there are no limitations under the laws of
Canada, the Province of British Columbia or in any constituent documents of the
Company on the right of non-Canadians to hold or vote the common shares of the
Company.

The IC Act governs acquisitions
of Canadian business by a non-Canadian person or entity. The IC Act requires a
non-Canadian (as defined in the IC Act) making an investment to acquire control
of a Canadian business, the gross assets of which exceed certain defined
threshold levels, to file an application for review with the Investment Review
Division of Industry Canada. The IC Act provides, among other things, for a
review of an investment in the event of acquisition of control in certain
Canadian businesses in the following circumstances:

1. If the investor is a
non-Canadian and is a national of a country belonging to the North American Free
Trade Agreement (NAFTA) and/or the World Trade Organization (WTO) (NAFTA or
WTO National), any direct acquisition having an asset value exceeding
$281,000,000 (for 2007) is reviewable. This amount is subject to an annual
adjustment on the basis of a prescribed formula in the IC Act to reflect
inflation and real growth within Canada. This threshold level does not apply in
certain sections of Canadian industry, such as uranium, financial services
(except insurance), transportation services and cultural services (i.e. the
publication, distribution or sale of books, magazines, periodicals (other than
printing or typesetting businesses), music in print or machine readable form,
radio, television, cable and satellite services; the publication, distribution,
sale or exhibition of film or video recordings on audio or video music
recordings), to which lower thresholds as prescribed in the IC Act are
applicable.

2. If the investor is a
non-Canadian and is not a NAFTA or WTO National, any direct acquisition having
an asset value exceeding $5,000,000 and any indirect acquisition having an asset
value exceeding $50,000,000 is reviewable.

3. If the investor is a
non-Canadian and is NAFTA or WTO National, an indirect acquisition of control is
reviewable if the value of the assets of the business located in Canada
represents more than 50% of the asset value of the transaction or the business
is involved in uranium, financial services, transportation services or cultural
services (as set forth above).

Finally, certain transactions
prescribed in the IC Act are exempted from review altogether.

In the context of the Company, in
essence, three methods of acquiring control of a Canadian business are regulated
by the IC Act: (i) the acquisition of all or substantially all of the assets
used in carrying on business in Canada; (ii) the acquisition, directly or
indirectly, of voting shares of a Canadian corporation carrying on business in
Canada; or (iii) the acquisition of voting shares of an entity which controls,
directly or indirectly, another entity carrying on business in Canada.

An acquisition of a majority of
the voting shares of a Canadian entity, including a corporation, is deemed to be
an acquisition of control under the IC Act. However, under the IC Act, there is
a rebuttable presumption that control is acquired if one-third of the voting
shares of a Canadian corporation or an equivalent undivided interest in the
voting shares of such corporation are held by a non-Canadian person or entity.
An acquisition of less than one-third of the voting shares of a Canadian
corporation is deemed not to be an acquisition of control. An acquisition of

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less than a majority, but one-third or more, of the voting
shares of a Canadian corporation is presumed to be an acquisition of control
unless it can be established that, on the acquisition, the Canadian corporation
is not, in fact, controlled by the acquirer through the ownership of voting
shares. For partnerships, trusts, joint ventures or other unincorporated
Canadian entities, an acquisition of less than a majority of the voting
interests is deemed not to be an acquisition of control.

In addition, if a Canadian
corporation is controlled by a non-Canadian, the acquisition of control of any
other Canadian corporation by such corporation may be subject to the prior
approval of the Investment Review Division, unless it can be established that
the Canadian corporation is not in fact controlled by the acquirer through the
ownership of voting shares.

Where an investment is reviewable
under the IC Act, the investment may not be implemented unless it is likely to
be of net benefit to Canada. If an applicant is unable to satisfy the Minister
responsible for Industry Canada that the investment is likely to be of net
benefit to Canada, the applicant may not proceed with the investment.
Alternatively, an acquirer may be required to divest control of the Canadian
business that is the subject of the investment.

In addition to the foregoing, the
IC Act provides for formal notification under the IC Act of all other
acquisitions of control by Canadian businesses by non-Canadian investors. The
notification process consists of filing a notification within 30 days following
the implementation of an investment, which notification is for information, as
opposed to review, purposes.

7. Provisions of Companys articles,
charter or by-laws that have the effect of delaying, deferring or
preventing a change in control of the Company and that would operate only
with respect to a merger, acquisition, or corporate restructuring
involving the Company:

There are no provisions in the
Companys Articles or charter documents that would have the effect of delaying,
deferring or preventing a change in the control of the Company, or that would
operate with respect to any proposed merger, acquisition or corporate
restructuring involving the Company or any of its subsidiaries.

8. Provisions governing the
ownership threshold above which shareholder ownership must be disclosed:

The British Columbia
Securities Act provides that a person that has direct or indirect
beneficial ownership of, control or direction over, or a combination of direct
or indirect beneficial ownership of, and control or direction over, securities
of the issuer carrying more than 10% of the voting rights attached to all the
issuers outstanding voting securities must, within 10 days of becoming an
insider, file an insider report in the required form effective the date on
which the person became an insider, disclosing any direct or indirect beneficial
ownership of, or control or direction over, securities of the reporting issuer.
The British Columbia Securities Act also provides for the filing of a
report by an insider of a reporting issuer who acquires or transfers
securities of the issuer. This insider report must be filed within 10 days after
the end of the month in which the change takes place.

The U.S. rules governing the
ownership threshold above which shareholder ownership must be disclosed are more
stringent than those discussed above. Section 13 of the Exchange Act imposes
reporting requirements on persons who acquire beneficial ownership (as such term
is defined in the Rule 13d-3 under the Exchange Act) of more than 5 per cent of
a class of an equity security registered under Section 12 of the Exchange Act.
In general, such persons must file, within 10 days after such acquisition, a
report of beneficial ownership with the Securities and Exchange Commission
containing the information prescribed by the regulations under Section 13 of the
Exchange Act. This information is also required to be sent to the issuer of the
securities and to each exchange where the securities are traded.

9. Significant differences between
law applicable to the Company and law of the United States. See 8,
above.

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|C. | Material Contracts
|-- | ------------------

Following is a summary of each material
contract, other than contracts entered into the ordinary course of business, to
which the Company is a party, during the previous two fiscal years:

|(a) | Stock Option Plan approved by the Board of Directors on
      August 12, 2003 and by the shareholders (annual shareholder approval
      required; most recently approved by shareholders as of September 13,
      2007). See Item 6. Directors, Senior Management and Employees -- E. Share
      Ownership -- Stock Option Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(b) | Lease Agreement between the Company and 915035 Alberta
      Ltd. effective March 1, 2007 for office premises for a term of twenty-two
      months expiring December 31, 2008. The monthly rent under the lease is
      $8,658 including $1,010 per month for parking space.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(d) | Demand promissory note made by the Company in favor of
      Exploram, dated December 20, 2005, for $2,000,000 at an annual interest
      rate of 9.5%, payable monthly (repaid in March 2006). (See Item 5.
      Operating and Financial Review and Prospects -- B. Liquidity and Capital
      Resources).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(e) | Secured convertible debenture between the Company and
      Exploram dated March 1, 2006, maturing January 1, 2009 for $5,000,000 at
      an annual interest rate of 9.5%, payable semi annually (July 31 and
      January 31) with first interest payment on July 31, 2006. The Debenture is
      convertible into common shares of the Company at any time after January
      31, 2007, at a price of $0.635 per share. In addition, for every dollar of
      principal outstanding on February 1, 2007, the Company was to issue one
      common share purchase warrant to Exploram, each warrant entitling Exploram
      to acquire one common share at any time up to January 31, 2008 at $0.635
      per share. Such warrants were issued to Exploram as of January 31, 2007.
      (See Item 5. Operating and Financial Review and Prospects B. Liquidity
      and Capital Resources).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(f) | Demand promissory note made by the Company in favor of
      Exploram, dated April 13, 2006, for $1,500,000 at an annual interest rate
      of 9.5%, payable monthly. The Note is payable on demand after the earlier
      of (i) the occurrence of an event of default under the above secured
      convertible Debenture dated March 1, 2006 and (ii) June 30, 2006. The Loan
      is secured by a general security agreement over the Companys assets. The
      Company agreed to pay a 3% structuring fee for the financing. On May 31,
      2007, the Company repaid the note to Exploram.                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(g) | Demand promissory note made by the Company in favor of
      Exploram, dated June 19, 2006, for $1,500,000 at an annual interest rate
      of 9.5%, payable monthly. The Note is payable on demand after the earlier
      of (i) the occurrence of an event of default under the above secured
      convertible Debenture dated March 1, 2006 and (ii) August 31, 2006. The
      Loan is secured by a general security agreement over the Companys assets.
      The Company agreed to pay a 3% structuring fee for the financing. The
      Company and Exploram have agreed that the note payable due date be
      extended from August 31, 2006 such that it is now payable on demand after
      June 15, 2008.                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(h) | Demand promissory note made by the Company in favor of
      Exploram, dated October 30, 2006, for $1,000,000 at an annual interest
      rate of 9.5%, payable monthly. The Note is payable on demand after the
      earlier of (i) the occurrence of an event of default under the above
      secured convertible Debenture dated March 1, 2006 and (ii) December 31,
      2006. The Loan is secured by a general security agreement over the
      Companys assets. The Company agreed to pay a 3% structuring fee for the
      financing. On May 31, 2007, the Company repaid the note to
  Exploram.                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(i) | Demand promissory note made by the Company in favor of
      Exploram, dated December 27, 2006, for $1,000,000 at an annual interest
      rate of 9.5%, payable monthly. The Note is payable on demand after the
      earlier of (i) the occurrence of an event of default under the above
      secured convertible Debenture dated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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|    | March 1, 2006 and (ii) February 28, 2007. The Loan is
      secured by a general security agreement over the Companys assets. The
      Company agreed to pay a 3% structuring fee for the financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(j) | On February 15, 2007, in a non brokered private
      placement, the Company issued 5,000,000 Units, each consisting of one
      common share and one-half of one share purchase warrant, at a price of
      $0.30 per Unit to Exploram, the sole subscriber in the placement, for an
      aggregate purchase price of Cdn. $1,500,000. See Item 5. Operating and
      Financial Review and Prospects  B. Liquidity and Capital Resources 
      Subsequent Events.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(k) | On May 15, 2007, as previously reported by the Issuer,
      the Company issued 18,571,371 Units, each consisting of one common share
      and one-half of one share purchase warrant, at a price of $0.35 per Unit.
      Of this total, Exploram purchased 4,285,714 Units and Auro purchased
      5,714,285 Units. See Item 5. Operating and Financial Review and Prospects
       B. Liquidity and Capital Resources  Subsequent Events.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(l) | On May 15, 2007, as part of the above private placement,
      the Company issued a $3 million unsecured convertible note (the Note) to
      Auro. The Note matures May 15, 2009, bears interest at 8%, payable at
      maturity, and is convertible at any time up to maturity into units of the
      Company at $0.41 per unit (a Note Unit). Each Note Unit consists of one
      share and one half of one common share purchase warrant (a Note Warrant)
      and each Note Warrant is exercisable to acquire one share of the Company
      at $0.45 per share until May 15, 2009. The Issuer has the right to prepay
      the Note at any time after May 15, 2008, subject to Auros right to
      convert before prepayment. Auro has the right to elect to receive interest
      payments in cash or in shares of the Company at a price equal to the
      market price on the date the interest is payable. The Note includes
      negative covenants, events of default and conversion right adjustment
      provisions that are standard for transactions of this nature. See Item 5.
      Operating and Financial Review and Prospects  B. Liquidity and Capital
      Resources  Subsequent Events
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(m) | On May 15, 2007, the Company retained Sirocco Advisory
      Services Limited, a company Steven G. Dean is associated with to provide
      management consulting services to the Company for an annual fee of
      $120,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

|D. | Exchange Controls
|-- | -----------------

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

|E. | Taxation
|-- | --------

Canadian Federal Income Tax
Consequences

The following discussion is a
summary of the principal Canadian federal income tax considerations generally
applicable to purchasers of the Companys Common Shares who, for purposes of the
Income Tax Act (Canada) and Income Tax Regulations (the Canadian Act), deal at
arms length with the Company, hold Common Shares as capital property, and are
not deemed to be residents of Canada at any time when holding Common Shares, do
not use or hold and are not deemed to use or hold Common Shares in or in the
course of carrying on business in Canada, are not tax exempt under the Canadian
Act, are not financial institutions as defined in the Canadian Act that are
subject to the mark to market rules in the Canadian Act and, are not insurers
who carry on an insurance business in Canada and elsewhere.. Such a purchaser is
referred to in this discussion as a shareholder.

This summary is based on the
current provisions of the Canadian Act and the Canada-United States Income Tax
Convention (1980) (the Treaty) as amended. This summary takes into account
specific proposals to amend the Canadian Act publicly announced by the Minister
of Finance prior to the date hereof and the Companys understanding of the
current published administrative and assessing practices of the Canada Revenue
Agency. This summary does not take into account Canadian provincial income tax
law or the income tax laws of any country other than Canada.

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A shareholder of the Company will
generally not be subject to tax pursuant to the Canadian Act on a capital gain
realized on a disposition of Common Shares unless the Common Shares are taxable
Canadian property to the shareholder for purposes of the Canadian Act and the
shareholder is not eligible for relief pursuant to an applicable bilateral tax
treaty. The Common Shares will not be taxable Canadian property to a shareholder
provided that such Common Shares are listed on a prescribed Canadian or foreign
stock exchange within the meaning of the Canadian Act and provided that such
shareholder, or persons with whom such shareholder did not deal at arms length
(within the meaning of the Canadian Act), or any combination thereof, did not
own 25% or more of the issued shares of any class or series of the Company at
any time within five years immediately preceding the date of disposition. In
addition, the Treaty will generally exempt a shareholder who is a resident of
the United States for purposes of the Treaty from tax in respect of a
disposition of Common Shares provided that the value of the shares of the
Company is not derived (directly or indirectly) principally from a real property
interest (including resource property) situated in Canada.

Under the Canadian Act, a
disposition of shares that constitute taxable Canadian property will give rise
to a capital gain (or a capital loss) equal to the amount by which the proceeds
of disposition of such shares, net of any reasonable costs of disposition,
exceeds (or is less than) the adjusted cost base of such shares to the
shareholder. Generally, unless exempt under an applicable bilateral tax treaty,
one half of any such capital gain (a taxable capital gain) realized by the
shareholder on a disposition or deemed disposition of such shares is included in
computing his Canadian income tax for that year as a taxable capital gain. One
half of any capital loss (an allowable taxable loss) realized by a shareholder
on a disposition or deemed disposition of such a share in a taxable year may
generally be deducted from his Canadian taxable capital gains for that year.
Allowable capital losses for a taxation year in excess of taxable capital gains
for that year may generally be carried back and deducted in any of the three
proceeding taxation years or carried forward and deducted in any subsequent
taxation year against net taxable capital gains realized in such years to the
extent and under the circumstances described in the Canadian Act.

Under the Canadian Act, the
disposition of a share by a shareholder may occur or be deemed to occur in a
number of circumstances including on a sale or gift of such share upon the
shareholder becoming or ceasing to be resident in Canada or upon the death of
the shareholder.

The initial adjusted cost base of
a share to a shareholder will be the cost to him of that share. Under the
Canadian Act, certain additions to or reductions of the cost of a share may be
required from time to time. The adjusted cost base of each share of a
corporation owned by a shareholder at any particular time will be the average
adjusted cost base to him of all shares of the same class of that corporation
owned by him at that time.

Any dividend, including stock
dividends, paid or credited, or deemed to be paid or credited, by the Company to
or for the benefit of a shareholder will be subject to Canadian withholding tax
at the rate of 25% on the gross amount of the dividend, subject to reduction in
accordance with the provisions of any applicable bilateral income tax treaty.
Pursuant to the Treaty, the rate of withholding tax generally will be reduced to
15% in respect of dividends paid to a shareholder who is a resident of the
United States for purposes of the Treaty. The rate of withholding is further
reduced to 5% if the beneficial owner of the shares is a corporation that is a
resident of the United States for purposes of the Treaty and owns at least 10%
of the voting shares of the Company.

United States Federal Income Tax
Consequences

The following is a general
discussion of the material U.S. federal income tax consequences, under current
law, which may be applicable to a U.S. Holder (as defined below) of common
shares of the Company. This discussion does not address all potentially relevant
U.S. federal income tax matters and it does not address consequences peculiar to
persons subject to special provisions of U.S. federal income tax law, such as
those described below as excluded from the definition of a U.S. Holder. In
addition, this discussion does not cover any state, local or foreign tax
consequences. (See  Canadian Federal Income Tax Consequences above.)

The following discussion is based
upon the sections of the Internal Revenue Code of 1986, as amended to the date
hereof (the Code), Treasury Regulations, published Internal Revenue Service
(IRS) rulings, published administrative positions of the IRS and court
decisions that are currently applicable, any or all of which could be materially
and adversely changed, possibly on a retroactive basis, at any time. In
addition, this discussion does not

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consider the potential effects, both adverse and beneficial, of
any future legislation which, if enacted, could be applied, possibly on a
retroactive basis, at any time.

This discussion is for general
information only and it is not intended to be, nor should it be construed to be,
legal or tax advice to any U.S. Holder or prospective U.S. Holder of common
shares of the Company, and no opinion or representation with respect to the U.S.
federal income tax consequences to any such U.S. Holder or prospective U.S.
Holder is made. Accordingly, U.S. Holders and prospective U.S. Holders of common
shares of the Company should consult their own financial advisor, legal counsel,
or accountant regarding the U.S. federal, state, local and foreign tax
consequences of purchasing, owning and disposing of common shares of the
Company.

U.S. Holders

As used herein, a U.S. Holder
is a holder of common shares of the Company who or which is a citizen or
individual resident (or is treated as a citizen or individual resident) of the
United States for U.S. federal income tax purposes, a corporation or partnership
created or organized (or treated as created or organized for federal income tax
purposes) in or under the laws of the United States or any political subdivision
thereof, or a trust or estate the income of which is includable in its gross
income for U.S. federal income tax purposes without regard to its source, if,
(i) a court within the United States is able to exercise primary supervision
over the administration of the trust and (ii) one or more United States trustees
have the authority to control all substantial decisions of the trust. For
purposes of this discussion, a U.S. Holder does not include persons subject to
special provisions of U.S. federal income tax law, such as tax-exempt
organizations, qualified retirement plans, financial institutions, insurance
companies, real estate investment trusts, regulated investment companies,
broker-dealers and Holders who acquired their stock through the exercise of
employee stock options or otherwise as compensation, persons subject to the
alternative minimum tax, and persons who own their common shares of the Company
other than as a capital asset within the meaning of Section 1221 of the
Code.

Distributions on common shares of
the Company

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

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

Dividends paid on the common
shares of the Company will not generally be eligible for the dividends received
deduction provided to corporations receiving dividends from certain United
States corporations. A U.S. Holder which is a corporation may, under certain
circumstances, be entitled to a 70% or 80% deduction of the United States source
portion of dividends received from the Company (unless the Company qualifies as
a foreign personal holding company or a passive foreign investment company,
as defined below) if such U.S. Holder owns

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common shares representing at least 10% or 20%, respectively,
of the voting power and value of the Company. The availability of this deduction
is subject to several complex limitations which are beyond the scope of this
discussion.

Under current temporary Treasury
Regulations, dividends paid, and the proceeds of a sale of the Companys common
shares, in the U.S. through a U.S. or U.S. related paying agent (including a
broker) will be subject to U.S. information reporting requirements and may also
be subject to the 30% U.S. backup withholding tax for payments made in 2002 and
2003 (29% in 2004 and 2005), unless the paying agent is furnished with a duly
completed and signed Form W-9. Any amounts withheld under the U.S. backup
withholding tax rules will be allowed as a refund or a credit against the U.S.
Holders U.S. federal income tax liability, provided the required information is
furnished to the IRS.

With effect from January 1, 2003,
the United States reduced the maximum tax rate on certain qualifying dividend
distributions to 15% (5% for certain U.S. Holders). In order for dividends paid
by foreign corporations to qualify for the reduced rates, (1) the foreign
corporation must meet certain requirements, including that it not be classified
as a foreign investment company or a passive foreign investment company for U.S.
federal income tax purposes in either the taxable year of the distribution or
the preceding taxable year, and (2) the U.S. Holder must meet the required
holding period. In order to meet the required holding period, the U.S. Holder
must hold the Company common shares for at least 60 days during the 120-day
period beginning 60 days before the ex-dividend date.

Foreign Tax Credit

A U.S. Holder who pays (or has
withheld from distributions) Canadian income tax with respect to the ownership
of common shares of the Company may be entitled, at the option of the U.S.
Holder, to either a deduction or a tax credit for such foreign tax paid or
withheld. Generally, it will be more advantageous to claim a credit because a
credit reduces U.S. federal income taxes on a dollar-for-dollar basis, while a
deduction merely reduces the taxpayers income subject to tax. This election is
made on a year-by-year basis and applies to all foreign taxes paid by (or
withheld from) the U.S. Holder during that year. There are significant and
complex limitations, which apply to the credit; among which is the general
limitation that the credit cannot exceed the proportionate shares of the U.S.
Holders United States income tax liability that the U.S. Holders foreign
source income bears to his or its worldwide taxable income. In the determination
of the application of this limitation, the various items of income and deduction
must be classified into foreign and domestic sources. Complex rules govern this
classification process. There are further limitations on the foreign tax credit
for certain types of income such as passive income, high withholding tax
interest, financial services income, shipping income, and certain other
classifications of income. The availability of the foreign tax credit and the
application of the limitations on the credit are fact specific and holders and
prospective holders of common shares of the Company should consult their own tax
advisors regarding their individual circumstances.

Disposition of common shares of the
Company

A U.S. Holder will recognize gain
or loss upon the sale of common shares of the Company equal to the difference,
if any, between the amount of cash plus the fair market value of any property
received, and the Holders tax basis in the common shares of the Company. This
gain or loss will be capital gain or loss if the common shares are a capital
asset in the hands of the U.S. Holder unless the Company were to become a
controlled foreign corporation. For the effect on the Company of becoming a
controlled corporation, see Controlled Foreign Corporation Status below. Any
capital gain will be a short-term or long-term capital gain or loss depending
upon the holding period of the U.S. Holder. Gains and losses are netted and
combined according to special rules in arriving at the overall capital gain or
loss for a particular tax year. Deductions for net capital losses are subject to
significant limitations. For U.S. Holders who are individuals, any unused
portion of such net capital loss may be carried over to be used in later tax
years until such net capital loss is thereby exhausted. For U.S. Holders which
are corporations (other than corporations subject to Subchapter S of the Code),
an unused net capital loss may be carried back three years from the loss year
and carried forward five years from the loss year to be offset against capital
gains until such net capital loss is thereby exhausted.

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Eligibility of U.S. Holders who are
Individuals for the Reduced Federal 15% rate on Dividends

As a result of the Jobs and
Growth Tax Relief Reconciliation Act of 2003, U.S. Holders who are individuals
will pay the top federal 15% tax rate on eligible common stock dividends
received from January 1, 2003, through December 31, 2008. Eligible dividends are
the dividends received during the tax year from (i) a domestic corporation, or
(ii) a qualified foreign corporation (incorporated in a U.S. possession; traded
on a U.S. exchange; or eligible for benefits under a comprehensive income tax
treaty). There is the possibility that the Companys common shares are passive
foreign investment company shares. As such, any dividends on the Companys
common shares may not be eligible for the reduced maximum tax rates. Dividends
paid by foreign corporations that are (i) a foreign investment company (FIC),
(ii) a passive foreign investment company (PFIC), or (iii) a foreign personal
holding company (FPHC) (as defined below) do not qualify for the reduced
15% federal tax rate. Also, beginning in 2009 the reduced 15% federal tax rate
on dividends for individuals expires and those dividends will be taxed again at
a marginal tax rate (35%).

Other Considerations for U.S.
Holders

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

Foreign Personal Holding
Company

If at any time during a taxable
year more than 50% of the total combined voting power or the total value of the
Companys outstanding shares is owned, actually or constructively, by five or
fewer individuals who are citizens or residents of the United States and 50%
(60% in the first year) or more of the Companys gross income for such year was
derived from certain passive sources (e.g., from dividends received from its
subsidiaries), the Company would be treated as a foreign personal holding
company. In that event, U.S. Holders that hold common shares of the Company
would be required to include in income for such year their allocable portion of
the Companys passive income which would have been treated as a dividend had
that passive income actually been distributed. For corporate tax years beginning
after December 31, 2004, the foreign personal holding company rules have been
eliminated.

Foreign Investment Company

If 50% or more of the combined
voting power or total value of the Companys outstanding shares are held,
actually or constructively, by citizens or residents of the United States,
United States domestic partnerships or corporations, or estates or trusts other
than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and
the Company is found to be engaged primarily in the business of investing,
reinvesting, or trading in securities, commodities, or any interest therein, it
is possible that the Company might be treated as a foreign investment company
as defined in Section 1246 of the Code, causing all or part of any gain realized
by a U.S. Holder selling or exchanging common shares of the Company to be
treated as ordinary income rather than capital gains. For corporate tax years
beginning after December 31, 2004, the foreign investment company rules have
been eliminated.

Passive Foreign Investment
Company

A U.S. Holder who holds stock in
a foreign corporation during any year in which such corporation qualifies as a
passive foreign investment company (PFIC) is subject to U.S. federal income
taxation of that foreign corporation under one of two alternative tax methods at
the election of each such U.S. Holder.

Section 1297 of the Code defines
a PFIC as a corporation that is not formed in the United States and, for any
taxable year, either (i) 75% or more of its gross income is passive income,
which includes interest, dividends and certain rents and royalties or (ii) the
average percentage, by value (or, if the Company is a controlled foreign
corporation or makes an election, adjusted tax basis), of its assets that
produce or are held for the production of passive income is 50% or more. For
taxable years of U.S. persons beginning after December 31, 1997, and for tax
years of foreign corporations ending with or within such tax years, Section
1297(f) of the Code provides that publicly traded corporations must apply this
test on a fair market value basis only.

69

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As a PFIC, each U.S. Holder must
determine under which of the alternative tax methods it wishes to be taxed.
Under one method, a U.S. Holder who elects in a timely manner to treat the
Company as a Qualified Electing Fund (QEF), as defined in the Code, (an
Electing U.S. Holder) will be subject, under Section 1293 of the Code, to
current U.S. federal income tax for any taxable year in which the Companys
qualifies as a PFIC on his pro-rata share of the Companys (i) net capital
gain (the excess of net long-term capital gain over net short-term capital
loss), which will be taxed as long-term capital gain to the Electing U.S. Holder
and (ii) ordinary earnings (the excess of earnings and profits over net
capital gain), which will be taxed as ordinary income to the Electing U.S.
Holder, in each case, for the U.S. Holders taxable year in which (or with
which) the Company taxable year ends, regardless of whether such amounts are
actually distributed.

A QEF election also allows the
Electing U.S. Holder to (i) generally treat any gain realized on the disposition
of his common shares (or deemed to be realized on the pledge of his common
shares) as capital gain; (ii) treat his share of the Companys net capital gain,
if any, as long-term capital gain instead of ordinary income, and (iii) either
avoid interest charges resulting from PFIC status altogether (see discussion of
interest charge below), or make an annual election, subject to certain
limitations, to defer payment of current taxes on his share of the Companys
annual realized net capital gain and ordinary earnings subject, however, to an
interest charge. If the Electing U.S. Holder is not a corporation, such an
interest charge would be treated as personal interest that is not deductible
at all in taxable years beginning after 1990.

The procedure a U.S. Holder must
comply with in making a timely QEF election will depend on whether the year of
the election is the first year in the U.S. Holders holding period in which the
Company is a PFIC. If the U.S. Holder makes a QEF election in such first year,
(sometimes referred to as a Pedigreed QEF Election), then the U.S. Holder may
make the QEF election by simply filing the appropriate documents at the time the
U.S. Holder files its tax return for such first year. If, however, the Company
qualified as a PFIC in a prior year, then in addition to filing documents, the
U.S. Holder may also elect to recognize as an excess distribution (i) under
the rules of Section 1291 (discussed below), any gain that he would otherwise
recognize if the U.S. Holder sold his stock on the application date or (ii) if
the Company is a controlled foreign corporation (CFC), the Holders pro rata
share of the Companys earnings and profits. (But see Elimination of Overlap
Between Subpart F Rules and PFIC Provisions). Either the deemed sale election
or the deemed dividend election will result in the U.S. Holder being deemed to
have made a timely QEF election.

With respect to a situation in
which a Pedigreed QEF election is made, if the Company no longer qualifies as a
PFIC in a subsequent year, normal Code rules and not the PFIC rules will
apply.

If a U.S. Holder has not made a
QEF Election at any time (a Non-electing U.S. Holder), then special taxation
rules under Section 1291 of the Code will apply to (i) gains realized on the
disposition (or deemed to be realized by reason of a pledge) of his common
shares and (ii) certain excess distributions, as specially defined, by the
Company.

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

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

70

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Under Section 1291(f) of the
Code, the Department of the Treasury has issued proposed regulations that would
treat as taxable certain transfers of PFIC stock by Non-electing U.S. Holders
that are generally not otherwise taxed, such as gifts, exchanges pursuant to
corporate reorganizations, and transfers at death.

If a U.S. Holder makes a QEF
Election that is not a Pedigreed Election (i.e., it is made after the first year
during which the Company is a PFIC and the U.S. Holder holds shares of the
Company) (a Non-Pedigreed Election), the QEF rules apply prospectively but do
not apply to years prior to the year in which the QEF first becomes effective.
U.S. Holders should consult their tax advisors regarding the specific
consequences of making a Non-Pedigreed QEF Election.

Certain special, generally
adverse, rules will apply with respect to the common shares while the Company is
a PFIC whether or not it is treated as a QEF. For example under Section
1297(b)(6) of the Code (as in effect prior to the Taxpayer Relief Act of 1997),
a U.S. Holder who uses PFIC stock as security for a loan (including a margin
loan) will, except as may be provided in regulations, be treated as having made
a taxable disposition of such stock.

The foregoing discussion is based
on currently effective provisions of the Code, existing and proposed regulations
there under, and current administrative rulings and court decisions, all of
which are subject to change. Any such change could affect the validity of this
discussion. In addition, the implementation of certain aspects of the PFIC rules
requires the issuance of regulations which in many instances have not been
promulgated and which may have retroactive effect. There can be no assurance
that any of these proposals will be enacted or promulgated, and if so, the form
they will take or the effect that they may have on this discussion. Accordingly,
and due to the complexity of the PFIC rules, U.S. Holders of the Company are
strongly urged to consult their own tax advisors concerning the impact of these
rules on their investment in the Company. For a discussion of the impact of the
Taxpayer Relief Act of 1997 on a U.S. Holder of a PFIC, see Mark-to-Market
Election For PFIC Stock Under the Taxpayer Relief Act of 1997 and Elimination
of Overlap Between Subpart F Rules and PFIC Provisions below.

Mark-to-Market Election for PFIC
Stock Under Section 1296 of the Code

Section 1296 of the Code provides
that a U.S. Holder of a PFIC may make a mark-to-market election with respect to
the stock of the PFIC if such stock is marketable as defined below. This
provision is designed to provide a current inclusion provision for persons that
are Non-Electing Holders. Under the election, any excess of the fair market
value of the PFIC stock at the close of the tax year over the Holders adjusted
basis in the stock is included in the Holders income. The Holder may deduct any
excess of the adjusted basis of the PFIC stock over its fair market value at the
close of the tax year. However, deductions are limited to the net mark-to-market
gains on the stock that the Holder included in income in prior tax years, or so
called unreversed inclusions.

For purposes of the election,
PFIC stock is marketable if it is regularly traded on (1) a national securities
exchange that is registered with the SEC, (2) the national market system
established under Section 11A of the Securities Exchange Act of 1934, or (3) an
exchange or market that the IRS determines has rules sufficient to ensure that
the market price represents legitimate and sound fair market value.

A Holders adjusted basis of PFIC
stock is increased by the income recognized under the mark-to-market election
and decreased by the deductions allowed under the election. If a U.S. Holder
owns PFIC stock indirectly through a foreign entity, the basis adjustments apply
to the basis of the PFIC stock in the hands of the foreign entity for the
purpose of applying the PFIC rules to the tax treatment of the U.S. owner.
Similar basis adjustments are made to the basis of the property through which
the U.S. persons hold the PFIC stock.

Income recognized under the
mark-to-market election and gain on the sale of PFIC stock with respect to which
an election is made is treated as ordinary income. Deductions allowed under the
election and loss on the sale of PFIC with respect to which an election is made,
to the extent that the amount of loss does not exceed the net mark-to-market
gains previously included, are treated as ordinary losses. The U.S. or foreign
source of any income or losses is determined as if the amount were a gain or
loss from the sale of stock in the PFIC.

If PFIC stock is owned by a CFC
(discussed below), the CFC is treated as a U.S. person that may make the
mark-to-market election. Amounts includable in the CFCs income under the
election are treated as foreign personal holding company income, and deductions
are allocable to foreign personal holding company income.

71

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The above provisions apply to tax
years of U.S. persons beginning after December 31, 1997, and to tax years of
foreign corporations ending with or within such tax years of U.S. persons.

The rules of Code Section 1291
applicable to nonqualified funds generally do not apply to a U.S. Holder for tax
years for which a mark-to-market election is in effect. If Code Section 1291 is
applied and a mark-to-market election was in effect for any prior tax year, the
U.S. Holders holding period for the PFIC stock is treated as beginning
immediately after the last tax year of the election. However, if a taxpayer
makes a mark-to-market election for PFIC stock that is a nonqualified fund after
the beginning of a taxpayers holding period for such stock, a coordination rule
applies to ensure that the taxpayer does not avoid the interest charge with
respect to amounts attributable to periods before the election.

Controlled Foreign Corporation
Status

If more than 50% of the voting
power of all classes of stock or the total value of the stock of the Company is
owned, directly or indirectly, by U.S. Holders, each of whom own 10% or more of
the total combined voting power of all classes of stock of the Company, the
Company would be treated as a controlled foreign corporation or CFC under
Subpart F of the Code. This classification would bring into effect many complex
results including the required inclusion by such 10% U.S. Holders in income of
their pro rata shares of Subpart F income (as defined by the Code) of the
Company and the Companys earnings invested in U.S. property (as defined by
the Code). In addition, under Section 1248 of the Code, gain from the sale or
exchange of common shares of the Company by such a 10% U.S. Holder of Registrant
at any time during the five year period ending with the sale or exchange is
treated as ordinary dividend income to the extent of earnings and profits of the
Company attributable to the stock sold or exchanged. Because of the complexity
of Subpart F, and because the Company may never be a CFC, a more detailed review
of these rules is beyond the scope of this discussion.

Elimination of Overlap Between
Subpart F Rules and PFIC Provisions

Under Section 1297(e) of the
Code, a PFIC that is also a CFC will not be treated as a PFIC with respect to
certain 10% U.S. Holders. For the exception to apply, (i) the corporation must
be a CFC within the meaning of section 957(a) of the Code and (ii) the U.S.
Holder must be subject to the current inclusion rules of Subpart F with respect
to such corporation (i.e., the U.S. Holder is a United States Shareholder, see
Controlled Foreign Corporation, above). The exception only applies to that
portion of a U.S. Holders holding period beginning after December 31, 1997. For
that portion of a United States Holder before January 1, 1998, the ordinary PFIC
and QEF rules continue to apply.

As a result of this new
provision, if the Company were ever to become a CFC, U.S. Holders who are
currently taxed on their pro rata shares of Subpart F income of a PFIC which is
also a CFC will not be subject to the PFIC provisions with respect to the same
stock if they have previously made a Pedigreed QEF Election. The PFIC provisions
will however continue to apply to PFIC/CFC U.S. Holders for any periods in which
they are not subject to Subpart F and to U.S. Holders that did not make a
Pedigreed QEF Election unless the U.S. Holder elects to recognize gain on the
PFIC shares held in the Company as if those shares had been sold.

The PFIC provisions of the Code
are very complicated, and U.S. Holders should consult their own financial
advisor, legal counsel or accountant regarding the PFIC rules and how they may
impact their U.S. federal income tax situation.

72

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|F. | Dividends and Paying
Agents
|-- | ---------------------------

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

|G. | Statement by Experts
|-- | --------------------

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

|H. | Documents on Display
|-- | --------------------

Copies of the Companys exhibits
and documents are available for inspection at the Companys head office located
at Suite 220, 1010 - 1st Street SW, Calgary, Alberta, Canada T2R 1K4.

|I. | Subsidiary Information
|-- | ----------------------

The information referred to in this
section is not required for reports filed in the United States.

|ITEM
      11 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------------- | ----------------------------------------------------------

The Company is a Small Business
Issuer as such term is defined in Rule 12b-2 under the Exchange Act and, as
such, there is no requirement to provide any information under this Item.

|ITEM 12 | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|------- | ------------------------------------------------------

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

PART II

|ITEM 13 | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|------- | -----------------------------------------------

There has not been a material
default in the payment of principal, interest, a sinking or purchase fund
installment, or any other material default not cured within thirty days,
relating to indebtedness of the Company or any of its subsidiaries. There are no
payments of dividends by the Company in arrears, nor has there been any other
material delinquency relating to any class of preference shares of the
Company.

|ITEM
      14 | MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|------------- | ----------------------------------------------------------------------------------

Neither the Company nor any other
person has (i) modified materially any instrument defining the rights of holders
of any class of registered securities, (ii) modified materially or qualified the
rights evidenced by any class of registered securities by issuing or modifying
any other class of securities, or (iii) withdrawn or substituted a material
amount of the assets securing any class of registered securities. There has been
no change in the trustees or paying agents for any of the Companys securities
during the previous fiscal year.

73

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|ITEM 15 | CONTROLS AND PROCEDURES
|------- | -----------------------

Disclosure Controls and
ProceduresAs of March 31, 2007, an evaluation was carried out by the
Companys Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the Companys disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934, as
amended). Based on that evaluation, the Companys Chief Executive Officer and
Chief Financial Officer concluded that the disclosure controls and procedures
were 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.

Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the Companys management, including its principal executive and principal
financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.

Changes in Internal Control
over Financial Reporting. During the fiscal year ended March 31, 2007, there
were no changes in the Companys internal control over financial reporting that
have materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.

|ITEM 16A | AUDIT COMMITTEE FINANCIAL EXPERT
|-------- | --------------------------------

The Company has an Audit
Committee established by the Board of Directors. The members of the Audit
Committee are Manfred Peschke, George Chapel and Steven Dean. The Board has
designated Mr. Peschke and Mr. Dean as the Audit Committee Financial Experts
as that term is defined under Section 407 of the Sarbanes-Oxley Act of 2002. As
at August 28, 2007, Mr. Peschke and Mr. Chapel are independent as that term is
defined under the rules of the American Stock Exchange.

|ITEM 16B | CODE OF ETHICS
|-------- | --------------

The Company has adopted a Code of
Business Conduct and Ethics (the Code) that applies to all directors, officers
and employees, including its Chief Executive Officer, Chief Financial Officer
and principal accounting officer. The Code is posted on the Companys website,
www.vannessaventures.com.

|ITEM 16C | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

The aggregate amounts billed to
the Company by the Companys principal accountants, Ernst & Young, LLP,
Chartered Accountants (E&Y) with respect to services performed for each of
the fiscal years ended March 31, 2007 (Fiscal 2007) and 2006 (Fiscal 2006),
respectively, for audit fees, audit-related fees, tax fees and all other fees
are set forth below, in thousands of dollars:

Fiscal 2007
    Fiscal 2006Audit Fees (1)
    $78
    $105Audit-Related Fees (2)
    -
    3Tax Fees (3)
    11
    -All Other Fees (4)
    66
    -Totals
    $155
    $108


74

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NOTES:

(1) Audit Fees represent fees for the
audit of the Companys annual financial statements.

(2) Audit-Related Fees represent fees
for assurance and related services with respect to regulatory filings.

(3) Tax Fees represent fees for the
preparation of the Companys Canadian income tax returns.

(4) All Other Fees represent fees for
the review and related services with respect to the Companys Fiscal 2006 20-F
Annual Report filing.

The Company incurred additional
audit and audit-related fees in Fiscal 2007 and Fiscal 2006 by other independent
accountants who assisted the Companys principal accountants.

The Audit Committee has adopted
procedures requiring Audit Committee review and approval in advance of all
particular engagements for services provided by the Companys independent
auditors. Consistent with applicable laws, the procedures permit limited amounts
of services, other than audit, review or attest services, to be approved by one
or more members of the Audit Committee pursuant to authority delegated by the
Audit Committee, provided the Audit Committee is informed of each particular
service. All of the engagements and fees for Fiscal 2006 were pre-approved by
the Audit Committee. The Audit Committee reviews whether the non-audit services
to be provided are compatible with maintaining the auditors independence.
Permissible non-audit services will be limited to fees for tax services,
accounting assistance or audits in connection with acquisitions, and other
services specifically related to accounting or audit matters such as audits of
employee benefit plans.

|ITEM
      16D | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|-------------- | ----------------------------------------------------------

As the Companys common shares
are not listed on a national securities exchange or listed in an automated
inter-dealer quotation system of a national securities association as provided
under Rule 10A-3 under the Exchange Act, the requirements of that Rule are not
applicable to the Company and, as such, there is no requirement to provide any
information under this Item.

|ITEM
      16E | PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|-------------- | ----------------------------------------------------------------------------

The Company made no purchases of its
equity securities during the fiscal year ended March 31, 2007.

75

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PART III

|ITEM 17 | FINANCIAL STATEMENTS
|------- | --------------------

The following financial statements are
attached and incorporated herein:

| | Description of Document                                                                                                      | Page
| | ---------------------------------------------------------------------------------------------------------------------------- | ----
| |                                                                                                                              |     
| | Independent Auditors Report dated
      July 26, 2007, except for Notes 11 and 15, which are as of September 6,
      2007. | F-1 
| |                                                                                                                              |     
| | Consolidated Balance Sheets as at March
      31, 2007 and 2006                                                              | F-2 
| |                                                                                                                              |     
| | Consolidated State ments of Operations
      and Deficit for the Years Ended March 31, 2007, 2006 and 2005                   | F-3 
| |                                                                                                                              |     
| | Consolidated Statements of Cash Flows for
      the Years Ended March 31, 2007, 2006 and 2005                                | F-4 
| |                                                                                                                              |     
| | Notes to Financial Statements for the Years
      Ended March 31, 2007, 2006 and 2005                                        | F-5 

76

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VANNESSA VENTURES LTD.( an exploration stage company)

Consolidated Financial Statements
  Years Ended March 31, 2007, 2006 and 2005(In Canadian Dollars)

---



Report of Independent Registered Public Accounting Firm

To the Board of DirectorsVannessa Ventures Ltd.(an exploration stage enterprise)

We have audited the consolidated balances sheet of Vannessa Ventures
  Ltd. (an exploration stage enterprise) as at March 31, 2007 and 2006 and the
  consolidated statements of operations and deficit and cash flows for each of
  the years in the three year period ended March 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 audit.

We conducted our audit in accordance with Canadian generally
  accepted auditing standards and the standards of the Public Company Accounting
  Oversight Board (United States). Those standards require that we plan and perform
  an audit to obtain reasonable assurance whether the financial statements are
  free of material misstatement. We were not engaged to perform an audit of the
  Companys 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, assessing the accounting principles
  used and significant estimates made by management, and evaluating the overall
  financial statement presentation. We believe that our audit provides 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 the Company as at
  March 31, 2007 and 2006 and the results of its operations and its cash flows
  for each of the years in the three year period ended March 31, 2007 in conformity
  with Canadian generally accepted accounting principles.



Chartered Accountants

Vancouver, Canada
  July 25, 2007, except for Notes 11 and 15, which are as of September 6, 2007.

Comments by Auditors for U.S. Readers
  on Canada - U.S. Reporting Conflict

In the United States, reporting standards for auditors require
  the addition of an explanatory paragraph, following the opinion paragraph, when
  the financial statements are affected by conditions and events that cast substantial
  doubt on the Companys ability to continue as a going concern, such as
  those described in Note 1 to these consolidated financial statements. Our report
  to the Directors dated August 12, 2007, except for Notes 11 and 15, which are
  as of September 22, 2006 is expressed in accordance with Canadian reporting
  standards which do not permit a reference to such events and conditions in the
  report of the independent auditor when these are adequately disclosed in the
  financial statements.



Chartered Accountants

Vancouver, Canada
  July 25, 2007, except for Notes 11 and 15, which are as of September 6, 2007.

F-1

---



VANNESSA VENTURES LTD.( an exploration stage company)
  Consolidated Balance Sheets
  March 31, 2007 and 2006(In Canadian Dollars)

|                                            |   | 2007        |   |   | 2006        |  
|------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                            |   |             |   |   |             |  
|A S S E T S(Note 9)                         |   |             |   |   |             |  
|                                            |   |             |   |   |             |  
|Current                                     |   |             |   |   |             |  
|Cash                                        | $ | 280,338     |   | $ | 1,675,350   |  
|Amounts receivable                          |   | 158,324     |   |   | 149,405     |  
|Prepaid expenses                            |   | 90,526      |   |   | 78,039      |  
|                                            |   | 529,188     |   |   | 1,902,796   |  
|Capital Assets(Note 4)                      |   | 3,908,666   |   |   | 1,738,312   |  
|Mineral Interests(Note 5)                   |   | 9,521,407   |   |   | 7,000,771   |  
|                                            | $ | 13,959,261  |   | $ | 10,641,877  |  
|                                            |   |             |   |   |             |  
|L I A B I L I T I E S                       |   |             |   |   |             |  
|                                            |   |             |   |   |             |  
|Current Liabilities                         |   |             |   |   |             |  
|Accounts payable and accrued liabilities    | $ | 2,157,516   |   | $ | 2,612,481   |  
|Demand notes payable (Note 7)               |   | 5,000,000   |   |   | -           |  
|                                            |   | 7,157,516   |   |   | 2,612,481   |  
|Convertible debenture
      payable(Note 9) |   | 3,947,551   |   |   | 3,539,401   |  
|                                            |   | 11,105,067  |   |   | 6,151,882   |  
|S H A R E H O L D E R S E Q U I T Y        |   |             |   |   |             |  
|                                            |   |             |   |   |             |  
|Share Capital(Note 6)                       |   | 48,976,420  |   |   | 45,470,220  |  
|Contributed Surplus(Note 8)                 |   | 2,927,604   |   |   | 2,692,812   |  
|Other Paid in Capital(Note 9)               |   | 1,490,475   |   |   | 1,490,475   |  
|Deficit                                     |   | (50,540,305 | ) |   | (45,163,512 | )
|                                            |   | 2,854,194   |   |   | 4,489,995   |  
|                                            | $ | 13,959,261  |   | $ | 10,641,877  |  
|Nature of Operations (Note 1)               |   |             |   |   |             |  
|Commitments (Note 14)                       |   |             |   |   |             |  
|Subsequent Events (Note 11)                 |   |             |   |   |             |  

-See Accompanying Notes-

F-2

---



VANNESSA VENTURES LTD.( an exploration stage company)Consolidated Statements of Operations and Deficit March 31, 2007, 2006
  and 2005(In Canadian Dollars)

|                                                     |   | 2007        |   |   | 2006        |   |   | 2005        |  
|---------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
|General and Administrative Expenses                  |   |             |   |   |             |   |   |             |  
|Amortization                                         | $ | 14,988      |   | $ | 20,534      |   | $ | 40,648      |  
|Automotive                                           |   | -           |   |   | -           |   |   | 112         |  
|Bank charges and interest                            |   | 9,076       |   |   | 9,379       |   |   | 13,221      |  
|Consulting                                           |   | 45,000      |   |   | 64,481      |   |   | 83,584      |  
|Insurance                                            |   | 22,738      |   |   | 21,500      |   |   | 10,750      |  
|Investor relations                                   |   | 49,299      |   |   | 68,994      |   |   | 90,299      |  
|Office and miscellaneous                             |   | 102,147     |   |   | 54,152      |   |   | 72,992      |  
|Office wages and services                            |   | 387,105     |   |   | 499,061     |   |   | 470,542     |  
|Professional fees                                    |   | 242,140     |   |   | 324,165     |   |   | 196,333     |  
|Provision for doubtful account                       |   | (28,053     | ) |   | 89,511      |   |   | -           |  
|Rent                                                 |   | 76,544      |   |   | 67,450      |   |   | 80,417      |  
|Stock-based compensation (Note 8)                    |   | 193,306     |   |   | 528,605     |   |   | 624,736     |  
|Telephone                                            |   | 25,058      |   |   | 17,877      |   |   | 25,448      |  
|Transfer agent and listing fees                      |   | 41,974      |   |   | 59,519      |   |   | 26,298      |  
|Travel and accommodation                             |   | 6,823       |   |   | 35,339      |   |   | 80,310      |  
|                                                     |   |             |   |   |             |   |   |             |  
|                                                     |   | (1,188,145  | ) |   | (1,860,567  | ) |   | (1,815,690  | )
|                                                     |   |             |   |   |             |   |   |             |  
|Project Development Expenses                         |   |             |   |   |             |   |   |             |  
|Consulting                                           |   | 986,020     |   |   | 714,287     |   |   | 305,996     |  
|Arbitration                                          |   | 922,666     |   |   | 1,222,957   |   |   | 217,910     |  
|Impairment of mineral interests (Note 5)             |   | 921,152     |   |   | 3,378,614   |   |   | 2,824,335   |  
|                                                     |   | (2,829,838  | ) |   | (5,315,858  | ) |   | (3,348,241  | )
|                                                     |   |             |   |   |             |   |   |             |  
|Other Items                                          |   |             |   |   |             |   |   |             |  
|Loss on disposal of mineral interests (Note
      3) |   | -           |   |   | -           |   |   | (220,901    | )
|Interest expense and financing costs                 |   | (1,360,441  | ) |   | (302,054    | ) |   | -           |  
|Interest income                                      |   | 1,631       |   |   | 4,504       |   |   | 42,159      |  
|                                                     |   | (1,358,810  | ) |   | (297,550    | ) |   | (178,742    | )
|Net loss                                             |   | (5,376,793  | ) |   | (7,473,975  | ) |   | (5,342,673  | )
|Deficit, beginning
      of year                     |   | (45,163,512 | ) |   | (37,689,537 | ) |   | (32,346,864 | )
|                                                     |   |             |   |   |             |   |   |             |  
|Deficit, end of
      year                           | $ | (50,540,305 | ) | $ | (45,163,512 | ) | $ | (37,689,537 | )
|                                                     |   |             |   |   |             |   |   |             |  
|Net loss per share
       basic and diluted         | $ | (0.06       | ) | $ | (0.09       | ) | $ | (0.07       | )
|Weighted average number of common                    |   | (0.0857     | ) |   | (0.0857     | ) |   |             |  
|shares outstanding
       basic and diluted         |   | 91,716,042  |   |   | 86,129,983  |   |   | 76,875,180  |  

-See Accompanying Notes-

F-3

---



VANNESSA VENTURES LTD.
  Consolidated Statements of Cash Flows
  ( an exploration stage company) March 31, 2007, 2006 and 2005(In Canadian Dollars)

|                                                      |   |            |   |   |            |   |   |            |  
|----------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|                                                      |   |            |   |   |            |   |   |            |  
|                                                      |   | 2007       |   |   | 2006       |   |   | 2005       |  
|                                                      |   |            |   |   |            |   |   |            |  
|Operating activities                                  |   |            |   |   |            |   |   |            |  
|Net loss                                              | $ | (5,376,793 | ) | $ | (7,473,975 | ) | $ | (5,342,673 | )
|Items not involving cash:                             |   |            |   |   |            |   |   |            |  
|Amortization                                          |   | 14,988     |   |   | 20,534     |   |   | 40,648     |  
|Provision for doubtful
      account                  |   | -          |   |   | 89,511     |   |   | -          |  
|Convertible debenture accretion
      (Note 9)        |   | 408,150    |   |   | 29,876     |   |   | -          |  
|Stock based compensation
      (Note 8)               |   | 193,306    |   |   | 528,605    |   |   | 624,736    |  
|Loss on disposal of mineral interests                 |   | -          |   |   | -          |   |   | 220,901    |  
|Impairment of mineral interests
      (Note 5)        |   | 921,152    |   |   | 3,378,614  |   |   | 2,824,335  |  
|                                                      |   |            |   |   |            |   |   |            |  
|                                                      |   | (3,839,197 | ) |   | (3,426,835 | ) |   | (1,632,053 | )
|                                                      |   |            |   |   |            |   |   |            |  
|Changes in non-cash working capital items             |   |            |   |   |            |   |   |            |  
|Amounts receivable                                    |   | (8,919     | ) |   | (59,137    | ) |   | (108,913   | )
|Prepaid expenses                                      |   | (12,487    | ) |   | (25,284    | ) |   | (8,847     | )
|Accounts payable                                      |   | (454,965   | ) |   | 1,723,665  |   |   | (102,119   | )
|                                                      |   |            |   |   |            |   |   |            |  
|Cash used in operating
      activities               |   | (4,315,568 | ) |   | (1,787,591 | ) |   | (1,851,932 | )
|                                                      |   |            |   |   |            |   |   |            |  
|Investing activities                                  |   |            |   |   |            |   |   |            |  
|Sale of short term investments                        |   | -          |   |   | -          |   |   | 4,344,575  |  
|Purchase of capital assets                            |   | (2,201,297 | ) |   | (1,200,466 | ) |   | (88,748    | )
|Proceed on disposal of mineral interests              |   | -          |   |   | -          |   |   | 107,820    |  
|(Note 3)                                              |   |            |   |   |            |   |   |            |  
|Mineral interests expenditures (net of                |   | (3,384,347 | ) |   | (3,123,684 | ) |   | (3,729,078 | )
|recoveries)                                           |   |            |   |   |            |   |   |            |  
|                                                      |   |            |   |   |            |   |   |            |  
|Cash provided by (used
      in) investing activities |   | (5,585,644 | ) |   | (4,324,150 | ) |   | 634,569    |  
|                                                      |   |            |   |   |            |   |   |            |  
|Financing activities (Note 9)                         |   |            |   |   |            |   |   |            |  
|Shares issued for cash (Note 6)                       |   | 3,506,200  |   |   | 1,724,375  |   |   | 2,047,600  |  
|Issue of demand notes (Note 7)                        |   | 5,000,000  |   |   | -          |   |   | -          |  
|Convertible debenture (Note 9)                        |   | -          |   |   | 5,000,000  |   |   | -          |  
|                                                      |   |            |   |   |            |   |   |            |  
|Cash provided by financing activities                 |   | 8,506,200  |   |   | 6,724,375  |   |   | 2,047,600  |  
|                                                      |   |            |   |   |            |   |   |            |  
|Increase (decrease) in cash                           |   | (1,395,012 | ) |   | 612,634    |   |   | 830,237    |  
|Cash, beginning
      of year                         |   | 1,675,350  |   |   | 1,062,716  |   |   | 232,479    |  
|                                                      |   |            |   |   |            |   |   |            |  
|Cash, end of year                                     | $ | 280,338    |   | $ | 1,675,350  |   | $ | 1,062,716  |  

-See Accompanying Notes-

F-4

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|1. | NATURE OF OPERATIONS
|-- | --------------------

The Company is a development stage enterprise,
  as defined by CICA accounting guideline AcG 11, Enterprises in the Development
  Stage, and is engaged in the acquisition, exploration and development
  of mineral interests. For United States generally accepted accounting principle
  purposes, the Company is defined as an exploration stage enterprise (See
  Note 15 (a) (vii)).

These financial statements have been
  prepared in accordance with Canadian generally accepted accounting principles
  ("GAAP") on a "going concern" basis, which presumes the Company will realize
  its assets and discharge its liabilities in the normal course of business for
  the foreseeable future. As at March 31, 2007 the Company has incurred an accumulated
  deficit from operations of approximately $51 million and has a working capital
  deficiency of approximately $6.6 million. Funding for operations is raised primarily
  through public and private share offerings and debt financing, of which significant
  amounts have been provided by the Company's controlling shareholder (See Note
  11 for financings subsequent to March 31, 2007).

There is considerable uncertainty regarding
  the Companys ability to operate as a going concern without the continued
  support of the Companys major shareholders and future operations are dependent
  on raising sufficient funding through share offerings, debt financing, joint
  venture participations or from profitable operations.

|2. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------

| | (a) | Consolidation
| | --- | -------------

These consolidated financial statements
  include the accounts of the Company and its wholly-owned and controlled subsidiaries.

All inter-company transactions and balances
  have been eliminated upon consolidation.

| | (b) | Capital Assets and Amortization
| | --- | -------------------------------

Capital assets are recorded at cost.
  Amortization of assets in use is provided at the following annual rates:

| | Computer equipment                   | 30%  | Declining balance
| | ------------------------------------ | ---- | -----------------
| | Computer software                    | 100% | Straight line    
| | Exploration and processing equipment | 20%  | Declining balance
| | Office furniture and equipment       | 20%  | Declining balance
| | Vehicles                             | 30%  | Declining balance

F-5

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|2. | SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | -------------------------------------------

| | (b) | Capital Assets and Amortization (continued)
| | --- | -------------------------------------------

Capital assets are amortized at one-half
  the rates in the year of acquisition.

Capital assets used in exploration activities,
  where substantially all the economic life or value of the asset is expected
  to be derived from a specific project, are accounted for as dedicated capital
  assets and included as a separate category within the costs allocated to the
  related exploration stage mineral interests. Amortization for these assets is
  provided over their estimated lives and is charged to exploration costs of the
  related project.

Capital assets in use but not specifically
  dedicated to exploration stage mineral projects are included in capital assets
  in the balance sheet and amortized as provided above.

Capital assets not in use and held for
  sale are included in capital assets in the balance sheet and valued at the lower
  of amortized cost and estimated net recoverable value.

The carrying value of all categories
  of capital assets are reviewed for impairment whenever events or circumstances
  indicate the recoverable value may be less than the carrying amount. An impairment
  charge would be recognized when estimates of undiscounted future cash flows
  expected to result from the use of an asset and its eventual disposition are
  less than the carrying amount. An impairment charge would represent the excess
  of the carrying amount over the fair value of an asset. Impairment charges are
  recorded in the reporting period in which determination of impairment is made
  by management.

| | (c) | Foreign Exchange
| | --- | ----------------

The accounts of subsidiaries are translated
  into Canadian dollars using the temporal method. Under this method, monetary
  assets and liabilities are translated at the year end exchange rates. Non-monetary
  assets and liabilities are translated using historical rates of exchange. Revenues
  and expenses are translated at average rates for the period and exchange gains
  and losses on translation are included in income.

Transactions denominated in foreign
  currencies are translated into Canadian dollars at the exchange rate prevailing
  at transaction dates.

| | (d) | Mineral Interests and Exploration Costs
| | --- | ---------------------------------------

The Company is in the process of exploring
  and developing mineral interests in several countries through wholly-owned and
  controlled subsidiaries. None of the Company's mineral interests have reached
  commercial production. Title to mineral

F-6

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|2. | SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | -------------------------------------------

| | (d) | Mineral Interests and Exploration Costs (continued)
| | --- | ---------------------------------------------------

interests include options, leases, concessions,
  participating interests and direct title.

Costs incurred for acquisition, including
  option payments under acquisition agreements, are capitalized until such time
  as the related interest is placed into production, sold, abandoned or where
  management has determined an impairment in value.

All mineral interests which are being
  maintained, with the exceptions of the Crucitas project in Costa Rica and the
  Maple Creek, Potaro, Paint Mountain and Marudi concessions in Guyana, are currently
  under extended legal, political, environmental or permitting restrictions. The
  Crucitas project in Costa Rica is the subject of a legal challenge seeking that
  the Exploitation Concession be revoked and while the Company has a legal opinion
  from local counsel indicating that the Company has fulfilled all legal requirements
  and the Exploitation Concession will not be revoked, the final outcome is not
  yet certain. Accordingly, for the current and future years, management has determined
  until such time as current impediments to future development are resolved, all
  exploration and other costs incurred to maintain such interests will be considered
  impaired and charged as impairment charges in the period incurred.

For mineral interests not affected by
  restrictions referred to above, where specific exploration programs are planned
  and budgeted by management, mineral exploration costs are capitalized until
  the properties to which they relate are advanced to the development stage, placed
  into commercial production, sold, abandoned or determined by management to be
  impaired in value.

Management evaluates each mineral interest
  on a reporting period basis and makes a determination based on the above criteria
  and availability of funding as to whether the carrying amounts are impaired.
  Mineral interests, where future cash flows are not reasonably determinable,
  are evaluated for impairment based on managements intentions and determination
  of the extent to which future exploration programs are warranted and likely
  to be funded.

Cost recoveries during exploration

Joint Venture Participation and Accounting

From time to time the Company enters
  into agreements that provide for specified percentage interests in mineral property
  rights to be allocated to joint venture participants in exchange for funding
  or joint funding of exploration programs.

F-7

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|2. | SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | -------------------------------------------

| | (d) | Mineral Interests and Exploration Costs (continued)
| | --- | ---------------------------------------------------

Where agreements specify the Company
  as the operator, and controlling interest of the exploration program of the
  venture, such arrangements are considered to be participation funding and not
  considered to be joint ventures.

Joint venture accounting is applied
  by the Company only when commercial feasibility is established and the parties
  enter into formal comprehensive

agreements for ownership and mining
  participation terms. Accordingly, the Company records funding contributions
  prior to such agreements as reductions of carrying costs and no gain or loss
  on disposition of a partial interest is recorded.

Cost recoveries during exploration (continued)

Partial dispositions

Proceeds from partial dispositions of
  mineral interests during the exploration stage are credited as a reduction of
  carrying costs. No gain or loss is realized until all carrying costs of the
  specific interest have been recovered. Bulk sampling recoveries

The Company records the selling or market
  value from the sale or retention of bulk sampling recoveries as reductions of
  carrying costs until commercial production is established.

Bulk sampling inventories incidental
  to the overall program and that are held for verification and assessment purposes
  are capitalized as exploration mineral interests and are not classified as current
  inventory.

Capital assets dedicated to specific
  mineral interests are capitalized to the interests to which they relate.

Carrying values of mineral interests
  as reported in the balance sheet may not necessarily reflect actual present
  or future value. Recovery of carrying values is dependent upon future commercial
  success or proceeds from disposition of the mineral interests.

Upon the establishment of commercial
  production, carrying values of deferred acquisition and exploration costs will
  be amortized over the estimated life of the mine on the units of production
  method.

F-8

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|2. | SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | -------------------------------------------

| | (e) | Administrative Costs
| | --- | --------------------

Administrative costs not directly associated
  with mineral properties are recognized as period costs and are expensed in the
  period incurred.

| | (f) | Loss per share
| | --- | --------------

The treasury stock method is used to
  determine the dilutive effect of stock options and other dilutive instruments.
  The treasury stock method assumes proceeds received from in-the-money stock
  options are used to repurchase common shares at the prevailing market rate.

Basic loss per share figures has been
  calculated using the weighted average number of shares outstanding during the
  reporting periods. Diluted loss per share figures are equal to those of basic
  loss per share for each year since the effects of warrants, stock options and
  the conversion feature of the convertible debenture have been excluded as they
  are anti-dilutive.

| | (g) | Use of estimates
| | --- | ----------------

The preparation of financial statements
  in conformity with Canadian generally accepted accounting principles requires
  management to make estimates and assumptions that affect the reported amount
  of assets and liabilities and disclosure of contingent assets and liabilities
  at the date of the financial statements and the reported amounts of revenues
  and expenses during the reporting period. Significant areas requiring the use
  of management estimates relate to the determination of impairment of assets,
  useful lives for depreciation and amortization and allocation of cost to specific
  mineral interests. Financial results as determined by actual events could differ
  from those estimates.

The carrying value of mineral property
  interests is based on costs incurred and managements estimate of net recoverable
  value. Estimates may not necessarily reflect actual recoverable value as this
  will be dependant on the development program, the nature of the mineral deposit,
  commodity prices, adequate funding and the ability of the Company to achieve
  commercial production.

| | (h) | Risk Management
| | --- | ---------------

The Company does not use derivative
  instruments to reduce its exposure to credit, foreign currency, interest rate
  or cash flow risks.

F-9

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|2. | SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | -------------------------------------------

| | (h) | Risk Management (continued)
| | --- | ---------------------------

The Company maintains the majority of
  its cash and short-term investments in Canadian and U.S. dollar denominated
  securities with well capitalized financial institutions. Other financial instruments
  include accounts receivable and accounts payable. There are no significant differences
  between the carrying amounts of these instruments and their estimated fair values.

| | (i) | Future Income Taxes
| | --- | -------------------

The liability method is used in accounting
  for income taxes. Under this method an enterprise would recognize a future income
  tax liability whenever recovery or settlement of the carrying amount of an asset
  or liability would result in future income tax outflows. Similarly, an enterprise
  would recognize a future income tax asset whenever recovery or settlement of
  the carrying amount of an asset or liability would generate future income tax
  reductions. In the case of unused tax losses, foreign resource expenditure pools,
  income tax reductions, and certain items that have a tax basis but cannot be
  identified with an asset or liability on the balance sheet, the recognition
  of future income tax benefits is determined by reference to the likely realization
  of a future income tax reduction.

Net future tax assets are subject to
  valuation allowances when it is more likely than not that they will not be realized
  in the future.

| | (j) | Stock-based compensation and other stock-based transactions
| | --- | -----------------------------------------------------------

The Company grants stock options to
  executive officers, directors, employees and consultants and records the fair
  value of all awards as a credit to contributed surplus. The Company is allocating
  the fair value of all stock based compensation as a direct charge to income
  in its financial statements for administrative personnel and to mineral interests
  for field personnel.

The fair value of options and other
  stock based awards to employees or consultants, issued or altered in the period,
  are determined using the Black-Scholes option pricing model.

| | (k) | Financial instruments
| | --- | ---------------------

Financial instruments include cash,
  accounts receivable, accounts payable, demand notes payable and the convertible
  debenture. Management believes that the carrying values of these instruments
  approximate their fair values.

F-10

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|3. | DISPOSAL OF MINERAL INTERESTS
|-- | -----------------------------

During the year ended March 31, 2005,
  the Company disposed of its mineral interests in the La Fe/Yuruan/Kilometre
  88 region located in Venezuela due to the negative political environment following
  the initiation of International Arbitration against the Venezuelan Government
  regarding the Companys Las Cristinas property. (Note 5 (d)(i))

The loss on disposal of these concessions
  was as follows:

$Acquisition costs
      
      902,251Accumulated exploration expenditures
      
      2,540,233Accumulated impairment charges
      
      (3,113,763
      )Net book value
      
      328,721Proceeds of disposition
      
      (107,820
      )Loss on disposition
      
      220,901


The concessions located in the Kilometre
  88 region were returned to the former owner, Boralis Holdings A.V.V., for nil
  proceeds and consideration to pay the Company 80% of all future net benefits
  realized from these concessions. No value has been attributed to future consideration.
  (Note 7)

|4. | CAPITAL ASSETS
|-- | --------------

2007
      
      
      
      
      
      2006Cost
      
      
      Accumulated
      
      
      Net
      
      
      NetAssets in use:
      
      
      
      
      AmortizationComputer equipment
      $
      92,055
      
      
      71,608
      
      $
      20,447
      
      $
      25,471Computer software
      
      52,253
      
      
      52,253
      
      
      -
      
      
      -Office furniture and equipment
      
      284,529
      
      
      199,069
      
      
      85,460
      
      
      90,758Exploration and processing equipment
      
      4,176,012
      
      
      651,225
      
      
      3,524,787
      
      
      1,322,587Vehicles
      
      296,161
      
      
      200,531
      
      
      95,630
      
      
      117,1544,901,010
      
      
      1,174,686
      
      
      3,726,324
      
      
      1,555,970Assets not in use:Exploration and processing equipment
      
      182,342
      
      
      -
      
      
      182,342
      
      
      182,342$
      5,083,352
      
      
      1,174,686
      
      $
      3,908,666
      
      $
      1,738,312


Amortization of exploration and processing
  equipment not in use has not been recorded as these assets are being held for
  sale. Management has reviewed these assets for impairment and has concluded,
  based on estimates of future cash flows from sale or use, the net recoverable
  value of capital assets not in use exceeds their carrying value.

F-11

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS
|-- | -----------------

A summary of the carrying values of the
  Companys mineral interests by areas of interest:

| |                                             |   | 2007       |   |   | Current   |   |   | 2006       |   |   | 2005       |  
| | ------------------------------------------- | - | ---------- | - | - | --------- | - | - | ---------- | - | - | ---------- | -
| |                                             |   |            |   |   | Charges   |   |   |            |   |   |            |  
| | BRAZIL                                      |   |            |   |   |           |   |   |            |   |   |            |  
| | Parima                                      |   |            |   |   |           |   |   |            |   |   |            |  
| | Acquisition costs                           | $ | 1          |   |   |           |   | $ | 1          |   | $ | 1          |  
| | Exploration costs                           |   | 67,495     |   |   | 3,402     |   |   | 64,093     |   |   | 60,603     |  
| | Impairment charges                          |   | (67,495    | ) |   | (3,402    | ) |   | (64,093    | ) |   | (60,603    | )
| | Total 
      Brazil                        |   | 1          |   |   | -         |   |   | 1          |   |   | 1          |  
| | COSTA RICA                                  |   |            |   |   |           |   |   |            |   |   |            |  
| | Crucitas Gold Project                       |   |            |   |   |           |   |   |            |   |   |            |  
| | Acquisition costs                           |   | 2,669,504  |   |   | -         |   |   | 2,669,504  |   |   | 2,669,504  |  
| | Exploration and permitting costs            |   | 8,911,589  |   |   | 2,520,635 |   |   | 6,390,954  |   |   | 4,453,540  |  
| | Impairment charges                          |   | (4,081,850 | ) |   | -         |   |   | (4,081,850 | ) |   | (2,621,737 | )
| | Total  Costa Rica                          |   | 7,499,243  |   |   | 2,520,635 |   |   | 4,978,608  |   |   | 4,501,307  |  
| |                                             |   |            |   |   |           |   |   |            |   |   |            |  
| | GUYANA                                      |   |            |   |   |           |   |   |            |   |   |            |  
| | Maple Creek Concessions                     |   |            |   |   |           |   |   |            |   |   |            |  
| | Exploration costs (net of recoveries)       |   | 5,590,987  |   |   | 511,573   |   |   | 5,079,414  |   |   | 4,480,899  |  
| | Impairment charges                          |   | (4,502,735 | ) |   | (212,015  | ) |   | (4,290,720 | ) |   | (3,435,451 | )
| | Dedicated capital assets                    |   | 1,227,993  |   |   | (299,558  | ) |   | 1,527,551  |   |   | 1,915,797  |  
| | Diamond inventory from
      bulk sampling  |   | 65,481     |   |   | -         |   |   | 65,481     |   |   | 65,481     |  
| |                                             |   | 2,381,726  |   |   | -         |   |   | 2,381,726  |   |   | 3,026,726  |  
| | Less: contributed by joint
      venturer   |   | (2,354,304 | ) |   | -         |   |   | (2,354,304 | ) |   | (2,999,304 | )
| |                                             |   | 27,422     |   |   | -         |   |   | 27,422     |   |   | 27,422     |  
| | Potaro Concessions                          |   |            |   |   |           |   |   |            |   |   |            |  
| | Acquisition costs                           |   | 54,378     |   |   | -         |   |   | 54,378     |   |   | 54,378     |  
| | Exploration costs (net
      of recoveries) |   | 3,665,774  |   |   | 169,815   |   |   | 3,495,959  |   |   | 3,291,144  |  
| | Diamond inventories from bulk sampling      |   | 41,170     |   |   | -         |   |   | 41,170     |   |   | 41,170     |  
| | Impairment charges                          |   | (3,661,322 | ) |   | (169,815  | ) |   | (3,491,507 | ) |   | (3,286,692 | )
| |                                             |   | 100,000    |   |   | -         |   |   | 100,000    |   |   | 100,000    |  
| | Marudi Mountain Gold Project                |   |            |   |   |           |   |   |            |   |   |            |  
| | Acquisition costs                           |   | 144,000    |   |   | -         |   |   | 144,000    |   |   | 144,000    |  
| | Exploration costs                           |   | 2,161,704  |   |   | 203,817   |   |   | 1,957,887  |   |   | 1,659,979  |  
| | Impairment charges                          |   | (501,725   | ) |   | (203,817  | ) |   | (297,908   | ) |   | -          |  
| |                                             |   | 1,803,979  |   |   | -         |   |   | 1,803,979  |   |   | 1,803,979  |  
| |                                             |   |            |   |   |           |   |   |            |   |   |            |  
| | South Guyana  Paint Mountain               |   |            |   |   |           |   |   |            |   |   |            |  
| | Acquisition costs                           |   | 218,557    |   |   | -         |   |   | 218,557    |   |   | 218,557    |  
| | Exploration costs                           |   | 461,350    |   |   | -         |   |   | 461,350    |   |   | 448,246    |  
| | Impairment charges                          |   | (589,146   | ) |   | -         |   |   | (589,146   | ) |   | (576,042   | )
| |                                             |   | 90,761     |   |   | -         |   |   | 90,761     |   |   | 90,761     |  
| | Total  Guyana                              |   | 2,022,162  |   |   | -         |   |   | 2,022,162  |   |   | 2,022,162  |  
| | VENEZUELA                                   |   |            |   |   |           |   |   |            |   |   |            |  
| | Las Cristinas                               |   |            |   |   |           |   |   |            |   |   |            |  
| | Acquisition costs                           |   | 122,635    |   |   | -         |   |   | 122,635    |   |   | 122,635    |  
| | Carrying costs                              |   | 5,365,099  |   |   | 332,103   |   |   | 5,032,996  |   |   | 4,499,235  |  
| | Impairment charges                          |   | (5,487,733 | ) |   | (332,103  | ) |   | (5,155,630 | ) |   | (4,611,715 | )
| | Total - Venezuela                           |   | 1          |   |   | -         |   |   | 1          |   |   | 10,155     |  
| | TOTAL  MINERAL INTERESTS                   | $ | 9,521,407  |   | $ | 2,520,635 |   | $ | 7,000,771  |   | $ | 6,533,625  |  

F-12

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS (Continued)
|-- | -----------------------------

| | (a) | Brazil
| | --- | ------

Parima

In October 1996, the Company entered
  into an agreement for the acquisition of up to an 85% interest in 15 concessions
  located in the Sierra Parima region of the State of Roraima, Brazil.

The Brazilian government lifted certain
  mining restrictions and state government institutions are continuing the process
  of changing their laws to accommodate mining activity. The Company, together
  with the vendor, will endeavour to secure necessary mining and development permits.
  Once permits are secured, the Company will enter into a formal agreement with
  the Vendor to earn up to an 85% interest in 15 concessions located in the Sierra
  Parima region of the State of Roraima.

Due to continuing uncertainties over
  the process of changing laws to accommodate future mining in the region, management
  is recording impairment charges sufficient to reduce the carrying value of its
  interest to a nominal amount.

As at year end, the region remains closed
  to mining. The Company intends to pursue the interests in the region and monitor
  the legal process.

| | (b) | Costa Rica
| | --- | ----------

In May 2000, the Company signed an agreement
  to acquire a 100% interest in 10 mining concessions known as the Crucitas Gold
  Project located in northern Costa Rica.

Acquisition costs are comprised of the
  following:

| |                                         | $
| | --------------------------------------- | -
| | A cash payment                          |  
| | Issuance of 250,000 common shares       |  
| | Payment of certain trade payables       |  
| | Staged payments totaling $ 1,000,000 US |  
| | Interest on staged payments             |  
| | Finders fee of 80,000 common shares    |  
| | Acquisition fees and other costs        |  
| |                                         |  

Payment of two net smelter royalties
  of 1% each on all production from start-up to a maximum of $20 million U.S.
  and $3 million U.S. is payable to the respective vendors.

F-13

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS (Continued)
|-- | -----------------------------

| | (b) | Costa Rica (continued)
| | --- | ----------------------

Through its wholly owned subsidiary,
  Industrias Infinito S.A., the Company has successfully concluded the environmental
  permitting process for its Crucitas gold project located in North Central Costa
  Rica. The final resolution, (Resolución No3638-2005-SETENA),
  was issued by the Ministry of Environment in Costa Rica (SETENA) on December
  12, 2005. The final resolution follows the approval of the Environmental Impact
  Statement which was announced in early September of 2005 indicating the Company
  had complied with all of the requisites of Costa Rican mining and environmental
  regulations. The final resolution has also specified the amount of the required
  Environmental Performance Bond as US$ 600,000.

Prior to obtaining this final resolution,
  due to the uncertainty of the outcome of the permitting process, the Company
  had impaired all expenditures since fiscal 2003. Upon receipt of this resolution,
  the Company has discontinued recording impairment charges on subsequent expenditures
  and is in the process of developing the project.

Previously, the Company notified the
  Canadian Government and Costa Rican Government it will maintain its option to
  pursue an International Arbitration Process under the Foreign Investment Protection
  Agreement (FIPA) signed between the two countries. The Company filed a Request
  for Arbitration in June of 2005 alleging that protracted delays in the approval
  process and other actions by the Government of Costa Rica resulted in an act
  of expropriation of the Crucitas project. The Company has not moved forward
  with the Arbitration due to encouraging progress including the receipt of the
  approval for the Environmental Impact Study in late 2005.

| | (c) | Guyana
| | --- | ------

| | (i) | Maple Creek Concessions
| | --- | -----------------------

Dedicated capital assets in the Maple
  Creek concessions consist of the following amounts:

| |                       |   |           |  |   | 2007         |  |   |           |  |   | 2006      | 
| | --------------------- | - | --------- |  | - | ------------ |  | - | --------- |  | - | --------- | 
| |                       |   | Cost      |  |   | Amortization |  |   | Net       |  |   | Net       | 
| | Exploration equipment | $ | 1,854,395 |  | $ | 1,118,493    |  | $ | 735,902   |  | $ | 915,633   | 
| | Processing plant      |   | 1,043,544 |  |   | 590,749      |  |   | 452,795   |  |   | 565,993   | 
| | Vehicles              |   | 121,546   |  |   | 82,250       |  |   | 39,296    |  |   | 45,925    | 
| |                       | $ | 3,019,485 |  | $ | 1,791,492    |  | $ | 1,227,993 |  | $ | 1,527,551 | 

The Company entered into a joint venture
  agreement in February, 2000 (amended March, 2000) to develop and mine two of
  the Companys properties located in the

F-14

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS (Continued)
|-- | -----------------------------

| | (c) | Guyana (Continued)                 
| | --- | -----------------------------------
| |     |                                    
| | (i) | Maple Creek Concessions (Continued)

Potaro Mining District #2 through an
  operating company, Vanarde Mining Inc. (Vanarde). The Company agreed
  to assign 100% of the mining rights of the two properties to Vanarde in return
  for 60% of the outstanding shares of Vanarde.

Pursuant to this agreement, advances
  totaling $2,999,304 had been received from the joint venture participant, net
  of finders fees. These advances were designated to acquire specific capital
  assets and to undertake exploration programs. Accordingly, for accounting purposes,
  capital assets acquired for the joint venture exploration programs have been
  allocated to the exploration costs for the concessions and advances have been
  recorded as a recovery of exploration expenditures.

No gain was recognized by the Company
  on effective transfer to its joint venture participant of 40% of the mining
  rights as the Company can only recover its investment through future mining
  profits or proceeds from disposition.

On July 14, 2005, the Company re-acquired
  the 40% minority interest in Vanarde Mining Inc., the owner of Vannessa's Potaro
  diamond project, for the issuance of 1,500,000 common shares having a value
  of $645,000 which was determined by estimating the proportional net asset value
  of the mobile mining equipment and other infrastructure on site.

The Maple Creek concessions are alluvial
  diamond concessions which are contiguous to the Potaro concessions. In prior
  years, the Company initiated a program under the joint venture to do bulk sampling
  and determine a mining plan. Until the bulk sampling indicates economic values,
  the Company is recording an impairment charge relating to current expenditures
  equal to costs incurred during the year.

| | (ii) | Potaro Concessions
| | ---- | ------------------

The Company entered into several agreements
  in prior years to acquire a 100% interest, subject to royalties, in mineral
  permits and concessions located in the Potaro Mining District #2.

F-15

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS (Continued)
|-- | -----------------------------

| | (c)  | Guyana (Continued)            
| | ---- | ------------------------------
| |      |                               
| | (ii) | Potaro Concessions (Continued)

Consideration for the acquisition of
  these permits and concessions was as follows:

| | Cash payment $29,000 US              | $ | 42,828 | 
| | ------------------------------------ | - | ------ | 
| | Finders fee of 15,000 common shares |   | 11,550 | 
| |                                      | $ | 54,378 | 

After a review of plans and operations
  in this area, management is continuing to record impairment charges to reduce
  the carrying value to estimated recoverable value.

| | (iii) | Marudi Mountain
| | ----- | ---------------

In December 1998, the Company signed
  a letter of agreement to acquire 100% of the exploration license to the Marudi
  Mountain Gold Project in southern Guyana. This letter of agreement was replaced
  by a purchase and royalty agreement with the vendor in July 2003.

Consideration for the acquisition was
  as follows:

| | 350,000 common shares           | $ | 140,000 | 
| | ------------------------------- | - | ------- | 
| | A finders fee of 10,000 shares |   | 4,000   | 
| |                                 | $ | 144,000 | 

In addition, the Company is committed
  to keeping the interest in good standing, assumption of the net profit participation
  obligation when the interest goes into production, and the payment of $10.00
  U.S. per ounce of gold production.

F-16

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS (Continued)
|-- | -----------------------------

| | (c)   | Guyana (Continued)         
| | ----- | ---------------------------
| |       |                            
| | (iii) | Marudi Mountain (Continued)

On September 1, 2004 the Company received
  an Environmental Permit from the Guyanese Environmental Protection Agency giving
  environmental approval for mining in the Marudi area subject to certain conditions.

The Company continues to explore the
  project however, until more definitive mineralization is determined, the current
  expenditures are impaired and the mineral interest is being carried at its estimated
  recoverable value.

| | (iv) | Paint Mountain
| | ---- | --------------

In July 2003, the Company, through a
  wholly owned subsidiary, Vannessa (Guyana) Inc., was granted by the Government
  of Guyana the exclusive right to occupy and conduct geological and geophysical
  surveys for all minerals in an area in southern Guyana. As a result of the survey,
  the Company applied for and was granted one prospecting license known as Paint
  Mountain. In September of 2004 the Company was granted a Prospecting License
  by the Guyana Geology and Mines Commission granting the Company exclusive rights
  to occupy and explore approximately 32.92 square kilometers of territory adjacent
  to the Marudi property. Exploration plans in this regard are being evaluated
  by management for future implementation.

The Company continues to explore the
  project however, until more definitive mineralization is determined, the current
  expenditures are impaired and the mineral interest is being carried at its estimated
  recoverable value.

| | (v) | Effective March 6, 2007, the Company executed Agreements
        with Shoreham Resources Ltd. of Toronto ("Shoreham") for the acceleration
        of the exploration and development of the Marudi Mountain and Paint Mountain
        prospects in Guyana.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under the terms of the agreement, the
  Company grants Shoreham the option to earn an initial 50% working interest in
  the Marudi Mountain Gold project by completing US$2 million in exploration and
  qualified project management expenditures during a period of three years or
  less. Shoreham may earn a further 25% by completing an additional US$2 million
  in exploration and development work prior to the fourth anniversary of the Agreement.
  The Company has the option to retain a 25% interest in the property going forward.

Under Shoreham's direction and supervision,
  exploration will focus on expanding

F-17

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS (Continued)
|-- | -----------------------------

| | (c) | Guyana (Continued)                 
| | --- | -----------------------------------
| |     |                                    
| | (v) | Shoreham Resources Ltd. (Continued)

known gold occurrences at both the Marudi
  and Paint Mountain prospects with a view to identifying additional mining opportunities
  in this large under-explored gold producing area. The Company is of the view
  that this course of action provides the best opportunity for early expansion,
  definition and development of the Marudi and Paint Mountain gold projects and
  looks forward to working with Shoreham to continue development in this gold
  producing region.

The Potaro Purchase Agreement with Shoreham
  for the sale of 100% of the Company's Potaro assets was also executed which
  involves the payment to the Company of an aggregate sum of US$ 1.2 million over
  four years.

| | (d) | Venezuela                    
| | --- | -----------------------------
| |     |                              
| | (i) | La Fe / Yuruan / Kilometre 88

Disposal

Various agreements signed between 1994
  and 1999 gave the Company certain mining rights and ownership of certain concessions
  within Bolivar State. During the year ended March 31, 2005, management disposed
  of these concessions for proceeds of $107,820 (Note 3).

| | (ii) | Acquisition
| | ---- | -----------

By agreements dated July 13, 2001, as
  amended, the Company acquired through a newly incorporated subsidiary, Vannessa
  Holdings Corp. (Vannessa Barbados), all of the issued and outstanding
  shares of Vannessa de Venezuela C.A. (VV) (formerly Placer Dome
  de Venezuela C.A.), a Venezuelan holding company owned by Placer Dome Inc. VV
  owns 95% of the shares of Minera Las Cristinas C.A. (Minca).

The remaining 5% of Minca shares are
  owned by Corporacion Venezolana de Guayana (CVG), a state-owned
  holding company responsible for certain mining concessions in Bolivar State,
  Venezuela. CVG holds rights to increase its interest in Minca by an additional
  25%.

Under the agreement, Vannessa (Barbados)
  has granted Placer Dome a participation in future revenues derived from sales
  of gold and copper ranging

F-18

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS (Continued)
|-- | -----------------------------

| | (d)  | Venezuela (Continued)    
| | ---- | -------------------------
| |      |                          
| | (ii) | Las Cristinas (Continued)

between 1% and 5% depending on the price
  of gold and equity percentage held by Vannessa.

The agreement also provides Placer Dome
  certain irrevocable option rights to repurchase the shares of VV in the event
  of acts of default, or lack of financial capacity. Vannessa has granted a security
  mortgage to Placer Dome over the shares of VV in support of the participation
  and repurchase rights.

The agreement further provides Placer
  Dome with rights of first refusal and a share purchase option allowing Placer
  Dome to repurchase the shares of VV by paying Vannessa the greater of fair market
  value of post-acquisition, tangible capital property subject to independent
  determination and the book value of all post-acquisition costs incurred by Vannessa
  directly or indirectly, plus 10%.

Consideration under the agreement for
  the purchase of VV was $50 U.S. including certain back in rights to Placer Dome
  (see above) as well as an additional $50 U.S. for the purchase of certain debt
  obligations between Minca and Placer Dome.

At the time of acquisition, Minca held
  certain rights to mineral concessions known as Las Cristinas 4, 5, 6 and 7 in
  the Kilometre 88 area in the State of Bolivar.

Title dispute and legal proceedings

Since August 2001, the Venezuelan government
  and CVG board members have refused to recognize Vannessas status in Minca
  and have not attended meetings or acted on corporate matters.

In November 2001, the Venezuelan government
  and CVG cancelled the mining rights held by Minca and took possession of the
  properties. On April 29, 2002, President Chavez issued a Presidential Decree
  reserving Las Cristinas for direct exploitation by the Government of Venezuela.
  A number of legal applications, proceedings and jurisdictional disputes have
  arisen between Vannessa, CVG and government authorities over the concessions.

F-19

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS (Continued)
|-- | -----------------------------

| | (d)  | Venezuela (Continued)    
| | ---- | -------------------------
| |      |                          
| | (ii) | Las Cristinas (Continued)

International Arbitration

On July 9, 2004 Vannessa commenced a
  process of international arbitration with the International Centre for Settlement
  of Investment Disputes (ICSID) in Washington, D.C. Accordingly,
  as part of the requirements for entering into the process of International Arbitration,
  the Court proceedings relating directly to the dispute between the Venezuelan
  government, CVG and Vannessa in Venezuela have been waived by the Company.

On July 9, 2004 the Company filed a
  Request for International Arbitration alleging that Venezuela was in breach
  of the Bilateral Investment Treaty in place between Venezuela and Canada. On
  October 28, 2004, the Secretary-General of the International Centre for Settlement
  of Investment Disputes (ICSID) in Washington, D.C. registered the Companys
  Request For Arbitration against the Bolivarian Republic of Venezuela with respect
  to the Las Cristinas gold and copper property (See Subsequent Event Note 11 (d)).

Any awards arising from the claim will
  be shared with other shareholders or royalty holders of MINCA or Vannessa de
  Venezuela according to contractual rights.

Management is not able to assess at
  this time the outcome of the legal proceedings and international arbitration
  in process or further quantify what, if any, additional financial impact may
  result from final resolution of the disputes.

Carrying costs

Carrying costs by period incurred relating
  to Mincas mineral interests comprise the following:

| |                           | 2007 | 2006    | 2005
| | ------------------------- | ---- | ------- | ----
| | Administrative salaries   | $    | 41,194  |     
| | Community relations       |      | 22,294  |     
| | General administration    |      | 79,112  |     
| | Legal costs               |      | 147,982 |     
| | Rent, utilities and taxes |      | 30,162  |     
| | Travel                    |      | 11,359  |     
| |                           | $    | 332,103 |     

Due to the Companys ongoing disputes
  outlined above, the Company continues to record impairment charges equal to
  the direct carrying costs incurred for its Las

F-20

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|5. | MINERAL INTERESTS (Continued)
|-- | -----------------------------

| | (d)  | Venezuela (Continued)    
| | ---- | -------------------------
| |      |                          
| | (ii) | Las Cristinas (Continued)

Cristinas interest. Additional legal
  and technical support arbitration and consulting costs incurred by the Company
  are not included in these carrying costs.

|6. | SHARE CAPITAL
|-- | -------------

The Companys authorized and issued
  share capital is as follow:

| |                                |  | 2007       |  |   | 2006       |  |  | 2005       | 
| | ------------------------------ |  | ---------- |  | - | ---------- |  |  | ---------- | 
| |                                |  | Number     |  |   | $          |  |  | Number     | 
| |                                |  | of Shares  |  |   |            |  |  | of Shares  | 
| | Authorized                     |  |            |  |   |            |  |  |            | 
| | 250,000,000 common shares      |  |            |  |   |            |  |  |            | 
| | Issued                         |  |            |  |   |            |  |  |            | 
| | Balance, beginning of year     |  | 87,258,853 |  | $ | 45,470,220 |  |  | 81,471,353 | 
| | Private placement (a)          |  | -          |  |   | -          |  |  | -          | 
| | Warrants exercised (a)         |  | -          |  |   | -          |  |  | 4,000,000  | 
| | Options exercised (b)          |  | 300,000    |  |   | 84,000     |  |  | -          | 
| | Warrants exercised (c) and (d) |  | -          |  |   | -          |  |  | 287,500    | 
| | Private placement (d)          |  | -          |  |   | -          |  |  | -          | 
| | Purchase subsidiary minority   |  |            |  |   |            |  |  |            | 
| | interest (e)                   |  | -          |  |   | -          |  |  | 1,500,000  | 
| | Warrants exercised (f)         |  | 4,805,500  |  |   | 1,922,200  |  |  | -          | 
| | Private placement (g)          |  | 5,000,00   |  |   | 1,500,000  |  |  | -          | 
| |                                |  |            |  |   |            |  |  |            | 
| | Balance, end of year           |  | 97,364,353 |  | $ | 48,976,420 |  |  | 87,258,853 | 

|(a) | In fiscal 2005, pursuant to a non-brokered private placement,
        4,805,500 (2004  4,300,000) units were issued at a price of $0.32
        (2004 - $0.35) per unit. Each unit consisted of one common share and one
        share purchase warrant entitling the holder to purchase one additional
        share at a price of $0.40 (2004 - $0.40) per share until December 22,
        2006 (2004  June 4, 2005). 4,000,000 of the 2004 warrants were exercised
        during the year ended March 31, 2006 and 300,000 expired.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-21

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|6.  | SHARE CAPITAL (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(b) | In fiscal 2007, stock options
        totaling 300,000 (2006  nil; 2005  170,000) were exercised
        at a price of $0.28 (2006  nil; 2005 - $0.28) per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(c) | Pursuant to a non-brokered private
        placement in fiscal 2004, 13,500,000 units were issued at a price of $0.40
        per unit. Each unit consisted of one common share and three quarters of
        one warrant entitling the holder to purchase one additional share at a
        price of $0.45 per share until October 15, 2005. During the year ended
        March 31, 2006, pursuant to the exercise of warrants, 187,500 shares were
        issued at a price of $0.45 per warrant.                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(d) | In fiscal 2005, pursuant to a
        non-brokered private placement, 1,444,500 (2004  2,500,000) units
        were issued at a price of $0.32 (2004 - $0.60) per unit. Each unit consisted
        of one common share and one share purchase warrant entitling the holder
        to purchase one additional share at a price of $0.40 (2004 - $0.66) per
        share until January 7, 2007 (2004  February 18, 2006) (See (i) below).
        Finders fees of $nil (2004 - $177,500) was paid pursuant to this
        financing. During the year ended March 31, 2006, pursuant to the exercise
        of warrants, 100,000 shares were issued at a price of $0.40 per warrant.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(e) | On July 14, 2005. the Company
        acquired the 40% minority interest in Vanarde Mining Inc., the owner of
        the Companys Potaro diamond project, for 1,500,000 common shares
        at a price of $0.43 per common share.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(f) | On July 6, 2006, warrants totaling
        4,805,500 were exercised at a price of $0.40 per warrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(g) | Pursuant to a non-brokered private
        placement on February 22, 2007, 5,000,000 units were issued at a price
        of $0.30 per unit. Each unit consisted of one common share and one- half
        of one warrant entitling the holder to purchase one additional share at
        a price of $0.40 per share for a period of twelve months and at a price
        of $0.50 for a period thereafter until twenty four months from the date
        of closing.                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(h) | Pursuant to the Convertible Debenture
        (Note 9), 5,000,000 warrants were issued on March 1, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-22

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|6. | SHARE CAPITAL (Continued)
|-- | -------------------------

The continuity of the Companys share purchase warrants
  is as follows:

| |                          |  |             |   |  |     |  |  |                |  |  |             |  |  | Weighted  | 
| | ------------------------ |  | ----------- | - |  | --- |  |  | -------------- |  |  | ----------- |  |  | --------- | 
| |                          |  |             |   |  |     |  |  |                |  |  |             |  |  | Average   | 
| |                          |  | Warrants    |   |  |     |  |  | Exercise Price |  |  |             |  |  | Remaining | 
| |                          |  | Outstanding |   |  |     |  |  |                |  |  | Expiry Date |  |  | Life      | 
| |                          |  |             |   |  |     |  |  |                |  |  |             |  |  |           | 
| | Balance  March 31, 2004 |  | 23,705,000  |   |  |     |  |  |                |  |  |             |  |  | 1.21      | 
| | Issued                   |  | 4,805,500   |   |  | (a) |  |  | 0.40           |  |  | Dec. 22/06  |  |  |           | 
| | Issued                   |  | 1,444,500   |   |  | (d) |  |  | 0.40           |  |  | Jan. 7/07   |  |  |           | 
| | Expired                  |  | (300,000    | ) |  |     |  |  | 2.00           |  |  | May 22/04   |  |  |           | 
| | Balance  March 31, 2005 |  | 29,655,000  |   |  |     |  |  |                |  |  |             |  |  | 0.78      | 
| | Expired                  |  | (2,000,000  | ) |  |     |  |  | 0.55           |  |  | Dec /16/05  |  |  |           | 
| | Exercised                |  | (4,000,000  | ) |  | (a) |  |  | 0.40           |  |  | June 4/06   |  |  |           | 
| | Expired                  |  | (300,000    | ) |  | (a) |  |  | 0.40           |  |  | June 4/06   |  |  |           | 
| |                          |  |             |   |  |     |  |  |                |  |  |             |  |  |           | 
| | Exercised                |  | (100,000    | ) |  | (b) |  |  | 0.40           |  |  | Sept 12/06  |  |  |           | 
| | Exercised                |  | (187,500    | ) |  | (c) |  |  | 0.45           |  |  | Oct 15/05   |  |  |           | 
| | Expired                  |  | (9,937,500  | ) |  | (c) |  |  | 0.45           |  |  | Oct 15/05   |  |  |           | 
| | Balance  March 31,2006  |  | 13,130,000  |   |  |     |  |  | 0.62           |  |  |             |  |  | 0.69      | 
| | Exercised                |  | (4,805,500  | ) |  | (a) |  |  | 0.40           |  |  | Dec 22/06   |  |  |           | 
| | Expired                  |  | (780,000    | ) |  |     |  |  | 0.66           |  |  | Feb 18/07   |  |  |           | 
| | Issued                   |  | 5,000,000   |   |  | (h) |  |  | 0.635          |  |  | Mar 1/09    |  |  |           | 
| | Issued                   |  | 2,500,000   |   |  | (g) |  |  | 0.40\0.50      |  |  | Feb 22\09   |  |  |           | 
| |                          |  |             |   |  |     |  |  |                |  |  |             |  |  |           | 
| | Balance, March 31, 2007  |  | 15,044,500  |   |  |     |  |  |                |  |  |             |  |  | 0.66      | 

During fiscal 2007, regulatory approval was obtained for the
  extension of the expiry dates relating to the following share purchase warrants:

| | (i)  | 2,500,000 warrants with an expiry date of February 18,
        2007 have been extended to February 18, 2008; the exercise price is $0.66
        per share.                                                          
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                      
| | (ii) | 1,700,000 and 2,000,000 warrants with expiry dates August
        26, 2006 and August 28, 2007 have been extended to August 26, 2007 and
        August 28, 2007; the exercise price is $0.60 per share respectively.

| | (iii) | 1,344,500 warrants with an expiry date of January
      7, 2007 have been extended to
| | ----- | -------------------------------------------------------------------------------------
| |       | January 7,2008; the exercise price is $0.40 per share.                               
| | (iv)  | 780,000 warrants at a price of $0.66 per
      warrant expired on February 18, 2007. 

See Note 9 for additional warrants that
  could be issued in connection with the Convertible Debenture.

F-23

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            
|                                                 

|6. | SHARE CAPITAL (Continued)
|-- | -------------------------

As at March 31, 2007 and 2006, there
  were no escrow shares outstanding or voluntary pooling arrangements.

At March 31, 2007, the Company had share
  purchase warrants outstanding as follows:

| | Outstanding | Exercise Price | Expiry                             
| | ----------- | -------------- | -----------------------------------
| | Warrants    | per Warrant    | Date                               
| |             |                |                                    
| |             |                |                                    
| | 1,700,000   | 1.06           | August 26, 2007                    
| | 2,000,000   | 0.89           | August 28, 2007                    
| | 2,500,000   | 0.66           | February 18, 2008                  
| | 1,344,500   | 0.40           | January 7, 2008                    
| | 5,000,000   | 0.635          | March 1, 2009                      
| | 2,500,000   | 0.40\0.50      | February 22, 2008\February 22, 2009
| |             |                |                                    
| | 15,044,500  |                |                                    

The Company entered into transactions
  relating to stock options as follows:

| |                          |  | Options    |   |   | Weighted
      Average |   |  | Weighted Average Remaining Life | 
| | ------------------------ |  | ---------- | - | - | ---------------------- | - |  | ------------------------------- | 
| |                          |  |            |   |   | Exercise Price         |   |  |                                 | 
| |                          |  |            |   |   |                        |   |  |                                 | 
| | Balance  March 31, 2004 |  | 3,500,000  |   | $ | 0.64                   |   |  | 3.57                            | 
| | Granted (Note 8)         |  | 1,630,000  |   | $ | 0.28                   |   |  |                                 | 
| | Exercised                |  | (170,000   | ) | $ | 0.28                   |   |  |                                 | 
| | Expired                  |  | (210,000   | ) | $ | (0.85                  | ) |  |                                 | 
| | Balance  March 31, 2005 |  | 4,750,000  |   | $ | 0.64                   |   |  | 3.29                            | 
| | Granted (Note 8)         |  | 1,525,000  |   | $ | 0.60                   |   |  |                                 | 
| | Expired                  |  | (490,000   | ) | $ | (0.76                  | ) |  |                                 | 
| | Balance  March 31, 2006 |  | 5,785,000  |   | $ | 0.58                   |   |  | 2.88                            | 
| | Granted (Note 8)         |  | 1,430,000  |   | $ | 0.32                   |   |  |                                 | 
| | Expired                  |  | (1,620,000 | ) | $ | 0.66                   |   |  |                                 | 
| | Exercised                |  | (300,000   | ) | $ | 0.28                   |   |  |                                 | 
| | Balance  March 31, 2007 |  | 5,295,000  |   | $ | 0.50                   |   |  | 2.91                            | 

F-24

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|6. | SHARE CAPITAL (Continued)
|-- | -------------------------

At March 31, 2007, the Company had share
  purchase options outstanding to directors and employees as follows:

| | Outstanding | Exercise Price    |  | Expiry Date      
| | ----------- | ----------------- |  | -----------------
| | 790,000     | $ 0.95 per share  |  | July 4, 2007     
| | 100,000     | $ 0.475 per share |  | March 12, 2008   
| | 800,000     | $ 0.28 per share  |  | August 25, 2008  
| | 175,000     | $ 0.64 per share  |  | March 11, 2009   
| | 1,080,000   | $ 0.45 per share  |  | September 2, 2009
| | 1,020,000   | $ 0.60 per share  |  | August 26, 2010  
| | 1,330,000   | $ 0.32 per share  |  | December 12, 2011
| | 5,295,000   |                   |  |                  

|7. | RELATED PARTY TRANSACTIONS
|-- | --------------------------

The Company incurred expenditures for
  consulting services from two companies controlled by two Directors and, the
  retention of a Director to provide professional project management services
  to the Crucitas gold project commencing in September 2005 which became direct
  employment commencing January 1, 2006.

The expenditures were allocated as follows:

| |                                       |   | 2007    |  |   | 2006    |  |   | 2005    | 
| | ------------------------------------- | - | ------- |  | - | ------- |  | - | ------- | 
| | Charged to head office administration | $ | 246,022 |  | $ | 160,016 |  | $ | 60,000  | 
| | Charged mineral interests             |   | 21,022  |  |   | 44,891  |  |   | 89,280  | 
| |                                       | $ | 267,044 |  | $ | 204,907 |  | $ | 149,280 | 

In the past, the agreements were on a
  month-to-month basis and were to remain in force from year to year until such
  time as notice of termination is given by either party. Effective December 31,
  2006, consulting agreements with the respective Directors are no longer in place.

On May 15, 2007, the Company executed
  a consulting advisory agreement with a company affiliated with a Director for
  $120,000 per annum (see Note 11(a), Subsequent Events).

Stock-based compensation related to options
  awarded to directors of the Company totaled $141,228 (2006 - $460,527; 2005
  - $506,543).

F-25

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|7. | RELATED PARTY TRANSACTIONS (Continued)
|-- | --------------------------------------

Effective November, 2004, the Company
  returned properties in the Kilometer 88 area in Venezuela to Boralis Holdings
  A.V.V., a company in which a Director has an interest. Consideration for this
  transaction is an agreement for Boralis to pay the Company 80% of all net benefits
  realized from these properties (Note 3).

During fiscal 2007, the Company paid
  debt financing structuring fees of $ 150,000 (2006 -$150,000) to the controlling
  shareholder related to $5 million (2006 - $3 million) of short term financing
  (bearing interest at 9.5%) and related to the convertible debenture (Note
  9).These fees were expensed during fiscal 2007 and 2006 as interest and
  financing costs.

Related party transactions have been
  recorded at their exchange amounts.

|8. | CONTRIBUTED SURPLUS
|-- | -------------------

During the year, the Company granted
  1,430,000 (2006  1,525,000; 2005 - 1,630,000) stock options to directors,
  employees and consultants. Options vest immediately on the grant date. Using
  the Black-Scholes fair value based option pricing method, stock options granted
  have been valued at $0.18 (2006 - $0.40; 2005 - $0.42) per option for a total
  value of $234,792 (2006 - $610,698; 2005 - $688,053) of which $193,306 (2006
  -$528,605; 2005 - $624,736) was charged to operations and $41,486 (2006 - $82,093;
  2005  63,317) was allocated to mineral interests.

Assumptions used in this model were as
  follows:

| |                                                      |   | 2007      |  |   | 2006      |  |   | 2005      | 
| | ---------------------------------------------------- | - | --------- |  | - | --------- |  | - | --------- | 
| | Risk free interest rate                              |   | 4.36%     |  |   | 4.24%     |  |   | 2.63%     | 
| | Dividend yield                                       |   | -         |  |   | -         |  |   | -         | 
| | Volatility factor                                    |   | 86%       |  |   | 80%       |  |   | 121%      | 
| | Expected option life                                 |   | 5 years   |  |   | 5 years   |  |   | 5 years   | 
| |                                                      |   |           |  |   |           |  |   |           | 
| | The continuity of contributed surplus is as follows: |   |           |  |   |           |  |   |           | 
| | Balance, beginning of year                           | $ | 2,692,812 |  | $ | 2,082,114 |  | $ | 1,394,061 | 
| | Value of stock-based compensation granted            |   | 234,792   |  |   | 610,698   |  |   | 688,053   | 
| | Balance, end of year                                 | $ | 2,927,604 |  | $ | 2,692,812 |  | $ | 2,082,114 | 

F-26

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|9. | CONVERTIBLE DEBENTURE
|-- | ---------------------

On March 1, 2006, the Company issued
  a non-brokered private placement of a collateralized convertible debenture for
  $5 million to Exploram Enterprises Ltd. ("Exploram"), its controlling shareholder.
  The convertible debenture matures on January 31, 2009 and interest is payable
  on the outstanding principal amount at a rate of 9.5% per annum, payable semi-annually
  on July 31 and January 31. At the option of the holder, the principal amount
  outstanding under the convertible debenture may be converted into common shares
  any time after January 31, 2007 until maturity at a price of $0.635 per share
  (which is 20% over the average closing price over the last 10 trading days prior
  to March 1, 2006). The principal amount outstanding may be repaid at the option
  of the Company at any time before January 31, 2007 upon payment of a 5% prepayment
  penalty, or thereafter upon thirty days notice (within which period Exploram
  may convert) without payment of a prepayment penalty. In addition, for every
  dollar of principal outstanding on February 1, 2007, the Company will issue
  one common share purchase warrant to Exploram, each warrant entitling Exploram
  to acquire one common share at any time up to March 1, 2008 at $0.635 per share.
  The Company's obligations under the convertible debenture are secured by a general
  security agreement over the Company's assets and a pledge of the shares of each
  of its subsidiaries. The Company agreed to pay Exploram a structuring fee of
  $90,000 in respect of the placement. This amount has been charged to financing
  expenses.

The Company has deemed the fair market
  value of the liability portion of the convertible debenture upon issuance to
  be approximately $3.5 million which amount will be accreted to its face value
  of $5 million through interest expense charges computed at 25% per annum through
  to January 31, 2009. The balance of the convertible debenture approximating
  $1.5 million has been credited to equity and represents the values ascribed
  to the obligation to issue warrants and the convertible feature of the debenture.

|10. | NON-CASH ITEMS EXCLUDED FROM CASH FLOWS
|--- | ---------------------------------------

The following non-cash amounts have been
  excluded from mineral interests and share capital on the statements of cash
  flows:

| |                                                              |   | 2007    |  |   | 2006    |  |   | 2005    | 
| | ------------------------------------------------------------ | - | ------- |  | - | ------- |  | - | ------- | 
| | Mineral interests                                            |   |         |  |   |         |  |   |         | 
| | Stock-based compensation                                     | $ | 41,486  |  | $ | 82,093  |  | $ | 63,317  | 
| | Amortization of capital assets
      used in exploration     |   | 301,538 |  |   | 424,535 |  |   | 515,104 | 
| | Shares issued for the acquisition of mineral interests       |   | -       |  |   | 645,000 |  |   | -       | 
| |                                                              |   |         |  |   |         |  |   |         | 
| | Share capital                                                |   |         |  |   |         |  |   |         | 
| | Shares issued for the acquisition
      of mineral interests | $ | -       |  | $ | 645,000 |  | $ | -       | 

F-27

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|11. | SUBSEQUENT EVENTS
|--- | -----------------

|(a) | On May 15, 2007, the Company issued 18,571,371 units
        (the "Units") at the price of $0.35 per Unit for gross proceeds
        of $6.5 million, each Unit consisting of one common share and one-half
        of one share purchase warrant (a "Unit Warrant"). Each whole Unit
        Warrant entitles the holder to purchase one additional common share of
        the Company at a price of $0.45 per share until to May 15, 2009. Exploram
        Enterprises Ltd., the controlling shareholder of the Company, purchased
        4,285,714 Units under the private placement and Auro Investments Pty Ltd.
        (Auro), a private company associated with Steven G.
        Dean, purchased 5,714,285 Units under the private placement. In connection
        with the sale of the Units, the Company paid a cash finder's fee of $296,850
        and issued share purchase warrants (the "Finder's Warrants") allowing
        the finders to purchase an aggregate of 1,413,566 common shares of the
        Company. Each Finder's Warrant is exercisable to acquire one share of
        the Company at a price of $0.45 until May 15, 2008.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company also raised $3 million under
  a non-brokered private placement of a $3 million unsecured convertible note
  (the "Note") issued to Auro. The Note matures May 15, 2009, bears interest
  at 8%, payable at maturity, and is convertible at any time up to maturity into
  units of the Company at $0.41 per unit (a "Note Unit"). Each Note Unit
  consists of one share and one half of one common share purchase warrant (a "Note
  Warrant") and each Note Warrant is exercisable to acquire one share of the
  Company at $0.45 per until May 15, 2009. The Issuer has the right to prepay
  the Note at any time after May 15, 2008, subject to Auro's right to convert
  before prepayment. Auro has the right to elect to receive interest payments
  in cash or in shares of the Company at a price equal to the market price on
  the date the interest is payable. The Note includes negative covenants, events
  of default and conversion right adjustment provisions that are standard for
  transactions of this nature. A cash structuring fee of $90,000 was paid by the
  Company.

The shares and Unit Warrants that make
  up the Units, the Note, the shares and Note Warrants issuable under the Note,
  the Finder's Warrants and the shares issuable under the Warrants, the Note Warrants
  and the Finder's Warrants are all subject to a hold period expiring on September
  16, 2007.

On May 15, 2007, in conjunction with
  this financing, Mr. Steven G. Dean was appointed to the Companys Board
  of Directors and as Chairman. Mr. Dean has extensive experience in the gold
  mining business, including serving as President of Teck Cominco Ltd. to July
  2002. He was also the Executive Director and Chief Financial Officer of the
  Australian gold group Normandy Mining Ltd. from 1987 to 1994.

F-28

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|11. | SUBSEQUENT EVENTS (Continued)
|--- | -----------------------------

|(a) | Mr. Dean is based in Vancouver and is a director and
        Chairman of a number of public companies, is a Fellow of the Institute
        of Chartered Accountants of Australia, a Fellow of the Australian Institute
        of Mining and Metallurgy and a Member of the Canadian Institute of Mining,
        Metallurgy and Petroleum.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Mr. Dean succeeds Manfred Peschke as
  Chairman of the Company. Mr. Peschke is continuing as a director and Chairman
  of the Audit Committee.

|(b) | On May 15, 2007, 20,000 stock options were exercised
        by an employee.                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(c) | On May 31, 2007, the Company repaid two demand loans
        payable to Exploram Enterprises Ltd. (Exploram) for a total
        of $2,500,000. The Company and Exploram have agreed that an additional
        demand loan for $1,500,000, that was payable on demand after August 31,
        2006, be extended such that it is now payable on demand after June 15,
        2008. This leaves one Exploram loan for $1,000,000 that remains payable
        on demand as of February 28, 2007.

All of the loans carry interest at a
  rate of 9.5 percent per annum, payable monthly, and are secured by a general
  security agreement over the Companys assets.

|(d) | The Company submitted its Memorial to ICSID setting
        out its argument and written evidence on January 13, 2006. Venezuela recently
        raised objections regarding the tribunals jurisdiction in this matter
        and the Tribunal has scheduled a hearing to address Venezuelas objections
        in May 2007. Counsel has advised the Com- pany that jurisdictional objections
        are not uncommon in arbitration cases of this kind. The Company remains
        confident in its position theTribunal has jurisdiction to arbitrate this
        dispute.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The jurisdictional hearing in its international
  arbitration against Venezuela regarding the Las Cristinas project which commenced
  on May 7, 2007 was delayed for procedural reasons on the first morning. Both
  the President of the three-arbitrator panel and Venezuela's appointee to the
  panel resigned from the panel at the opening of the hearing in London, England,
  for reasons unrelated to the merits of the dispute. A date will be set to continue
  the hearing following the appointment of replacement arbitrators. The Company
  has received notice that Venezuela has appointed an arbitrator and the parties
  are now in the process of jointly selecting the third arbitrator to chair the
  arbitral tribunal.

|(e) | On July 4, 2007, 790,000 stock options expired.
|--- | -----------------------------------------------

F-29

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|12. | SEGMENTED INFORMATION
|--- | ---------------------

| |                                                              |   | 2007       |  |   | 2006       | 
| | ------------------------------------------------------------ | - | ---------- |  | - | ---------- | 
| | Identifiable assets by geographical location are as follows: |   |            |  |   |            | 
| |                                                              |   |            |  |   |            | 
| | Canada                                                       | $ | 348,023    |  | $ | 1,703,944  | 
| | Brazil                                                       |   | 8,944      |  |   | 8,944      | 
| | Costa Rica                                                   |   | 11,207,197 |  |   | 6,576,329  | 
| | Guyana                                                       |   | 2,200,382  |  |   | 2,208,443  | 
| | Venezuela                                                    |   | 194,715    |  |   | 144,217    | 
| |                                                              | $ | 13,959,261 |  | $ | 10,641,877 | 

|13. | POTENTIAL FUTURE INCOME TAX ASSETS
|--- | ----------------------------------

The significant components of the Companys
  Canadian tax-effected future income tax assets in accordance with corporate
  income tax filings are made up as follows:

| |                                                             |   | 2007        |   |   | 2006       |  
| | ----------------------------------------------------------- | - | ----------- | - | - | ---------- | -
| | Future income tax assets:                                   |   |             |   |   |            |  
| | Non-capital losses carried forward                          | $ | 15,188,475  |   | $ | 11,309,694 |  
| | Property plant and equipment                                |   | 1,504,470   |   |   | 1,504,470  |  
| | Mineral property interests                                  |   | 2,323,247   |   |   | 2,323,247  |  
| |                                                             |   | 19,016,192  |   |   | 15,137,411 |  
| | Estimated Tax Rate                                          |   | 37%         |   |   | 37%        |  
| | Subtotal                                                    |   | 7,035,991   |   |   | 5,600,842  |  
| | Capital losses carried forward (est. tax rate
      of 25%) |   | 3,133,783   |   |   | 3,133,783  |  
| | Future income tax assets before valuation allowance         |   | 10,169,774  |   |   | 8,734,625  |  
| | Valuation allowance                                         |   | (10,169,774 | ) |   | (8,734,625 | )
| | Net Future income tax assets                                | $ | -           |   | $ | -          |  

Potential future income tax balances
  are recorded at known or estimates of substantially enacted tax rates applicable
  in jurisdictions to which tax bases, adjustments and balances apply.

At March 31, 2007, the Company has non-capital
  losses remaining to be carried forward of approximately $15,190,000 (2006 -
  $11,310,000; 2005 - $8,190,000) which may be available to offset future income
  for income tax purposes. These losses expire over the next seven years. The
  Companys foreign exploration and development expenses approximating $2,323,000
  (2006 - $2,323,000; 2005 - $2,323,000) which can be carried forward indefinitely,
  may be available to offset future foreign resource profit. In addition, the
  Company has capital losses of approximately $12,535,000 (2006 - $12,535,000;
  2005 - $12,535,000) which can be carried forward indefinitely and may be available
  to offset future capital gains. Due to the uncertainty of realization of these
  carry-forwards, a full valuation allowance has been provided in the financial
  statements against future tax assets.

F-30

---



|VANNESSA VENTURES LTD.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|14. | COMMITMENTS
|--- | -----------

| | (a) | Effective March 1, 2007, the Company renewed its Calgary,
        Alberta head office lease agreement for office premises for a period of
        twenty-two months at a cost of $87,602 per annum.                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                    
| | (b) | The Company entered into a lease agreement expiring
        May 31, 2006 for its premises in Guyana requiring lease payments of $19,200
        U.S. per year. The lease was renewed, effective June 1, 2006, for another
        one year term at a cost of $19,200 U.S. per year.
| |     |                                                                                                                                                                                                                                                                                    
| | (c) | Effective November 18, 2005, the Company entered into
        a lease agreement expiring November 17, 2008 for its office premises in
        Costa Rica requiring lease payments of $U.S. 42,000 per year.                                                                        

F-31

---



|VANNESSA VENTURES Ltd.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|15. | RECONCILIATION TO U.S. GAAP
|--- | ---------------------------

| | (a) | The financial statements of the Company have been prepared
        in accordance with Canadian generally accepted accounting principles (GAAP)
        which differ in certain material respects from US GAAP. Material differences
        between Canadian GAAP and US GAAP and their effects on the Companys
        financial statements are summarized in the tables below.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                            |  | 2007        |   |  | 2006        |   |  | 2005        |  
| | ---------------------------------------------------------- |  | ----------- | - |  | ----------- | - |  | ----------- | -
| |                                                            |  | **$**       |   |  | **$**       |   |  | **$**       |  
| | Mineral interests (i) (ii)                                 |  |             |   |  |             |   |  |             |  
| | Under Canadian GAAP                                        |  | 9,521,407   |   |  | 7,000,771   |   |  | 6,533,625   |  
| | Deferred exploration expenditures                          |  | (26,223,998 | ) |  | (22,482,653 | ) |  | (18,893,646 | )
| | Deferred exploration impairment                            |  | 18,642,473  |   |  | 17,720,424  |   |  | 14,351,964  |  
| | Contributions from joint venture participant               |  | 2,999,304   |   |  | 2,999,304   |   |  | 2,999,304   |  
| | Purchase of minority interest                              |  | (645,000    | ) |  | (645,000    | ) |  | -           |  
| | Accumulated amortization of dedicated capital
      assets |  | (343,831    | ) |  | (452,156    | ) |  | (585,621    | )
| | Under US GAAP                                              |  | 3,950,355   |   |  | 4,140,690   |   |  | 4,405,626   |  
| |                                                            |  |             |   |  |             |   |  |             |  
| | Convertible Debenture and Other Paid in Capital (iii)      |  |             |   |  |             |   |  |             |  
| | Under Canadian GAAP                                        |  | 3,947,551   |   |  | 3,539,401   |   |  | -           |  
| | Additional paid in capital                                 |  | 890,475     |   |  | 890,475     |   |  | -           |  
| | Interest accretion under Canadian GAAP                     |  | (408,150    | ) |  | (29,876     | ) |  | -           |  
| | Interest accretion under US GAAP                           |  | 189,580     |   |  | 13,877      |   |  | -           |  
| | Under US GAAP                                              |  | 4,619,456   |   |  | 4,413,877   |   |  | -           |  
| |                                                            |  |             |   |  |             |   |  |             |  
| | Minority interest (ii)                                     |  |             |   |  |             |   |  |             |  
| | Under Canadian GAAP                                        |  | -           |   |  | -           |   |  | -           |  
| | Contributions from joint venture participant               |  | -           |   |  | -           |   |  | 2,999,304   |  
| | Joint venture participants share of deferred exploration  |  |             |   |  |             |   |  |             |  
| | expenditures                                               |  | -           |   |  | -           |   |  | (1,792,360  | )
| | Joint venture participants share of accumulated            |  |             |   |  |             |   |  |             |  
| | amortization of dedicated
      capital assets (i)         |  | -           |   |  | -           |   |  | (680,788    | )
| | Under US GAAP                                              |  | -           |   |  | -           |   |  | 526,156     |  
| |                                                            |  |             |   |  |             |   |  |             |  
| | Deficit                                                    |  |             |   |  |             |   |  |             |  
| | Under Canadian GAAP                                        |  | (50,540,305 | ) |  | (45,163,512 | ) |  | (37,689,537 | )
| | Deferred exploration expenditures                          |  | (26,223,998 | ) |  | (22,482,653 | ) |  | (18,893,646 | )
| | Deferred exploration impairment                            |  | 18,642,473  |   |  | 17,720,424  |   |  | 14,351,964  |  
| | Joint venture participants share of deferred exploration  |  |             |   |  |             |   |  |             |  
| | costs                                                      |  | 1,673,516   |   |  | 1,673,516   |   |  | 1,792,360   |  
| | Joint venture participants share of accumulated            |  |             |   |  |             |   |  |             |  
| | amortization of dedicated
      capital assets             |  | 680,788     |   |  | 680,788     |   |  | 680,788     |  
| | Convertible debenture accretion                            |  | 218,570     |   |  | 15,999      |   |  | -           |  
| | Accumulated amortization of dedicated capital
      assets |  | (343,831    | ) |  | (452,156    | ) |  | (585,621    | )
| | Compensation expense on escrow shares (v)                  |  | (416,957    | ) |  | (416,957    | ) |  | (416,957    | )
| | Under US GAAP                                              |  | (56,309,744 | ) |  | (48,424,551 | ) |  | (40,760,649 | )

F-32

---



|VANNESSA VENTURES Ltd.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|15. | RECONCILIATION TO U.S. GAAP (Continued)
|--- | ---------------------------------------

| |                                           | 2007      | 2006      | 2005     
| | ----------------------------------------- | --------- | --------- | ---------
| |                                           | **$**     | **$**     | **$**    
| | Contributed surplus                       |           |           |          
| | Under Canadian GAAP                       | 2,927,604 | 2,692,812 | 2,082,113
| | Compensation expense on escrow shares (v) | 416,957   | 416,957   | 416,957  
| | Under US GAAP                             | 3,344,561 | 3,109,769 | 2,499,070

| | Additional paid in capital (iii)               |              |              |             
| | ---------------------------------------------- | ------------ | ------------ | ------------
| | Under Canadian GAAP                            | 1,490,475    | 1,490,475    | -           
| | Convertible debenture                          | (890,475)    | (890,475)    | -           
| | Additional paid in capital under US GAAP       | 600,000      | 600,000      | -           
| |                                                |              |              |             
| | Shareholders equity                           |              |              |             
| | Share capital                                  | 48,976,420   | 45,470,220   | 43,100,845  
| | Contributed surplus                            | 3,344,561    | 3,109,769    | 2,499,070   
| | Additional paid in capital                     | 600,000      | 600,000      | -           
| | Deficit under US GAAP                          | (56,309,744) | (48,424,511) | (40,760,649)
| | Shareholders equity under US GAAP             | 3,388,763    | 755,438      | 4,839,266   
| |                                                |              |              |             
| | Net loss for the year                          |              |              |             
| | Under Canadian GAAP                            | (5,376,793)  | (7,473,975)  | (5,342,673) 
| | Deferred exploration expenditures (i)          | (3,741,345)  | (3,589,007)  | (1,433,485) 
| | Deferred exploration impairment (i)            | 922,049      | 3,368,460    | 612,823     
| | Minority interest (ii)                         | -            | (118,844)    | 595,129     
| | Amortization of dedicated capital assets (i)   | 108,325      | 133,466      | 161,512     
| | Convertible debenture accretion                | 202,571      | 15,999       | -           
| | Compensation expense on escrow shares (v)      | -            | -            | -           
| | Under US GAAP                                  | (7,885,193)  | (7,663,901)  | (5,406,694) 
| |                                                |              |              |             
| | Basic and diluted loss per share under US GAAP | (0.09)       | (0.09)       | (0.07)      
| |                                                |              |              |             
| | Weighted average number of common shares       |              |              |             
| | outstanding
      under US GAAP                | 91,716,042   | 86,129,983   | 76,875,180  
| |                                                |              |              |             
| | Comprehensive loss                             |              |              |             
| | Net loss for the year under US GAAP            | (7,885,193)  | (7,663,901)  | (5,406,694) 

F-33

---



|VANNESSA VENTURES Ltd.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|15. | RECONCILIATION TO U.S. GAAP (Continued)
|--- | ---------------------------------------

| |                                                       |  | 2007       |   |  | 2006       |   |  | 2005       |  
| | ----------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                                       |  | **$**      |   |  | **$**      |   |  | **$**      |  
| | Consolidated statements of cash flows                 |  |            |   |  |            |   |  |            |  
| | Operating activities                                  |  |            |   |  |            |   |  |            |  
| | Cash used under Canadian GAAP                         |  | (4,315,568 | ) |  | (1,787,591 | ) |  | (1,851,932 | )
| | Mineral interest expenditures and impairments         |  | (3,384,347 | ) |  | (3,123,684 | ) |  | (3,459,146 | )
| | Cash used in operating activities under US
      GAAP |  | (7,699,915 | ) |  | (4,911,275 | ) |  | (5,311,076 | )
| |                                                       |  |            |   |  |            |   |  |            |  
| | Investing activities                                  |  |            |   |  |            |   |  |            |  
| | Cash provided (used) under Canadian GAAP              |  | (5,585,644 | ) |  | (4,324,150 | ) |  | 634,569    |  
| | Mineral interest expenditures and impairments         |  | 3,384,347  |   |  | 3,123,684  |   |  | 3,459,146  |  
| | Cash provided by (used in) investing activities       |  |            |   |  |            |   |  |            |  
| | under US GAAP                                         |  | (2,201,297 | ) |  | (1,200,466 | ) |  | 4,093,715  |  

| | (i) | Mineral interests and exploration costs
| | --- | ---------------------------------------

Mineral interests and exploration costs
  are accounted for in accordance with Canadian GAAP as disclosed in Note 2(d).
  For US GAAP purposes, only third party acquisition costs are capitalized. Subsequently,
  all exploration and carrying costs are expensed as incurred until a positive
  feasibility study is completed and a positive mine development decision has
  been approved by the Board of Directors and appropriate financing has been obtained.
  The capitalized costs of such claims would then be measured, on a periodic basis,
  to ensure that the carrying value can be recovered on an undiscounted cash flow
  basis. If the carrying value cannot be recovered on this basis, the mineral
  claims would be written down to net recoverable value on a discounted cash flow
  basis.

Capital assets dedicated to specific
  exploration properties as disclosed in Note 5 (c)(i) are categorized under deferred
  exploration costs and are capitalized for US GAAP purposes because they retain
  the character of capital assets. For Canadian GAAP purposes, assets are amortized
  when in use, and for US GAAP purposes amortization commences when the assets
  are available for use.

F-34

---



|VANNESSA VENTURES Ltd.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|15. | RECONCILIATION TO U.S. GAAP (Continued)
|--- | ---------------------------------------

| | (ii) | Minority interest
| | ---- | -----------------

For Canadian GAAP purposes, participant
  contributions are treated as a reduction of exploration expenditure where the
  substance of the transaction is that of a farm out arrangement typical
  of the mineral and oil exploration sectors. Typically in these financing arrangements
  an interest can be earned in a property by spending a certain amount on exploration
  expenditures. Once the amount is spent the interest in the property is legally
  earned and disclosed. The holder of the mineral interest does not record any
  disposition or minority interest for exploration expenditure incurred by the
  party. The party would have no recourse to have the exploration expenditure
  incurred refunded should the mineral interest prove worthless. For US GAAP purposes,
  a minority interest is recognized equal to the participant contributions, less
  the participants share of exploration costs.

On July 14, 2005, the Company re-acquired
  the 40% minority interest in Vanarde Mining Inc., the owner of Vannessa's Potaro
  diamond project, for the issuance of 1,500,000 common shares having a value
  of $645,000 which was determined by estimating the proportional net asset value
  of the mobile mining equipment and other infrastructure on site. For Canadian
  GAAP, the $645,000 was recorded as a mineral interest expenditure; for US GAAP,
  the amount reduced minority interest and increased the 2006 net loss, as an
  impairment of mineral interests.

| | (iii) | Convertible Debenture and Other Paid in Capital
| | ----- | -----------------------------------------------

For Canadian GAAP, the Company bifurcated
  the debt, the holders embedded conversion option and the warrants. For
  US GAAP, bifurcation of the holders embedded conversion option is not
  required and as such the Company only bifurcated the warrants.

| | (iv) | Stock-based Compensation
| | ---- | ------------------------

In the year ended March 31, 2002 and
  prior, the Company elected to follow Accounting Principles Board No. 25 Accounting
  for Stock Issued to Employees (APB 25). Under APB 25,
  no compensation expense is recognized in connection with options granted to
  employees except if options are granted at a strike price below the fair value
  of the underlying stock.

Effective April 1, 2002, the Company
  adopted the fair value recognition provision of FASB Statement No. 123 Accounting
  for Stock-Based Compensation(SFAS 123). Under the modified
  prospective method of adoption selected by the Company under the provisions
  of FASB Statement No. 148 Accounting for Stock-based

F-35

---



|VANNESSA VENTURES Ltd.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|15. | RECONCILIATION TO U.S. GAAP (Continued)
|--- | ---------------------------------------

| | (iv) | Stock-based Compensation (Continued)
| | ---- | ------------------------------------

Compensation  Transition and
  Disclosure(SFAS 148), compensation cost recognized in
  the years ended March 31, 2007, 2006, 2005 and 2004 is the same as that which
  would have been recognized had the recognition provisions of SFAS 123 been applied
  from its original effective date. Results of prior years have not been restated.

| | (v) | Escrow Shares
| | --- | -------------

Under Canadian GAAP, common shares issued
  with escrow restrictions are recorded at the issue price and are not revalued
  upon release from escrow.

Under US GAAP, escrow shares that are
  released upon the Company meeting certain performance criteria are considered
  contingently issuable. These escrow shares are excluded from the computation
  of weighted average number of common shares outstanding. The difference between
  the fair value of the escrow shares at the time of their release from escrow
  and the original issue price is accounted for as compensation expense at the
  time the escrow shares are released from escrow.

| | (vi) | Other Comprehensive Income
| | ---- | --------------------------

US GAAP requires that a statement of
  comprehensive income be displayed with the same prominence as other financial
  statements and that the aggregate amount of comprehensive income excluding the
  deficit be disclosed separately in shareholders equity. Comprehensive
  income, which incorporates the net loss, includes all changes in shareholders
  equity during a period except those resulting from investments by and distributions
  to owners. There is currently no requirement to disclose comprehensive income
  under Canadian GAAP.

| | (vii) | Exploration Stage Enterprise
| | ----- | ----------------------------

The Securities and Exchange Commissions

| | (viii) | Impairment of long-lived assets
| | ------ | -------------------------------

Industry Guide 7 requires companies
  without proven and probable reserves to refer to themselves as exploration
  stage enterprises. Canadian GAAP does not require any such disclosure.

The Company applied Statements of Financial
  Accounting Standards No. 144 (SFAS 144) to account for the impairment
  or disposal of long-lived assets. Under SFAS 144, the Company tests assets for
  impairment in carrying value whenever events or circumstances indicate that
  the Company may not be able to recover the

F-36

---



|VANNESSA VENTURES Ltd.                           
|-------------------------------------------------
|( an exploration stage company)                  
|Notes to the Consolidated Financial Statements   
|For the Years Ended March 31, 2007, 2006 and 2005
|(In Canadian Dollars)                            

|15. | RECONCILIATION TO U.S. GAAP (Continued)
|--- | ---------------------------------------

| | (viii) | Impairment of long-lived assets (Continued)
| | ------ | -------------------------------------------

carrying value of the assets. An impairment
  loss is measured as the excess of carrying amount of an asset or group of assets
  over fair value. Fair value is determined using expected net present value by
  reference to undiscounted expected future cash flows from operations or from
  future sale net of selling or abandonment costs. SFAS 144 requires separate
  tests for assets to be held and used, assets to be disposed of by sale and assets
  to be disposed of other than by sale. SFAS 144 does not differ materially from
  Canadian GAAP requirements for impairment and recoverability tests for long-lived
  assets.

| | (ix) | Income Tax
| | ---- | ----------

Under Canadian GAAP, future income tax
  assets are calculated based on enacted or substantially enacted tax rates applicable
  to future years. Under US GAAP, only enacted rates are used in the calculation
  of deferred income taxes. This difference in Canadian GAAP and US GAAP did not
  have any effect on the financial position or the results of operations of the
  Company for the years ended March 31, 2007, 2006, and 2005.

F-37

---



|ITEM 18 | FINANCIAL STATEMENTS
|------- | --------------------

See Item 17.

|ITEM 19 | EXHIBITS
|------- | --------

The following exhibits are attached and incorporated
herein:

|    | Description of Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|1.1 | Notice of Articles, dated September 23, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|1.2 | Articles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.1 | Stock Option Plan of Vannessa Ventures Ltd. dated August
      12, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | --Incorporated by Reference to
      Form 20-F 2004 Annual Report                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.2 | Letter agreement dated October 26, 1996 between Vannessa
      Ventures Ltd. and Mineraçao Parima Ltda. of Boa Vista, Brazil pursuant to
      which the Company was granted the right to earn up to an 85% interest in
      the Parima Concessions (if and when the Brazilian government lifts the
      restrictions currently in place and issues exploration licences) by making
      a US $30,000 payment to Mineraçao Parima.                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.3 | Joint venture agreement dated October 17, 1997, as
      amended September 20, 1998 between Vannessa (Guyana) Inc. and Michael
      Viera of Georgetown, Guyana (Viera) pursuant to which Viera agreed to
      assign to Vannessa Guyana the exclusive exploration rights of two medium
      scale exploration licenses, known as the Uewang Permits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.4 | Agreement dated December 10, 1998 between Vannessa
      (Guyana) Inc. and Edward Garnet Hopkinson pursuant to which Hopkinson has
      agreed to sell to Vannessa Guyana a 100% interest in nine exploration
      licences for a property known as the Queen of Diamonds Block in the Potaro
      River area, Guyana, totalling approximately 9,918 acres.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.5 | Vannessa Guyana has agreed to pay Viera 7.5% of gross
      production for both gold and diamonds produced by alluvial mining
      operations so long as the 7.5% royalty exceeds US $3,000 in the first
      year, US $10,000 in the second, third, fourth and fifth years and US
      $50,000 in the sixth and subsequent years. Viera is entitled to a 0.75%
      net smelter return derived from hard rock mining operations. Vannessa
      Guyana has the option to purchase at any time the alluvial rights for the
      sum of US $500,000 and the 0.75% net smelter return for US $1.5 million.
      Upon receipt of a mining permit on the Uewang Permits, Vannessa Guyana
      shall become the sole and exclusive mining operator on the property.
      ---Incorporated by Reference to Form 20-F 2000 Annual Report
  

77

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|     | Description of Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.6  | Amended and Restated Transaction Agreement dated July 25,
      2001 between Placer B-V Limited, an indirect subsidiary of Placer Dome
      Inc., Vannessa Ventures Ltd. and Vannessa Holdings Corporation, a wholly
      owned subsidiary of the Company, pursuant to which Placer B-V Limited
      agreed to sell its shares of Placer Dome de Venezuela C.A. to Vannessa
      Holdings Corporation for the sum of US $50, its loan obligations for the
      sum of US $50, and all indebtedness of Placer Dome de Venezuela C.A. to
      Placer B-V Limited for the sum of US $25. As a result, the Company assumed
      loans due to Placer Dome affiliates and the continuing obligations of
      Placer Dome de Venezuela C.A. under the work contract governing the
      exploration of the Las Cristinas Project.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.7  | Lease Agreement renewal between the Company and 915035
      Alberta Ltd. effective March 1, 2004 for the Calgary, Alberta office lease
      for a period of twenty-two months ending on December 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.8  | Demand Promissory Note made by the Company in favor of
      Exploram Enterprises Ltd. dated December 20, 2005, for $2,000,000 at an
      annual interest rate of 9.5%, payable monthly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.9  | Secured Convertible Debenture between the Company and
      Exploram Enterprises Ltd. dated March 1, 2006, maturing January 31, 2009
      for $5,000,000 at an annual interest rate of 9.5%, payable semi-annually
      (July 31 and January 31) with first interest payment on July 31,
    2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.10 | Demand Promissory Note made by the Company in favor of
      Exploram, dated April 13, 2006, for $1,500,000 at an annual interest rate
      of 9.5%, payable monthly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     | - - Incorporated by Reference to
      Form 20-F 2006 Annual Report                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.11 | Demand Promissory Note made by the Company in favor of
      Exploram, dated June 19, 2006, for $1,500,000 at an annual interest rate
      of 9.5%, payable monthly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.12 | Demand Promissory Note made by the Company in favor of
      Exploram, dated October 30, 2006, for $1,000,000 at an annual interest
    rate of 9.5%, payable monthly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.13 | Demand Promissory Note made by the Company in favor of
      Exploram, dated December 27, 2006, for $1,000,000 at an annual interest
      rate of 9.5%, payable monthly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.14 | Convertible Note made by the Company in favor of Auro
      Investments Pty. Ltd. dated May 15, 2007, maturing May 15, 2009 for
      $3,000,000 at an annual interest rate of 8.0%, payable on maturity, May
      15, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.15 | Management Services Contract with Sirocco Advisory
      Services Ltd. dated May 15, 2007 to provide management consulting
      services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.16 | Ian R. Ward, P. Eng., and Mani Verma, P.Eng. Consent to
      File the Las Crucitas Gold Project, NI 43-101 Technical Report Summary of
      the Bankable Feasibilty Study and Addendum Report dated February
    2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

78

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|     | Description of Document                                                                                                                                                                                                               
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                       
|4.17 | Philip R. Bedell, P. Eng., and Kenneth J. De Vos , P.
      Geo. Consent to File Las Crucitas Gold Project, NI 43-101 Technical
      Report Summary of the Bankable Feasibilty Study and Addendum Report dated
      February 2007.
|     |                                                                                                                                                                                                                                       
|4.18 | Pierre Jean Lafleur, P. Eng., Consent to File Las
      Crucitas Gold Project, NI 43-101 Technical Report Summary of the Bankable
      Feasibilty Study and Addendum Report dated February 2007.                                   
|     |                                                                                                                                                                                                                                       
|8    | Subsidiaries of the Company                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                       
|12.1 | Certification of Chief Executive Officer Pursuant to Rule
      13a-14(a) under the Securities Exchange Act of 1934, as amended                                                                                                       
|     |                                                                                                                                                                                                                                       
|12.2 | Certification of Chief Financial Officer Pursuant to Rule
      13a-14(a) under the Securities Exchange Act of 1934, as amended                                                                                                       
|     |                                                                                                                                                                                                                                       
|13.1 | Statement of Chief Executive Officer Pursuant to 18
      U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002                                                                             
|     |                                                                                                                                                                                                                                       
|13.2 | Statement of Chief Financial Officer Pursuant to 18
      U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002                                                                             

79

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SIGNATURE

Pursuant to the requirements of
Section 12 of the Securities Exchange Act of 1934, the registrant certifies that
it meets all of the requirements for filing on Form 20F and has duly caused this
annual report to be signed on its behalf by the undersigned, thereunto duly
authorized.

VANNESSA VENTURES LTD.RegistrantBy:
    /s/ John R. MorganName: John R. MorganTitle: President and Chief Executive Officer


Date: October 11, 2007

80

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