UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-KSB




(Mark
one)




[X]
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended:   December
      31, 2005[ 
       ]
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACTFor
      the transition period from _________ to ________Commission
      file number:   000-25523




U. S. CANADIAN MINERALS,
INC.






(Exact
name of small business issuer in its charter)




Nevada
            33-0843633(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)8000
      W. Spring Mountain Road., Suite 1041 Las Vegas, NV 89117
              (Address
      of principal executive offices)
            (702)
      357-8722
              (Registrant's
      telephone number)




Securities
registered under Section 12(b) of the Act: None.




Securities
      registered under Section 12(g) of the Act:
            Common Stock, par
      value $0.001 per share(Title
      of class)




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






Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. x




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




Registrant’s
revenues for its most recent fiscal year: $NIL




As of
December 31, 2007 the aggregate market value of the voting common equity held by
non-affiliates of the registrant was approximately $420,000based on the
closing trade reported on the Pink Sheets. Shares of common stock held by each
officer and director and by each person who owns five percent or more of the
outstanding common stock have been excluded from this calculation as such
persons may be considered to be affiliated with the Company.




On
December 31, 2007 the registrant had 2,995,279 shares of Common Stock, (0.001par
value per share) issued and outstanding, and  129,849 shares of Series
“A” preferred stock, (0.001par value per share); issued and
outstanding.




Documents
incorporated by reference: None




Transitional
Small Business Disclosure Format: Yes  ̈ No
x




Index to Annual Report




U.S.
CANADIAN MINERALS, INC.




Index to




Annual
Report of Form 10-KSB




For the
Period Ended December 31, 2005




Part
      I
            
            PageItem
      1
            Description of Business
            3Item
      2
            Description of Property
            4Item
      3
            Legal Proceedings
            4Item
      4
            Submission of Matters to a Vote of Security
      Holders
            6Part
      IIItem
      5
            Market for Common Equity and Related Stockholder
      Matters
            6Item
      6
            Management's Discussion and Analysis of Financial Condition or
      Plan of Operation
            10Item
      7
            Financial Statements
            19Item
      8
            Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure
            20Item
      8A
            Controls and Procedures
            20Item
      8B
            Other Information
            22Part
      IIIItem
      9
            Directors, Executive Officers, Promoters and Control Persons;
      Compliance With Section 16(a) of the Exchange Act
            22Item
      10
            Executive Compensation
            24Item
      11
            Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
            25Item
      12
            Certain Relationships and Related
    Transactions
            26Item
      13
            Exhibits
            26Item
      14
            Principal Accountants Fees and Services
            28Signatures
            29





2
 Index to Annual Report




PART
I




ITEM
1.     
 DESCRIPTION OF BUSINESS





CORPORATE
BACKGROUND





We are a
development stage company.  During 2004 the Company acquired various
mineral rights and mining resource interests in Fort a la Corne, Saskatchewan,
Canada; Lincoln County, Nevada; District of Juina, Mato Grosso, Brazil;
southwest Ecuador; and the COD mine in Arizona.  Management
has realized, since taking over control of the company in January 2006, that the
COD mine is by far the best asset that the company owns due to the in ground
valuations from the commercial appraisal completed in November 2006. Since then,
the Gold Silver Lead Zinc and Copper prices have increased two to three fold. We
are looking to attract either a major joint venture partner or a buyer to garner
the best value for the company and its shareholders.  See Item 6,
Management Discussion and Analysis - Plan of Operations for further information
regarding the COD mine.





The
Company’s management has determined that during 2004 the fair values of many of
its properties listed below at the date of acquisition were
substantially less than the Company had originally reported. See Item 6 for a
more detailed discussion of the Company’s mining businesses and plan of
operation.





Intellectual
Property





The
nature of patent and trademark registration is very complex and requires legal
expertise. To date, no applications have been prepared to patent any of the
Company’s assets or concepts.





Governmental
Regulation





The
Company’s operations require licenses and permits from various governmental
authorities.  The Company believes that it presently holds all
licenses and permits required to carry on with present activities under
applicable laws and regulations, and believes that it is complying at the
present time in all material respects with the terms of such licenses and
permits.  In order to commence additional operations the Company may
be required to obtain additional licenses and permits, and there is no assurance
that we will be able to do so.





The
Company presently has no significant operations in the United States. However,
the Company has investments in several U.S. properties. It is subject to the
environmental regulations of jurisdictions outside the United
States.  The Company believes that it is in compliance with all of
these laws, and believes that the environmental impact of the Company’s
exploration activities will be minimal.  Should the Company's
operations result in the removal of large amounts of rock or soil, it will
likely have to remediate any environmental disruption caused by such
activities.





Employees





At
December 31, 2005, the Company had one full-time employee.  None of
its employees were represented by a collective bargaining
arrangement.  The Company has no employees as of the date of this
report.




3
 Index to Annual Report





At
December 31, 2005, the Company had 3 consultants and contractors on staff. As of
the date of this report, the Company has 2 consultants and contractors on
staff.  The Company also looks to its directors and officers for their
combined entrepreneurial skills and talents, and to outside subcontracted
consultants. Management plans to use consultants, attorneys and accountants as
necessary. The Company’s performance and success is dependent on management’s
ability to raise the necessary funds required to develop, create and execute
strategies for the Company.





The
Company does not carry key person life insurance on any of its Directorial
personnel. The loss of the services of any of its executive officers or other
directors could have a material adverse effect on the business, results of
operations and financial condition of the Company. The Company's future success
also depends on its ability to retain and attract highly qualified technical and
managerial personnel.





There can
be no assurance that the Company will be able to retain its key managerial and
technical personnel or that it will be able to attract and retain additional
highly qualified technical and managerial personnel in the future. The inability
to attract and retain the technical and managerial personnel necessary to
support the growth of the Company's business, due to, among other things, a
large increase in the wages demanded by such personnel, could have a material
adverse effect upon the Company's business, results of operations and financial
condition.





ITEM
2.        
DESCRIPTION OF PROPERTY.




In 2005
we occupied leased premises at 4955 S. Durango Drive, Suite 216, Las Vegas,
Nevada 89113.  In 2006, the Company rented its principal executive and
business offices at 5380 Valley View Avenue, Suite F, Las Vegas NV 89118. In
2007, the Company moved from this office and occupies space rented by an
officer. In September 2007, the Company moved to 8000 W. Spring Mountain Road,
Suite no. 1041, Las Vegas, NV 89117. During 2004 the Company did not own any
real property in the United States. The company had investment in other
organizations which owned interests in real estate, including mineral and/or
mining rights.
  ITEM
3.         
LEGAL PROCEEDINGS.





As
disclosed on a previous Form 8-K, on Oct. 27, 2004, the Securities and Exchange
Commission entered a formal order directing the investigation of the Company by
the staff of the SEC. Pursuant to that formal order, the SEC staff commenced an
investigation of the Company and issued subpoenas to the company, its officers
and directors, and others having relationships with the company, which subpoenas
required the production of documents and the giving of testimony. The Company
and its officers and directors have produced documents and given testimony in
cooperation with the investigation and intend to continue to cooperate fully in
the future.





As
disclosed on a previous Form 8-K, on March 14, 2006 the Company received a
“Wells Notice” from the Securities and Exchange Commission (the ”SEC”). The
Company was notified that the SEC is considering bringing a civil action against
the Company seeking a civil injunction, administrative remedies, disgorgement
and penalties. The outcome of the matter is uncertain at this time. Since
March 2006, management has responded to the Wells notice within the time
period allotted. To date no proceedings have been brought by the SEC against the
company.




4
 Index to Annual Report





Pending
or Threatened Litigation, Claims and Assessments (excluding unasserted claims
and assessments)





Mpower, Inc. v. U.S.
Canadian Minerals, Inc. – District Court Case No. A515024





On
December 28, 2005 Mpower, Inc. filed a Complaint against U.S. Canadian Minerals,
Inc. in order to recover the sum of $38,808.27 due Mpower, Inc. from a
promissory note executed on or about January 2, 2005. The promissory note U.S.
Canadian Minerals, Inc. was being sued on was actually executed on behalf of
Barrington Foods International, Inc. We did not contest such complaint. Thus, a
Default Judgment was entered against U.S. Canadian in the amount of $53,287.04
on April 18, 2006.





Management
is in negotiations to resolve this issue without having to pay out the entire
sum of the judgment. There is no assurance that management will be able to
negotiate a lower sum. The Company may have to pay the entire sum.





James McFadden v. U.S.
Canadian Minerals, Inc. - American Arbitration Assoc.
No. 79 168 00084 05 MAGE





On or
about May 26, 2005, James McFadden filed a demand for Arbitration before the
American Arbitration Assoc. pursuant to the March 23, 2004 Agreement entered
into between McFadden and U.S. Canadian whereby U.S. Canadian agreed to purchase
from McFadden 25 million common shares of Juina Mining Corp. in exchange for:
(i) 277,778 shares of common stock of U.S. Canadian; (ii) an option to
repurchase the 277,778 U.S. Canadian shares at a price of $4.00 per share for a
period of 1 year commencing on April 1, 2004; and (iii) a loan payment by U.S.
Canadian to McFadden in the amount of $300,000 on or before April 30, 2004, for
which McFadden was to pledge 75,000 of the above shares, post 90-1 conversion,
as a security interest for the $300,000 loan. Subsequent of the execution of
that March 2004 Agreement, McFadden alleges that U.S. Canadian participated with
other Defendants in causing the promised U.S. Canadian shares to be sold
illegally into the public market, nor did U.S. Canadian pay McFadden the
$300,000 loan/payment. The Company does not admit such claims. The amount
claimed in this matter was for $300,000. In 2007, the Company settled this
matter without further adjudication by the outright transfer of an ownership
interest in Juina Mining Company.





Stephen Issod v. U.S.
Canadian Minerals, Inc. et al. - U.S. District Court Case No.
CV-S-05-0939-KJDIJUJ





This
matter was filed against U.S. Canadian Minerals, Inc. on August 5, 2005 alleging
breach of royalty interests and payments due from diamonds mined from a
Brazilian diamond mine. Specifically, Plaintiff's claim was for a 6.78% interest
in the diamonds mined, and the verified Complaint estimated the diamonds worth
over 50 million dollars. The Company did not admit or deny such claims. In 2007,
the Company settled this matter without further adjudication by the outright
transfer of an ownership interest in Juina.  Upon settlement, the
Company retained no ownership interest in Juina Mining Company.





Subsequent Event– Post December 31,
2005





Subsequent
to December 31, 2005, the issues discussed above regarding McFadden and Issod
were satisfactorily settled. On Nov. 2, 2006 the Company agreed to the transfer
of 471,000 shares of Juina Mining Company (post 350:1 rollback). At the time of
the settlement Juina shares were trading on the Pink Sheets. The average volume
of trading and average price per share in Juina commons shares in the month
of October is considered undeterminable due to the fluctuation in the trading
activity.  During that month, the high price per share was $4.00 and the
low price per share was $1.30.  The high trading volume was 1000 shares and
the low trading volume was zero shares.  In 2007, the Company
effectuated the terms of the settlement agreement as the stock transfer to
McFadden and Issod is complete.


5
 Index to Annual Report





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





None.





PART
II





ITEM
5.               
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.





The
Company's stock was quoted on the pink sheets under the stock symbol USCA and is
now trading under the stock symbol USCN.





The
following table sets forth the high and low bid prices of the Company's common
stock for each quarter shown, as provided by the NASDAQ Trading and Market
Services Research Unit. Quotations reflect inter-dealer prices, without retail
mark-up, markdown or commission and may not represent actual
transactions.





FISCAL 2003
            HIGH
            LOWQuarter
      Ended March 31, 2003
            $0.160
            $0.050Quarter
      Ended June 30, 2003
            $0.110
            $0.045Quarter
      Ended September 30, 2003
            $0.500
            $0.005Quarter
      Ended December 31, 2003
            $0.035
            $0.010FISCAL 2004
            HIGH
            LOWQuarter
      Ended March 31, 2004
            $2.30
            $0.01Quarter
      Ended June 30, 2004
            $7.05
            $1.35Quarter
      Ended September 30, 2004
            $7.35
            $2.55Quarter
      Ended December 31, 2004
            $18.75
            $1.85FISCAL 2005
            HIGH
            LOWQuarter
      Ended March 31, 2005
            $2.70
            $0.65Quarter
      Ended June 30, 2005
            $1.09
            $0.39Quarter
      Ended September 30, 2005
            $0.65
            $0.32Quarter
      Ended December 31, 2005
            $0.53
            $0.20





At
December 31, 2005, the company had 101,753,270common shares issued and
outstanding, and 222,750preferred series “A”
shares issued and outstanding. The Company has not paid dividends in prior years
and has no plans to pay dividends in the near future. The company intends to
reinvest its earnings, if any are achieved, in the continued development and
operations of its business. Any payment of dividends would depend upon the
company’s patterns of growth, profitability, financial conditions, and such
other factors as the Board of Directors may deem relevant.





Penny
Stock





The
Securities Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system. The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Commission, which: (a)







6
 Index to Annual Report




contains
a description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (b) contains a description of the
broker's or dealer's duties to the customer and of the rights and remedies
available to the customer with respect to a violation to such duties or other
requirements of Securities' laws; (c) contains a brief, clear, narrative
description of a dealer market, including bid and ask prices for penny stocks
and significance of the spread between the bid and ask price; (d) contains a
toll-free telephone number for inquiries on disciplinary actions; (e) defines
significant terms in the disclosure document or in the conduct of trading in
penny stocks; and (f) contains such other information and is in such form as the
Commission shall require by rule or regulation. The broker-dealer also must
provide, prior to effecting any transaction in a penny stock, the customer: (a)
with bid and offer quotations for the penny stock; (b) the compensation of the
broker-dealer and its salesperson in the transaction; (c) the number of shares
to which such bid and ask prices apply, or other comparable information relating
to the depth and liquidity of the market for such stock; and (d) monthly account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from those rules; the broker-dealer must
make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written acknowledgment
of the receipt of a risk disclosure statement, a written agreement to
transactions involving penny stocks, and a signed and dated copy of a written
suitably statement.





These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for our stock if it becomes subject to these penny stock
rules. Therefore, because our common stock is subject to the penny stock rules,
stockholders may have difficulty selling our securities.





Holders
of Our Common Stock





As of
December 31, 2005, we had approximately 5,600 holders of record of our common
stock and several other stockholders hold shares in street
name.




Dividends





There are
no restrictions in our articles of incorporation or bylaws that restrict us from
declaring dividends.  The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:





1.
            We
      would not be able to pay our debts as they become due in the usual course
      of business; or





2.
            Our
      total assets would be less than the sum of our total liabilities, plus the
      amount that would be needed to satisfy the rights of shareholders who have
      preferential rights superior to those receiving the
      distribution.





There are
no restrictions in our articles of incorporation or bylaws that prevent us from
declaring dividends.





Securities
Authorized for Issuance Under Equity Compensation Plans





We
currently do not have any equity compensation plans in place.




7
 Index to Annual Report





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





Shares
issued in 2005 were exempt from registration under Section 4(2) of the
Securities Act as transactions not involving a public offering.





PREFERRED
STOCK - SERIES A





The
Company is authorized to issue 1,000,000 shares of its $0.001 par value Series
A, B and C preferred stock.





No
issuance of preferred stock in 2005.





Subsequent
to December 31, 2005, on November 24, 2006 the Company issued 80,000 of
Preferred “A” shares of its shares for services rendered by the Company’s
management.





COMMON
STOCK





The
Company is authorized to issue 200,000,000 shares of its $0.001 par value common
stock.





On
January 13, 2005 the Company issued 40,000 shares of its common stock to reflect
3:1 forward split to LJDT LLC.





On
February 23 2005 the Company issued 450,000 shares of its common stock for
conversion of preferred stock.





On March
4, 2005 the Company issued 480 shares of its common stock for certificates from
old transfer agent.





On March
18, 2005 the Company issued 100,000 shares of its common stock for
services.





On March
21, 2005 the Company issued 960 shares of its common stock for replacement of
stock.





On April
28, 2005 the Company issued 12,000 shares of its common stock for cash
investment.





On May 2,
2005 the Company issued 50,000 shares of its common stock for cash
investment.





On May 3,
2005 the Company cancelled 300,000 shares of its common stock previously
issued.





On May
11, 2005 the Company issued 480 shares of its common stock for certificates from
old transfer agent.





On June
10 2005 the Company issued 1,000,000 shares of its common stock for cash
investment.





On July
1, 2005 the Company issued 500,000 shares of its common stock for cash
investment.





On August
25, 2005 the Company cancelled 600,000 shares of its common stock previously
issued.





On
September 6, 2005 the Company issued 30,000,000 shares of its common stock for
conversion of 300,000 preferred stock Series A to Nevada Minerals.





On
November 29, 2005 the Company issued 139,534 shares of its common stock to North
Star Diamonds per terms of an agreement.







8
 Index to Annual Report





On
November 29, 2005 the Company issued 642,500 shares of its common stock for cash
investment.





On
November 23,  2005 the company received $75,000 in exchange for a note
payable, the issuance of 400,000 common shares (issued on November 29th), and a
common stock warrant.  The note bears no interest.  The note
was due 180 days from the date of receipt of proceeds.  The Company
has made no payments towards this note as of the date of this
filing.  The warrant provides for the mandatory redemption of the
1,400,000 of the stockholder’s common shares back to the Company’s treasury at a
strike price of 25 cents above the market price on November 23,
2006.


On
November 29 2005 the Company issued 270,000 shares of its common stock for
services.





On
December 2, 2005 the Company issued 500,000 shares of its common stock for cash
investment.  As discussed above, this stockholder also received a
warrant to redeem such shares.





Subsequent
to December 31, 2005:





On
January 12, 2006 the Company issued 500,000 shares of its common stock for cash
investment. As discussed above, this stockholder also received a warrant to
redeem such shares.





On
January 27, 2006 the Company issued 320,000 shares of its common stock for cash
investment.





On April
1, 2006 the Company agreed to issue 2,000,000 of its shares for
services.





On July
11, 2007 the Company issued 36,432,758 common shares for services provided by
its Chief Financial Officer and Director.





On July
11, 2007, the Company issued 36,432,758 common shares for services provided by
its CEO, President and Director.





On
October 9, 2007 the Company completed a 50 to 1 reverse split of its common
shares. This reduced the issued and outstanding common shares of the company
from 147,263,982 to 2,945,279. The amount of preferred shares were not subject
to a reverse split.





In
November, 2007 the Company issued 50,000 common shares for the conversion of 500
shares of preferred stock Series A to Tormi Jogeda, a non-affiliate of the
Company.







9
 Index to Annual Report





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


OR PLAN OF OPERATION,
      INCLUDING SUBSEQUENT EVENTS.





Certain
statements in this report and elsewhere (such as in other filings by the Company
with the Securities and Exchange Commission ("SEC"), press releases,
presentations by the Company of its management and oral statements) may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates," and
"should," and variations of these words and similar expressions, are intended to
identify these forward-looking statements. Actual results may materially differ
from any forward-looking statements. Factors that might cause or contribute to
such differences include, among others, competitive pressures and constantly
changing technology and market acceptance of the Company's products and
services. The Company undertakes no obligation to publicly release the result of
any revisions to these forward-looking statements, which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.





Plan of
Operation





(i)
GENERAL





COD Mine





On May
11, 2004, the Company entered into a joint venture agreement with El Capitan
Precious Metals Inc. to acquire 100% ownership of the COD mine and claims
located in Kingman Arizona. The Company was required to contribute 720,000
shares of its common stock to acquire the mine. This joint venture agreement
entitled El Capitan Precious Metals Inc to receive 20%.





Management
have realized since taking over control of the company in Jan 2006 that the COD
mine is by far the best asset that the company owns due to the in ground
valuations from the commercial appraisal completed in November 2006. Since then,
the Gold Silver Lead Zinc and Copper prices have increased two to three fold. We
are looking to attract either a major joint venture partner or a buyer to garner
the best value for the company and its shareholders.





In
November 2006 the Company was provided an outside commercial appraisal of COD
mine valuing it at $6,800,000. The reserves in the November 2006 appraisal were
estimated to yield in ground values of approximately $229,000,000 and eventual
recovery of $187,000,000 in revenues, these reserves are broken down between
Proven Probable and Possible. The estimated reserves at March 2008 metal prices
were estimated to yield in ground values of approximately $615,549,550 and
eventual recovery of $502,653,940 in revenues. These estimates were based on
gold (22% of total values), silver (28.4%), lead (15.5%), zinc (25.0%), as well
as copper (4.0%) prices at March 3, 2008. The reserves are purported to have not
been depleted since the date of appraisal. No minerals were produced during the
twelve months ended December 31, 2005.





Juina Mining
Corporation





Juina
owns 49% of a joint venture called Juina Mining Mineracao, Ltd.
("JMML").  The remaining 51% of JMML is owned by DIAGEM International
Resources Corp., a Canadian corporation ("DIAGEM").





The sole
asset of JMML is an 86% working interest in the mineral and mining rights to
2,471 acres of land in the District of Juina, Mato Grosso, Brazil ("Property
1000") as well as the equipment and processing facility appurtenant
thereto.




10
 Index to Annual Report





At
present, there are no operations being conducted by JMML because, among other
considerations, the required permits have not been issued by the relevant
governmental agencies. Permits for mining were never obtained and plans for
mining have been abandoned. Moreover, JMML is controlled by Diagem, which has
publicly disclosed that it considers JMML to be inactive.  Subsequent
to 2005, the Company transferred its remaining interest in Juina Mining
Corporation as previously described in the litigation section of this
report.





On July
28, 2004, the Company entered into an asset purchase agreement with Juina Mining
Corporation to purchase its entire investment in Yellow River Mining, S.A. in
exchange for 50,000 shares of the Company's common stock.  During the
period July 28, 2004 through 2005, the Company commenced construction of the
processing plant and facilities located at the Yellow River site.  The
Company made a significant investment in such construction. Subsequently, the
Yellow River Mining Company, S.A. was transferred to our company.  We
held a majority interest in this investment, but did not control this
investment.  It was later sold to Nevada Minerals, a related party and
affiliate, for $800,000, as discussed previously. At December 31, 2005, the
value of our remaining interest in Juina is reported at its cost of
$151,000.  At the date of our disposition of our interest in Juina in
September 2006, the value of our interest in Juina is recorded at the lesser of
cost or fair market value and is $151,000.





Durangoro





The
Company owned a majority interest in Durango Oro, S.A., Compania Minera with
offices located at Circunvalacion Norte, #511, Machala El Oro,
Ecuador.  Such offices are shared with Santa Fe Mining Company, S.A.,
an Ecuador company in which we own 80%. Sante Fe owns the mineral processing
plant and land known as “Buza”.  In 2005, the Company did not have
managerial control of Durango Oro.  A mineral processing plant, known
as Durango I, was operated by Durango Oro in Ecuador.  In 2005, the
Company acquired another mineral processing plant known as Durango
II.  The Durango I was operational at the time on-site auditing field
work was completed in Ecuador in May, 2006. At Sept. 30, 2005, these processing
plants were wholly owned, but not controlled, by the Company, and are
investments rather than subsidiaries.  Subsequent to 2005, the Company
closed its processing plant and eventually sold our interest in June,
2007.





Yellow River
Mining





In April
2005, the Company entered into an agreement to sell its interest in the Yellow
River Mining Company, S.A.  The Company closed on its sale of its 80%
interest in Yellow River Mining Company., S.A., an Ecuador
corporation.  Such property was previously owned by Juina Mining
Corporation, in which the Company owned a majority interest.  The cost
basis of the Company’s interest in the Yellow River Mining Company, S.A. is
$151,000. Nevada Minerals, a related party and controlling shareholder, paid the
Company $800,000, which included the assumption of debt owed by the Company to
the buyer.  In addition, the Company (through the Durango Oro, S.A.
company) retained the processing plant and land located at Durango
I.  At closing, Nevada Minerals Inc. paid various obligations of
Yellow River Mining Company, including bank fees, unpaid salaries and bonuses to
its Ecuadorian employees and managers, and financial obligations for processing
plant equipment.  In 2005 the Company received no net proceeds from
the sale of such property and the Company no longer has any financial interest
in the Yellow River Mining Company, S.A.  By September 2005, the
Company began operations of the Durango I processing plant and incurred its own
costs associated with such operations.  At that time, the buyer of its
extracted gold and tailings containing gold and other minerals was the Yellow
River Mining Company, which continued to process the tailings in order to
extract the remaining minerals.  By 2006 the Durango I processing
plant was selling its gold, tailings and other minerals to other individuals and
companies. Subsequently, the Company ceased operating its Durango processing
plant and such asset was sold in June, 2007.







11
 Index to Annual Report





Nevada
Minerals





On July
19, 2004, the Company entered into an agreement with Nevada Minerals, a related
party and affiliate of the Company, to purchase an additional 20% interest in
500,000 acres of Canadian property, which was subject to a joint venture between
the two entities. The property is located in Fort a la Corne, Saskatchewan,
Canada.  Subsequently management has determined that these mineral
rights were impaired, and that the interest should be valued based on the cost
basis of the acquisition of such property rights by Nevada Minerals, which was
$127,000.





Langley Park Investment
Trust





The
Company also entered into a stock purchase agreement to sell 1,714,000 shares of
common stock to an unrelated party at the average per share price of the closing
bid of the Company's common stock for the 10 trading days immediately preceding
July 30, 2004. The acquiring entity was to use its shares as consideration for
the purchase.  On August 8, 2004 the company issued 1,714,000 shares
to Langley Park Investment Trust (LPIT) in exchange for shares of Langley Park
Investment Trust. Langley Park Investment Trust is a mutual fund traded on the
London AIM exchange investing primarily in microcap mining stocks. The company
received 4,958,896 shares of LPIT in exchange for 1,714,000 shares of company
stock. In 2005 the company sold 2,479,448shares leaving 2,479,448 shares of LPIT
in escrow upon which LPIT held a call option exercisable at 1 pence per share if
the company’s stock decreased in value by an agreed upon percentage. Due to the
precipitous decline of the value of the company’s stock in 2005 this option
became exercisable in October, 2006. LPIT called the stock at 1 pence per share
as per the 2004 acquisition agreement. At April 21, 2006 the Company owned
2,479,448 shares in escrow.  Subsequently, in 2006, LPI called such
shares at this amount, and the Company owns no shares of LPI trust.





Santa Fe Mining,
S.A.





In 2005
the company formed an Ecuadorian subsidiary, Santa Fe Mining, S.A. of which the
company is 80% owner. Santa Fe Mining, S.A. has a flotation processing plant in
Buza, El Oro, Ecuador. The plant remained in construction throughout 2005. To
date the plant has not been operational. The plant has 3 flotation tanks, a semi
autogenous ball mill, hopper and conveyor system and is capable of processing up
to 50 tons per day of ore, once additional capital equipment has been installed.
The plant has approximately one hectare of land and a residential house on the
property. The property is surrounded by a concrete wall and metal fencing. The
plant has 24 hour security onsite. The company did not complete construction of
the processing plant, and subsequently disposed of the facility in
2007.





Ecuador Mineral
Rights





On April
8, 2005 the Company acquired mineral rights to 5,616 hectares of land in Ecuador
for $11,000 cash and 200 shares of restricted stock. The property is located
near the Yellow River and Santa Fe processing plants. The property has a number
of existing mineshafts on the land from which gold bearing ore has been
previously produced. These mineral rights were subsequently lost in 2006 due to
failure to pay taxes.







12
 Index to Annual Report





North Star Diamonds,
Inc.





On August
30, 2005, the Company entered into a material agreement to acquire a royalty
interest by issuing restricted stock to North Star Diamonds, Inc. for a joint
drilling program.  Subsequently the Company was unable to raise
sufficient capital and the Company abandoned its plans to proceed with this
project.






In 2005
the Company was engaged in development stage activities. The Company continued
to invest in the mining operations and activities described above, which
included an operating processing plant and mine within the Durango Oro S.A. /
Yellow River Mining Company S.A. properties.  The Company had revenues
of $-0-.  For the year ended December 31, 2005, the company incurred a
loss in the amount of $990,715 compared to a net loss of $5,226,338 in the
previous year. Most of the expenses incurred both years were for office and
administrative and consulting fees provided to the Company for the purpose of
increasing the Company’s business presence and efforts to develop, and later in
2005 to implement, its business plan. For the 2005 fiscal year, the Company
expended $87,122 for office, travel and entertainment, and administration
costs.  We also paid $340,451 in professional fees, which included
$278,587 in legal fees.  We also paid $144,766 in stock-based
compensation to independent consultants, and $120,000 in stock-based
compensation to related party consultants who were not officers or directors of
the company. In addition, we paid $161,268  in stock based
compensation to our officers and directors. During the year the Company leased
space in Las Vegas, Nevada for its head office, incurring rent of $51,046 (which
is included in the $87,122 figure listed above). The costs were financed by
credit on a short-term basis (accounts payable) and loans payable from related
parties.
   
 The
Company has had to rely on funds received from financing activities and related
party transactions. During the year ended December 31, 2005, cash received from
the sale of our stock was $921,301 and we borrowed $75,000 but repaid $140,936
in other loans.  Thus we had a net decrease in loans of $65,936. We
also rescinded previously issued common stock from a related party in an amount
of $879,500.
 
 To the
extent that increases in its operating expenses precede or are not subsequently
followed by commensurate increases in revenues, or that the Company is unable to
adjust operating expense levels accordingly, the Company's business, results of
operations and financial condition would be materially and adversely affected.
There can be no assurances that the Company can achieve or sustain profitability
or that the Company's operating losses will not increase in the
future.




The
Company has earned no significant revenue or profits to date, and even though
mining operations began during 2004 and continued in 2005 the Company
anticipates that it will continue to incur net losses for the foreseeable
future. The Company incurred a net loss $990,715 for the year ended December 31,
2005, as compared to a net loss of $5,226,338 for 2004. From the date of
inception February 4, 1999, to December 31, 2005, the Company incurred a net
loss of $6,217,053.  Most labor and services have been compensated
with issuances of stock or cash payment has been deferred and remained unpaid at
December 31, 2005.
  The
Company has financed its expenses and costs thus far through financing and
through the increase in its accounts payable, payments made by others for the
company and by the settlement of the payable amounts with shares of common stock
of the Company. As of December 31, 2005, the Company had a working capital
deficit of $1,425,436 compared to a working capital deficit of $1,449,273 as
December 31, 2004.


13
 Index to Annual Report




For the
most recent fiscal year, 2005, the Company incurred a loss in the amount of
$990,715 and $5,226,338 for 2004. Both years’ losses are a result of
organizational expenses and expenses associated with setting up a Company
structure in order to begin implementing its business plan. The Company
anticipates that until these procedures are completed, it will not generate
revenues, and may continue to operate at a loss thereafter, depending upon the
performance of the business.  In 2007, upon the sale of its interest
in the SantefeMining Company, S.A. the company abandoned its business plan as to
the conduct of mining interests in Ecuador.  The Company is
concentrating its efforts in potential mining activities in Chile and at the COD
Mine location in Kingman, Arizona.
 
 During
the period from February 4, 1999 (date of inception) through December 31, 2005,
the Company has incurred an accumulated net loss of $20,242,822 and has not
attained profitable operations. The Company is dependent upon obtaining adequate
financing to enable it to pursue its business plan and manage its operations so
that they are profitable.
 
 As shown
in the accompanying financial statements, the Company had revenue of $NIL from
operations in 2005.  Revenues were reported within the Durango Oro,
S.A. and Yellow River Mining Company S.A. operations in which we maintained an
investment.  However, the revenues were completely offset by expenses
and the value of our investments continued to be impaired from 2004 to
2005.  The future of the Company is dependent upon its ability to
obtain financing and upon future profitable operations from the development of
its services. The financial statements do not include any adjustments relating
to the recoverability and classification of recorded assets, or the amounts of
and classification of liabilities that might be necessary in the event the
Company cannot continue in existence.


(iii) The
Company has limited financial resources available, which has had an adverse
impact on the Company's liquidity, activities and operations. These limitations
have adversely affected the Company's ability to obtain certain projects and
pursue additional business. There is no assurance that the Company will be able
to raise sufficient funding to enhance the Company's financial resources
sufficiently to generate volume for the Company, or to engage in any significant
research and development, or purchase plant or significant
equipment.





The
Company has entered into several agreements and material transactions subsequent
to December 31, 2005, through the date of the independent auditor's
report.





The
Company’s new management has had to determine which unfinished projects were
worth finishing and which might have exposed the company to unknown liability.
Management has re-assessed the operating activities for 2004 and has adjusted
the fair values at date of acquisition of certain assets down as it believes the
asset values were less at the acquisition date than originally
reported.





Management
has been successful in raising sufficient funds to cover the Company’s immediate
expenses including the cost of auditing and filing past due required documents
for 2005 to 2007 and has also negotiated settlements on pending
lawsuits.





The
Company as a whole may continue to operate at a loss for an indeterminate period
thereafter, depending upon the performance of its new businesses. In the process
of carrying out its business plan, the Company will continue to identify new
financial partners and investors.  However, it may determine that it
cannot raise sufficient capital to support its business on acceptable terms, or
at all.  Accordingly, there can be no assurance that any additional
funds will be available on terms acceptable to the Company or at all. As of
December 31, 2005, the company was authorized to issue shares of common stock.
In 2005 the authorized common stock in the company was increased to 200 million
shares.







14
 Index to Annual Report





Going
Concern





As
of the date of this report, we may require additional capital for our
operational activities and our ability to raise capital through future issuances
of common stock is unknown. Obtaining additional financing and attaining
profitable operations are necessary for us to continue operations. These
factors, among others, raise substantial doubt about our ability to continue as
a going concern as of the date of this report. The audited financial statements
do not include any adjustments that may result from the outcome of these
aforementioned uncertainties.





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





Revenue
recognition.  The Company has no revenue in
2005.  The Company received consulting fees of $108,000 in
2004.




Receivables.  In
2005 and 2004, the Company had no accounts receivable.




Inventory.  In
2005 and 2004, the Company had no inventory




Stock-based
compensation - The Company accounts for its stock options under SFAS
123(R).
 
 In order
to determine compensation on options issued to consultants, and employees’
options, the fair value of each option granted is estimated on the date of grant
using the Black-Scholes option-pricing model. The Company estimates the
requisite service period used in the Black-Scholes calculation based on an
analysis of vesting and exercisability conditions, explicit, implicit, and/or
derived service periods, and the probability of the satisfaction of any
performance or service conditions. The Company also considers whether the
requisite service has been rendered when recognizing compensation costs. The
Company does not consider market conditions to be vesting conditions and an
award is not deemed to be forfeited solely because a market condition is not
satisfied.








15
 Index to Annual Report




Recently
Issued Accounting Pronouncements





In
September 2006, the SEC released Staff Accounting Bulletin No. 108, “Considering
the Effects of Prior Year Misstatements when Quantifying Misstatements in
Current Year Financial Statements” (SAB 108). SAB 108 provides interpretive
guidance on the SEC’s views regarding the process of quantifying materiality of
financial statement misstatements. SAB 108 is effective for fiscal years ending
after November 15, 2006. The adoption of this accounting pronouncement is not
expected to have a material effect on the consolidated financial
statements.





In
September 2006, the FASB issued FAS 157, Fair Value Measurements. This standard
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007. Earlier application is
encouraged. The adoption of this accounting pronouncement is not expected to
have a material effect on the consolidated financial statements.





In July
2006, the FASB issued Interpretation No. 48 (FIN No. 48), Accounting for
Uncertainty in Income Taxes. This interpretation requires recognition and
measurement of uncertain income tax positions using a “more-likely-than-not”
approach. The provisions of FIN No. 48 are effective for fiscal years beginning
after December 15, 2006. The adoption of this accounting pronouncement is not
expected to have a material effect on the consolidated financial
statements.




In March
2006, the FASB issued FAS 156 (SFAS No. 156), Accounting for Servicing of
financial Assets - an amendment of FASB Statement No. 140. This standard
clarifies when to separately account for servicing rights, requires servicing
rights to be separately recognized initially at fair value, and provides the
option of subsequently accounting for servicing rights at either fair value or
under the amortization method. The standard is effective for fiscal years
beginning after September 30, 2006 but can be adopted early as long as financial
statements for the fiscal year in which early adoption is elected, including
interim statements, have not yet been issued. The adoption of this accounting
pronouncement is not expected to have a material effect on the consolidated
financial statements.




In
February 2006, the FASB issued FAS 155 (SFAS No. 155), Accounting for Certain
Hybrid Financial Instruments - an amendment of FASB Statements No. 133 and 140.
This statement permits fair value remeasurement for any hybrid financial
instrument that contains an embedded derivative that would otherwise have to be
accounted for separately. The new statement also requires companies to identify
interests in securitized financial assets that are freestanding derivatives or
contain embedded derivatives that would have to be accounted for separately,
clarifies which interest-and principal-only strips are subject to Statement No.
133, and amends Statement No. 140 to revise the conditions of a qualifying
special purpose entity due to the new requirement to identify whether interests
in securitized financial assets are freestanding derivatives or contain embedded
derivates. This statement is effective for all financial instruments acquired or
issued after the beginning of an entity’s first fiscal year that begins after
September 30, 2006, but can be adopted early as long as financial statements for
the fiscal year in which early adoption is elected, including interim
statements, have not yet been issued. The adoption of this accounting
pronouncement is not expected to have a material effect on the consolidated
financial statements.







16
 Index to Annual Report





In May
2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections —
a replacement of Accounting Principles Board Opinion (“APB”) Opinion No. 20 and
FASB Statement No. 3. This statement applies to all voluntary changes in
accounting principle and changes required by an accounting pronouncement where
no specific transition provisions are included. SFAS No. 154 requires
retrospective application to prior periods’ financial statements of changes in
accounting principle, unless it is impracticable to determine either the
period-specific effects or the cumulative effect of the change. Retrospective
application is limited to the direct effects of the change; the indirect effects
should be recognized in the period of the change. This statement carries forward
without change the guidance contained in APB Opinion No. 20 for reporting the
correction of an error in previously issued financial statements and a change in
accounting estimate. However, SFAS No. 154 redefines restatement as the revising
of previously issued financial statements to reflect the correction of an error.
The provisions of SFAS No. 154 are effective for accounting changes and
corrections of errors made in fiscal periods that begin after December 15, 2005,
although early adoption is permitted. The adoption of this accounting
pronouncement did not have a material effect on the consolidated financial
statements.





In March
2005, the FASB issued Interpretation No. 47 (FIN No. 47), Accounting for
Conditional Asset Retirement Obligations, and Interpretation of FASB Statement
No. 143. This interpretation clarifies the timing for recording certain asset
retirement obligations required by FASB Statement No. 143, Accounting for Asset
Retirement Obligations. The provisions of FIN No. 47 are effective for years
ending after December 15, 2005. The adoption of this accounting pronouncement
did not have a material effect on the consolidated financial
statements.





In
December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets,
an amendment of APB Opinion No. 29.” SFAS No. 153 is based on the principle that
exchanges of nonmonetary assets should be measured based on the fair value of
the assets exchanged. APB Opinion No. 29, “Accounting for Nonmonetary
Transactions,” provided an exception to its basic measurement principle (fair
value) for exchanges of similar productive assets. Under APB Opinion No. 29, an
exchange of a productive asset for a similar productive asset was based on the
recorded amount of the asset
relinquished. SFAS No. 153 eliminates this exception and replaces it with an
exception of exchanges of nonmonetary assets that do not have commercial
substance. The provisions of this Statement are effective for nonmonetary asset
exchanges occurring in fiscal periods beginning after June 15, 2005. The
adoption of this accounting pronouncement did not have a material effect on the
consolidated financial statements.







17
 Index to Annual Report






In
November 2004, the FASB issued SFAS No. 151, “Inventory Costs, an amendment of
Accounting Research Bulletin No. 43, Chapter 4.” SFAS No. 151 requires that
abnormal amounts of idle facility expense, freight, handling costs and wasted
materials (spoilage) be recorded as current period charges and that the
allocation of fixed production overhead to inventory be based on the normal
capacity of the production facilities. SFAS No. 151 was effective for the fiscal
year beginning on October 1, 2005. The adoption of this accounting pronouncement
did not have a material effect on the consolidated financial
statements.











18
 Index to Annual Report





ITEM
7.                  FINANCIAL
STATEMENTS.








Index to
Financial Statements:





Audited
      Financial Statements:F-1
            Independent
      Auditor’s Report for 2005 of Ronald Serota, CPA, P.C.F-2
            Independent
      Auditor’s Report for 2004 of Ronald N. Silberstein, CPA,
      P.L.L.C.F-3
      & F-4
            Statement
      of Balance Sheets as of December 31, 2005 and 2004F-5
            Statements
      of Operations For the Years Ended December 31, 2005 and
    2004F-6
            Statement
      of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2005
      and 2004F-7
            Statements
      of Cash Flows for the Years Ended December 31, 2005 and
    2004F-8 to
      F-13
            Notes
      to Financial Statements








19
 Index to Annual Report





Ronald
      N. Serota, CPA, P.C.
                PCAOB
      Registered CPA Firm
                www.ronaldserota.comFrankfurt
      Office:
                
                Attn:
      Mr. Serota
                Inheidenerstrasse
      69,14th
      Floor
                60385
      Frankfurt, Germany
                (Europe):  702.232.0504
              2620
      Regatta Drive, Suite 102
                Las
      Vegas, Nevada  89128
                702.869.0099
      - Telephone
                702.446.6071
      - Facsimile
              Zurich
      Office:
                
                
                Zollikerstrasse
      27
                CH
      8032 Zurich, Switzerland
                (Europe):
      702.232.0504
 
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 TO THE
BOARD OF DIRECTORS OF
 U.S.
CANADIAN MINERALS, INC.
 LAS
VEGAS, NEVADA
 
 We have
audited the accompanying balance sheet of U.S. Canadian Minerals, Inc. (a
development stage company) as of December 31, 2005, and the related statements
of operations, changes in stockholders’ equity and cash flows for the year then
ended. 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 did not audit the financial statements of U.S.
Canadian Minerals, Inc. as of or for the year ended December 31, 2004. Such
financial statements were audited by another auditor, Maddox, Ungar and
Silberstein PLLC (previously, Ronald N. Silberstein, CPA, PLLC), whose report
has been furnished to us.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.The Company has determined
that it is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
 
 In our
opinion, based on our audit and the report of the prior auditor, the financial
statements referred to above present fairly, in all material respects, the
financial position of U.S. Canadian Minerals, Inc. as of December 31, 2005 and
the results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
 
  /s/ 
Ronald
Serota
 Ronald
Serota CPA, P.C.
 Las
Vegas, Nevada
 January
8, 2008







F -
1
 Index to Annual Report







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
 
 
 TO THE
BOARD OF DIRECTORS OF
 U.S.
CANADIAN MINERALS, INC.
 Las
Vegas, Nevada
 
 We have
audited the accompanying balance sheet of U.S. Canadian Minerals, Inc. as of
December 31, 2004, and the related statements of operations, changes in
stockholders’ equity and cash flows for the year then ended. 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. The financial statements of U.S. Canadian Minerals, Inc. as of
December 31, 2003, were audited by other auditors whose report dated April 15,
2004 included an explanatory paragraph describing conditions that raised
substantial doubt about the Company’s ability to continue as a going concern. As
discussed in Note 1 to the financial statements, the Company has adjusted its
2003 financial statements to reflect that it is no longer a development stage
company and to reflect that operating activities related to the manufacture and
distribution of food products undertaken prior to January 1, 2004 have been
discontinued.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.The Company has determined
that it is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
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 U.S. Canadian Minerals, Inc. as of
December 31, 2004 and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
 
 /s/ 
Ronald N.
Siberstein
 Ronald
N. Silberstein, CPA, PLLC
 Farmington
Hills, Michigan
 June 23,
2006


F -
2
 Index to Annual Report







U.S.
      CANADIAN MINERALS, INC.(A
      Development Stage Company)Balance
      SheetsASSETSDecember
      31,
            
            
            December
      31,2005
            
            
            2004CURRENT
      ASSETSCash
            
            $
            6,825
            
            
            $
            201,210Total
      Current Assets
            
            
            6,825
            
            
            
            201,210FIXED
      ASSETS, net
            
            
            27,532
            
            
            
            22,261OTHER
      ASSETSDeposits
            
            
            5,227
            
            
            
            5,227Investments
            
            
            857,380
            
            
            
            1,517,163Mineral
      properties
            
            
            1,258,250
            
            
            
            1,747,250Notes
      receivable - related party
            
            
            401,261
            
            
            
            145,000Total
      Other Assets
            
            
            2,522,118
            
            
            
            3,414,640TOTAL
      ASSETS
            
            $
            2,556,475
            
            
            $
            3,638,111











F -
3
 Index to Annual Report







U.S.
      CANADIAN MINERALS, INC.(A
      Development Stage Company)Balance
      SheetsLIABILITIES AND
      STOCKHOLDERS' EQUITY (DEFICIT)December
      31,
            
            
            December
      31,2005
            
            
            2004CURRENT
      LIABILITIESAccounts
      payable and accrued expenses
            
            $
            386,902
            
            
            $
            161,188Due
      to related parties
            
            
            240,016
            
            
            
            380,952Net
      liabilities of discontinued operations
            
            
            597,317
            
            
            
            975,317Due
      to unrelated parties
            
            
            208,026
            
            
            
            133,026Total
      Current Liabilities
            
            
            1,432,261
            
            
            
            1,650,483LONG
      TERM LIABILITIESDue
      to related parties - long term
            
            
            500,000
            
            
            
            500,000Total
      Liabilities
            
            
            1,932,261
            
            
            
            2,150,483STOCKHOLDERS'
      EQUITY (DEFICIT)Preferred
      stock - Series A; $0.001 par value;1,000,000
      shares authorized; 225,750 and 527,450 sharesissued
      and outstanding,respectively
            
            
            226
            
            
            
            527Common
      stock - Series A; $0.001 par value;200,000,000
      shares authorized; 99,801,236 and 68,405,282shares
      issued and outstanding,respectively
            
            
            102,581
            
            
            
            68,405Treasury
      stock
            
            
            1,000
            
            
            
            1,000Additional
      paid-in capital
            
            
            21,753,944
            
            
            
            21,660,518Accumulated
      deficit
            
            
            (21,233,537
            )
            
            
            (20,242,822
            )Total
      Stockholders' Equity (Deficit)
            
            
            624,214
            
            
            
            1,487,628TOTAL
      LIABILITIES AND STOCKHOLDERS'EQUITY
      (DEFICIT)
            
            $
            2,556,475
            
            
            $
            3,638,111












F -
4
 Index to Annual Report





U.S.
      CANADIAN MINERALS, INC.(A
      Development Stage Company)Statements
      of OperationsFrom
      Inceptionon
      January 1,For
      the Year Ended
            
            
            
            
            
            2004
      ThroughDecember
      31,
            
            
            
            
            
            December
      31,2005
            
            
            2004
            
            
            2005REVENUES
            
            $
            -
            
            
            $
            108,000
            
            
            $
            108,000COST
      OF REVENUES
            
            
            -
            
            
            
            -
            
            
            
            -GROSS
      MARGIN
            
            
            -
            
            
            
            108,000
            
            
            
            108,000OPERATING
      EXPENSESGeneral
      and administrative
            
            
            900,808
            
            
            
            5,307,285
            
            
            
            6,208,093Total
      Operating Expenses
            
            
            900,808
            
            
            
            5,307,285
            
            
            
            6,208,093INCOME
      (LOSS) FROM OPERATIONS
            
            
            (900,808
            )
            
            
            (5,199,285
            )
            
            
            (6,100,093
            )OTHER
      INCOME AND (EXPENSE)Interest
      expense
            
            
            (131,796
            )
            
            
            (83,119
            )
            
            
            (214,915
            )Gain
      on sale of assets
            
            
            41,889
            
            
            
            -
            
            
            
            41,889Total
      Other Income (Expense)
            
            
            (89,907
            )
            
            
            (83,119
            )
            
            
            (173,026
            )LOSS
      FROM CONTINUING OPERATIONS
            
            
            (990,715
            )
            
            
            (5,282,404
            )
            
            
            (6,273,119
            )GAIN
      (LOSS) FROM DISCONTINUED OPERATIONS
            
            
            -
            
            
            
            56,066
            
            
            
            56,066NET
      LOSS
            
            $
            (990,715
            )
            
            $
            (5,226,338
            )
            
            $
            (6,217,053
            )BASIC
      LOSS PER SHAREContinuing
      Operations
            
            $
            (0.01
            )
            
            $
            (0.16
            )Discontinued
      Operations
            
            $
            0.00
            
            
            $
            0.00WEIGHTED
      AVERAGE NUMBEROF
      SHARES OUTSTANDING
            
            
            84,103,259
            
            
            
            32,532,920









F -
5
 Index to Annual Report





U.S.
      CANADIAN MINERALS, INC.(A
      Development Stage Company)Statements
      of Stockholders' Equity (Deficit)AdditionalPreferred
      Stock
            
            Common
      Stock
            Paid-In
            Treasury
            AccumulatedShares
            
            Amount
            
            Shares
            Amount
            Capital
            Stock
            Deficit
            TotalBalance
      at January 1, 2004
            477,500
            
            $
            477
            
            1,335,448
            $
            1,336
            $
            13,808,025
            $
            -
            $
            (15,016,484)
            $
            (1,206,646)Issuance
      of preferred sharesfor
      services
            114,000
            
            
            114
            
            -
            
            -
            
            57,342
            
            -
            
            -
            
            57,456Issuance
      of common sharesfor
      services
            -
            
            
            -
            
            2,838,811
            
            2,839
            
            1,581,658
            
            -
            
            -
            
            1,584,497Issuance
      of common shares forconversion
      of preferred shares
            (254,050)
            
            
            (254)
            
            12,985,000
            
            12,985
            
            (5,182)
            
            -
            
            -
            
            7,549Cancellation
      of shares
            (140,000)
            
            
            (140)
            
            (94,500)
            
            (95)
            
            235
            
            -
            
            -
            
            -Issuance
      of preferred stockfor
      acquisition of mineral rights
            330,000
            
            
            330
            
            -
            
            -
            
            (156,746)
            
            -
            
            -
            
            (156,416)Fractional
      shares issued
            -
            
            
            -
            
            555
            
            -
            
            1,038
            
            -
            
            -
            
            1,038Issuance
      of common stock for cash
            -
            
            
            -
            
            9,277,508
            
            9,277
            
            3,274,424
            
            -
            
            -
            
            3,283,701Issuance
      of common sharesfor
      acquisition of mineral rights
            -
            
            
            -
            
            42,062,460
            
            42,063
            
            3,099,724
            
            1,000
            
            -
            
            3,142,787Netloss
      for the year endedthrough
      December 31, 2004
            -
            
            
            -
            
            -
            
            -
            
            -
            
            -
            
            (5,226,338)
            
            (5,226,338)Balance,
      December 31, 2004
            527,450
            
            
            527
            
            68,405,282
            
            68,405
            
            21,660,518
            
            1,000
            
            (20,242,822)
            
            1,487,628Fractional
      shares issued
            -
            
            
            -
            
            53,920
            
            53
            
            (53)
            
            -
            
            -
            
            -Issuance
      of common shares forconversion
      of preferred shares
            (301,700)
            
            
            (301)
            
            30,470,000
            
            30,470
            
            (30,169)
            
            -
            
            -
            
            -Recission
      of common stock
            -
            
            
            -
            
            (850,000)
            
            (850)
            
            (878,650)
            
            -
            
            -
            
            (879,500)Issuance
      of common stockfor
      services
            -
            
            
            -
            
            50,000
            
            50
            
            40,450
            
            -
            
            -
            
            40,500Issuance
      of common stock for cash
            -
            
            
            -
            
            4,312,534
            
            4,313
            
            916,988
            
            -
            
            -
            
            921,301Issuance
      of common sharesfor
      acquisition of mineral rights
            -
            
            
            -
            
            139,534
            
            140
            
            44,860
            
            -
            
            -
            
            45,000Net
      loss for the yearended
      December 31, 2005
            -
            
            
            -
            
            -
            
            -
            
            -
            
            -
            
            (990,715)
            
            (990,715)Balance,
      December 31, 2005
            225,750
            
            $
            226
            
            102,581,270
            $
            102,581
            $
            21,753,944
            $
            1,000
            $
            (21,233,537)
            $
            624,214










F -
6
 Index to Annual Report





U.S.
      CANADIAN MINERALS, INC.(A
      Development Stage Company)Statements
      of Cash FlowsFrom
      Inceptionon
      January 1,For
      the Years Ended
            
            
            
            
            
            2004
      ThroughDecember
      31,
            
            
            
            
            
            December
      31,2005
            
            
            2004
            
            
            2005CASH
      FLOWS FROM   OPERATING ACTIVITIESNet
      loss
            
            $
            (990,715
            )
            
            $
            (5,226,338
            )
            
            $
            (6,217,053
            )Discontinued
      operations
            
            
            (378,000
            )
            
            
            (293,825
            )
            
            
            (671,825
            )Adjustments
      to reconcile net loss tonet
      cash used by operating activities:Depreciation
      expense
            
            
            10,517
            
            
            
            4,459
            
            
            
            14,976Stock  issued
      for services
            
            
            40,500
            
            
            
            960,132
            
            
            
            1,000,632Stock
      based compensation
            
            
            -
            
            
            
            531,781
            
            
            
            531,781Changes
      in operating assets and liabilities(Increase)
      decrease in deposits
            
            
            -
            
            
            
            (5,227
            )
            
            
            (5,227
            )Increase
      (decrease) in accounts payableand
      accrued expenses
            
            
            225,714
            
            
            
            161,186
            
            
            
            386,900Net
      Cash Used byOperating
      Activities
            
            
            (1,091,984
            )
            
            
            (3,867,832
            )
            
            
            (4,959,816
            )CASH
      FLOWS FROM INVESTING ACTIVITIESAdditons
      to property and equipment
            
            
            (15,788
            )
            
            
            (1,769,511
            )
            
            
            (1,785,299
            )Loans
      made
            
            
            (256,261
            )
            
            
            (658,978
            )
            
            
            (915,239
            )Proceeds
      from mineral properties
            
            
            489,000
            
            
            
            -
            
            
            
            489,000Proceeds
      from investments
            
            
            704,783
            
            
            
            -
            
            
            
            704,783Additions
      to investments
            
            
            -
            
            
            
            (1,517,163
            )
            
            
            (1,517,163
            )Net
      Cash Used by Investing Activities
            
            
            921,734
            
            
            
            (3,945,652
            )
            
            
            (3,023,918
            )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from loans
            
            
            75,000
            
            
            
            1,589,947
            
            
            
            1,664,947Repayment
      of loans
            
            
            (140,936
            )
            
            
            -
            
            
            
            (140,936
            )Recission
      of common stock
            
            
            (879,500
            )
            
            
            -
            
            
            
            (879,500
            )Proceeds
      from common stock and preferred stock
            
            
            921,301
            
            
            
            6,424,747
            
            
            
            7,346,048Net
      Cash Provided byFinancing
      Activities
            
            
            (24,135
            )
            
            
            8,014,694
            
            
            
            7,990,559NET
      DECREASE IN CASH
            
            
            (194,385
            )
            
            
            201,210
            
            
            
            6,825CASH
      AT BEGINNING OF PERIOD
            
            
            201,210
            
            
            
            -
            
            
            
            -CASH
      AT END OF PERIOD
            
            $
            6,825
            
            
            $
            201,210
            
            
            $
            6,825SUPPLIMENTAL
      DISCLOSURES OFCASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
            
            $
            -
            
            
            $
            -
            
            
            $
            -Income
      Taxes
            
            $
            -
            
            
            $
            -
            
            
            $
            -NON
      CASH FINANCING ACTIVITIESStock
      issued for mineral properties
            
            $
            45,000
            
            
            $
            -
            
            
            $
            45,000









F -
7
 Index to Annual Report


U.S.
CANADIAN MINERALS, INC.
 (A
Development Stage Company)
 Notes to
Financial Statements
 December
31, 2005 and 2004
 
 
 
 NOTE 1 -
ORGANIZATION AND BUSINESS ACTIVITIES
 
 a.   Business
and Organization
 
 As to the
comparison of information from 2004 to 2005, certain categories of financial
statement accounts have been reorganized in order to more clearly reflect the
company’s on-going financial reporting.  By doing so, certain
financial statement categories previously presented in the 2004 audited
financial statements are now reclassified into other categories and now compared
with similar accounts for 2005.  Thus, a line by line comparison may
be difficult when reading the  previously published financial
statements and those presented within the year 2004 column appearing in these
financial statements.  No restatement of the 2004 financial statements
is required as a result of these minor reclassifications.
 
 ORGANIZATION:
U.S. Canadian Minerals, Inc. (hereinafter referred to as the "Company") is a
development stage company in accordance with Statement of Financial Accounting
Standards No. 7. Until December 31, 2003, its main focus was on the manufacture
and distribution of food products, and it was known as Barrington Foods
International, Inc. (“BFI”).  On January 2, 2004, the Company changed
its name to U.S. Canadian Minerals, Inc. and changed its business focus to the
mining industry and acquiring existing mining business operations and
assets.
 
 HISTORY:
Barrington Foods International, Inc., formerly E-Bait, Inc, ("E-Bait") was
incorporated in the State of California in February 1999. In August 2001, E-Bait
consummated an acquisition and merger agreement (the "Agreement") to acquire all
200,000 shares of outstanding capital stock of BFI, a Nevada corporation, in
exchange for 1,772,015 shares of E-Bait's common stock and a note payable of
$700,000 (the "Transaction"). Accordingly, the stockholders of BFI received an
additional 1,552,015 shares of E-Bait's common stock and converted the existing
200,000 shares of BFI's common stock into E-Bait common stock. Prior to the
Transaction, E-Bait was a public company with nominal operations, assets, and no
liabilities; and BFI was an operational privately held company. Net loss from
development activities from December 8, 2000 (the date of Inception for BFI)
through December 31, 2003 are reflected in the financial statements as
discontinued operations.
 
 CAPITAL
CHANGES: In December 2003, the Company's Board of Directors adopted a resolution
whereby it approved a 1-for-100 reverse stock split. Effective January 20, 2004
the Company’s Board of Directors adopted a resolution whereby it approved a
1-for-125 reverse stock split. Accordingly, the accompanying financial
statements have been retroactively restated to reflect the stock splits as if
such stock splits occurred as of the Company's date of inception. Effective
October 25, 2004 the Company’s Board of Directors adopted a resolution whereby
it approved a 3-for-1 forward stock split of the Company’s common shares and
Preferred Series A shares. The
 
 Company
issued no Preferred “A” shares in 2005. In 2005, 301,700 Preferred Shares were
converted into 30,470,000 common shares. Of this amount, 30,000,000 was issued
to Nevada Minerals, Inc.  The Company also issued 4,312,534 common
shares for cash and rescinded 850,000 common shares. Subsequent to December 31,
2005, on November 24, 2006 the Company issued 80,000 of Preferred “A” shares of
its shares for services
rendered by the Company’s management.
  F -
8
 Index to Annual Report
  
 U.S.
CANADIAN MINERALS, INC.
 Notes to
Financial Statements
 December
31, 2005 and 2004
 
 
 BUSINESS
OPERATIONS: During the year ended December 31, 2004, the Company commenced the
acquisition of interests in mineral rights and underlying mining operations
through the issuance of shares for the acquisition of the shares of certain
entities and entering into joint venture agreements. Since September 2005, the
Company, through its investment in Durangoro, S.A., has been actively involved
in the extraction of ore and the processing and sale of gold and other minerals
in the province of El Oro, Ecuador. Such operations ceased in 2006. The
acquisitions of mineral rights have been accounted for as acquisitions of
tangible property, in accordance with Emerging Issues Task Force (EITF) Issue
No. 04-02 for reporting periods beginning after April 29, 2004. Other
acquisitions have been accounted for as investments.
 
 b.   Revenue
Recognition
 Revenue
is recognized when a valid contract or purchase order has been executed or
received, services have been performed or product has been delivered, the
selling price is fixed or determinable, and collection is reasonably
assured.
 
 NOTE 1 -
ORGANIZATION AND BUSINESS ACTIVITIES (Continued)
 
 c.   Depreciation
 
 The cost
of the property and equipment will be depreciated over the estimated useful life
of 5 years.  Depreciation is computed using the straight-line method
when the assets are placed in service.
 
 d.   Cash
and Cash Equivalents
 
 For the
purpose of the statement of cash flows, the Company considers all highly liquid
investments purchased with a maturity of three months or less to be cash
equivalents.
 
 e.   Basic
Loss per Share
 
 The
computation of basic loss per share of common stock is based on the weighted
average number of shares outstanding during the period. Diluted earnings per
share is calculated by dividing the Company’s net income available to common
shareholders by the diluted weighted average number of shares outstanding during
the year. The diluted weighted average number of shares outstanding is the basic
weighted number of shares adjusted for any potentially dilutive debt or equity.
There are no such common stock equivalents outstanding as of December 31, 2005
and 2004.
  For
      the Year Ended
                December
      31, 2005
              
              
              For
      the Year Ended December 31, 2004Loss
      (numerator)
              
              $
              (990,715
              )
              
              $
              (5,226,338
              )Shares
      (denominator)
              
              
              84,103,259
              
              
              
              32,532,920Per
      share amount
              
              $
              (0.01
              )
              
              $
              (0.16
              )
 
  F -
9
 Index to Annual Report
  U.S.
CANADIAN MINERALS, INC.
 Notes to
Financial Statements
 December
31, 2005 and 2004
   f. Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of
 the
financial statements and the reported amounts of revenues and expenses during
the reporting period.  Actual results could differ from those
estimates.
 
 g.  Advertising
 
 The
Company follows the policy of charging the costs of advertising to expense as
incurred.  The Company incurred no advertising expense during 2005 and
2004.
 
 h.  Concentrations
of Risk
 
 The
Company’s bank accounts are deposited in insured institutions. The funds are
insured up to $100,000. At December 31, 2005, the Company’s bank deposits did
not exceed the insured amounts.
 
 NOTE 1 -
ORGANIZATION AND BUSINESS ACTIVITIES (Continued)
 
 i.  Income
Taxes
 
 No
provision for income taxes has been recorded in the financial statements as the
Company has incurred net operating losses from the date of inception through
December 31, 2004.
  For the
period ended December 31, 2004 the Company has incurred net losses and,
therefore, has no tax liability.  The net deferred tax asset generated
by the loss carry-forward has been fully reserved with a valuation allowance
because of uncertainty regarding the realization of future taxable
income.  The cumulative net operating loss carry-forward is
approximately $7,947,715 at December 31, 2005 and $6,957,000 at December 31,
2004 and will expire in various amounts through the year 2025.  The
net operating loss carry forward for income tax purposes differs from the
Company’s accumulated losses for financial reporting primarily due to timing
differences caused by the issuance of stock-based compensation totaling
approximately $13,245,000.  Utilization of the net operating loss
carryover for income tax purposes may be subject to certain limitations under
Section 382 of the Internal Revenue Code.
   F -
10
 Index to Annual Report
  
 U.S.
CANADIAN MINERALS, INC.
 Notes to
Financial Statements
 December
31, 2005 and 2004
 
 The
cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
  
 2005
              
              
              2004Deferred
      tax asset attributable to:Net
      operating loss
              
              $
              7,218,843
              
              
              $
              6,883,000Valuation
      allowance
              
              
              (7,218,843
              )
              
              
              (6,883,000
              )Net
      deferred tax asset
              
              $
              -0-
              
              
              $
              -0-
 
 
 j.
Impairment of Long-Lived Assets
 
 The
Company continually monitors events and changes in circumstances that could
indicate carrying amounts of long-lived assets may not be recoverable. When such
events or changes in circumstances are present, the Company assesses the
recoverability of long-lived assets by determining whether the carrying value of
such assets will be recovered through undiscounted expected future cash flows.
If the total of the future cash flows is less than the carrying amount of those
assets, the Company recognizes an impairment loss based on the excess of the
carrying amount
over the fair value of the assets. Assets to be disposed of are reported at the
lower of the carrying amount or the fair value less costs to sell.
 
 k.
Recently Issued Accounting Pronouncements
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 does not require any new fair value
measurements, but provides guidance on how to measure fair value by providing a
fair value hierarchy used to classify the source of the information. This
statement is effective for us beginning January 1, 2008. The Company is
currently assessing the potential impact that adoption of SFAS No. 157
would have on the financial statements.
 
 In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. SFAS No. 159 gives the
irrevocable option to carry many financial assets and liabilities at fair
values, with changes in fair value recognized in earnings. SFAS No. 159 is
effective beginning January 1, 2008, although early adoption is permitted.
The Company is currently assessing the potential impact that adoption of SFAS
No. 159 will have on the financial statements.
 
  F -
11
 Index to Annual Report
  
 U.S.
CANADIAN MINERALS, INC.
 Notes to
Financial Statements
 December
31, 2005 and 2004
 
 
 The FASB
has revised SFAS No. 141.  This revised statement establishes uniform
treatment for all acquisitions.  It defines the acquiring
company.  The statement further requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquired at the acquisition date, measured at their fair market values as of
that date.  It requires the acquirer in a business combination
achieved in stages to recognize the identifiable assets and liabilities, as well
as the non-controlling interest in the acquired, at the full amounts of their
fair values. This changes the way that minority interest is recorded and
modified as a parent’s interest in a subsidiary changes over
time.  This statement also makes corresponding significant amendments
to other standards that related to business combinations, namely, 109, 142 and
various EITF’s.  This statement applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15,
2008.  The Company believes the implementation of this standard will
have no effect on our financial statements.
  l.
Foreign Currency Translation
  The
Company considers the U.S. dollar to be its functional currency as it is the
currency of the primary economic environment in which the Company operates.
Accordingly, monetary assets and liabilities denominated in foreign currencies
are translated into U.S. dollars at the exchange rate in effect at the balance
sheet date and non monetary assets and liabilities are translated at the
exchange rates in effect at the time of acquisition or issue. Revenues and
expenses are translated at rates approximating the exchange rates in effect at
the time of the transactions. All exchange gains and losses are included in
operations.
  NOTE 2 -
GOING CONCERN
 
 The
Company's financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business.  The Company has not yet established an
ongoing source of revenues sufficient to cover its operating costs and allow it
to continue as a going concern.  The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable.  If the
Company is unable to obtain adequate capital, it could be forced to cease
operations.
 
 In order
to continue as a going concern, the Company will need, among other things,
additional capital resources.  Management's plans to obtain such
resources for the Company include (1) obtaining capital from management and
significant shareholders sufficient to meet its minimal operating expenses, and
(2) seeking out and completing a merger with an existing operating
company.  However, management cannot provide any assurances that the
Company will be successful in accomplishing any of its plans.
 
 
  F -
12
 Index to Annual Report
  
 U.S.
CANADIAN MINERALS, INC.
 Notes to
Financial Statements
 December
31, 2005 and 2004
 
 The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations.  The accompanying financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
 
 NOTE 3 –
RELATED PARTY TRANSACTIONS
 
 The
Company acquired an interest in Juina on February 23, 2004 for
$200,000.  At December 31, 2004, the Company owed $500,000 to Juina
Mining Corporation, in which the Company owns a majority interest. This represents an
accrual for contingent liabilities pursuant to a funding agreement to assist
with potential diamond mining operations in Brazil. Juina was unable to obtain
the necessary mineral mining licenses from the government regulatory
authorities.  The operator, Mr. McFadden, filed suit against the
Company for monetary damages, which was settled in full in 2006 with the
transfer of certain Juina shares owned by the Company.  Upon
settlement of this and a separate case filed by Stephen Issod against U.S.
Canadian Minerals, Inc., the company fully transferred all Juina shares owned by
the Company.
 
 The
Company has various notes payable to related parties. The notes are due upon
demand, unsecured and bear interest at 5-10%. The Company owes $240,016 and
$380,952 for such notes payable as of December 31, 2005 and 2004,
respectively.
 
 NOTE 3 –
NOTES PAYABLE
 
 The
Company has various notes payable to unrelated parties. The notes are unsecured,
bear interest at 7% and are in default. The Company owes $208,026 and $133,026
for such notes payable as of December 31, 2005 and 2004,
respectively.


F -
13
 Index to Annual Report





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





On
January 18, 2005, the registrant's certifying accountants Child, Sullivan &
Company resigned.  Their report on the financial statements as of and
for the six months ended June 30, 2004, contained no adverse opinion or
disclaimer of opinion was not modified as to uncertainty audit scope, or
accounting principles. Their report contained a qualified opinion with respect
to the registrant's ability to continue as a going concern.  There
were no disagreements with them on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or
procedure.





Effective
February 20, 2005, the Company engaged Kyle L. Tingle, CPA, LLC to be the
Company’s outside independent auditor.





Effective
March 7, 2006 the Board of Directors of U.S. Canadian Minerals, Inc. dismissed
Kyle Tingle, CPA, the company’s independent auditor previously engaged to audit
its financial statements. The decision to dismiss Kyle Tingle CPA was made due
to Mr. Tingle’s large workload and inability to complete work in a timely
manner. There were no disagreements with them on any matter of accounting
principles or practices, financial statements disclosure or auditing scope or
procedure.





Effective
March 7, 2006 the Board of Directors of the Company engaged Ronald N.
Silberstein CPA, PLLC (“Silberstein“) as our new independent auditor. The
Company did not consult with Silberstein during the fiscal years ended 2005 and
2004, or during the subsequent interim reporting periods from the last fiscal
year ended of December 30, 2004, through and including December 31, 2005, on the
application of accounting principles, the type of opinion Silberstein might
issue on our financial statements or with respect to any disagreements with or
reportable event in connection with the performance of services by Kyle Tingle,
the Company’s former independent auditor.





Effective,
October, 2007 the Board of Directors of the Company engaged Ronald Serota CPA,
P.C., as our new independent auditor.  The Company did not consult
with Ronald Serota CPA P.C. during the fiscal years ended 2005 or during the
subsequent interim reporting periods from the last fiscal year ended of December
30, 2004, through and including December 31, 2005, on the application of
accounting principles, the type of opinion the former auditor Ronald Silberstein
might issue on our financial statements or with respect to any disagreements
with or reportable event in connection with the performance of services by
Ronald Silberstein or Kyle Tingle, the Company’s former independent
auditor.





ITEM
8A.              
CONTROLS AND PROCEDURES





We
maintain disclosure controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities and Exchange Act
of 1934, as amended, is recorded, processed, summarized, accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decision regarding required
disclosure.





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 Index to Annual Report


Based
upon their evaluation as of the end of the period covered by this report, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are not effective to ensure that information
required to be included in our periodic SEC filings is recorded, processed,
summarized, and reported within the time periods specified in the SEC rules and
forms.





A
material weakness is a significant deficiency or a combination of significant
deficiencies that result in a more than remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected.





Ronald N.
Serota CPA, P.C. our independent registered public accounting firm, has advised
our management and the board of directors it had identified the following
material weaknesses in our internal controls:





A
material weakness existed as of December 31, 2005, with regard to insufficient
personnel in the accounting and financial reporting function due to the size of
our Company which prevented our ability to employ sufficient resources to have
adequate segregation of duties within the internal control
system.  This material weakness affects management’s ability to
effectively review and analyze elements of the financial statement closing
process and prepare financial statements in accordance with U.S.
GAAP.





In
addition, a material weakness existed as of December 31, 2005, in controls over
closing procedures due to a number of adjustments made at the end of the year
period.  There were deficiencies in the analysis and reconciliation of
general ledger accounts which were indicative of a material weakness in controls
over closing procedures, including the (a) accounting and reporting of capital
transactions and (b) the valuation of certain assets.





In order
to remediate these material weaknesses in our internal control over financial
reporting, management is in the process of designing and implementing and
continuing to enhance controls to aid in the correct preparation, review,
presentation and disclosures of the Company’s financial
statements.  Management is continuing to monitor, evaluate, and test
the operating effectiveness of these controls.





Limitations on the
Effectiveness of Internal Controls





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





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 Index to Annual Report





ITEM 8B.      
CHANGES IN INTERNAL CONTROL





Other
than indicated above, there were no changes in the Company’s internal controls
over financial reporting that occurred during the last fiscal year that have
materially affected, or are reasonable likely to materially affect, the
Company’s internal control over financial reporting.








PART
III





ITEM
9.             DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;


COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT





The
following information sets forth the names of our directors and executive
officers, their ages and their present positions with the Company as of December
31, 2005.   The directors serve for a term of one year or until
the next annual meeting of the shareholders.  Each officer serves at
the discretion of the Board of Directors.





Name
            Age
            Office(s) HeldRendal
      Williams
            54
            Chief
      Executive Officer, President, Chief Financial Officer, Secretary,
      Treasurer and Chairman of the Board of
Directors





Set forth
below is a brief description of the background and business experience of our
current executive officer and director.





Rendal
Williams.Mr. Williams is an experienced senior management
professional in the food and beverage industry. He has over 18 years experience
in marketing, sales, and executive management positions.




Term
of Office




Our
Directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders, until they resign or until removed from
office in accordance with our bylaws.  Our officers are appointed by
our board of directors and hold office until removed by the board.




Family
Relationships




There is
a family relationship between or among the directors, executive officers or
persons nominated or chosen by us to become directors or executive
officers.




Involvement
in Certain Legal Proceedings




To the
best of our knowledge, during the past five years, none of the following
occurred with respect to a present or former director or executive officer: (1)
any bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the bankruptcy
or within two years prior to that time; (2) any conviction in a criminal
proceeding or being subject to a pending criminal proceeding (excluding traffic
violations and other minor offenses); (3) being subject to any order, judgment
or decree, not







22
 Index to Annual Report


subsequently
reversed, suspended or vacated, of any court of any competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; and
(4) being found by a court of competent jurisdiction (in a civil action), the
SEC or the Commodities Futures Trading Commission to have violated a federal or
state securities or commodities law, and the judgment has not been reversed,
suspended or vacated.





Committees





We
currently do not have an audit committee, compensation committee, nominating
committee, executive committee, Stock Plan Committee, or any other
committees.  There has been no need to delegate functions to these
committees due to the fact that our operations are at a very early stage to
justify the effort and expense of creating and maintaining these
committees.





Audit
Committee





We do not
have a separately-designated standing audit committee.  The entire
board of directors performs the functions of an audit committee, but no written
charter governs the actions of the board of directors when performing the
functions of that would generally be performed by an audit committee. The board
of directors approves the selection of our independent accountants and meets and
interacts with the independent accountants to discuss issues related to
financial reporting. In addition, the board of directors reviews the scope and
results of the audit with the independent accountants, reviews with management
and the independent accountants our annual operating results, considers the
adequacy of our internal accounting procedures and considers other auditing and
accounting matters including fees to be paid to the independent auditor and the
performance of the independent auditor.





We do not
have an audit committee financial expert because of the size of our company and
our board of directors at this time. We believe that we do not require an audit
committee financial expert at this time because we retain outside consultants
who possess these attributes.





For the
fiscal year ending December 31, 2005, the board of directors:





1.
            Reviewed
      and discussed the audited financial statements with management,
      and





2.
            Reviewed
      and discussed the written disclosures and the letter from our independent
      auditors on the matters relating to the auditor's
      independence.





Based
upon the board of directors’ review and discussion of the matters above, the
board of directors authorized inclusion of the audited financial statements for
the year ended December 31, 2005 to be included in this Annual Report on Form
10-KSB and filed with the Securities and Exchange Commission.





Significant
Employees





We do not
have any significant employees other than our officers and
directors.


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 Index to Annual Report







Section
16(a) Beneficial Ownership Reporting Compliance




Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s directors
and executive officers and persons who beneficially owns more than ten percent
of a registered class of the Company’s equity securities to file with the SEC
initial reports of ownership and reports of change in ownership of common stock
and other equity securities of the Company.  Officers, directors and
greater than ten percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.  To our
knowledge, the following persons have failed to file, on a timely basis, the
identified reports required by Section 16(a) of the Exchange Act during fiscal
year ended December 31, 2005:




Name
      and principal position
            Number
      of
              late
      reports
            Transactions
      not
              timely
      reported
            Known
      failures to
              file
      a required formRendal
      Williams
              CEO,
      CFO, and Director
            4
            Not
      determinable
            4





Code
of Ethics





We have
not adopted a Code of Ethics for Financial Executives, which include our
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, as required by
sections 406 and 407 of the Sarbanes-Oxley Act of 2002.





ITEM
10.   
EXECUTIVE COMPENSATION.




The
following table sets forth the compensation paid to the Chief Executive Officer
and other Executive Officers and key persons in total annual salary and bonus,
for all services rendered in all capacities to the company, for the fiscal years
ended December 31, 2005 and 2004:




Summary Compensation
Table





SUMMARY
      COMPENSATION TABLEName
              and
              principal
              Position
            Year
            Salary($)
            Bonus
              ($)
            Stock
              Awards
              ($)
            Option
              Awards
              ($)
            Non-Equity
              Incentive
      Plan
              Compensation
              ($)
            Nonqualified
              Deferred
              Compensation
              Earnings
      ($)
            All
      Other
              Compensation
              ($)
            Total
              ($)Rendal
      Williams
              CEO,
      CFO and Director
            2005
              2004
            180,000
              180,000
            -
              -
            -
              -
            -
              -
            -
              -
            -
              -
            -
              -
            180,000
              180,000





1) The
employment agreement with Rendal Williams entitles him to additional
compensation of 1% of the issued and outstanding shares of the company if the
gross revenue exceeds $10,000,000 for the year ending December 31,
2005.  As the Company received revenues of less than $7,000 this bonus
was not achieved.





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 Index to Annual Report





Stock
Options/SAR Grants





There
were no grants of stock options or stock appreciation rights made during the
fiscal year ended December 31, 2005 to our executive officers and
directors.  There were a total of 0 stock options outstanding as at
September 30, 2006.




Long-Term
Incentive Plans




There are
no arrangements or plans in which we provide pension, retirement or similar
benefits for directors or executive officers, except that our directors and
executive officers may receive stock options at the discretion of our board of
directors. We do not have any material bonus or profit sharing plans pursuant to
which cash or non-cash compensation is or may be paid to our directors or
executive officers, except that stock options may be granted at the discretion
of our board of directors.




We have
no plans or arrangements in respect of remuneration received or that may be
received by our executive officers to compensate such officers in the event of
termination of employment (as a result of resignation, retirement, change of
control) or a change of responsibilities following a change of control, where
the value of such compensation exceeds $60,000 per executive
officer.




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





The
following table sets forth, as of December 31, 2005, the beneficial ownership of
our common stock by each executive officer and director, by each person known by
us to beneficially own more than 5% of the our common stock and by the executive
officers and directors as a group. Except as otherwise indicated, all shares are
owned directly and the percentage shown is based on 99,801,236 shares of common
stock issued and outstanding and 225,750 shares of Preferred A stock issued and
outstanding on December 31, 2005.





Title
      of class
            Name
      and address
              of
      beneficial owner
            Amount
      of
              beneficial
      ownership
            Percent
              of
      classExecutive
      Officers & Directors:Common
            Rendal
      Williams
              4955
      South Durango Drive
              Suite
      216
              Las
      Vegas, NV 89113
            12,097,719
      *
            11.89
      %Total
      of All Directors and Executive Officers:
            12,097,719 shares
            11.89
      %More
      Than 5% Beneficial Owners:Common
            John
      E. Dhonau and
              Nevada
      Minerals, Inc.
              4955
      South Durango Drive
              Suite
      218
              Las
      Vegas, NV 89113
            49,986,213
      shares **
            49.12%Total
      of More Than 5% Beneficial Owners:
            49,986,213 shares
            49.12%





25
 Index to Annual Report





*   Included
within Mr. Rendal Williams 12,097,719 shares computed on a fully diluted basis
were 11,400,000 unissued common shares that could have been issued based on a
conversion of Mr. Williams’ preferred stock holdings.  Mr. Williams
held 697,719 common shares.





**
Included within Mr. Dhonau’s 49,986,213 shares computed on a fully diluted basis
were 30,000,000 unissued common shares that could have been issued based on a
conversion of Mr. Dhonau’s preferred stock holdings.  Mr. Dhonau held
19,986,213 common shares.





CHANGE
IN CONTROL





The
Company is not aware on any arrangement that would upset the control mechanisms
currently in place. Although it is conceivable that a third party could attempt
a hostile takeover of the Company, the company has not received notice of any
such effort.





ITEM
12.         CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS





Various
related party transactions are reported throughout the notes to our financial
statements and should be considered incorporated by reference
herein.





PART
IV





ITEM
13.        EXHIBITS
AND REPORTS ON FORM 8-K





EXHIBITS:








Exhibit
      Number
            Description31.1
            Certification of Chief Executive Officer pursuant to
      Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200231.2
            Certification of Chief Financial Officer pursuant to
      Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200232.1
            Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of
  2002





REPORTS
ON FORM 8K





On
February 7, 2005 the Company filed a Form 8-K to report that Marti A. Hansen
joined the Company as Chief Financial Officer.





On March
1, 2005, the Company filed a Form 8-K to report the resignation of the Company’s
certifying accountant Child, Sullivan & Company and the engagement of Kyle
L. Tingle, CPA, LLC.


26
 Index to Annual Report





On March
16, 2005, the Company filed a Form 8-K amendment to 8-K filed March 1, 2005 for
the purpose of filing the letter from Child, Sullivan and Company,
PC.





On March
25, 2005, the Company filed a Form 8-K/A amendment to 8-K filed March 1, 2005
for the purpose of filing the letter from Child, Sullivan and Company,
PC.





On March
25, 2005, the Company filed a Form 8-K to correct the description of the
engagement of Child, Sullivan & company.





On March
29, 2005, The Company filed a Form 8-K with respect to unregistered sales of
equity securities to Marti A. Hansen, CFO and William G. Roan VP of Compliance
as employee sign-on bonuses.





On March
30, 2005, the Company filed a Form 8-K stating the following:





“On March
29, 2005, the registrant concluded that its previously issued financial
statements,(i) as of and for the nine months ended September 30, 2004, as filed
in the registrant's Quarterly Report on Form 10-QSB on November 16, 2004,(ii) as
of and for six months ended June 30, 2004, as filed in the registrants Quarterly
Report on Form 10-QSB on August 23, 2004 and (iii) as of and for the three
months ended March 31, 2004 as filed in the registrants Quarterly Report on Form
10-QSB on May 21, 2004, should no longer be relied upon because of an error in
such financial statements. The error is in the methodology used to value the
mineral rights acquired by the registrant, which resulted in the value of such
mineral rights being overstated.”





On April
14, 2005 the Company filed a Form 8-K announcing the acquisition of mineral
rights to 5,616 hectares of land in Ecuador.





On May
11, 2005 the Company filed a Form 8-K/A for the purpose of filing the letter
from Child, Sullivan & Company, PC, setting forth whether it agreed with the
statements made by the registrant in said report as amended.





On August
30, 2005 the Company filed a Form 8-K to report that it had entered into a
material agreement to acquire a royalty interest by issuing restricted stock to
North Star Diamonds, Inc. for a joint drilling program.





October
31, 2005 the Company filed a Form 8-K to report the resignation of Dr. Joseph de
Beauchamp as President.





November
17, 2005 the Company filed a Form 8-K to report the resignation of Marti Hansen
as Chief Financial Officer.





December
16, 2005 the Company filed a Form 8-K to report the sale of the Company’s 80%
interest in Yellow River Mining, SA, an Ecuador corporation. The Buyer paid the
Company $800,000, which included the assumption of $127,000 debt owed by the
Company to Nevada Minerals, Inc., a Nevada Corporation.





December
28, 2005 the Company filed a Form 8-K to report the finalization of plans to
increase production of the Company’s Durango plant located in Portovello,
Ecuador.





On
January 26, 2006 the Company filed a Form 8-K announcing the appointment of Adam
Jenn as President and Frank J. Van der Bok Busboom as Chief Financial
Officer.


27
 Index to Annual Report





On March
10, 2006 the Company filed a Form 8-K to report the dismissal of Kyle Tingle CPA
as the Company’s independent auditor and the engagement of Ronald N. Silberstein
CPA, PLLC as the Company’s new independent auditor.





On March
23, 2006 the Company filed a Form 8-K that on March 14, 2006, U. S. Canadian
Minerals, Inc. (the “Company”) received a “Wells Notice” from the staff of the
Securities and Exchange Commission (the “SEC”). The Wells Notice notifies
the Company that the SEC staff is considering recommending that the SEC bring a
civil enforcement proceeding against the Company for possible violation of the
federal securities laws pertaining to fraudulent disclosures, failure to file
reports in a timely manner and improper accounting practices.




Under SEC
procedures, the Company has the opportunity to respond to the SEC staff before
the staff makes a formal recommendation regarding any action to be taken against
the Company by the SEC.





On May 4,
2006 the Company filed a Form 8-K to report the resignation of Rendal Williams
as CEO, Director and Chairman of the Board.





On
February 5, 2007, the Company filed a Form 8-K to report the cancellation of
39,626,500 shares of stock and also to report that the Company has obtained an
option on 1200 hectares of mining claims in the Xth region of
Chile.





On May
25, 2007 the Company filed a Form 8-K to report the resignation of Ronald N.
Silberstein as the Company’s independent auditor.





On
October 9, 2007 the Company filed a Form 8-K to announced today a 50 to 1
reverse split of its' common shares.





On
October 23, 2007, the Company filed a Form 8-K to announce the engagement of
Ronald Serota CPA, P.C., a Nevada PCAOB registered CPA firm, as its principal
accountants and also to announce that on Oct. 23, 2007 the company had disposed
of 80% of its interests in Santa Fe Mining S.A.





ITEM
14.        
PRINCIPAL ACCOUNTANT FEES AND SERVICES.





* Audit
Fees paid to the Company’s prior auditors, Beckstead and Watts,
CPA’s





** Audit
Fees paid to the Company’s auditor, Ronald N. Silberstein, CPA,
PLLC





*** Audit
Fees paid to the Company’s auditor, Ronald Serota, CPA, P.C.





Calendar
      Year-end
            Audit
      Services
            Audit
      Related Fees
            Tax
      Fees
            Other
      Fees2003
            $63,000
      *
            -0-
            -0-
            -0-2004
            $56,000
      **
            -0-
            -0-
            -0-2005
            $38,000
      ***
            -0-
            -0-
            -0-





28
 Index to Annual Report





SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





U.S.
      CANADIAN MINERALS, INC.By:
      /s/    Adam
      Jenn
            Date:  March
      10, 2008Adam
      JennPresident,
      CEO, Director
















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Report