**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
        1934
  For
        the
        fiscal year ended **December
        31, 2004**
  OR
  oTRANSITION
        REPORT UNDER
        SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
        OF
        1934
  Commission
        file number: 0-25523
  **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.)**5380
                  Valley View Ave., Suite F**
                **Las
                  Vegas, NV 89118**
                (Address
                  of principal executive offices)
              **(702)
                  433-8223**
                (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** ****
  Registrant’s
        revenues for its most recent fiscal year: $108,000
  As
        of
        December 29, 2006 the aggregate market value of the voting common equity
        held by
        non-affiliates of the registrant was approximately $2,977,073  based
        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 29, 2006 the registrant had 104,031,236  of
        Common
        Stock, (0.001par value per share) issued and 607,450 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** ****
   ***Table
            of Contents***
  
  **U.S.
        CANADIAN MINERALS, INC.**
 Index
        to
 Annual
        Report of Form 10-KSB
 For
        the
        Period Ended December 31, 2004
  **Part
                  I**
              
              **Page**Item
                  1
              Description
                  of Business
              3Item
                  2
              Description
                  of Property
              4Item
                  3
              Legal
                  Proceedings
              4Item
                  4
              Submission
                  of Matters to a Vote of Security Holders
              6**Part
                  II**Item
                  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
              22Item
                  8B
              Other
                  Information
              23**Part
                  III**Item
                  9
              Directors,
                  Executive Officers, Promoters and Control Persons;
                  Compliance With Section 16(a) of the Exchange Act
              23Item
                  10
              Executive
                  Compensation
              24Item
                  11
              Security
                  Ownership of Certain Beneficial Owners and Management
                  and Related Stockholder Matters
              24Item
                  12
              Certain
                  Relationships and Related Transactions
              25Item
                  13
              Exhibits
              26Item
                  14
              Principal
                  Accountants Fees and Services
              29Signatures
              29Certifications
 
  2
 ***Table
            of Contents***
   **PART
        I**
  **ITEM
        1.    DESCRIPTION OF
        BUSINESS**
 
 **CORPORATE
        BACKGROUND**
 U.S.
          Canadian Minerals, Inc., formerly known as Barrington Foods International,
          Inc.,
          (hereinafter referred to as the "Company") was a development stage company
          in
          accordance with Statement of Financial Accounting Standards No. 7 until
          it began
          mining operations in 2004. Up until December 31, 2003, the Company's main
          focus
          was on the manufacture/distribution of food products. In January 2004,
          the
          Company changed its business focus to the acquisition of mineral rights,
          mining
          resources and the development of mining operations to extract minerals
          by
          acquiring existing active and inactive mining operations and/or assets
          and it is
          no longer a development stage company. On January 2, 2004, the Company
          changed
          its name from Barrington Foods International, Inc. to U.S. Canadian Minerals,
          Inc. 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
          Arizona.
 The
        Company’s management has determined that during 2004 the fair values of many of
        its properties 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, 2004, the Company had 2 full time employees. None of its employees
        were represented by a collective bargaining arrangement.
  3
 ***Table
            of Contents***
  
 The
        Company currently 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.**
 
 The
        Company rents its principal executive and business offices at 5380 Valley
        View
        Avenue, Suite F, La Vegas NV 89118. 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 October 28, 2004, the U.S. Securities
        and
        Exchange Commission announced the temporary suspension of trading in the
        Company's securities. The suspension expired by its terms at 11:59 PM on
        November 10, 2004. The SEC stated that the suspension was because of questions
        that had been raised about the accuracy of publicly disseminated information
        concerning among other things, the Company's financing and mining activities
        and
        the value of the Company's purported assets.
  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
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            of Contents***
  
 **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.
 
 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.
 
 Subsequent
        Event
 
 Subsequent
        to December 31, 2004, 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.  As of the date of this report, the
        Company has not yet effectuated the terms of the settlement agreement as
        the
        stock transfer to McFadden and Issod is incomplete. The
        Company has no dispute regarding to terms of the settlement agreements.
  5
 ***Table
            of Contents***
  
 **ITEM
        4.   SUBMISSIONOF MATTERS TO VOTE OF SECURITY
        HOLDERS.**
 
 None.
 
 **PART
        II**
 
 **ITEM
        5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER
        MATTERS.**
 
 On
        August
        6, 2001 the Company's common stock (under a prior name of E-Bait, Inc.) was
        cleared for trading on the OTC Bulletin Board system under the symbol EBAI.
        When
        the Company changed its name to Barrington Foods International, Inc., it
        changed
        its trading symbol to BFII effective December 10, 2001. Subsequently, on
        January
        2, 2004, the Company changed its name to U.S. Canadian Minerals, Inc. and
        changed its trading symbol to UCAD.
 
 In
        January 2004, the Company executed a 1 for 125 reverse split of its common
        stock, and in October 2004 the Company executed a 3 for 1 forward stock split.
        The table set forth below has been adjusted to reflect both these stock splits.
        Until October 28, 2004, the Company's stock was quoted on the OTCBB. After
        November 10, 2004, because of the trading suspension imposed by the SEC,
        as
        described below, the Company's stock was quoted on the pink sheets under
        stock
        symbol USCA.
 
 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
                  2002
              HIGH
              LOWQuarter
                  Ended March 31, 2002
              $0.95
              $0.06Quarter
                  Ended June 30, 2002
              $0.31
              $0.06Quarter
                  Ended September 30, 2002
              $0.19
              $0.06Quarter
                  Ended December 31, 2002
              $0.22
              $0.09FISCAL
                  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
              $1.85
 
 At
        December 31, 2004, the company had 68,405,282 common shares issued and
        outstanding, and 527,450 preferred 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.
  6
 ***Table
            of Contents***
  
 **RECENT
        SALE OF UNREGISTERED SECURITIES**
 
 Shares
        issued in 2004 were exempt from registration under Section 4(2) of the
        Securities Act as transactions not involving a public offering.
 
 PREFERRED
        STOCK - SERIES A - In January 2004, the company issued 10,000 shares of Class
        A
        Preferred Stock in satisfaction of a Company liability totaling $156,416.
        This
        stock was issued to IB 2000 for repayment of debt of $156,416 dating to
        Barrington Foods.
 
 In
        January 2004 38,000 preferred “A” shares were issued to Rendal Williams CEO. As
        of the date of this report, the Company has not yet issued 76,000 preferred
        series “A” shares owed to Rendal Williams associated with the forward split of
        such securities.
 
 On
        January 5, 2004 the Company issued 25,021,670 shares of its common stock
        for
        repayment of debt.
 
 On
        January 6, 2004 the Company issued 8,000,000 shares of its common stock to
        the
        Company’s officers and directors.
 
 **On
        January 20, 2004, the Company approved a 125-to-1 reverse stock split of
        its
        common stock.**
 
 On
        January 23, 2004 the Company issued 5,000,000 shares of its common stock
        to
        Nevada Minerals Inc. for acquisition of mineral rights.
 
 On
        January 28, 2004 the Company issued 460,000 shares of its common stock for
        conversion of preferred stock.
 
 On
        January 28, 2004 the Company issued 13 shares of its common stock for beneficial
        owner round up.
 
 On
        February 3, 2004 the Company issued 1,000,000 shares of its common stock
        for
        conversion of preferred stock.
 
 On
        February 10, 2004 the Company issued 12 shares of its common stock for
        beneficial owner round up.
 
 On
        February 27, 2004 the Company issued 4,300 shares of its common stock for
        services.
 
 On
        February 27, 2004 the Company issued 5,000 shares of its common stock for
        conversion of preferred stock.
 
 On
        March
        15, 2004 the Company issued 5,000 shares of its common stock for
        services.
 
 On
        March
        30, 2004 the Company issued 404,140 shares of its common stock for acquisition
        of asset.
 
 On
        April
        12, 2004 the Company issued 160,000 shares of its common stock for
        services.
 
 On
        May
        27, 2004 the Company issued 50,000 shares of its common stock to Nevada Magnetic
        for acquisition of assets.
 
 On
        May
        27, 2004 the Company issued 720,000 shares of its common stock to El Capitan
        Precious Metals for acquisition of assets.
  7
 ***Table
            of Contents***
  
 On
        June
        30, 2004 the Company issued 1,000,000 warrants to an officer of an affiliate
        to
        purchase stock at $5.00 per share.
 
 On
        June
        8, 2004 the Company issued 20,000 shares of its common stock for consulting
        services.
 
 On
        July
        2, 2004 the Company issued 200,000 shares of its common stock to CMKXtreme
        for
        acquisition of asset.
 
 On
        July
        7, 2004 the Company issued through a subscription agreement 600,000 shares
        of
        common for $3,000,000.
 
 On
        July
        19, 2004 100,000 shares of preferred “A” shares were issued to Nevada Minerals
        for a 20% interest in 500,000 acres of mining claims in Saskatchewan,
        Canada.
 
 On
        July
        20, 2004 the Company issued 7,500,000 shares of its common stock to CMKM
        Diamonds, Inc. for acquisition of asset.
 
 On
        July
        21, 2004 the Company issued 15,000 shares of its common stock for conversion
        of
        preferred shares.
 
 On
        August
        10, 2004 the Company issued 20,000 shares of its common stock for services.
 
 On
        August
        10, 2004 the Company issued 1,714,000 shares of its common stock to Langley
        Park
        Investment Trust as per stock purchase agreement.
 
 On
        August
        23, 2004 the Company issued 10,000 shares of its common stock for services.
 
 On
        September 2, 2004 the Company issued 100,000 shares of its common stock for
        services.
 
 On
        September 7, 2004 the Company issued through a subscription agreement 600,000
        shares of common for $3,000,000.
 
 On
        September 21, 2004 the Company issued through subscription agreements 1,200,000
        shares of its common stock for $6,000,000.
 
 On
        September 22, 2004 the Company issued through a subscription agreement 600,000
        shares of common for $3,000,000.
 
 On
        September 23, 2004 the Company issued 29,677 shares of its common stock for
        rounding shares.
 
 On
        October 7, 2004 the Company issued 85,700 shares of its common stock for
        cash
        investment.
 
 On
        October 11, 2004 the Company issued 2,080,000 shares of its common stock
        for
        conversion of preferred shares.
 
 On
        October 12, 2004 the Company cancelled 31,500 shares of its common
        stock.
 
 On
        October 22, 2004 the Company entered 40 shares from prior transfer
        agent.
  8
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            of Contents***
  
 On
        October 25 2004, the Company approved a 3:1 forward stock split of its common
        and preferred series A stock.
 
 On
        October 26, 2004 the Company issued 20,000 shares of its common stock to
        Langley
        Park for exercising of warrants.
 
 On
        October 27, 2004 the Company cancelled 4,806,000 shares of its common stock
        previously issued to Nevada Minerals Inc.
 
 On
        November 3, 2004 the Company issued 179,091 shares of its common stock for
        services.
 
 On
        November 11, 2004 the Company issued 921,000 shares of its common stock for
        services.
 
 On
        November 16 2004 the Company issued 399 shares of its common stock for rounding
        shares.
 
 On
        November 19, 2004 the Company issued 408 shares of its common stock for treasury
        issue certificates from old TA.
 
 On
        December 17, 2004 the Company issued 3,300 shares of its common stock for
        debt
        repayment.
 
 On
        December 20, 2004 the Company issued 1,000,000 shares of its common stock
        for
        conversion of preferred shares.
 
 Subsequent
        to the year ended December 31, 2004 the Company issued the
        following:
 
 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.
  9
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 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.
 
 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 29 th ),
        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. The shareholder is the beneficial owner of just less than
        10%
        of the Company’s common shares issued and outstanding as of the date of this
        report.
 
 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.
 
 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
        October 26, 2006 the Company issued 628,000 shares of its common stock for
        settlement of fees owing for services to Stevenson Management.
 
 On
        November 24, 2006 the Company issued 80,000 of Preferred “A” shares of its
        shares for services rendered by the Company’s management.
 
 **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.
  10
 ***Table
            of Contents***
  
 Plan
        of Operation
 
 (i)
        GENERAL
 
 U.S.
        Canadian Minerals, Inc. began developing products in 2000, and during 2002-2003
        conducted business under the name Barrington Foods International, Inc. During
        this time the business was unrelated to minerals and mining. On January 2,
        2004,
        the Company changed its name to U.S. Canadian Minerals, Inc., and commenced
        business development as a mining and mineral processing company.
 
 The
        Company is authorized to issue 200,000,000 shares of its $0.001 par value
        common
        stock and 1,000,000 shares of its $0.001 par value Series A, B and C preferred
        stock.
 
 Significant
        Adjustments Recorded to the Purchase Price of Certain Assets
 
 The
        Company’s management has determined that during 2004 the fair values of many of
        its properties at the date of acquisition were substantially less than the
        Company had originally reported. These include the investments in Nevada
        Minerals’ claims in Smeaton, Saskatchewan, Fort La Corne, Saskatchewan,
        investments in CMKM, investments in Nevada Magnetics and 5616 hectares of
        mining
        claims in Ecuador.
 
 Fort
        a
        la Corne
 
 On
        January 20, 2004, the Company acquired from Nevada Minerals, Inc. a 20% interest
        in the mineral rights to 500,000 acres in Saskatchewan Canada near Fort a
        La
        Corne (the "Fort a La Corne Property"). See "Item 12. Certain Relationships
        and
        Related Transactions." The Company issued 5,000,000 shares of its common
        stock
        to Nevada Minerals as consideration for such rights. On July 18, 2004, Nevada
        Minerals conveyed an additional 20% interest in the mineral rights to the
        Fort a
        La Corne Property to the Company for 100,000 shares of Series A Preferred
        Stock,
        giving the Company an aggregate 40% of the mineral rights to the Fort a La
        Corne
        property. The mineral rights include the right to explore and exploit all
        minerals discovered in the Fort a La Corne property.
 
 Lincoln
        County
 
 The
        Company acquired from Nevada Minerals, Inc., for nominal consideration, an
        option to purchase a mining operation and associated property located in
        Rachel,
        Lincoln County, Nevada, (the "Rachel Property") for an exercise price of
        $2,000,000. See "Item 12. Certain Relationships and Related Transactions."
        Nevada Minerals' title to the Rachel Property is the subject of litigation.
        Nevada Minerals acquired the Rachel Property in a foreclosure proceeding,
        and
        the person from which title to the Rachel Property was acquired in the
        foreclosure has filed a lawsuit against Nevada Minerals to have such title
        reinstated in it. While the Company had initially formed an intention to
        exercise the option to acquire the Rachel Property, it no longer intends
        to do
        so because of its focus on its Ecuador projects described below and because
        it
        would have to spend $300,000 to build a processing facility on the property.
        The
        option does not expire until failure to exercise upon 10 days written notice
        of
        a bona fide offer to purchase the Rachel Property by a third party, however,
        and
        the Company may exercise the option to acquire the Rachel Property at any
        time
        that the Company concludes that it is in its best interest to do so. John
        Edgar
        Dhonau, who beneficially owns a majority of the Company's common stock, owns
        all
        of and controls Nevada Minerals.
 
 At
        the
        time the Company intended to exercise the option to acquire the Rachel Property,
        it entered into a land use agreement with Nevada Minerals that gave it the
        right
        to enter the property to begin building a processing facility. Pursuant to
        this
        agreement, the Company made two monthly rent payments of $10,000 each for
        the
        periods ended August 15 and September 15, 2004.
  11
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            of Contents***
  
 Smeaton
 
 On
        March
        22, 2004, in consideration of a payment of $50,000, the Company acquired
        from
        United Carina Resources Corp. ("Carina") and Consolidated Pine Channel Gold
        Corp. ("Pine Channel"), both of which are incorporated under the laws of
        Canada
        and have offices at 105-111 Research Drive, Saskatoon, Saskatchewan, Canada,
        an
        option to acquire an undivided 25% interest (the "Smeaton Claims") in the
        mineral rights to 22,447 acres located near the Fort a La Corne Property
        (the
        "Smeaton Property") subject to a 1% net overriding Smelter Royalty. In order
        to
        exercise this option, the Company would be required to spend $200,000 CDN
        on a
        development and exploration project on the Smeaton Property. The company
        decided
        not to expend any additional money to exercise this option.
 
 Juina
        Mining Corporation
 
 On
        March
        23, 2004, the Company acquired 10 million shares of the Preferred Stock of
        Juina
        Mining Corporation, a Nevada corporation ("Juina"), in exchange for $116,000
        in
        cash and a note in principal amount of $84,000 (which note was subsequently
        paid
        in full). At the same time, the Company acquired 25 million, 5 million and
        5
        million shares of Juina common stock, respectively, from James D. McFadden,
        Mark
        Hutchison and Richard Taulli in exchange for 833,334 shares, 179,091 shares
        and
        150,000 shares, respectively, of the Company's common stock. Subsequently,
        the
        Company converted the preferred stock to 80 million shares of Juina common
        stock, giving the Company 77.1% of Juina's total outstanding common stock.
        At
        the time of this acquisition, there was an understanding between the Company
        and
        Mr. Hutchison that he would become a Director of the Company. See "Item 12.
        Certain Relationships and Related Transactions." The Company had the rights,
        exercisable in whole or in part at the option of the Company, for one year
        from
        the date of exchange in the case of Messrs. McFadden and Hutchison and 120
        days
        from the date of exchange in the case of Mr. Taulli to repurchase the shares
        of
        its common stock issued to each of Messrs. McFadden, Hutchison and Taulli,
        at a
        price of $1.33 per share. The Company exercised its rights to acquire its
        shares
        from Mr. Taulli at that price. Subsequently, in May 2004, the Company paid
        another $150,000 on behalf of Juina to satisfy an obligation of Juina, and
        in
        return received 10 million additional shares of Juina preferred stock
        (convertible into 80 million shares of common stock), which the company
        converted. In connection with the original acquisition of an interest in
        Juina,
        the Company paid 324,996 shares of its common stock to four persons as
        consulting fees in connection with the transaction. One of those persons
        was
        Nevada Minerals, which is an affiliate of the Company. Nevada Minerals received
        225,000 of the 324,996 shares paid as consulting fees. See "Item 12. Certain
        Relationships and Related Transactions."
 
 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.
 
 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.
  12
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 JMML,
        however, has entered into a Joint Venture Agreement with Mineradora ECO with
        respect to a 49.80 hectare parcel in the western portion of Property 1000.
        As
        part of the Joint Venture Agreement, Mineradora ECO is entitled to 50% of
        all
        revenue generated by the sale of diamonds produced from this portion of Property
        1000. In return, Mineradora ECO will undertake the task of securing land
        owner
        permissions and all government permits and licenses in order to commence
        operations and act as the operator on the 49.80 hectare parcel. To date,
        Mineradora ECO has been unsuccessful in obtaining these permits and licenses,
        and there is no assurance that it will ever do so. This agreement was never
        fulfilled and the project was abandoned.
 
 Yellow
        River Mining
 
 On
        March
        22, 2004, Juina Mining issued 5,000,000 of its restricted common shares to
        acquire 80% of the issued and outstanding shares of Yellow River Mining S.A,
        which owned processing plants in the Provincia Del Oro (Province of Gold)
        in
        southwest Ecuador. Yellow River is an active mine with unproven reserves
        and has
        not produced significant amounts of revenue. Under the terms of the agreement,
        Yellow River S.A. is to receive 50% of the gold it extracts at its plants.
        The
        other 20% of Yellow river Mining S.A. is owned by an individual who is an
        Ecuadorian resident, from whom the company acquired its 80% interest. The
        Company anticipated using proceeds from subsequent offerings to construct
        and
        improve mining facilities at Yellow River.
 
 CMKM
        Diamonds, Inc., owned a producing mine shaft near one of the Yellow River
        processing plants. The Company had an agreement with CMKM Diamonds pursuant
        to
        which CMKM Diamonds must use that processing plant to extract the gold from
        the
        ore from that mine except to the extent the production of such ore exceeds
        the
        processing plant's capacity. CMKM Diamonds was to pay Nevada Minerals a fee
        equal to 20% of its revenues from that mine. The Yellow River Mining Co.
        processed ore from the American Shaft in 2004 and 2005.
 
 Subsequent
        to the year ended December 31, 2004, on August 3, 2005 the Company executed
        an
        Asset Purchase Agreement with Minera Compania Double Down SA, which provided
        for
        the sale of 100% of the company’s 80% interest in Yellow River Mining, SA, an
        Ecuador corporation which owns certain mineral rights to land in Ecuador. 
From April 2005 to September 2005 the company’s subsidiary Durangoro had an
        agreement to process Yellow River’s ore and Durangoro received compensation from
        the sale of gold. The Buyer holds 46.6% of the Company’s common stock. As
        consideration for the Assets, the Buyer paid the company $800,000 which included
        the assumption of a $127,000 debt owed by the Company to Nevada Minerals,
        Inc
        and payment of various debts of the Company to various vendors associated
        with
        the construction and maintenance of the Yellow River Mining Co.’s assets. Full
        consideration was not transferred to the Company until September 9, 2005.
 
 Nevada
        Magnetic Materials
 
 On
        March
        16, 2004, the Company issued 50,000 shares of restricted common stock for
        100%
        of the issued and outstanding shares of Nevada Magnetic Minerals (NMM). NMM
        owns
        mineral rights to real property located in Nevada and was previously engaged
        in
        the business of processing raw ore into anode bars, which could be transported
        for further processing into gold bullion. At the date of acquisition, NMM's
        assets were of a speculative nature and have not been involved in active
        operations for some time. Subsequently, the individual operating NMM has
        died
        and the investment has been written down to zero.
  13
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 COD
        Mine
 
 On
        May
        11, 2004, the Company entered into a joint venture agreement with El Capitan
        Precious Metals Inc. to acquire an 80% ownership of mining claims located
        in
        Arizona. The Company was required to contribute 720,000 shares of its common
        stock to acquire the mining rights. The joint venture agreement entitled
        the
        Company to receive 50% of the anticipated profits from tailings and settlement
        ponds and gave the Company the obligation to provide operating capital for
        the
        first 90 days of operation. After this period, the joint venture partner
        (operator) bore the risk of excess losses and liability.
 
 The
        reserves for which the Company obtained mineral rights through the El Capitan
        joint venture agreement were "proven or probable" that is, the Company had
        been
        provided an outside commercial appraisal of the estimated value of the property
        "as is" for $5,000,000. The estimated reserves at March 2001 were estimated
        to
        yield ground values of approximately $138,000,000 and eventual recovery of
        $120,000,000 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 February 27, 2001.In November of 2006 management obtained a new
        commercial appraisal of COD mine valuing it at $6,800,000.The reserves at
        November 2006 were estimated to yield ground values of approximately
        $229,000,000 and eventual recovery of $187,000,000 in revenues 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, 2004.
 
 CMKM
        Diamonds, Inc. Mineral Rights
 
 On
        July
        18, 2004, the Company agreed to purchase a 5% interest in all current and
        future
        claim holdings and mineral interests of CMKM Diamonds, Inc. in exchange for
        7,500,000 shares of the Company's common stock. The Company also executed
        an
        option agreement to purchase up to an additional 10% of CMKM Diamonds, Inc.
        at a
        price of $1,500,000 for each 1% purchased. The Company had one year from
        the
        date of the agreement to execute all or part of the option in minimum 1%
        increments.
 
 The
        Company received five stock subscription agreements from related parties
        to CMKM
        Diamonds to purchase 3,000,000 shares of the Company's common stock at a
        price
        of $5 per share. $15,000,000 was received by the Company, in addition with
        common shares, to exercise the options on the first 7% of the current and
        future
        claims of CMKM Diamonds, Inc. under the July 18, 2004 agreement, noted above
        and
        an additional 5% of current and future claims of CMKM Diamonds, Inc. On the
        same
        dates of receipt of proceeds, the Company issued a checks for the amount
        of the
        investments back to CMKM Diamonds, Inc., in which Urban and Carolyn Casavant,
        are affiliates. As stated in the findings by the U.S. SEC, on July 27, 2004,
        CMKM issued a press release confirming receipt of proceeds of $3,000,000
        from
        the Company. See SEC Initial Decision Release No. 291, Administrative Proceeding
        in the Matter of CMKM Diamonds, Inc., File No. 3-11858 dated July 12, 2005.
        Other investors of $3,000,000 each include Wesley Casavant and Cindy Dwyer,
        relatives of Urban and Carolyn Casavant.
 
 On
        July
        18, 2004, the Company acquired 5% of all mineral holdings of CMKM Diamonds,
        Inc.
        ("CMKM") for 7,500,000 shares of common stock of the Company. On the same
        date,
        the company acquired an option to purchase an additional 10% of such mineral
        holdings. The exercise price of this option was $15,000,000. On July 27,
        2004,
        the Company made its initial exercise pursuant to this option in the amount
        of
        $3,000,000 which is equivalent to an additional 2% of such mineral
        holdings.
 
  14
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 On
        September 9, 2004, the Company exercised an additional portion of the option
        agreement with CMKM in the amount of 1.66% for $2,500,000. On September 9,
        2004,
        the Company exercised an additional portion of the option agreement with
        CMKM in
        the amount of 5.33% for $8,000,000.
 
 Most
        of
        CMKM Diamonds, Inc.'s holdings are in Saskatchewan, Canada in the general
        vicinity of the Company's Fort a La Corne and Smeaton holdings.
 
 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 (see above). The Company acquired such interest for 100,000 preferred
        shares (pre forward 3:1 split). The interest purchased current and future
        mineral rights, but did not include any real property interests. In 2005,
        an
        independent appraiser had valued the total mineral rights associated with
        the
        500,000 acres at approximately $12,000,000. Company management, however,
        has
        determined that these mineral rights were never of this value and as of the
        date
        of acquisition are valued based on the $127,000 cost basis of the acquisition
        of
        such property rights by Nevada Minerals.
 
 Juina
        Mining
 
 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, 2004, the value of our remaining interest in
        Juina
        is reported at its cost of $151,000.
 
 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.
 
  15
 ***Table
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 Subsequent
        to the year ended December 31, 2004 the Company made the following
        acquisitions:
 
 Santa
        Fe Mining, S.A .
 
 Subsequent
        to December 31, 2004 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.
 
 Ecuador
        Mineral Rights
 
 On
        March
        30, 2005 the Company acquired mineral rights to 5,616 hectares of land in
        Ecuador for $11,000 cash and 200,000 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.
 
 Minera
        Durangoro, Ecuador
 
 In
        2005,
        we owned a majority interest in Minera-Durangoro, S.A., a company incorporated
        in Ecuador. We did not control this investment. In November 2006, the Company
        approved an agreement in principal for the future sale of mineral processing
        plants owned by Minera Durangoro, S.A., of which such plants were previously
        part of the Yellow River Mining Company, owned by Juina in 2004. These plants
        are located in Portovelo, Oro, Ecuador. These plants are currently owned
        by
        Minera Durangoro, S.A., one of our investment assets. We anticipate the
        transaction to close in the second quarter of 2007.
 
 The
        Company has a limited operating history upon which an evaluation of the Company,
        its current business and its prospects can be based. The Company's prospects
        must be considered in light of the risks, uncertainties, expenses and
        difficulties frequently encountered by companies in their early stages of
        development. Such risks include, the company's inability to anticipate and
        adapt
        to a developing market, the failure of the company's infrastructure, changes
        in
        laws that adversely affect the company's business, the ability of the Company
        to
        manage its operations, including the amount and timing of capital expenditures
        and other costs relating to the expansion of the company's operations, the
        introduction and development of different or more extensive communities by
        direct and indirect competitors of the Company, including those with greater
        financial, technical and marketing resources, the inability of the Company
        to
        attract, retain and motivate qualified personnel and general economic
        conditions.
 
 The
        Company reclassified 2003 operating expenses as expenses from discontinued
        operations associated with Barrington Foods, Inc. During the period from
        December 8, 2000 (date of inception) through December 31, 2003, the Company
        engaged in limited operations other than organization activities and research
        and development. In 2004, the Company had revenues from consulting fees of
        $108,000. For the year ended December 31, 2004, the company incurred a loss
        in
        the amount of $5,226,338 compared to a loss of $2,198,026 in the previous
        year.
        Most of the expenses incurred both years were for office and administrative
        and
        consulting fees provided to the
  16
 ***Table
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  Company
        for the purpose of increasing the Company’s business presence and efforts to
        develop, and later in 2004 to implement, its business plan. For the 2004
        fiscal
        year, the Company expended $96,386 for office and administration costs,
        $3,835,840 for professional and consulting costs, which includes $960,132
        paid
        out in stock based compensation to our consultants and other outside
        professionals. We also paid out $531,781 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 $63,836 (which is included
        above)
        and is obligated to pay $62,112 for 2005 and 2006 ($5,176/mo.). 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, 2004, cash received
        from
        the sale of our stock was $3,310,331 and we had an increase in borrowings
        of
        $1,589,947.
 
 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.
 
 (ii)
        RESULTS OF OPERATIONS
 
 The
        Company has earned no significant revenue or profits to date, and even though
        mining operations began during 2004 the Company anticipates that it will
        continue to incur net losses for the foreseeable future. The Company incurred
        a
        net loss of $5,226,338 for the year ended December 31, 2004, as compared
        to a
        net loss of $2,198,026 for 2003. From the date of inception February 4, 1999,
        to
        December 31, 2004, the Company lost a total of $20,242,822. Most labor and
        services have been compensated with issuances of stock or cash payment has
        been
        deferred.
 
 Liquidity
        and Capital Resources
 
 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, 2004, the Company had a working capital
        deficit of $1,449,271 compared to a working capital deficit of $1,212,934
        as
        December 31, 2003.
 
 For
        the
        most recent fiscal year, 2004, the Company incurred a loss in the amount
        of
        $5,226,338 and $2,198,026 for 2003. 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.
 
 During
        the period from February 4, 1999 (date of inception) through December 31,
        2004,
        the Company has incurred an accumulated net loss of $20,242,822 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.
 
 In
        2004 a
        substantial investment in capital equipment was made, both in the Yellow
        River
        Mining Co. assets (initially held by Juina Mining Co) which were sold to
        Nevada
        Minerals, Inc., a related party, and in the development of Santa Fe Mining,
        S.A.’s Buza, El Oro, Ecuador processing plant.
  17
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 As
        shown
        in the accompanying financial statements, the Company had revenue of $108,000
        from operations in 2004. 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, 2004, 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 2004 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,
        2004,
        the company was authorized to issue 100 million shares of common stock. In
        2005
        the authorized common stock in the company was increased to 200 million
        shares.
  18
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 **ITEM
        7.   FINANCIALSTATEMENTS.**
  **U.S.
          CANADIAN MINERALS, INC.**
  **TABLE
          OF CONTENTS**
 
 **DECEMBER
          31, 2004**
 
 
 **Page**Report
                    of Independent Registered Public Accounting
                    Firm
                F-1Balance
                    Sheet as of December 31, 2004
                F-2Statements
                    of Operations for the years ended December 31,
                    2004 and 2003
                F-3Statements
                    of Stockholders’ Equity for years ended December
                    31, 2004 and 2003
                F-4Statements
                    of Cash Flows for the years ended December 31,
                    2004 and 2003
                F-5Notes
                    to Financial Statements
                F-6
                    to F-21
 
  19
 ***Table
              of Contents***
  **REPORTOF
          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.
 
 Ronald
          N.
          Silberstein, CPA, PLLC
 Farmington
          Hills, Michigan
 June
          23,
          2006
 
  F
            -
            1
 ***Table
            of Contents***
 **U.S.
        Canadian Minerals, Inc.**
 **Balance
        Sheet**
 **as
        of 12/31/2004**
  **Assets**Current
                  AssetsCash
                  and Cash Equivalents
              
              $
              201,210Property
                  and Equipment, Net
              
              
              1,769,511Other
                  AssetsNote
                  Receivable - Related Party
              
              
              145,000Investments
              
              
              1,517,163Office
                  Rent Deposit
              
              
              5,227Total
                  Other Assets
              
              
              1,667,390Total
                  Assets
              
              $
              3,638,111**Liabilities
                  and Stockholders' Equity**LiabilitiesCurrent
                  LiabilitiesAccounts
                  Payable
              
              $
              42,168Accrued
                  Expenses and Taxes
              
              
              119,018Due
                  to Related Parties
              
              
              380,952Due
                  to Unrelated Parties
              
              
              133,026Net
                  Liabilities of Discontinued Operations
              
              
              975,317Total
                  Current Liabilities
              
              
              1,650,481Due
                  to Related Parties - Long-Term
              
              
              500,000Total
                  Liabilities
              
              
              2,150,481Stockholders'
                  EquityPreferred
                  Stock -Series A; $.001 par value; 1,000,000 shares
                  authorized527,450
                  shares issued and outstanding
              
              
              528Common
                  stock $.001 par value, 200,000,000 shares authorized, 68,405,282shares
                  issued and outstanding
              
              
              68,405Treasury
                  Stock
              
              
              1,000Additional
                  Paid-In Capital
              
              
              21,660,519Accumulated
                  Deficit
              
              
              (20,242,822
              )Total
                  Stockholders' Equity
              
              
              1,487,630Total
                  Liabilities and Stockholders' Equity
              
              $
              3,638,111
 See
        Accompanying Notes to Financial Statements
 F
            -
            2
 ***Table
            of Contents***
 **U.S.
          Canadian Minerals, Inc.**
 **Statements
          of Operations**
 **For
          the Years Ended December 31, 2004 and 2003**
  **Year
                    Ended December 31,****2004**
                
                **2003****(Restated)**Revenues
                
                $
                108,000
                
                $
                0General
                    and Administrative Costs
                
                
                5,307,285
                
                
                0Net
                    Loss from Operations
                
                
                (5,199,285
                )
                
                0Other
                    Income (Expense)
                
                
                (83,119
                )
                
                0Loss
                    from Continuing Operations
                
                
                (5,282,404
                )
                
                0Gain
                    (Loss) from Discontinued Operations
                
                
                56,066
                
                
                (2,198,026
                )Net
                    Loss Before Income Taxes
                
                
                (5,226,338
                )
                
                (2,198,026
                )Provision
                    for Federal Corporate Income Taxes
                
                
                0
                
                
                0Net
                    Loss
                
                $
                (5,226,338
                )
                $
                (2,198,026
                )Basic
                    and Diluted Loss per Common Share:Continuing
                    Operations
                
                $
                (0.16
                )
                $
                0.00Discontinued
                    Operations
                
                $
                (0.00
                )
                $
                (0.06
                )Net
                
                $
                (0.16
                )
                $
                (0.06
                )Weighted
                    Average Common Shares Outstanding
                
                
                32,532,920
                
                
                42,768,889
 See
          Accompanying Notes to Financial Statements
  F
            -
            3
 ***Table
            of Contents***




**** **U.S.
        Canadian Minerals, Inc.**
 **Statements
        of Stockholders' Equity**
 **For
        the Years Ended December 31, 2004 and 2003**





Preferred
                A
            
            Preferred
            
            Preferred
                B
            
            Preferred
            
            Common
            
            Common
            
            Additional
            
            Other
            
            
            
            TotalSeries
            
            "A"Series
            
            Series
            
            "B"Series
            
            Stock
            
            Stock
            
            Paid
                In
            
            Receivables
            
            Accumulated
            
            Shareholders'Shares
            
            Amount
            
            Shares
            
            Amount
            
            Shares
            
            Amount
            
            Capital
            
            or
                Treasury
            
            Deficit
            
            EquityStock
            
            
            
            (Deficit)Balance
                at January 1, 2003 (as adjusted to account for stock
                splits)
            
            
            289,500
            
            $
            290
            
            
            140,000
            
            $
            140
            
            
            477,185
            
            $
            477
            
            $
            11,749,143
            
            
            ($2,750
            )
            
            ($12,818,458
            )
            
            ($1,071,158
            )Issuance
                of Preferred A series stock for services at $7
            
            
            240,000
            
            
            240
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            559,760
            
            
            
            
            
            
            
            
            560,000Issuance
                  of common shares for cash, weighted averageprice of $0.02
                per share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            183,772
            
            
            184
            
            
            166,334
            
            
            
            
            
            
            
            
            166,518Issuance
                  of common stock in satisfaction of Companyliabilities,
                weighted average prices of $0.02
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            15,600
            
            
            16
            
            
            12,984
            
            
            
            
            
            
            
            
            13,000Issuance
                  of common stock for related interest on notespayable,
                weighted average price $0.06
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            80,922
            
            
            81
            
            
            216,824
            
            
            
            
            
            
            
            
            216,905Issuance
                  of common stock for services, weightedaverage price of
                $0.07
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            424,369
            
            
            424
            
            
            1,102,942
            
            
            
            
            
            
            
            
            1,103,366Conversion
                of preferred series "A" shares into common stock
            
            
            (192,000
            )
            
            (192
            )
            
            
            
            
            
            
            
            153,600
            
            
            154
            
            
            38
            
            
            
            
            
            
            
            
            (0
            )Bad
                debt related to other receivable
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,750
            
            
            
            
            
            2,750Net
                loss for the year ended December 31, 2003
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,198,026
            )
            
            (2,198,026
            )Balance
                at January 1, 2004 (as adjusted to account for stock
                splits)
            
            
            337,500
            
            $
            338
            
            
            140,000
            
            $
            140
            
            
            1,335,448
            
            $
            1,335
            
            $
            13,808,025
            
            $
            0
            
            
            ($15,016,484
            )
            
            ($1,206,646
            )Cancellation
                of preferred shares
            
            
            
            
            
            
            
            
            (140,000
            )
            
            (140
            )
            
            
            
            
            
            
            
            140
            
            
            
            
            
            
            
            
            0Issuance
                of preferred shares for services rendered - Rendal Williams
                $1.51@
            
            
            114,000
            
            
            114
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            57,342
            
            
            
            
            
            
            
            
            57,456Issuance
                of common shares to Mpower, Michael Kauffman, Pres. $1.51
                @
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            300,000
            
            
            300
            
            
            150,700
            
            
            
            
            
            
            
            
            151,000Issuance
                of common shares to Rendal Williams, CEO, $1.51 @
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            492,520
            
            
            493
            
            
            247,408
            
            
            
            
            
            
            
            
            247,901Issuance
                of preferred shares to IB 2000 for repayment of debt of
                $156,416
            
            
            30,000
            
            
            30
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (156,446
            )
            
            
            
            
            
            
            
            (156,416
            )**The
                company approved a 125:1 reverse split of its common
                shares**Issuance
                  of common shares for acquisition of mineral rights
                  inSaskatchewan, Canada from Nevada Minerals, Inc, a
                related
                party
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            15,000,000
            
            
            15,000
            
            
            112,000
            
            
            
            
            
            
            
            
            127,000Issuance
                of common shares for conversion of preferred shares
            
            
            (138,000
            )
            
            (138
            )
            
            
            
            
            
            
            
            1,380,000
            
            
            1,380
            
            
            (1,242
            )
            
            
            
            
            
            
            
            0Issuance
                of common shares for rounding
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            39
            
            
            0Issuance
                of common shares for conversion of preferred shares -IB
                2000
            
            
            (30,000
            )
            
            (30
            )
            
            
            
            
            
            
            
            3,000,000
            
            
            3,000
            
            
            (2,970
            )
            
            
            
            
            
            
            
            0Issuance
                of common shares for rounding
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            36
            
            
            0
            
            
            0
            
            
            
            
            
            
            
            
            0Issuance
                of common shares for services rendered
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            12,900
            
            
            13
            
            
            0
            
            
            
            
            
            
            
            
            13Issuance
                of common shares for conversion of preferred shares
            
            
            (150
            )
            
            (0
            )
            
            
            
            
            
            
            
            15,000
            
            
            15
            
            
            (15
            )
            
            
            
            
            
            
            
            0Issuance
                of common shares for services rendered $1.51 @
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            15,000
            
            
            15
            
            
            7,535
            
            
            
            
            
            
            
            
            7,550Issuance
                of common shares for acquisition of an asset - Juina Mining
                Co.
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,212,420
            
            
            1,212
            
            
            149,788
            
            
            
            
            
            
            
            
            151,000Issuance
                of common shares for services rendered - Stevenson Mgmt
                $1.51@
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            30,000
            
            
            30
            
            
            15,070
            
            
            
            
            
            
            
            
            15,100Issuance
                of common shares for services rendered - T. Mercer, Director
                $1.51@
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            450,000
            
            
            450
            
            
            226,050
            
            
            
            
            
            
            
            
            226,500Issuance
                of common shares - acquisition of interest in NV Magnetics,
                Inc.
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            150,000
            
            
            150
            
            
            218,600
            
            
            
            
            
            
            
            
            218,750Issuance
                of common shares - acquisition of interest in El Capitan
                Metals
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,160,000
            
            
            2,160
            
            
            1,659,093
            
            
            
            
            
            
            
            
            1,661,253Issuance
                of warrants to El Capitan to purchase stock at $5 per
                share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            107,000
            
            
            1000
            
            
            
            
            
            108,000Issuance
                of common shares for consulting services rendered $1.51 @
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            60,000
            
            
            60
            
            
            30,140
            
            
            
            
            
            
            
            
            30,200Issuance
                of common shares - acquisition of interest in CMKXtreme
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            600,000
            
            
            600
            
            
            (600
            )
            
            
            
            
            
            
            
            0Issuance
                of common shares for cash -Casavant family member @$5
                share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,800,000
            
            
            1,800
            
            
            2,998,200
            
            
            
            
            
            
            
            
            3,000,000Issuance
                of common shares for acquisition of asset -CMKM Diamonds
                Inc
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            22,500,000
            
            
            22,500
            
            
            (22,500
            )
            
            
            
            
            
            
            
            0Issuance of preferred shares for acquisition of
                  additional
                  mineral rights inSaskatchewan, Canada from Nevada Minerals, Inc, a
                related party
            
            
            300,000
            
            
            300
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (300
            )
            
            
            
            
            
            
            
            0Issuance
                of common shares for conversion of preferred shares
            
            
            (13,500
            )
            
            (14
            )
            
            
            
            
            
            
            
            1,350,000
            
            
            1,350
            
            
            (1,337
            )
            
            
            
            
            
            
            
            0Issuance
                of common shares for services rendered @1.40
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            60,000
            
            
            60
            
            
            27,940
            
            
            
            
            
            
            
            
            28,000Issuance
                  of common shares for acquisition of an asset - Langley Park Investment
                  Trust, Mutual Fund, AMI London Exchange
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            5,142,000
            
            
            5,142
            
            
            744,271
            
            
            
            
            
            
            
            
            749,413Issuance
                of common shares for services rendered @ 1.40 per share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            30,000
            
            
            30
            
            
            41,970
            
            
            
            
            
            
            
            
            42,000Issuance
                of common shares for services rendered - A. Daryll Pryor
                @1.40
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            300,000
            
            
            300
            
            
            419,700
            
            
            
            
            
            
            
            
            420,000Issuance
                of common shares for cash -Casavant family member @$5
                share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,800,000
            
            
            1,800
            
            
            2,998,200
            
            
            
            
            
            
            
            
            3,000,000Issuance
                of common shares for cash -Casavant family member @$5
                share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,800,000
            
            
            1,800
            
            
            2,998,200
            
            
            
            
            
            
            
            
            3,000,000Issuance
                of common shares for cash -Casavant family member @$5
                share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,800,000
            
            
            1,800
            
            
            2,998,200
            
            
            
            
            
            
            
            
            3,000,000Issuance
                of common shares for cash -Casavant family member @$5
                share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,800,000
            
            
            1,800
            
            
            2,998,200
            
            
            
            
            
            
            
            
            3,000,000Issuance
                of common shares for rounding - CMKM Diamonds, Inc.
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            89,001
            
            
            89
            
            
            148,246
            
            
            
            
            
            
            
            
            148,335Issuance
                of common shares for cash @ 2.05 per share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            257,100
            
            
            257
            
            
            175,428
            
            
            
            
            
            
            
            
            175,685Issuance
                of common shares for conversion of preferred shares NV
                Minerals
            
            
            (53,400
            )
            
            (53
            )
            
            
            
            
            
            
            
            5,340,000
            
            
            5,340
            
            
            (5,287
            )
            
            
            
            
            
            
            
            0Issuance
                of common shares for conversion of preferred
                shares-Woodward
            
            
            (9,000
            )
            
            (9
            )
            
            
            
            
            
            
            
            900,000
            
            
            900
            
            
            (891
            )
            
            
            
            
            
            
            
            0Cancellation
                of common shares
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (94,500
            )
            
            (95
            )
            
            95
            
            
            
            
            
            
            
            
            0Issuance
                of shares - rounding to reconcile to transfer agent records
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            120
            
            
            0
            
            
            240
            
            
            
            
            
            
            
            
            240**1:3
                forward stock split of its common and PF Series A
                shares**Issuance
                of shares for exercise of stock warrants exchanged @ $5.00
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            20,000
            
            
            20
            
            
            99,980
            
            
            
            
            
            
            
            
            100,000Cancellation
                of common shares issued to NV Minerals, Inc.
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (4,806,000
            )
            
            (4,806
            )
            
            4,806
            
            
            
            
            
            
            
            
            0Issuance
                of common shares for services rendered - Trigon Geoservices
                Ltd.
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            179,091
            
            
            179
            
            
            417,103
            
            
            
            
            
            
            
            
            417,282Issuance
                of common shares for services rendered - NV Minerals, Inc.
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            921,000
            
            
            921
            
            
            (921
            )
            
            
            
            
            
            
            
            0Issuance
                of common shares for rounding @1.97
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            399
            
            
            0
            
            
            798
            
            
            
            
            
            
            
            
            798Issuance
                of common shares for cash @1.97
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            408
            
            
            0
            
            
            816
            
            
            
            
            
            
            
            
            816Issuance
                of common shares for repayment of debt @ $1.97
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            3,300
            
            
            3
            
            
            6,498
            
            
            
            
            
            
            
            
            6,501Barrington
                Foods, Inc. (see issuance of PF Series A listed above)
            
            
            (10,000
            )
            
            (10
            )
            
            
            
            
            
            
            
            1,000,000
            
            
            1,000
            
            
            (990
            )
            
            
            
            
            
            
            
            0Issuance
                  of common shares for conversion of preferred shares relating toAdjustment
                to Paid in Capital to account for price-adjusted
                investments
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (12,013,689
            )
            
            
            
            
            
            
            
            (12,013,689
            )Net
                loss for the year ended December 31, 2004
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (5,226,338
            )
            
            (5,226,338
            )Balance
                at December 31, 2004 (as adjusted to account for stock
                splits)
            
            
            527,450
            
            $
            528
            
            
            0
            
            
            0
            
            
            68,405,282
            
            $
            68,405
            
            $
            21,660,595
            
            $
            1,000
            
            
            ($20,242,822
            )
            $
            1,487,706


See
        Accompanying Notes to Financial Statements


F
          -
          4
 ***Table
          of Contents***


**U.S.
        Canadian Minerals, Inc.**
 **Statements
        of Cash Flows** **For
          the Years Ended December 31, 2004 and 2003**
  **Year
                  Ended December 31,****2004**
              
              **2003****(Restated)****Cash
                  Flows from Operating Activities**Net
                  Income (Loss)
              
              
              ($5,226,338
              )
              
              ($2,198,026
              )Less:
                  Income (Loss) from Discontinued Operations
              
              
              56,066
              
              
              (2,198,026
              )Income
                  (Loss) from Continuing Operations
              
              
              (5,282,404
              )
              
              0Adjustments
                  to Reconcile Net Loss toNet
                  Cash Used by Operating Activities:Stock
                  Based Compensation
              
              
              531,781Depreciation
              
              
              4,459Stocks
                  and Warrants Issued for Services
              
              
              960,132Changes
                  in Operating Assets and LiabilitiesIncrease
                  in Accounts Receivable
              
              
              (145,000
              )Increase
                  in Office Rent Deposit
              
              
              (5,227
              )Increase
                  in Accounts Payable
              
              
              42,168Increase
                  in Accrued Expenses and Taxes
              
              
              63,670Accrued
                  Interest
              
              
              55,348Total
                  Adjustments
              
              
              1,507,331
              
              
              0Net
                  Cash (Used in ) Continuing Operating Activities
              
              
              (3,775,073
              )Net
                  Cash Flows from Discontinued Operations
              
              
              (237,759
              )
              
              283,269Net
                  Cash Provided by (Used in) Operating Activities
              
              
              (4,012,832
              )
              
              283,269**Cash
                  Flows from Investing Activities:**Additions
                  to Property and Equipment
              
              
              (1,769,511
              )Additions
                  to Investment Assets
              
              
              (1,517,163
              )Loans
                  to Unrelated Parties
              
              
              (133,026
              )Loans
                  to Related Parties
              
              
              (380,952
              )Net
                  Cash (Used in) Investing Activities
              
              
              (3,800,652
              )
              
              0**Cash
                  Flows from Financing Activities:******Proceeds
                  from the****Issuance
                  of Common Shares
              
              
              3,310,331Net
                  Increase in Borrowings
              
              
              1,589,947Common
                  and Preferred Stock Issued to Acquire Assets
              
              
              3,115,416Purchase
                  of Treasury Stock
              
              
              (1,000
              )Net
                  Cash Provided by Continuing Financing Activities
              
              
              8,014,694
              
              
              0Net
                  Financing Cash Flow from Discontinued Operations
              
              
              0
              
              
              (285,630
              )Net
                  Cash Provided by (Used In) Financing Activities
              
              
              8,014,694
              
              
              (285,630
              )Net
                  Increase (Decrease) in Cash and Equivalents
              
              
              201,210
              
              
              (2,361
              )Cash
                  and Equivalents - Beginning of Year
              
              
              142
              
              
              2,503Cash
                  and Equivalents - End of Year
              
              $
              201,210
              
              $
              142Supplemental
                  Cash Flow Information:Cash
                  Paid for Interest
              
              $
              0
              
              $
              0Cash
                  Paid for Income Taxes
              
              $
              0
              
              $
              0




See
        Accompanying Notes to Financial Statements


F
          -
          5
 ***Table
          of Contents***


**U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 
 
 1.NATURE
        OF
        OPERATIONS AND BASIS OF PRESENTATION
 
 ORGANIZATION:
        U.S. Canadian Minerals, Inc. (hereinafter referred to as the "Company") was
        a
        development stage company in accordance with Statement of Financial Accounting
        Standards No. 7 until December 31, 2003, with its main focus on the manufacture
        and distribution of food products, and it was known as Barrington Foods
        International, Inc. (“BFI”). In January 2004, the Company changed its business
        focus to the mining industry and acquiring existing mining business operations
        and assets. On January 2, 2004, the Company changed its name to U.S. Canadian
        Minerals, Inc. and is no longer a development stage company.
 
 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 and are not aggregated with the net loss from operations
        of U.S. Canadian Minerals, Inc.
 
 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.
  F
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            6
 ***Table
            of Contents***
 
 **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 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. Therefore, the Company is no longer
        considered to be in the development stage. 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. Certain mineral rights and investments that were acquired during
        2004 have been determined to have been valued at amounts higher than they
        should
        have been, and the corrected acquisition values are reflected in these financial
        statements. We have no subsidiaries although we have majority ownership of
        some
        of our investment assets, as we do not have control of the investment
        assets.
 
 The
        financial statements reflect a restatement of the financial statement for
        calendar year end 2003. Such restatement reflects the treatment of all
        activities of Barrington Foods, Inc. as being associated with activities
        from
        discontinued operations at January 1, 2004.
 
 2.SIGNIFICANT
        ACCOUNTING POLICIES
 
 This
        summary of significant accounting policies of the Company is presented to
        assist
        in understanding the company’s financial statements. The financial statements
        and notes are representations of the company’s management, who is responsible
        for their integrity and objectivity. These accounting policies conform to
        generally accepted accounting principles and have been consistently applied
        to
        the preparation of the financial statements. The Company will adopt accounting
        policies and procedures based upon the nature of future
        transactions.
 
 a) Organization and Start Up costs
 
 Costs
        of
        start up activities, including organization costs, are expensed as
        incurred.
 
 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.
  F
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            7
 ***Table
            of Contents***
  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 c) 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.
 
 d) 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 period. Actual results
        could differ from those estimates.
 
 e) Loss Per
        Share
 
 In
        accordance with SFAS No. 128 - “Earnings Per Share”, the basic loss per common
        share is computed by dividing net loss available to common stockholders by
        the
        weighted average number of common shares outstanding. Diluted loss per common
        share is computed similar to basic loss per common share except that the
        denominator is increased to include the number of additional common shares
        that
        would have been outstanding if the potential common shares had been issued
        and
        if the additional common shares were dilutional. At December 31, 2004 the
        Company’s stock equivalents were anti-dilutional and therefore excluded in the
        net loss per share computation.
 
 f) Income
        Taxes
 
 The
        Company accounts for its income taxes in accordance with Statement of Financial
        Accounting Standards No. 109. Deferred tax assets and liabilities at the
        end of
        each period are determined using the tax rate expected to be in effect when
        the
        taxes are actually paid or recovered. Deferred tax assets are reduced by
        a
        valuation allowance when, based upon management’s estimates, it is more likely
        than not that a portion of the deferred tax assets will not be realized in
        a
        future period.
  F
            -
            8
 ***Table
            of Contents***
  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 h) Financial Instruments
 
 i.
        Fair
        values
 
 The
        Company considers cash on hand, cash in banks, certificates of deposit, time
        deposits, and U.S. government and other short-term securities with maturities
        of
        three months or less when purchased as cash and cash equivalents. The carrying
        value of cash, accounts receivable, accounts payable and accrued liabilities
        and
        convertible debentures, promissory notes and loans payable approximate their
        fair value because of the short maturity of these financial instruments.
        The
        Company reviews its long-lived assets for impairment when events or changes
        in
        circumstances indicate that the book value of an asset may not be recoverable.
        The Company evaluates, at each balance sheet date, whether events and
        circumstances have occurred which indicate possible impairment. The Company
        uses
        various methods, including outside appraisals and estimates of future
        undiscounted net cash flows of the related asset or group of assets over
        the
        estimated remaining life, in measuring whether the assets are recoverable.
 
 Significant
        Noncash Operating, Investing and Financing Activities
 
 In
        2004
        we issued common and preferred shares in the amount of $1,491,913 as
        compensation to outside consultants as well as to our officers and directors.
        This is made up of 114,000 preferred shares and 942,520 common shares (reported
        on a post-split basis). During this period we also increased our operating
        assets by the net amount of $10,959. In 2004, we recorded a net reduction
        in our
        property, equipment and investment assets in the amount of $3,286,674. This
        amount does not include adjustments to purchase prices recorded with regard
        to
        our various investments in mineral rights. During this period we also issued
        common and preferred shares in relation to the acquisition of assets the
        amount
        of $3,115,416. This is made up of 300,000 preferred shares and 41,378,420
        common
        shares (reported on a post-split basis). We also incurred debt of $1,589,947
        in
        relation to the acquisition of assets.
 
 ii
        Interest rate risk
 
 The
        Company is not exposed to significant interest rate risk due to the short
        term
        maturity of its monetary current assets and liabilities.
  F
            -
            9
 ***Table
            of Contents***
  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 iii
        Credit risk
 
 The
        Company is exposed to credit risk with respect to its accounts receivable.
        The
        Company follows a program of credit evaluations of customers and limits the
        amount of credit extended when deemed necessary. The Company maintains
        provisions for potential credit losses and any such losses to date have been
        within management’s expectations.
 
 i) Issued
        Shares
 
 All
        share
        and per share amounts have been restated to reflect the 10-to-1 stock split
        in
        August 2001, 1-for-10 reverse stock split in December 2001, a 1-for-100 reverse
        stock split in December 2003, the 1-for-125 reverse stock split in January
        2004
        and the 3:1 forward stock split in October 2004.
 
 j)  Long-Lived
        Assets
 
 The
        Company assesses the impairment of its intangible assets that have a defined
        life and other long-lived assets in accordance with Statement of Financial
        Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or
        Disposal of Long-Lived Assets” (“SFAS 144”). Pursuant to SFAS 144, the Company
        identifies and records impairment losses, as circumstances dictate, on
        long-lived assets used in operations when events and circumstances indicate
        that
        the assets might be impaired and the discounted cash flows estimated to be
        generated by those assets are less than the carrying amounts of those assets.
        In
        the event that assets are found to be carried at amounts which are in excess
        of
        estimated future cash flows or appraised values, the assets will be adjusted
        for
        impairment to a level commensurate with the estimated net recoverable amount.
 
 k) Property
        and Equipment
 
 The
        Company has a nominal amount of computer equipment and office furniture at
        December 31, 2004. The Company accounts for property and equipment at cost.
        Depreciation for financial reporting is provided over the estimated useful
        life
        of the assets by use of the straight line depreciation method, and accelerated
        methods are used for income tax reporting. Depreciation expense for the year
        ended December 31, 2004 totaled $4,459.
  F
            -
            10
 ***Table
            of Contents***
  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 During
        2004, mineral rights were acquired. It has been determined that the original
        values we put on the assets acquired were incorrect and that these assets
        were,
        in most cases, worth less than what we had thought. The reduced values are
        reflected in these financial statements and, since we had issued shares of
        common stock in exchange for the mineral rights, we have adjusted additional
        paid-in capital to reflect the reduced values.
 
 Property
        and equipment at December 31, 2004 was as follows:
 
 December
                  31, 2004Equipment
              
              $
              16,112Office
                  Furniture
              
              
              3,089Land
                  Improvements
              
              
              14,253Mineral
                  Rights
              
              
              1,747,251Less:
                  Accumulated Depreciation
              
              
              (11,194
              )Net
                  Property and Equipment
              
              $
              1,769,511
 
 **l)** Recent
        Accounting Pronouncements
 
 i.
        Effective for the reporting periods after December 15, 2005, Companies are
        required to account for the issuance of share-based payments in accordance
        with
        Statement of Financial Standard No. 123R. This Statement supersedes APB Opinion
        No. 25, Accounting for Stock Issued to Employees. SFAS 123R requires companies
        to value issuance of common stock, stock options and stock warrants at 'fair
        value' upon the completion of services rendered. For public companies, this
        fair
        value is arrived at by using an 'econometric model' to take into consideration
        variability of stock price, tax-free interest rate and time-value of money.
        The
        Company has not elected to retroactively apply such accounting principle
        to the
        2004 reporting period. The Company will conform with SFAS 123R in future
        reporting reports.
 
 ii
        FIN
        46(R), Consolidation of Variable Interest Entities, applies at different
        dates
        to different types of enterprises and entities, and special provisions apply
        to
        enterprises that have fully or partially applied Interpretation 46 prior
        to
        issuance of Interpretation 46(R). Application of Interpretation 46 or
        Interpretation 46(R) is required in financial statements of public
  F
            -
            11
 ***Table
            of Contents***
  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 entities
        that have interests in variable interest entities or potential variable interest
        entities commonly referred to as special-purpose entities for periods ending
        after December 15, 2003. Application by public entities (other than small
        business issuers) for all other types of entities is required in financial
        statements for periods ending after March 15, 2004. Application by small
        business issuers to entities other than special-purpose entities and by
        non-public entities is required at various dates in 2004 and 2005. There
        is no
        impact on the Company’s financial statements.
 
 iii.
        In
        December 2004, the FASB issued SFAS Statement No. 153, “Exchanges of Non
        monetary Assets.” The statement is an amendment of APB Opinion No. 29 to
        eliminate the exception for non monetary exchanges of similar productive
        assets
        and replaces it with a general exception for exchanges of non monetary assets
        that do not have commercial substance. The adoption of this standard did
        not
        have a material impact on its financial statements.
 
 iv.
        In
        March 2005, the FASB issued SFAS Interpretation (“FIN”) No. 47, “Accounting for
        Conditional Asset Retirement Obligations.” FIN 47 clarifies that the term
“Conditional Asset Retirement Obligation” as used in FASB Statement No. 143,
“Accounting for Asset Retirement Obligation,” refers to a legal obligation to
        perform an asset retirement activity in which the timing and/or method of
        settlement are conditional on a future event that may or may not be within
        the
        control of the entity. Accordingly, an entity is required to recognize a
        liability for the fair value of a Conditional Asset Retirement Obligation
        if the
        fair value of the liability can be reasonably estimated. FIN 47 is effective
        no
        later than the end of fiscal years ending after December 15, 2005. The adoption
        of FIN 47 does not have a material affect on the Company’s financial position,
        results of operations or cash flows.
 
 v.
        In May
        2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections
        (“SFAS No. 154”), which replaced Accounting Principles Board Opinion No. 20,
        Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim
        Financial Statements. SFAS No. 154 changes the requirements for the accounting
        for and reporting of a change in accounting principles. It requires
        retrospective application to prior periods’ financial statements of changes in
        accounting principles, unless it is impracticable to determine either the
        period-specific effects or the cumulative effect of the change. This statement
        is effective for accounting changes and corrections of errors made in fiscal
        years beginning after December 15, 2005.  The impact on the Company’s
        operations will depend on future accounting pronouncements or changes in
        accounting principles.
  F
            -
            12
 ***Table
            of Contents***
 
 **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 vi. In
        July
        2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
        Income Taxes - an Interpretation of FASB Statement No. 109” (“FIN 48”), which
        clarifies the accounting and disclosure for uncertain tax positions, as defined.
        FIN 48 seeks to reduce the diversity in practice associated with certain
        aspects
        of the recognition and measurement related to accounting for income taxes.
        This
        interpretation is effective for fiscal years beginning after December 15,
        2006.
        The Company is assessing FIN 48 and has not yet determined the impact that
        the
        adoption of FIN 48 will have on its consolidated results of operations or
        financial condition.
 
 vii.
        In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring
        fair value, and expands disclosure requirements regarding fair value
        measurement. Where applicable, this statement simplifies and codifies fair
        value
        related guidance previously issued within United States of America generally
        accepted accounting principles. SFAS 157 is effective for financial statements
        issued for fiscal years beginning after November 15, 2007, and interim periods
        within those fiscal years. The Company will adopt this pronouncement effective
        January 1, 2008 and does not anticipate any material impact on its financial
        condition or results of operations due to the adoption of SFAS No.
        157.
 
  F
            -
            13
 ***Table
            of Contents***
  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 **3.**  **NOTES
        PAYABLE- CURRENT LIABILITIES TO RELATED PARTIES**
  As
        of
        December 31, 2004, notes payable to related parties are comprised of amounts
        due
        to various officers, directors and shareholders to which are unsecured,
        non-interest bearing, and due on demand, as follows:
 
 Principal
                  Balance Due at December 31, 2004
              
              Due
                  Date
              
              Interest
                  RateLiabilities
                  associated with discontinued operations of Barrington Foods at
                  December
                  31, 2003
              
              $
              348,927
              
              
              Past
                  due and unpaid
              
              
              7
              %Rendal
                  Williams, the Company’s former CEO, Chairman &
Director
              
              
              331,585
              
              
              Credit
                  line; All debt discharged in 2006
              
              
              7
              %Nevada
                  Minerals, Inc., whose sole officer and director is John E. “Ed” Dhonau,
                  majority shareholder of the Company at December 31, 2004
              
              
              235,000
              
              
              June
                  30 2005
              
              
              7
              %IB
                  2000, a consultants to the company and owned by John E. “Ed”
                  Dhonau
              
              
              64,253
              
              
              April
                  12, 2005
              
              
              0%
                  first year; 7% thereafterMPower,
                  owned by Michael A. Kauffman, former President of Company through
                  January
                  2, 2004
              
              
              33,169
              
              
              Demand
                  Note
              
              
              7
              %Stevenson
                  Management, a consultant and resident agent of the Company
              
              
              25,000
              
              
              Demand
                  note
              
              
              7
              %Michael
                  A. Kaufman
              
              
              13,236
              
              
              Past
                  due; unpaid
              
              
              5
                  to 10
                now
                  at post- judgment rate of 14
              %
                %Richard
                  Tauli, former officer of the Company
              
              
              5,000
              
              
              Demand
                  note
              
              
              7
              %Accrued
                  interest on loans to related parties
              
              
              25,313Total
                  Notes Payable
              
              $
              1,081,483Less:
                  Notes Payable - Discontinued Operations
              
              
              (348,927
              )
              
              See
                  Above
              
              
              See
                  aboveTotal
                  Notes Payable - Continuing Operations
              
              $
              732,556
 
  F
            -
            14
 ***Table
            of Contents***
 
 **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 **4.**  **DUE
        TO RELATED PARTIES - LONG TERM**
  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
        all
        Juina shares owned by the Company. At the date of this report, the Company
        has
        no liability remaining to Juina. See Note 10.
 
 **5.**  **STOCKHOLDERS'
        EQUITY**
 
 COMMON
        STOCK - The Company is authorized to issue 200,000,000 shares of common stock,
        at par value $0.001. Effective January 20, 2004, the Board of Directors of
        the
        Company approved a reverse split of its common shares on the basis of 1:125.
        Effective October 25, 2004, the Board of Directors of the Company approved
        a
        forward split of its common shares on the basis of 3:1.
 
 PREFERRED
        STOCK - SERIES A - The Company is authorized to issue 1,000,000 shares of
        preferred stock, Series A, at par value $0.001 with such terms as determined
        by
        the Board of Directors and the Corporation prior to their issuance. Each
        Series
        A Preferred Share may be converted into one hundred (100) common shares upon
        approval by the Board of Directors of the Corporation. Effective October
        25,
        2004, the Board of Directors of the Company approved a forward split of the
        Preferred Stock Series A on the basis of 3:1.
 
 On
        November 24, 2006, the Company issued 80,000 of Preferred Stock Series A
        shares
        to the Company’s management. See Note 10.
 
 PREFERRED
        STOCK - SERIES B - The Company is authorized to issue 1,000,000 shares of
        Series
        B Preferred stock, at par value of $0.001 with other terms as may be determined
        prior to their issuance by the Board of Directors. Each Series B preferred
        share
        may be converted into two (2) common shares upon approval by the Board of
        Directors. As of December 31, 2004 and as of the date of this report, the
        Company has no issued and outstanding shares of this class.
  F
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            15
 ***Table
            of Contents***
 
 **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 PREFERRED
        STOCK - SERIES C - The Company is authorized to issue 1,000,000 shares of
        Series
        C preferred stock, at par value of $0.001 with other terms as may be determined
        by the Board of Directors prior to their issuance. As of December 31, 2004
        and
        as of the date of this report, the Company has no issued and outstanding
        shares
        of this class.
 
 **6.**  **WRITE-DOWN
        OF PROPERTY ASSETS - MINERAL RIGHTS AND INVESTMENT ASSETS**
 
 During
        2004, the Company determined that the values of many of its properties were
        substantially or materially less than the value that was originally recorded.
        These include the claims in Smeaton, Fort a La Corne, Saskatchewan, Canada,
        investments in mineral rights in Saskatchewan purchase from CMKM Diamonds,
        Inc.,
        investments in Nevada Magnetics and 5616 hectares of mining property in
        Ecuador.
 
 The
        Company recorded a reduction in the purchase price of 100% of the originally
        recorded cost of its investment assets of CMKM Diamonds, Inc. On July 12,
        2005,
        the U.S. SEC issued an order revoking the registration of each class of
        securities of CMKM. Although the Company believes it may have a remaining
        claim
        to some of the assets of CMKM, if any, the Company has insufficient information
        in which to base a recording of any asset relative to this claim.
 
 Due
        to
        the uncertainty of value, lack of liquidity, and the speculative nature of
        the
        venture, the Company’s investment in the Juina Mining Company was written down
        to its estimated fair market price of $151,000.
 
 Due
        to
        the uncertainty of value, liquidity, and the speculative nature of the stock,
        at
        December 31, 2004 all free trading shares held by the Company of Langley
        Park
        PLC (“LPI”), are valued at $749,413. This reflects an impairment of $604,514
        recorded at December 31, 2004. LPI is a mutual fund made up of approximately
        one
        dozen small cap public companies and is traded on the AIM London exchange.
        On
        March 29, 2005, the Company sold 2,231,503 shares and the amount of proceeds
        received by the Company on April 1, 2005, net of sales commissions, was
        $581,228.
 
 Due
        to
        the uncertainty of value, liquidity, and the speculative nature of the stock,
        all shares of Langley Park PLC held by the Company in escrow in the Company’s
        account (which was impounded until Fall, 2006) at Christows stock brokerage
        firm, London, England, should be valued at one pence per share (USD $0.018
        per
        share). 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.
  F
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            of Contents***
 
 **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 **7.**  **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 $6,957,000 at December
        31,
        2004 and will expire in various amounts through the year 2024. 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.
  The
        cumulative tax effect at the expected rate of 34% of significant items
        comprising our net deferred tax amount is as follows:
  2004Deferred
                  tax asset attributable to:Net
                  operating loss
              
              $
              6,883,000Valuation
                  allowance
              
              
              (6,883,000
              )Net
                  deferred tax asset
              
              $
              -0-
 
 **8.
        COMMITMENTS AND CONTINGENCIES**
 
 The
        Company was obligated under an office lease, which was terminated in mid-2006.
        This office was located at 4955 S. Durango, Suite 216, Las Vegas, NV 89113.
        For
        the years ended December 31, 2004 and 2003, rent expense was $63,836 and
        $14,134, respectively. At December 31, 2004 the Company had a rent deposit
        of
        $5,227. The terms of the lease are monthly payment of $5,176 through December
        31, 2006.
  F
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  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 Future
        minimum lease payments required under such operating leases as of December
        31,
        2004, are as follows:
 
 2005
              
              $
              62,1122006
              
              
              62,112$
              124,224
 
 In
        2006,
        the Company has relocated offices and has significantly reduced its office
        rent
        obligations.
 
 **9.**  **RELATED
        PARTY TRANSACTIONS**
 
 On
        July
        18, 2004, the Company signed an Asset Purchase Agreement with CMKM Diamonds,
        Inc. The Company purchased 5% of all current and future mineral claim holdings
        and interests in exchange for 7.5 million shares of common stock of the Company.
        In addition, the Company executed an “Option to Purchase” agreement for $10 and
        acquired an option to purchase up to an additional 10.00% of such interests
        for
        $15,000,000. Such interest may be purchased in up to 10 increments of $1,500,000
        for each 1%. The Company exercised the majority of such options (i.e. 9%
        for
        $13,500,000) as described immediately below. The claims are located mostly
        in
        Saskatchewan, Canada, nearby the claims previously purchased from Nevada
        Minerals, Inc. Upon closer examination subsequent to the dates of acquisition,
        the Company determined that the assets acquired had no value and the asset
        book
        values were retroactively adjusted down to zero.
 
 On
        July
        27, 2004 the Company received $3,000,000 proceeds from Wesley Casavant, a
        relative of Urban and Carolyn Casavant, for 600,000 common shares of the
        Company. On the same date, the Company issued a check for the amount of
        $3,000,000 to CMKM Diamonds, Inc., in which Urban and Carolyn Casavant are
        affiliates. This payment relates to the acquisition of an additional interest
        of
        2% per the Option to Purchase Agreement.
 
 On
        September 7, 2004 the Company issued through a subscription agreement 600,000
        shares of common stock for $3,000,000 from Cindy Dwyer, a relative of Urban
        and
        Carolyn Casavant. On the same date, the Company issued a check for the amount
        of
        $2,500,000 to CMKM Diamonds, Inc. This payment relates to the acquisition
        of an
        additional interest of 1.66% per the Option to Purchase Agreement.
   F
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  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 On
        September 21, 2004 the Company issued through a subscription agreement 1,200,000
        shares of its common stock for $6,000,000 from Urban and Carolyn Casavant,
        affiliates of CMKM Diamonds, Inc. On the same date, the Company issued a
        check
        for the amount of $5,000,000 to CMKM Diamonds, Inc. On September 22, 2004
        the
        Company issued through a subscription agreement 600,000 shares of common
        stock
        at $5 per share for $3,000,000 from Corrine Ward. On the same date, the Company
        issued a check for the amount of $3,000,000 to CMKM Diamonds, Inc. These
        payments relate to the acquisition of an additional interest of 5.34% per
        the
        Option to Purchase Agreement.
 
 **10.**  **SUBSEQUENT
        EVENTS**
 
 In
        2005,
        the Company owned a majority interest in Durangoro, 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 Durangoro. A
        mineral processing plant, known as Durango I, was operated by Durangoro 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 December 31, 2004, these
        processing plants were wholly owned, but not controlled, by the Company,
        and are
        investments rather than subsidiaries.
 
 On
        March
        29, 2005, the Company sold 2,231,503 shares of its investment in Langley
        Park
        PLC and the amount of proceeds received by the Company on April 1, 2005,
        net of
        sales commissions, was $581,228.
 
 On
        April
        14, 2005, the Company acquired mineral rights to 5,616 hectares of land in
        Ecuador. As noted later, in August, 2006, the Company lost such mining claims
        due to non-payment of taxes.
 
 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 Durangoro, S.A. company) retained the
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  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 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. 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.
 
 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.
 
 On
        October 31, 2005, the Company accepted the resignation of Dr. Joseph de
        Beauchamp as President.
 
 On
        November 17, 2005, the Company accepted the resignation of Marti Hansen as
        Chief
        Financial Officer. Ms. Hansen had joined the Company on or about February
        7,
        2005. There were no disagreements with Marti Hansen on any matter of accounting
        principles or practices, and financial statement disclosure.
 
 On
        January 26, 2006, the Company announced the appointment of Adam Jenn as
        President and Director and Frank J. Van der Bok Busboom as Chief Financial
        Officer. Subsequently the Company appointed Mr. Busboom as Secretary and
        Director.
 
 On
        March
        23, 2006, the Company received a “Wells Notice” from the staff of the Securities
        and Exchange Commission (the “SEC”).  The Wells Notice notified the Company
        that the SEC staff was 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. As of the date of this report, the Company reports that there has
        been
        no further enforcement action taken by the U.S. SEC as to such notice.
  F
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  **U.S.
        CANADIAN MINERALS, INC.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2004**
 **(CONTINUED)**
 
 On
        March
        30, 2006, the Company filed a Form 8-K with the U.S. SEC related to the
        unreliability of certain previous SEC filings as described in that current
        report. These reports are Forms 10-QSB for the periods ending March 31, 2004,
        June 30, 2004, and September 30, 2004. As of this date, the Company has not
        yet
        filed amended periodic reports described in the Form 8-K.
 
 At
        April
        21, 2006, the Company owned 2,479,448 Langley Park PLC (“LPI”) shares in escrow.
        Subsequently, in 2006, LPI trust called such shares at this amount. The Company
        no longer owns any shares of LPI trust.
 
 On
        May 4,
        2006, the Company accepted the resignation of Rendal Williams as CEO, Director
        and Chairman of the Board. There were no disagreements with Rendal Williams
        on
        any matter of accounting principles or practices, and financial statement
        disclosure.
 
 In
        August
        of 2006, 5614 hectares of Ecuadorian mining claims was lost due to the Company’s
        failure to pay taxes owed on the property.
 
 On
        November 2, 2006, the company settled pending lawsuits from McFadden and
        Issod
        by agreeing to the transfer of 471,000 shares of Juina owned by U.S. Canadian
        Minerals. The Company has not yet effectuated the terms of the settlement
        agreement as the stock transfer to McFadden and Issod is
        incomplete. The
        Company does not dispute regarding the terms of the settlement agreements.
 
 On
        November 24, 2006, the Company issued 80,000 of Preferred Stock Series A
        shares
        to pay for services rendered. Of this amount 40,000 shares was paid to Maria
        Regina Caeli Management Corp., a Nevada Corporation owned by Mr. Busboom,
        our
        Chief Financial Officer, Secretary and Director. In addition, 40,000 shares
        were
        issued to First Star Strategies, Inc, owned by Mr. Jenn, our President and
        Director.
 
 In
        2006,
        the Company relocated its offices from its former office on Durango Blvd.,
        Las
        Vegas, Nevada. The company has significantly reduced its monthly office expense.
        The Company forfeited its deposit of approximately $5,000 to the Durango
        Blvd.
        landlord at the time the lease was terminated. The Company also
        forfeited its office furniture and small equipment.






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





Effective
      February 28, 2003, the independent accountants who were previously engaged
      as
      the principal accountants to audit the Company's financial statements,
      Stonefield Josephson, Inc., were dismissed. The Board of Directors approved
      this
      dismissal. A prior independent accountant conducted the audit of the Company's
      financial statements for the year ending December 31, 2001. Subsequent to the
      10-K for December 31, 2001 report being filed, an 8-K report was filed wherein
      Stonefield Josephson was designated as the Company's auditor. However,
      Stonefield Josephson never performed any auditing functions for the Company.
      Stonefield Josephson did perform the 10-Q reviews for 2002 Consequently
      Stonefield Josephson never issued an opinion regarding the Company's financial
      condition.





During
      the Company's two most recent fiscal years and any subsequent interim period
      preceding such dismissal, there were no disagreements with the former
      accountants, Stonefield Josephson, on any matter of accounting principles or
      practices, financial statement disclosure, or auditing scope or procedure.
      During the past two years the principal accountant's reports have not contained
      any adverse opinion or disclaimer of opinion, or were modified as to
      uncertainty, audit scope or accounting principles. Since Stonefield Josephson
      never performed any auditing functions, there were no reportable events as
      described in Item 304(a)(1)(iv)(B) 1 through 3 of Regulation S-B that occurred
      within the Registrant's two most recent fiscal years and the subsequent interim
      period preceding the former accountants' dismissal.





Effective
      on February 28, 2003, the firm of L.L. Bradford & Company, LLC was engaged
      to serve as the new principal accountant to audit the Company's financial
      statements. The decision to retain L.L. Bradford & Company, LLC was approved
      by the Board of Directors. During the Company's two most recent fiscal years,
      and the subsequent interim period prior to engaging L.L. Bradford & Company,
      neither the Registrant (nor someone on its behalf) consulted the newly engaged
      accountant regarding any matter. L.L. Bradford & Company was never consulted
      during the two most recent fiscal years and the subsequent interim period prior
      to engagement as auditor for the Company regarding the application of the
      accounting principles to a specific completed or contemplated transaction,
      or
      the type of audit opinion that might be rendered on the Company's financial
      statements and no written or oral advice was provided that was an important
      factor considered by the Company in reaching a decision as to any accounting,
      auditing, or financial reporting issue. L.L. Bradford & Co. was given the
      opportunity to review this disclosure before it was filed and it had no
      disagreement or comment.





Effective
      December 18, 2003, The Board of Directors dismissed L.L. Bradford & Company,
      LLC who were previously engaged as the principal accountants to audit the
      Company's financial statements, and retained as its independent auditor
      Beckstead & Watts, LLP for the fiscal year ended December 31, 2003. The
      Board of Directors and the Company's Audit Committee approved of the dismissal
      of L.L. Bradford and the engagement of Beckstead, as its independent auditor.
      None of the reports of L.L. Bradford on the Company's financial statements
      for
      either of the past two years or subsequent interim period contained an adverse
      opinion or disclaimer of opinion, or was qualified or modified as to
      uncertainty, audit scope or accounting principles.





There
      were no disagreements between the Company and L.L. Bradford on any matter of
      accounting principles or practices, financial statement disclosure, or auditing
      scope or procedure, which, if not resolved to the satisfaction of L.L. Bradford,
      would have caused them to make reference to the subject matter of the
      disagreement in connection with its report. Further, L.L. Bradford has not
      advised the Company that: 1) internal controls





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necessary
      to develop reliable financial statements did not exist; or 2) information has
      come to the attention of L.L. Bradford which made it unwilling to rely upon
      management's representations, or made it unwilling to be associated with the
      financial statements prepared by management; or 3) the scope of the audit should
      be expanded significantly, or information has come to the attention of L.L.
      Bradford that they have concluded will, or if further investigated might,
      materially impact the fairness or reliability of a previously issued audit
      report or the underlying financial statements, or the financial statements
      issued or to be issued covering the fiscal year ended December 31,
      2003.





During
      the Company's two most recent fiscal years or subsequent interim period, the
      Company has not consulted Beckstead regarding the application of accounting
      principles to a specific transaction, either completed or proposed, or the
      type
      of audit opinion that might be rendered on the Company's financial statements,
      nor did Beckstead provide advice to the Company, either written or oral, that
      was an important factor considered by the Registrant in reaching a decision
      as
      to the accounting, auditing or financial reporting issue. Further, during the
      Company's two most recent fiscal years or subsequent interim period, the Company
      has not consulted Beckstead on any matter that was the subject of a disagreement
      or a reportable event.





On
      June
      11, 2004 the Board of Directors of U.S. Canadian Minerals, Inc. dismissed
      Beckstead and Watts, LLP as its independent public accounts.





Beckstead
      and Watts, LLP has been the Company’s certifying accounting for the prior year.
      During the past year, Beckstead and Watts, LLP’s report of the Company’s
      financial statements contained no adverse opinion or disclaimer or opinion,
      nor
      was modified as to uncertainly, audit scope, or accounting principles, except
      for a fourth explanatory paragraph regarding the Company’s ‘ability to continue
      as a going concern.”





The
      Company had no disagreements with Beckstead and Watts, LLP during the past
      year
      and any subsequent interim period preceding the date of dismissal on June 11,
      2004 on any matter of accounting principles or practices, financial statement
      disclosure, or auditing scope or procedure, which disagreements, if not resolved
      to the satisfaction of Beckstead and Watts, LLP, would have caused it to make
      reference to the subject matter of the disagreements in connection with its
      reports.





On
      July
      1, 2004, the Company engaged Child, Sullivan & Company, 1284 W. Flint Meadow
      Drive, Suite D, Kaysville, Utah to be the Company’s outside independent auditor.
      Child, Sullivan & Company were engaged to audit the Company financial
      statements as of and for the six months ended June 30, 2004. Their report
      contained a qualified opinion with respect to the registrant’s ability to
      continue as a going concern.





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.





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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.





**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.





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.
      Silberstein, CPA, PLLC, 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, 2004, 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, 2004, 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.





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**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 61A OF THE EXCHANGE ACT.**





This
      table sets forth the name and position of each director and executive officer
      of
      the Company as at December 31, 2004:





**NAME******
            ******POSITION**John
                S Woodward
            President,
                DirectorJohn
                Woodward is an attorney. He formerly practiced real estate law in
                the
                State of California.Rendal
                Williams
            Chairman
                of the Board, Chief Executive Officer, DirectorMr.
                Williams is an experienced senior management professional in the
                food and
                beverage industry. He has over 18 years experience in marketing,
                sales,
                andexecutive
                management positions.Mark
                Hutchinson
            Mining
                Advisory BoardMr.
                Hutchinson holds a Bachelor of Science degree with honors from the
                University of Edinburgh, and for the previous ten years has been
                studying
                diamonds in the Juina area - studies that formed the basis for his
                Ph.D.
                thesis in 1997.Michael
                A. Kauffman
            former
                Director and President until January 2, 2004.Mr.
                Kauffman was admitted to the bar of the State of New Mexico. His
                professional employment has included work as an Assistant District
                Attorney, Assistant Attorney General, and as a partner for 12 years
                in a
                law firm in Santa Fe, New Mexico. Since 1991 he has worked in businesses
                in which he was a partner or owner, and he was been trained and acted
                as a
                mediator in a variety of cases. He no longer has an active law practice.Thomas
                M. Mercer
            DirectorMr.
                Mercer has significant professional experience as a mechanical engineer
                and is based in Ohio. Immediately before and during his tenure with
                the
                Company, he owned and operated his own businesses.








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**ITEM
      10.   EXECUTIVE
      COMPENSATION.**





Name
            Position
            Annual
                Salary
            Stock
            Bonus
            IncentivesRendal
                Williams (1)
            Chairman/CEO
            $180,000
            None
            (1)
            NoneJohn
                S. Woodward
            President,
                Director
            $180,000
            900,000(2)
            None
            NoneRichard
                A Taulli
            Treasurer
            $120,000
            None
            None
            NoneMichael
                Kauffman
            President,
                Director
            None
            None
            None
            NoneMark
                Hutchison
            Director
            None
            None
            None
            NoneThomas
                M. Mercer
            Director
            None
            450,000(3)
            None
            None





(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, 2004. As
      the
      Company received revenues of $108,000 for consulting fees, this bonus was not
      achieved.





(2)
      John
      Woodward was issued 300,000 shares of common stock of the company on October
      11,
      2004, on October 25, 2004 they forward split 1 to 3 resulting in 900,000
      shares.





(3)
      Thomas Mercer was issued 150,000 shares of common stock of the company on Aril
      12, 2004, on October 25, 2004 they forward split 1 to 3 resulting in 450,000
      shares (BB)





At
      December 31, 2004 the Company issued 150,000 common shares (450,000 post forward
      split) to directors by the Company.





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




The
        following table sets forth as of December 31, 2004 certain information known
        to
        the Company regarding the beneficial ownership of the Company's common and
        preferred series “A” stock, and as adjusted to reflect the share ownership for
        (i) each executive officer or director of the Company who beneficially owns
        shares; (ii) each stockholder known to the Company to beneficially own five
        percent or more of the outstanding shares of its common and preferred series
“A”
stock; and (iii) all executive officers and directors as a group. The Company
        believes that the beneficial owners of the common and preferred stock listed
        below, based on information furnished by such owners, have sole investment
        and
        voting power with respect to such shares, subject to community property laws
        where applicable.




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Number
                  of Common
              Percentage
                  of Common
              Number
                  of Preferred
              Percentage
                  of PreferredName
                  and Position
              Shares
                  (1)
              Share
                  Class
              Series
                  A Shares (2)
              Series
                  A Share ClassRendal
                  Williams, CEO, Director
              697,719
              1
                  %
              114,000
              21.6
                  %John
                  E. “Ed” Dhonau, Shareholder
              19,986,213
              29%
              300,000
              56.8
                  %Urban
                  Casavant (3)
              31,500,000
              46%
              -0-
              N/A
 
 (1)
        Reported on a post-forward split 3:1 share basis. This class is made up of
        68,405,282 issued and outstanding shares at December 31, 2004.
 
 (2)
        Reported on a post-forward split 3:1 shares basis. This class consists of
        527,450 issued and outstanding shares at December 31, 2004. Each Series A
        Preferred Share may be converted into one hundred (100) common shares upon
        approval by the Board of Directors of the Corporation.
 
 (3)
        This
        includes 22,500,000 common shares owned by CMKM Diamonds, Inc., a Company
        controlled by Urban Casavant, an affiliate of CMKM Diamonds, Inc. This also
        includes 7,200,000 common shares owned by Wesley Casavant, Carolyn Casavant,
        Corrine Ward, and Cindy Dwyer, family relatives of Urban
        Casavant.


**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. Moreover,
      the Company reports the following important disclosures as to several material
      transactions involving a company in which USCA has made significant investments
      in mineral rights, including a joint venture agreement:





On
      July
      27, 2004 the Company received $3,000,000 proceeds from Wesley Casavant, a
      relative of Urban and Carolyn Casavant, for 600,000 common shares of the
      Company. On the same date, the Company issued a check for the amount of
      $3,000,000 to CMKM Diamonds, Inc., in which Urban and Carolyn Casavant are
      affiliates. As stated in the findings by the U.S. SEC, on July 27, 2004, CMKM
      issued a press release confirming receipt of proceeds of $3,000,000 from the
      Company. See SEC Initial Decision Release No. 291, Administrative Proceeding
      in
      the Matter of CMKM Diamonds, Inc., File No. 3-11858 dated July 12,
      2005.





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On
      September 7, 2004 the Company issued through a subscription agreement 600,000
      shares of common stock for $3,000,000 from Cindy Dwyer, a relative of Urban
      and
      Carolyn Casavant. On the same date, the Company issued a check for the amount
      of
      $2,500,000 to CMKM Diamonds, Inc. Of the remaining amount, approximately
      $250,000 was incurred in marketing expenses in the 4th Quarter, 2004, including
      a trade show, an exposition and a corporate party held at the Texas Station
      Casino on or about November 1, 2004.





On
      September 21, 2004 the Company issued through subscription agreements 1,200,000
      shares of its common stock for $6,000,000 from Urban and Carolyn Casavant,
      affiliates of CMKM Diamonds, Inc. On the same date, the Company issued a check
      for the amount of $5,000,000 to CMKM Diamonds, Inc.





On
      September 22, 2004 the Company issued through a subscription agreement 600,000
      shares of common stock at $5 per share for $3,000,000 from Corrine Ward. On
      the
      same date, the Company issued a check for the amount of $3,000,000 to CMKM
      Diamonds, Inc.





**PART
      IV**





**ITEM
      13.   EXHIBITSAND 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 pursuant to
                  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 200232.2
              Certification
                  of Chief Financial Officer pursuant to
                  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002
  **REPORTS
        ON FORM 8K**





On
      January 16, 2004, the Company filed a Form 8-K to report the change of the
      corporation's name from Barrington Foods International, Inc. to U.S. Canadian
      Minerals, Inc.





On
      May
      27, 2004 the Company filed a Form 8-K to report the election of John S. Woodward
      as President of the Company and Richard A. Taulli as Treasurer.





On
      May
      27, 2004 the Company filed a Form 8-K to report the acquisition of majority
      voting interest in Juina Mining Corporation (a Nevada Corporation).





On
      May
      27, 2004 the Company filed a Form 8-K to report the acquisition of Nevada
      Magnetic Material, Inc. (a Nevada Corporation). Nevada Magnetic Material, Inc.
      owns mineral right to real property located approximately 100 miles south of
      Las
      Vegas, Nevada. Since it was established in 1990, Nevada Magnetic was in the
      business of processing raw ore into Anode Bars.






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On
      May
      27, 2004 the Company filed a Form 8-K to report the acquisition, by and through
      Juina Mining Corporation, of an 80% interest in Yellow River Mining S.A., an
      Ecuador Corporation.





On
      May
      28, 2004 the Company filed a Form 8-K to report the acquisition of an 80%
      interest in the COD Mining claim.





On
      June
      17, 2004, the Company filed a Form 8-K to report that the Board of Directors
      dismissed Beckstead and Watts, LLP as its independent public
      accountants.





On
      July
      1, 2004, the Company filed a Form 8-K to report the engagement of Child,
      Sullivan & Company to be the Company’s independent auditor.





On
      July
      21, 2004, the Company filed a Form 8-K to report the acquisition of 5% of all
      current and future claims holdings and mineral interest of CMKM
      Diamonds.





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.





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.”




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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.





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.






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**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





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








**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:
                January 8, 2007Adam JennPresident, Director







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