**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




Form
        10-QSB
 
 
 X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF
        1934
 **For
        the quarter ended May 31, 2006**
 
 _
        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF
        1934
 For
        the
        transition period from ____ to _____


**MEXORO
        MINERALS LTD.**
 **(Formerly
        Sunburst Acquisitions IV, Inc.**
 (Name
        of
        small business in its charter)





Colorado
            0-23561
            84-1431797(State
                or other jurisdiction of incorporation)
            (Commission
                File Number)
            (IRS
                Employer Identification Number)609
                Granville Street, Suite 880
              Vancouver,
                British Columbia
              Canada
            V7Y
                1G5(Address
                of principal executive offices)
            (Zip
                Code)





Registrant’s
      telephone number, including area code:  (800)
      661-7830





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 X
        No ____
 
 Applicable
        only to issuers involved in bankruptcy proceedings during the past five
        years:
 
 Check
        whether the issuer has filed all documents and reports required to be filed
        by
        Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
        under a plan confirmed by a court. Yes ____ No ____
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes ____ No X
 
 Applicable
        only to corporate issuers:
 State
        the
        number of shares outstanding of each of the issuer's classes of common equity,
        as of the latest practicable date: 21,036,102 at July 13, 2006.
 
 Transitional
        Small Business Disclosure Format (Check one): Yes __
        NoX










**MEXORO
        MINERALS LTD.**
 **(Formerly
        Sunburst Acquisition IV, Inc.)**
 **(An
        Exploration Stage Company)**
 
 **Consolidated
        Financial Statements**
 **February
        28, 2006**
 **(U.S.
        Dollars)**
    **Index**
              **Page****Consolidated
                Financial Statements**Consolidated
                Balance Sheets
              3Consolidated
                Statements of Operations and Accumulated
                Deficit
              4Consolidated
                Statements of Cash Flows
              5Notes
                to Consolidated Financial Statements
              6
                  -
                  17







**MEXORO
      MINERALS LTD.**


**(Formerly
      Sunburst Acquisitions IV, Inc.)**


**(An
      Exploration Stage Company)**


**Consolidated
      Balance Sheets**


**(U.S.
      Dollars)**





**May
                31,**
              **2006**
              **(Unaudited)**
            
            
            **February
                  28,**
                **2006**
                **(Unaudited)****Assets****Current**Cash
                and cash
                equivalents
            
            $
            2,074,857
            
            $
            479,530Accounts
                receivable
            
            
            62,726
            
            
            10,069Prepaid
                expenses
            
            
            10,000
            
            
            48,2692,147,583
            
            
            537,868**Equipment
                (note 4)**
            
            
            2,725
            
            
            880**Total
                Assets**
            
            $
            2,150,308
            
            $
            538,748**Liabilities****Current**Accounts
                payable and accrued liabilities
            
            $
            86,777
            
            $
            79,124Promissory
                notes (note 6)
            
            
            -
            
            
            412,80086,777
            
            
            491,924**Convertible
                Debentures (note 7)**
            
            
            2,917,500
            
            
            652,000**Total
                Liabilities**
            
            
            3,004,277
            
            
            1,143,924**Stockholders’
                Deficiency****Capital
                Stock**Preferred
                stockAuthorized:
                20,000,000 shares without par value (note 8)Issued:
                nil
            
            
            **-**
            
            
            **-**Common
                stockAuthorized:
                200,000,000 shares without par valueIssued:
                15,201,102 (2006 - 12,799,902) (note 9)
            
            
            16,371,777
            
            
            15,583,977Additional
                paid-in capital
            
            
            18,347,846
            
            
            16,082,346Stock
                subscriptions
            
            
            -
            
            
            170,000Accumulated
                deficit from prior operations
            
            
            (2,003,427
            
            
            (2,003,427
            )Accumulated
                deficit during the exploration stage
            
            
            (33,553,799
            
            
            (30,439,123
            )Other
                comprehensive income
            
            
            (16,366
            
            
            1,051**Total
                Stockholders’ Deficiency**
            
            
            (853,969
            
            
            (605,176
            )**Total
                Liabilities and Stockholders’ Deficiency**
            
            $
            2,150,308
            
            $
            538,748





Going
      concern (note
      3)


Commitments
      (note
      5)


Subsequent
      events
      (note 13)




The
            Accompanying
            Notes are an Integral Part of These Financial
            Statements.


**MEXORO
        MINERALS LTD.**
 **(Formerly
        Sunburst Acquisitions IV, Inc.)**
 **(An
        Exploration Stage Company)**
 **Consolidated
        Statements of Operations and Accumulated Deficit**
 **(Unaudited)
        (U.S. Dollars)**


**Three
                Months Ended**
            
            
            **Period
                from**
              **Inception
                of
                Exploration****May
                31,**
              **2006**
            
            
            **May
                31,**
              **2005**
            
            
            **(March
                1, 2004)**
              **May
                31,**
              **2006****Expenses**General
                and
                administrative
            $
            570,288
            
            $
            13,052
            
            $
            9,957,035Stock-based
                compensation
            
            -
            
            
            -
            
            
            4,232,955Mineral
                exploration
            
            252,261
            
            
            -
            
            
            252,261Acquisition
                of resource properties
            
            -
            
            
            -
            
            
            15,306,422**Operating
                Loss**
            
            (822,549
            )
            
            (13,052
            )
            
            (29,748,673
            )**Other
                Income (Expenses)**Interest
                expense
            
            (2,305,441
            )
            
            (1,290
            )
            
            (3,951,625
            )Interest
                income
            
            6,055
            
            
            -
            
            
            6,055Gain
                on
                settlement of debt (notes 6 and 7)
            
            7,259
            
            
            -
            
            
            140,444**Net
                Loss**
            
            (3,114,676
            )
            
            (14,342
            )
            
            (33,553,799
            )**Accumulated
                Deficit, Beginning**
            
            (30,439,123
            )
            
            (13,912,488
            )
            
            -**Accumulated
                Deficit, Ending**
            $
            (33,553,799
            )
            $
            (13,926,830
            )
            $
            (33,553,799
            )**Other
                Comprehensive Income**Foreign
                exchange gain (loss) on translation
            
            (32,612
            )
            
            5,975
            
            
            (16,754
            )**Total
                Comprehensive Loss**
            $
            (3,147,288
            )
            $
            (8,367
            )
            $
            (33,570,553
            )**Total
                Loss Per Share** - basic and diluted
            $
            (0.22
            )
            $
            (0.01
            )**Weighted
                Average Number of Shares of********Common
                Stock** - basic and diluted
            
            14,159,872
            
            
            1,737,902




The
            Accompanying
            Notes are an Integral Part of These Financial
            Statements.





**MEXOROMINERALS
      LTD.** **(Formerly
        Sunburst Acquisitions IV, Inc.)**
 **(An
        Exploration Stage Company)**
 **Consolidated
        Statement of Cash Flows**
 **(Unaudited)
        (U.S. Dollars)**


**May
                31,**
              **2006**
            
            
            **May
                31,**
              **2005**
            ****
            ****
            **Period
                from**
              **Inception
                of**
              **Exploration**
              **(March
                1, 2004)**
              **to
                May 31,**
              **2006****Operating
                Activities******Net
                loss
            
            $
            (3,114,676
            )
            $
            (14,342
            )
            $
            (33,553,799
            )Adjustments
                to reconcile net loss
              to
                net cash
                flowsWrite
                off of
                note receivable
            
            
            -
            
            
            -
            
            
            57,500Acquisition
                of resource properties for
              stock
            
            
            -
            
            
            -
            
            
            13,065,000Amortization
            
            
            117
            
            
            -
            
            
            117Discount
                on
                convertible debenture
            
            
            -
            
            
            -
            
            
            175,000Effect
                of
                foreign currency translation on cash
            
            
            (17,417
            )
            
            96
            
            
            (3,218
            )Stock-based
                compensation
            
            
            -
            
            
            -
            
            
            14,535,955Beneficial
                conversion feature
            
            
            2,265,500
            
            
            -
            
            
            3,717,500Prepaid
                expense
            
            
            38,269
            
            
            4,492
            
            
            (3,520
            )Accounts
                receivable
            
            
            (52,657
            )
            
            -
            
            
            (54,520
            )Customer
                deposits
            
            
            -
            
            
            -
            
            
            (44,809
            )Accounts
                payable and accrued liabilities
            
            
            7,653
            
            
            418
            
            
            64,584**Cash
                Used in Operating Activities**
            
            
            (873,211
            )
            
            (10,172
            )
            
            (2,044,210
            )**Investing
                Activity**Purchase
                of
                property and equipment
            
            
            (1,962
            )
            
            -
            
            
            (2,842
            )**Cash
                Used in Investing Activity**
            
            
            (1,962
            )
            
            -
            
            
            (2,842
            )**Financing
                Activities**Proceeds
                from
                notes payable
            
            
            -
            
            
            -
            
            
            562,800Proceeds
                from
                convertible debentures
            
            
            2,265,500
            
            
            -
            
            
            3,717,500Proceeds
                from
                exercise of options
            
            
            -
            
            
            -
            
            
            78,000Repayment
                of
                notes payable
            
            
            -
            
            
            (15,000
            )
            
            (591,300
            )Repayment
                of
                convertible debentures
            
            
            -
            
            
            -
            
            
            (705,000
            )Stock
                subscriptions
            
            
            (170,000
            )
            
            -
            
            
            -Issuance
                of
                common stock
            
            
            375,000
            
            
            -
            
            
            1,059,909**Cash
                Provided by****(Used in) Financing****Activities**
            
            
            2,470,500
            
            
            (15,000
            )
            
            4,121,909**Inflow
                of Cash and Cash Equivalents**
            
            
            1,595,327
            
            
            (25,172
            )
            
            2,074,857**Cash
                and Cash Equivalents, Beginning**
            
            
            479,530
            
            
            35,122
            
            
            -**Cash
                and Cash Equivalents, Ending**
            
            $
            2,074,857
            
            $
            9,950
            
            $
            2,074,857**Supplemental
                Cash Flow Information**Interest
                paid
            
            $
            39,941
            
            $
            1,290
            
            $
            146,625Common
                stock
                issued on conversion of debt
            
            $
            -
            
            $
            -
            
            $
            300,000Common
                stock
                issued on settlement of notes payable
            
            $
            412,800
            
            $
            -
            
            $
            412,800Shares
                issued
                for services
            
            $
            -
            
            $
            -
            
            $
            100,000




The
            Accompanying
            Notes are an Integral Part of These Financial
            Statements.




**MEXORO
      MINERALS LTD.** **(Formerly
        Sunburst Acquisitions IV, Inc.)**
 **(An
        Exploration Stage Company)**
 **Notes
        to
        Consolidated Financial Statements**
 Three
        Months Ended
        May 31, 2006
 **(Unaudited)
        (U.S. Dollars)**




**1.**
            **BASIS
                OF PRESENTATION**





Mexoro
      Minerals
      Ltd. (formerly Sunburst Acquisitions IV, Inc.) ("Mexoro" or the “Company”) was
      incorporated in the state of Colorado on August 27, 1997 and on February 15,
      2006 its name was changed to Mexoro Minerals Ltd.  The Company was formed
      to seek out and acquire business opportunities.  Between 1997 and 2003, the
      Company engaged in two business acquisitions and one business opportunity,
      none
      of which generated a significant profit or created a sustainable business.
      All
      were sold or discontinued. Currently the main focus of the Company’s operations
      is in Mexico.





The
      Company had
      previously been pursuing various business opportunities and, effective
      March 1, 2004, the Company changed its principal operations to mineral
      exploration. Accordingly, as of March 1, 2004 the Company is considered an
      exploration stage company.





On
      May 25, 2004,
      the Company completed a share exchange transaction with Sierra Minerals and
      Mining, Inc. (“Sierra Minerals”), a Nevada corporation, which caused Sierra
      Minerals to become a wholly-owned subsidiary.  Sierra Minerals held certain
      rights to properties in Mexico that the Company now owns or has an option to
      acquire.  Through Sierra Minerals, the Company entered into an arm’s length
      joint venture agreement with Minera Rio Tinto, S.A. De C.V. (“MRT”), a company
      duly incorporated pursuant to the laws of the United Mexican States, which
      is
      controlled by an officer and director of the Company. In August 2005, the
      Company cancelled the joint venture agreement in order to pursue directly the
      mineral exploration opportunities through a wholly-owned Mexican subsidiary,
      Sunburst de Mexico, S.A. de C.V. (“Sunburst de Mexico”).  On August 25,
      2005, Sunburst de Mexico, Mexoro and MRT entered into agreements providing
      Sunburst de Mexico the right to explore and exploit certain properties in
      Mexico. In December 2005, the Company and Sunburst de Mexico entered into a
      new
      agreement with MRT (the “New Agreement”) (note 5). On January 20, 2006, Sierra
      Minerals was dissolved.





**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**





(a)
            Principles
                of
                consolidation





The
      accompanying
      financial statements include the accounts and activities of Mexoro Minerals
      Ltd.
      and its wholly-owned subsidiary, Sunburst de Mexico. All intercompany
      transactions have been eliminated in consolidation.





(b)
            Financial
                instruments





(i)
            Fair
                value





The
      carrying values
      of cash and cash equivalents, accounts receivable, and accounts payable and
      accrued liabilities approximate their fair values because of the short-term
      maturity of these financial instruments. The carrying value of convertible
      debentures approximates their fair value because these instruments earn interest
      at the market rate.





(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 current liabilities. The convertible debentures
      are
      not exposed to interest cash-flow risk because the interest rate is fixed to
      maturity.









**MEXORO
      MINERALS LTD.** **(Formerly
        Sunburst Acquisitions IV, Inc.)**
 **(An
        Exploration Stage Company)**
 **Notes
        to
        Consolidated Financial Statements**
 Three
        Months Ended
        May 31, 2006
 **(Unaudited)
        (U.S. Dollars)**




**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES
                (Continued)**




(b)
            Financial
                instruments (Continued)




(iii)
            Credit
                risk





The
      Company's
      financial assets that are exposed to credit risk consist primarily of cash
      that
      is placed with major financial institutions.





(iv)
            Translation
                risk





The
      Company
      translates the results of non-US operations into US currency using rates
      approximating the average exchange rate for the year. The exchange rate may
      vary
      from time to time. This risk is considered nominal, as the Company does not
      incur any significant transactions in-non-US currency.





(c)
            Equipment





Equipment
      is
      recorded at cost. Depreciation is provided on a declining-balance basis at
      30%
      on computer equipment and 20% on office furniture.





(d)
            Cash
                and cash
                equivalents





The
      Company
      considers all highly liquid debt instruments purchased with an original maturity
      of three months or less to be cash equivalents.





(e)
            Basic
                and
                diluted income (loss) per share





The
      Company
      computes income (loss) per share in accordance with SFAS No. 128, "*Earnings
      per Share*", which requires presentation of both basic and diluted earnings
      per share (EPS) on the face of the statement of operations and deficit. Basic
      EPS is computed by dividing income (loss) available to common shareholders
      (numerator) by the weighted average number of shares outstanding (denominator)
      during the period. Diluted EPS gives effect to all dilutive potential common
      shares outstanding during the period using the treasury stock method and
      convertible preferred stock using the if-converted method. In computing diluted
      EPS, the average stock price for the period is used in determining the number
      of
      shares assumed to be purchased from the exercise of stock options or warrants.
      Diluted EPS excludes all dilutive potential shares if their effect is
      anti-dilutive. All previously stated share and per share balances have been
      restated to give retroactive effect to the 1:50 share consolidation that
      occurred on February 15, 2006.










**MEXORO
      MINERALS LTD.** **(Formerly
        Sunburst Acquisitions IV, Inc.)**
 **(An
        Exploration Stage Company)**
 **Notes
        to
        Consolidated Financial Statements**
 Three
        Months Ended
        May 31, 2006
 **(Unaudited)
        (U.S. Dollars)**




**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES
                (Continued)**





(f)
            Impairment
                or
                disposal of long-lived assets





In
      August 2001, the
      FASB issued Statement No. 144, *“Accounting for the Impairment or Disposal of
      Long-Lived Assets”* (“FAS 144”). FAS 144 clarifies the accounting for the
      impairment of long-lived assets and for long-lived assets to be disposed of,
      including the disposal of business segments and major lines of business. The
      Company has implemented FAS 144. Long-lived assets are reviewed when facts
      and
      circumstances indicate that the carrying value of the asset may not be
      recoverable. When necessary, impaired assets are written down to estimate fair
      value based on the best information available. Estimated fair value is generally
      based on either appraised value or measured by discounting estimated future
      cash
      flows. Considerable management judgment is necessary to estimate discounted
      future cash flows. Accordingly, actual results could vary significantly from
      such estimates.





(g)
            Use
                of
                estimates





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





(h)
            Consideration
                of other comprehensive income items





SFAS
      No. 130 -
*“Reporting Comprehensive Income”*, requires companies to present
      comprehensive income (consisting primarily of net loss plus other direct equity
      changes and credits) and its components as part of the basic financial
      statements.





(i)
            Stock-based
                compensation





SFAS
      No. 123(R) -
      "*Accounting for Stock Based Compensation*", requires companies to
      estimate the fair value of share based payment awards on the date of grant
      using
      an option-pricing model. The value of the portion of the award that is
      ultimately expected to vest is recognized as expense over the requisite service
      period in the Company's financial statements. Stock based compensation expense
      recognized during the period is based on the value of the portion of the share
      based payment awards that is ultimately expected to vest during the period.
      The
      Company estimates the fair value of stock options using the Black Scholes
      valuation model, consistent with the provisions of SFAS No. 123(R). The Black
      Scholes valuation model requires the input of highly subjective assumptions,
      including the options expected life and the price volatility of the underlying
      stock.









**MEXORO
        MINERALS LTD.** **(Formerly
          Sunburst Acquisitions IV, Inc.)**
 **(An
          Exploration Stage Company)**
 **Notes
          to
          Consolidated Financial Statements**
 Three
          Months Ended
          May 31, 2006
 **(Unaudited)
          (U.S. Dollars)**


**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES
                (Continued)**


(j)
            Income
                taxes





The
      Company
      accounts for income taxes in accordance with SFAS No. 109 - *“Accounting for
      Income Taxes”*. Deferred tax assets and liabilities are recognized with
      respect to the tax consequences attributable to differences between the
      financial statement carrying values and tax basis of existing assets and
      liabilities. Deferred tax assets and liabilities are measured using enacted
      tax
      rates expected to apply to taxable income in the years in which these temporary
      differences are expected to be recovered or settled. Further, the effect on
      deferred tax assets and liabilities of changes in tax rates is recognized in
      income in the period that includes the enactment.





(k)
            Foreign
                currency translation





The
      Company’s
      functional and reporting currency is the United States dollar. Monetary assets
      and liabilities denominated in foreign currencies are translated to United
      States dollars in accordance with SFAS No. 52,*“Foreign Currency
      Translation”*, using the exchange rate prevailing at the balance sheet date.
      Gains and losses arising on translation or settlement of foreign currency
      denominated transactions or balances are included in the determination of
      comprehensive income. Foreign currency transactions are primarily undertaken
      in
      Mexican pesos. The Company has not, to the date of these financials statements,
      entered into derivative instruments to offset the impact of foreign currency
      fluctuations.





(l)
            Recent
                accounting pronouncements





(i)
            In
                December
                2004, FASB issued a revision of Statement No. 123(R), *“Accounting for
                Stock-Based Compensation”*. This statement supersedes APB 25 and its
                related implementation guidance. The revised pronouncement requires
                that
                all stock options and warrants be accounted for using the fair value
                method. This pronouncement does not impact the Company, as the Company
                has
                no employees and currently accounts for all options and warrants
                using the
                fair value method.





(ii)
            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 Company believes that
                the
                adoption of this standard will have no material impact on its financial
                statements. The Company accounts for income taxes in accordance with
                SFAS
                No. 109 - *“Accounting for Income Taxes”*. Deferred tax assets and
                liabilities are recognized with respect to the tax consequences
                attributable to differences between the financial statement carrying
                values and tax basis of existing assets and liabilities.









**MEXORO
        MINERALS LTD.** **(Formerly
          Sunburst Acquisitions IV, Inc.)**
 **(An
          Exploration Stage Company)**
 **Notes
          to
          Consolidated Financial Statements**
 Three
          Months Ended
          May 31, 2006
 **(Unaudited)
          (U.S. Dollars)**


**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES
                (Continued)**




(l)
            Recent
                accounting pronouncements
                (Continued)




(iii)
            In
                March
                2005, FASB issued Interpretation No. 47 (“FIN 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. This pronouncement does not
                impact the Company for the current
                year.




(iv)
            In
                May 2005,
                FASB issued SFAS No. 154 “*Accounting Changes and Error Corrections - a
                replacement of APB Opinion No. 20 and FASB Statement No. 3”*. This
                Statement replaces APB Opinion No. 20, “*Accounting Changes”*, and
                FASB Statement No. 3, “*Reporting Accounting Changes in Interim
                Financial Statements”*, and changes the requirements for the
                accounting for and reporting of a change in accounting principles.
                This
                statement applies to all voluntary changes in accounting principles.
                It
                also applies to changes required by an accounting pronouncement in
                the
                unusual instance that the pronouncement does not include specific
                transition provisions. When a pronouncement includes specific transition
                provisions, those provisions should be followed. This statement is
                effective for accounting changes and corrections of errors made in
                fiscal
                years beginning after December 15,
                2005





(v)
            In
                February
                2006, the FASB issued SFAS No. 155, “*Accounting for Certain Hybrid
                Financial Instruments, an amendment of FASB Statements No. 133 and
                140”.* This statement permits fair value re-measurement for any hybrid
                financial instrument that contains an embedded derivative that otherwise
                would require bifurcation. It establishes a requirement to evaluate
                interests in securitized financial assets to identify interests that
                are
                freestanding derivatives or that are hybrid financial instruments
                that
                contain an embedded derivative requiring bifurcation. In addition,
                SFAS
                155 clarifies which interest-only strips and principal-only strips
                are not
                subject to the requirements of Statement 133. It also clarifies that
                concentrations of credit risk in the form of subordination are not
                embedded derivatives. SFAS 155 amends Statement 140 to eliminate
                the
                prohibition on a qualifying special purpose entity from holding a
                derivative financial instrument that pertains to a beneficial interest
                other than another derivative financial instrument. This statement
                is
                effective for all financial instruments acquired or issued after
                the
                beginning of an entity’s first fiscal year that begins after September 15,
                2006. The adoption of this standard is not expected to have a material
                effect on the Company’s results of operations or financial
                position.




**MEXORO
          MINERALS LTD.** **(Formerly
            Sunburst Acquisitions IV, Inc.)**
 **(An
            Exploration Stage Company)**
 **Notes
            to
            Consolidated Financial Statements**
 Three
            Months Ended
            May 31, 2006
 **(Unaudited)
            (U.S. Dollars)**


**3.**
            **GOING-CONCERN**





The
      accompanying
      financial statements have been prepared on a going-concern basis. The Company
      has a history of operating losses and will need to raise additional capital
      to
      fund its planned operations. As at May 31, 2006, the Company had working capital
      of $2,060,806 (February 28, 2006 - $45,944) and a cumulative loss of $35,557,226
      (February 28, 2006 - $32,442,550). These conditions raise substantial doubt
      about the Company’s ability to continue as a going-concern.





The
      Company intends
      to reduce its cumulative loss through the attainment of profitable operations,
      from its investment in a Mexican mining venture (note 5). In addition, the
      Company has conducted private placements of convertible debt and common stock
      (notes 7 and 9), which have generated a portion of the initial cash
      requirements of its planned Mexican mining ventures (note 5).





**4.**
            **EQUIPMENT**




**May
                  31,**
                **2006**
              ****
              ****
              ****
              ****
              ****
              **February
                  28,**
                **2006**Cost
              
              
              Accumulated
                Depreciation
              
              
              Net
              
              
              NetOffice
                  equipment
              
              $
              880
              
              $
              -
              
              $
              880
              
              $
              -


**5.**
            **MINERAL
                PROPERTIES**





On
      May 3, 2004, the
      Company entered into a share exchange agreement with the shareholders of Sierra
      Minerals. Pursuant to the terms of the share exchange agreement, the Company
      issued 860,000 shares of its common stock (43,000,000 pre-split) in exchange
      for
      all of the outstanding shares of Sierra Minerals. As a result, Sierra Minerals
      became a wholly-owned subsidiary of the Company.  The common stock issued
      was valued at $12.75 per share ($0.255 pre-split) or $10,965,000; which
      represents the fair value based on the date of the share exchange agreement
      (May
      3, 2004).  Finders’ fees of 120,000 options (6,000,000 pre-split) to
      purchase the same number of shares of the Company’s common stock at $0.50 per
      share (0.01 pre-split) were issued to non-related parties in connection with
      this share exchange. The fair value of these options issued as finders’ fees was
      $1,523,000; this amount was determined using the Black-Scholes formula with
      a
      5-year expected life, a volatility factor of 191%, a risk-free rate of 5% and
      no
      assumed dividend rate. Due to the uncertainty of the future revenue to be
      generated from this property, the cost of the acquisition of $10,965.000,
      compensation expense of $1,523,000, and advances totalling $507,500 were charged
      to operations in the year ended February 28, 2005.





Sierra
      Minerals was
      a party to a joint venture agreement, dated April 26, 2004 and amended on June
      1, 2004, by and between Sierra Minerals and MRT, a Mexican company. MRT had
      interests in exploration properties.









**MEXORO
      MINERALS LTD.** **(Formerly
        Sunburst Acquisitions IV, Inc.)**
 **(An
        Exploration Stage Company)**
 **Notes
        to
        Consolidated Financial Statements**
 Three
        Months Ended
        May 31, 2006
 **(Unaudited)
        (U.S. Dollars)**




**5.**
            **MINERAL
                PROPERTIES (Continued)**





On
      August 25, 2005,
      the joint venture agreement was cancelled and the Company entered into a new
      arrangement with MRT.  Instead of a joint venture, the Company incorporated
      a Mexican wholly-owned subsidiary, Sunburst de Mexico. This restructuring
      allowed the Company to take title to the properties directly in the name of
      Sunburst de Mexico.  The Company entered into agreements with MRT, which
      provided Sunburst de Mexico options on the concessions of the Cieneguita and
      Guazapares properties and the right of first refusal on two Encino Gordo
      properties (collectively, the “Property Agreements”). The parties also entered
      into an operating agreement, which gave MRT the sole and exclusive right and
      authority to manage the Cieneguita Property.





On
      December 8,
      2005, the Company and Sunburst de Mexico entered into the New Agreement with
      MRT
      to exercise their option under the August 18, 2005 sale and purchase of mining
      concessions agreement to obtain two mining concessions in the Encino Gordo
      region.





The
      New Agreement
      also provided the Company the option to obtain three additional concessions
      in
      the Encino Gordo region.  These properties are located in the state of
      Chihuahua, Mexico.





The
      following are
      additional material terms of the New Agreement:





(a)
            The
                operator’s agreement with MRT was cancelled;





(b)
            The
                Company
                granted MRT the option to buy all of the outstanding shares of Sunburst
                de
                Mexico for $100 if the Company failed to transfer $1,500,000 to Sunburst
                de Mexico by April 30, 2006. However, in April 2006, the parties
                amended
                the New Agreement to delete both the required transfer of $1,500,000
                to
                Sunburst de Mexico and MRT’s option to purchase shares of Sunburst de
                Mexico;





(c)
            The
                Property
                Agreements were modified to change the net smelter rate to a maximum
                of
                2.5% for all properties covered by the agreements;





(d)
            The
                Company
                agreed to issue 2,000,000 shares of the Company’s common stock to MRT
                within four months of the date of the signing of the New Agreement.
                 These shares were issued to MRT and its assignee at the market value
                of $1.05 per share on February 23, 2006. This issuance fulfilled the
                Company’s payment obligations under the previous Property Agreements; and





(e)
            The
                Company
                agreed to issue 1,000,000 additional shares of the Company’s common stock
                to MRT if and when the Cieneguita Property is put into production
                and
                reaches 85% of production capacity over a 90-day period, as defined
                in the
                New Agreement.





**6.**
            **PROMISSORY
                NOTES**





As
      at May 31, 2006
      the Company had $nil (February 28, 2006 - $412,800) promissory notes outstanding
      and accrued interest of $nil (February 28, 2006 - $7,259) outstanding on the
      promissory notes.





On
      March 4, 2006,
      the Company agreed to issue 1,651,200 common shares at a price of $0.25 per
      share to settle $412,800 in promissory notes payable. As a condition, the
      promissory note holders would waive all accrued interest payable on the notes.
      On April 6, 2006, these shares were issued (note 9) and the Company recorded
      a
      $7,259 gain on settlement of debt.




**MEXORO
          MINERALS LTD.** **(Formerly
            Sunburst Acquisitions IV, Inc.)**
 **(An
            Exploration Stage Company)**
 **Notes
            to
            Consolidated Financial Statements**
 Three
            Months Ended
            May 31, 2006
 **(Unaudited)
            (U.S. Dollars)**


**7.**
            **CONVERTIBLE
                DEBENTURES**





On
      August 25, 2004,
      the Company entered into a securities purchase agreement (the “Agreement”), with
      Bristol Investment Fund, Ltd., Alpha Capital AG and Stonestreet LP (the
“Purchasers”). Pursuant to the Agreement, the Purchasers agreed to purchase up
      to $1,350,000 in face amount of secured convertible debentures (the
“Debentures”) from the Company.  The Debentures did not bear interest but
      were to be issued at a 26% discount to the face amount. Accordingly, the cash
      purchase price for the full $1,350,000 face amount of the Debentures was
      $1,000,000.   The Debentures were due and payable in full one year
      from the date of issuance.





The
      Purchasers also
      had the right to convert the full-face amount of the Debentures to common stock
      of the Company at a price of $5.00 per share ($0.10 pre-split).  Under the
      Agreement, the Purchasers were also to receive warrants and additional
      investment rights to purchase shares of the Company’s common stock. The warrants
      were exercisable at a price of $6.00 per share ($0.12 pre-split) for a period
      of
      five years and additional investment rights were exercisable at a price of
      $5.00
      per share ($0.10 pre-split).





The
      Purchasers
      purchased a total of $675,000 in face amount for cash proceeds of $500,000
      and
      the $175,000 discount was charged as interest over the term of the debenture;
      $87,500 in the year ending February 28, 2005 and the $87,500 in the year ending
      February 28, 2006. The Company paid $20,000 in legal fees and $50,000
      administration fees.





A
      beneficial
      conversion feature expense of $500,000 resulting from the anticipated conversion
      of the debentures, and the exercise of the associated warrants and additional
      investment rights of the above debentures was recorded as interest expense
      for
      the year ending February 28, 2005.





On
      August 10, 2005,
      the Company and the Purchasers agreed to retire the Debentures including all
      associated principal, terms, warrants and rights for the amount of $500,000
      plus
      8% interest. On September 21, 2005, the Company repaid in full $500,000 plus
      interest charges of $41,815 to the Purchasers. As a result of this payment,
      the
      Debentures were terminated and the associated warrants and additional investment
      rights were cancelled. A gain of $133,185 was recorded for settlement of this
      debt.





Another
      convertible
      debenture in the amount of $30,000 was issued on January 15, 2004. The
      conversion of principal and accrued interest (8% per year) was at the rate
      of
      $1.00 ($0.02 pre-split) per share of common stock. On December 21, 2005, the
      Company repaid the $30,000 convertible debenture plus accrued interest of
      $4,645.





The
      Company issued
      $300,000 in convertible debentures in December 2005 to three lenders with a
      maturity date of December 8, 2006, accrued interest at 7% per year, and
      convertible at the option of the holder into shares of common stock at $0.15
      per
      share. On January 6, 2006, these debentures were converted and the Company
      issued 2,000,000 common shares (100,000,000 pre-split). A beneficial conversion
      feature of $300,000 was recorded in interest expense as to the anticipated
      conversion of these debentures, with a corresponding increase in additional
      paid
      in capital.





In
      January 2006,
      the Company issued convertible debentures, with principal and accrued interest
      at 7% per year, convertible into units at the option of the holder.  Each
      unit consists of a warrant to purchase 25,000 common shares at $1.00 per share
      and $25,000 of debt, which may be converted to common shares at $0.50 per share
      and is exercisable until April 30, 2008.  As at February 28, 2006, the
      Company had issued convertible debentures in the amount of $652,000.











**MEXORO
        MINERALS LTD.** **(Formerly
          Sunburst Acquisitions IV, Inc.)**
 **(An
          Exploration Stage Company)**
 **Notes
          to
          Consolidated Financial Statements**
 Three
          Months Ended
          May 31, 2006
 **(Unaudited)
          (U.S. Dollars)**


**7.**
            **CONVERTIBLE
                DEBENTURES (Continued)**




A
      beneficial
      conversion feature of $489,000 was recorded in interest expense as to the
      anticipated conversion of these debentures. Also included in interest expense
      was $163,000 representing the relative fair value of the warrants (immediately
      exercisable) in relation to the convertible debt.





In
      the quarter
      ended May 31, 2006, the Company issued an additional $2,265,500 of convertible
      debentures, with principal and accrued interest at 7% per year, convertible
      into
      units at the option of the holder. Each unit consists of a warrant to
      purchase 25,000 common shares at $1.00 per share and $25,000 of debt, which
      may
      be converted to common shares at $0.50 per share and is exercisable until April
      30, 2008. A beneficial conversion feature of $1,359,300 was recorded in interest
      expense as to the anticipated conversion of these debentures. Also included
      in
      interest expense was $906,200 representing the relative fair value of the
      warrants (immediately exercisable) in relation to the convertible debt. As
      at
      May 31, 2006 there were $2,917,500 convertible debentures outstanding (note
      13).








**8.**
            **PREFERRED
                STOCK**





The
      Company is
      authorized to issue 20,000,000 shares of preferred stock. The Company’s board of
      directors is authorized to divide the preferred stock into series, and with
      respect to each series, to determine the preferences and rights and
      qualifications, limitations or restrictions thereof, including the dividend
      rights, conversion rights, voting rights, redemption rights and terms,
      liquidation preferences, sinking fund provisions, and the number of shares
      constituting the series and the designations of such series. The board of
      directors could, without stockholder approval, issue preferred stock with voting
      and other rights that could adversely affect the voting rights of the holders
      of
      common stock, which issuance could have certain anti-takeover
      effects.








**9.**
            **COMMON
                STOCK**





**Number**
              **of
                Shares**
            
            
            **Amount**Balance,
                February 28, 2006
            
            
            12,799,902
            
            $
            15,583,977Issued
                pursuant to private placement
            
            
            750,000
            
            
            375,000Issued
                pursuant to settlement of promissory notes
            
            
            1,651,200
            
            
            412,800Balance,
                May
                31, 2006
            
            
            15,201,102
            
            $
            16,371,777





On
      April 3, 2006
      and May 31, 2006 the Company issued 550,000 and 200,000 common shares
      respectively pursuant to a private placement unit offering. Units consisted
      of
      one share of common stock and one-half of one warrant. Each full warrant
      entitles the investor to purchase an additional share of the Company’s common
      stock at a price of $1.00 per share and is exercisable until April 30,
      2008.





On
      March 4, 2006,
      the Company agreed to issue 1,651,200 common shares at a price of $0.25 per
      share to settle $412,800 in promissory notes payable.(note 6), and on April
      6,
      2006, these shares were issued.




MEXORO MINERALS LTD. **(Formerly
          Sunburst Acquisitions IV, Inc.)**
 **(An
          Exploration Stage Company)**
 **Notes
          to
          Consolidated Financial Statements**
 Three
          Months Ended
          May 31, 2006
 **(Unaudited)
          (U.S. Dollars)**







**10.**
            **STOCK
                COMPENSATION PROGRAM**





On
      December 9,
      2005, the Company’s board of directors approved a stock compensation program,
      which was subsequently ratified at an extraordinary meeting of shareholders
      held
      on February 13, 2006. In order to maintain flexibility in the award of stock
      benefits, the program constitutes a single “omnibus” plan, but is composed of
      three parts. The first part is the qualified incentive stock option plan (the
      “ISO Plan”), which provides grants of qualified incentive stock options
      (“ISOs”).  The second part is the non-qualified stock option plan (“NQSO
      Plan”), which provides grants of nonqualified stock options (“NQSOs”).  The
      third part is the restricted shares plan (“Restricted Shares Plan”), which
      provides grants of restricted shares of the Company’s common stock (“Restricted
      Shares”). The maximum number of common shares that may be purchased under the
      plan is 6,000,000. Options granted under the plan include incentive and
      non-qualified stock options as well as actual shares of common stock, with
      vesting determined on the grant date, not to exceed 10 years, and are
      exercisable over a 10-year maximum period at a price to approximate the fair
      market value of the common stock at the date of grant.





On
      February 27,
      2006, the Company granted 800,000 ISOs under the ISO Plan to directors, officers
      and consultants at a price of $0.50 per common stock for a period of ten years.
      The ISOs vest in four equal instalments, at the time of the grant and then
      every
      six months thereafter. Compensation cost, being the fair value of the options,
      is calculated to be $982,000 of which $248,000 is expensed on the date of issue
      and as the remainder vest.





The
      fair value of
      the 800,000 options was determined using the Black-Scholes option pricing model
      using a ten-year expected life of the option, a volatility factor of 152%,
      a
      risk-free rate of 5% and no assumed dividend rate.





The
      options are
      summarized as follows:





Options
            
            
            Weighted
              Average
              Exercise
              PriceOutstanding
                at February 28, 2005
            
            
            168,000
            
            $
            0.94Granted
            
            
            800,000
            
            $
            0.50Cancelled
            
            
            (6,000
            )
            $
            1.50Exercised
            
            
            (32,000
            )
            $
            1.34Outstanding
                at February 28, 2006
            
            
            930,000
            
            $
            0.54Outstanding
                at May 31, 2006
            
            
            930,000
            
            $
            0.54











**MEXORO
          MINERALS LTD.** **(Formerly
            Sunburst Acquisitions IV, Inc.)**
 **(An
            Exploration Stage Company)**
 **Notes
            to
            Consolidated Financial Statements**
 Three
            Months Ended
            May 31, 2006
 **(Unaudited)
            (U.S. Dollars)**


**10.**
            **STOCK
                COMPENSATION PROGRAM
                (Continued)**





The
      following table
      summarizes options outstanding at May 31, 2006:





Exercise
                Price
            
            Number
                of
                Options Issued
            Number
                of
                Options Exercisable
            
            Remaining
                Contractual Life (Years)$0.50
            
            890,000
            290,000
            
            9.06$1.50
            
            40,000
            40,000
            
            3.75930,000
            330,000





The
      Company has
      reserved 930,000 common shares in the event that these options are
      exercised.





For
      the quarter
      ended May 31, 2006, there were $nil (2005 - $nil) stock-based compensation
      expenses.





**11.**
            **WARRANTS**





As
      at May 31, 2006,
      the Company had a total of 8,292,500 (February 28, 2006 - 5,652,000) warrants
      outstanding to purchase common stock. Each warrant entitles the holder to
      purchase one share of the Company’s common stock. The Company has reserved
      8,292,500 common shares in the event that these warrants are
      exercised.





The
      warrants
      include 1,000,000 Class A Warrants exercisable at $0.50 per share, 1,000,000
      Class B Warrants exercisable at $0.75 per share, 1,000,000 Class C Warrants
      exercisable at $1.00 per share, 1,000,000 Class D Warrants exercisable at $1.25
      per share, and 1,000,000 Class E Warrants exercisable at $1.50 per share; of
      which all are exercisable at the option of the holder. The Class A Warrants
      were
      fully vested upon issuance. They are exercisable at any time following their
      issuance but will expire on June 30, 2007 to the extent they are not exercised.
      The remaining classes of Warrants will each vest and become exercisable only
      at
      the time that the immediately preceding class has been fully exercised.





Unless
      terminated
      earlier as a result of failure to vest, the Class B and Class C Warrants will
      each expire on December 31, 2007, and the Class D and Class E Warrants will
      each
      expire on December 31, 2008. Stock-based compensation of $3,898,000 has been
      recorded on these warrants.





The
      Company has
      also issued 2,917,500 warrants exercisable at $1.00 each pursuant to the
      issuance of convertible debentures (note 7). These warrants expire on April
      30,
      2008, and are redeemable by the Company, at $.01 per share, in the event the
      Company’s Common Stock closes with a bid price, on average, over $3.00 per share
      for a consecutive 20 day period.





The
      Company has
      also issued 375,000 warrants exercisable at $1.00 each pursuant to a private
      placement unit offering. Each warrant entitles the investor to purchase an
      additional share of the Company’s common stock at a price of $1.00 per share and
      is exercisable until April 30, 2008.





**MEXORO
            MINERALS LTD.** **(Formerly
              Sunburst Acquisitions IV, Inc.)**
 **(An
              Exploration Stage Company)**
 **Notes
              to
              Consolidated Financial Statements**
 Three
              Months Ended
              May 31, 2006
 **(Unaudited)
              (U.S. Dollars)**


**12.**
            **RELATED
                PARTY TRANSACTIONS**





The
      Company paid
      management fees of $58,050 (2005 - $nil) to certain officers and directors
      and
      to companies controlled by directors. The Company paid $18,137 (2005 - $nil)
      to
      certain officers and directors and to companies controlled by directors for
      travel, office and other related expenses.





As
      at May 31, 2006,
      accounts payable of $175 (2005 - $nil) were owing to certain officers and
      directors of the Company and $5,339 (2005 - $nil) was owing to companies
      controlled by directors.





As
      of May 31, 2006,
      the Company had a note payable to former related entity in the amount of $nil
      (2005 - $28,500). Interest on this note was imputed at a rate of 6.09% and
      totalled $nil (2005 - $19,268) cumulatively at May 31, 2006.





All
      related party
      transactions are in the normal course of business at the exchange amount agreed
      to by each party.





**13.**
            **SUBSEQUENT
                EVENTS**





(a)
            Convertible
                debentures





Subsequent
      to May
      31, 2006, the Company received requests to convert $2,917,500 of convertible
      debentures to the Company common shares at $0.50 per share, and issued 5,835,000
      common shares and paid accrued interest of $58,817.









**ITEM
      2.**  **MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS**





**CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**





Certain
      statements contained in this Form 10-QSB constitute "forward-looking
      statements". These statements, identified by words such as “plan”, "anticipate",
      "believe", "estimate", "should", "expect" and similar expressions include our
      expectations and objectives regarding our future financial position, operating
      results and business strategy. These statements reflect the current views of
      management with respect to future events and are subject to risks, uncertainties
      and other factors that may cause our actual results, performance or
      achievements, or industry results, to be materially different from those
      described in the forward-looking statements. Such risks and uncertainties
      include those set forth under this Item 2. "Management's Discussion and Analysis
      or Plan of Operation" and elsewhere in this Form 10-QSB. We do not intend to
      update the forward-looking information to reflect actual results or changes
      in
      the factors affecting such forward-looking information. We advise you to
      carefully review the reports and documents we file from time to time with the
      Securities and Exchange Commission (the “SEC”), particularly our annual reports
      on Form 10-KSB, our quarterly reports on Form 10-QSB and our current reports
      on
      Form 8-K.





**Overview**


We
      are a
      start-up, exploration stage company and have not yet generated or realized
      any
      revenues from our exploration projects, which we commenced in May 2004. We
      have
      sufficient cash to maintain our operations until April 2007, unless our
      exploration is successful, of which there is no guarantee. If our exploration
      is
      successful, we will need to raise additional funds to meet our needs for
      additional exploration and/or production.





Our
      continued existence and plans for future growth depend on our ability to obtain
      the additional capital necessary to operate either through the generation of
      revenue or the issuance of additional debt or equity. While we believe that
      we
      raised sufficient funds in our recent private placement offerings to allow
      us to
      continue in business until April 2007, we may not be able to continue in
      business beyond that date unless we obtain additional capital. W e
      have
      not generated any revenues, and no revenues are anticipated unless and until
      mineralized material is discovered on the properties in which we have an
      interest.





We
      are
      not planning to buy or sell any plant or significant equipment in the next
      six
      months. In the event that our exploration is successful on our Cieneguita
      Property, we anticipate spending approximately $1,500,000 on equipment and
      building a plant to put that property into production. The ability to buy such
      equipment would be dependent upon our cash position at that time and our ability
      to raise additional capital. Currently, though, the Cieneguita Property has
      no
      known ore reserves.





**Plan
      of Operation**




Our
      business plan is to proceed with the exploration of our Mexican mineral
      properties to determine whether they contain commercially exploitable reserves
      of gold, silver or other metals. We believe that we have sufficient funds to
      fund our current exploration plans and meet our monthly general and
      administrative costs until April 2007 without the need to raise additional funds.
      In
      the event that our exploration program should find exploration targets that
      warrant additional exploration work, including exploration by drilling, we
      may
      not have enough cash available to fund an expanded program. If we do plan to
      expand our exploration, we would need to raise additional capital to meet these
      needs. We currently do not have any sources of additional capital available
      to
      us and we may not have any in the future.










We
      are
      not involved in any research and development on our exploration properties.
      Also, as we are in the exploration phase, we do not anticipate purchasing any
      plants or significant equipment. In the event that we did discover a mineral
      deposit, of which there is no guarantee, we would need to expend substantial
      amounts of capital to put any of our properties into production, if so
      warranted. We do not have enough capital available to us to make such
      expenditures, and we therefore would have to raise the additional capital or,
      if
      possible, enter into a joint venture for the production phase. If we were to
      form a joint venture, we cannot assess what our final position in the project
      would be. We do not have any sources of capital available to us at this time
      to
      fund such a project if one should be discovered.





Because
      we already have data from the previous exploration programs and mining records
      from Glamis Gold, our exploration program on the Cieneguita Property will focus
      mainly on identifying mineralized zones of economic grade to allow for the
      property to be put into production as an open pit heap leach mine. We expect
      the
      exploration cost to be approximately $200,000. Since January 2006, we have
      spent
      approximately $146,000 on the exploration project and expect to expend the
      remaining $54,000 by the end of August 2006. The proposed exploration program
      has included the review of available data to create a structural mineralization
      framework, detailed soil and rock sampling, resampling existing trenches, the
      extension of existing trenches, and the creation of new trenches. We expect
      to
      do some additional exploration work with the use of ground-based geophysics
      to
      measure the conductivity of underground rocks. Ground-based geophysics is a
      technique for exploring for minerals using electromagnetic impulses and the
      various resistances of the rocks to the conduction of the electromagnetic
      signals generated by the equipment. The conductivity of the rocks is compared
      to
      known rock formations to help indicate the types of rock that may be found
      underground where the geophysical work is done. We have one geologist on the
      Cieneguita Property working full time taking rock samples from the various
      trenches and surface samples on the property.





In
      April
      2006, we completed a sampling of the Cieneguita Property. We completed 8
      trenches approximately 200 meters long and 3 to 10 meters deep spaced equally
      along the 1,000 meters strike length of the property. From the walls of these
      trenches, we took approximately 550 rock samples for a total weight of 20
      tonnes. One half of these samples have been sent to ALS Chemex’s laboratory in
      Chihuahua for assaying. We expect a full geological report to be available
      by
      the end of July 2006. The purpose of the sampling is to further define the
      ore
      grade and potential of the Cieneguita Property. Once we have received all of
      the
      assay results and the completed geological report, we will be able to further
      assess whether the property needs additional exploration work or if it is
      suitable for a heap leach open pit mining operation. We have not determined
      if
      there any mineable reserves on the Cieneguita Property to date, and our program
      is still exploratory.





The
      other
      half of the 20 tonnes sample is being used to complete column tests to determine
      the leachability of the precious metals from the rock. In this test, the ore
      is
      placed in 3 PVC tubes, 500 cm in diameter and 3 meters high. Different mixtures
      of a cyanide solution are dripped over the top of the columns at different
      flow
      rates. The results of these tests will help determine the most effective
      solution to be used on the heap leach pads on the Cieneguita Property in the
      event it should ever be put into production. This test will take approximately
      90 days to complete and is being conducted at our office in Chihuahua, Mexico.
      The tests are being done by qualified geologists employed by MRT as part of
      our
      office package costs. The tests are scientifically conducted and monitored
      for
      quality control and efficacy. This test is done to determine whether the
      metallurgy of the minerals allows for economic recovery
      of the precious metals using a cyanide heap leach process. Even if we were
      able
      to delineate mineable reserves, the metallurgy must be economically feasible
      to
      allow us to proceed to mine.





The
      results of the reports will help us determine whether or not to continue
      exploration on the Cieneguita Property. If we continue exploration, our next
      step then would be to greater delineate the mineralized structure on the
      Cieneguita Property. This would entail additional trenching and sampling of
      the
      property to determine where the suitable grades of mineable ore are located.
      In
      the alternative, if our exploration geologists feel it is necessary, we would
      commence a shallow drilling program on a 25 meter by 50 meter spacing grid.
      In
      either scenario, the cost of exploration would be increased to approximately
      $500,000. We have sufficient capital to









make
      this
      additional expenditure from working capital. This additional exploration would
      likely occur, if ever, from August 2006 through the end of December 2006. If
      more exploration is warranted, we would then implement a feasibility study
      and
      mine design to determine whether to put the Cieneguita Property into production.
      Such a feasibility study would take approximately 60 days to complete and cost
      approximately $50,000.





The
      final
      stage, if warranted, would be to put the Cieneguita Property into production.
      It
      is estimated that this phase would cost us approximately $1,500,000 **** to
      purchase all of the necessary capital equipment and to build the necessary
      pads
      to put the property into production. We would need to raise the necessary
      capital through either debt or equity financing or find a joint venture partner.
      We do not currently have any sources of capital available to us to make such
      expenditures, and we can give no assurance that we would be able to raise such
      capital. We also do not have a joint venture partner at this time that is
      interested in the Cieneguita Property. We can give no assurance that we would
      be
      able to find such a joint venture partner to put this property into production
      if the feasibility study warranted such a plan.





Concurrently
      with the exploration of Cieneguita, we have budgeted approximately $450,000
      for
      exploration on our Guazaparez Property for the next 12 months. Of this amount,
      we have spent approximately $50,000 since May 2006. We have one full time
      geologist working on the Guazaparez Property collecting rock samples and mapping
      the property. By the end of July 2006, we plan to add two additional geologists
      to the property to continue sampling and mapping. This first phase of the
      exploration program has the goal of determining whether subsequent exploration
      is warranted and if a drill program should be commenced. It will include
      reviewing available data to create a structural mineralization framework,
      detailed soil and rock sampling, and ground-based geophysics measurements.





Most
      of
      the mining concessions being explored in the Guazaparez area are epithermal
      silver deposits similar to the Cieneguita Property. The geology from other
      properties in that area will serve as a guide when exploring the Guazaparez
      Property. Because we do not have the same amount of detailed information on
      Guazaparez as we do on Cieneguita, the exploration program will cost more than
      the exploration program on Cieneguita.





We
      anticipate that the initial sampling and mapping will be completed and the
      reports back from the results of the samples by September 2006. At that point,
      we will make a decision to whether to implement an initial drill program based
      on the recommendations of our head geologist working on the Guazapares Property.
      If the geologist does not recommend a drilling program, we may abandon the
      property. If we abandon the Guazapares Property, we will not have to make any
      further property payments as per our property purchase agreements.





If
      a
      drill program is warranted and implemented, the bulk of the remaining funds
      of
      the exploration program would be spent on the initial drilling targets. This
      initial drilling, assuming drill rigs are available in the area and drilling
      is
      warranted, could commence in October 2006 and last approximately 60 days. The
      results of this drill program would take approximately 90 days to be assayed
      and
      interpreted. Once those result are known, we would consult with our lead
      exploration geologists to determine whether to abandon the Guazapares Property
      or continue with further drilling exploration. If the Board of Directors decides
      to continue with further drilling, we would need to raise additional funding
      through the sale of debt or equity because we do not have sufficient capital
      to
      continue an exploration program beyond our original budget. Additional drilling
      would cost a
      significant amount of money, and there is no assurance that we would be able
      to
      raise such additional amounts of money. If we could not obtain additional
      financing, we could seek a joint venture partner if the results warranted it.
      We
      do not have any joint venture partners at this time and can give no assurance
      that we would be able to find one if the Guazapares Property warranted such
      a
      joint venture.




We
      have
      also planned an exploration program, budgeted at approximately $200,000 for
      the
      next 12 months, on our Encino Gordo Property. We currently have one geologist
      sampling and mapping this property, and we have expended approximately $30,000
      of our budget. The Encino Gordo Property comprises four mining concessions
      that
      total 1,042 hectares (approximately 2,575 acres). We have limited information
      available to us









about
      this property from previous exploration. The previous geochemical sampling
      that
      was done suggests a presence of mineralized structures, including gold, silver
      and copper anomalies. These anomalies will be investigated to determine if
      further exploration is warranted and to help refine the best drilling targets.
      We hope that this further exploration will be completed by September 2006,
      and a
      geological report prepared by our lead geologist on the Encino Gordo Property
      should be available shortly thereafter. Depending on the results of the report,
      we intend to either abandon the Encino Gordo Property, in which case no further
      payments would be made or be due under our agreements to acquire these
      concessions, or to make additional expenditures to determine potential drill
      targets. The amount and source of the capital needed for additional expenditures
      will be determined at that time. If a drill program is recommended, we do not
      have sufficient capital on hand to complete such a program because it would
      require the expenditure of significant amounts of money. We would need to raise
      additional capital through the sale of debt or equity. We can give no assurance
      that we would be able to raise such capital, as we have not identified any
      source of capital for such a program at this time. If we could not raise
      additional funds ,
      we
      would consider seeking a joint venture partner if the results warranted it.
      We
      do not have any joint venture partners at this time and can give no assurance
      that we would be able to find one if the Encino Gordo Property warranted such
      a
      joint venture.





Although
      two of our properties have been mined in the past, we are presently in the
      exploration stage and there is no assurance that a commercially viable mineral
      deposit exists in any of our properties. We do not have any proven or probable
      reserves on our properties.





We
      have
      one geologist doing some preliminary mapping and sampling on each of the
      properties. We have made a business decision to place a higher priority on
      the
      Cieneguita exploration program to define drill targets. However, we intend
      to
      proceed with exploration on all three properties simultaneously. We have engaged
      independent contractors to perform the exploration work with respect to the
      exploration programs. We do not anticipate buying equipment, other than
      transportation equipment, until construction of the Cieneguita mine is
      initiated, if ever. If
      our
      exploration programs warrant drilling programs
      on the properties, we anticipate contracting two geologists and four assistants
      for supervising the drilling work and taking splits for the drilling
      samples.





Once
      we
      receive results from these exploration programs, our board of directors will
      assess whether to proceed to any further exploration phases. In making this
      determination, we will make an assessment as to whether the results are
      sufficiently positive to enable us to obtain the financing necessary to proceed.
      The decision will be based mainly on the recommendations of our head exploration
      geologist that we anticipate hiring in by the end of July 2006. Other factors
      that will influence the production decision will be the current price of gold
      bullion, availability of mining equipment and a mining feasibility
      study.





**Results
      of Operations**




***Three
      months ended May 31, 2006 compared to the three months ended May 31,
      2005.***





Revenues





We
      did
      not earn revenues during the three months ended May 31, 2006 or 2005 because
      we
      did not have commercial production of any of our properties. We do not
      anticipate earning revenues until such time as we have entered into commercial
      production of our mineral properties, if ever. We are presently in the
      exploration stage of our business. We can provide no assurance that we will
      discover commercially exploitable levels of mineral resources on our properties
      or, if such resources are discovered, that we will enter into commercial
      production of our mineral properties. Interest income is recorded under Other
      Income in the Statement of Operations in the financial statements.





Operating
      Costs










We
      did
      not incur any operating costs during the years ended 2006 and 2005 due to the
      fact that we did not achieve production from exploration activities during
      either year.





Expenses





Our
      expenses increased to $822,549 for the three months ended May 31, 2006 compared
      to $13,052 for the three months ended May 31, 2005, representing an increase
      of
      $809,497. The increase is primarily attributable to the costs associated to
      raising capital and a developing exploration program which commenced in the
      prior fiscal quarter.





General
      and administrative cash expenses increased to $570,288 in the three months
      ended
      May 31, 2006 compared to $13,052 in the three months ended May 31, 2005,
      representing an increase of $557,236. Management fees increased to $88,045
      in
      the three months ended May 31, 2006 from $nil in the three months ended May
      31,
      2005. The increase was attributable to a new management team appointed in the
      prior fiscal quarter. Finders’ fees increased to $284,950 in the three months
      ended May 31, 2006 from $nil in the three months ended May 31, 2005. The
      increase was attributable to two private placements; a unit offering and
      convertible debentures. Accounting and legal fees increased to $41,312 in the
      three months ended May 31, 2006 from $8,000 in the three months ended May 31,
      2005. The increase in fees was primarily attributable to higher auditing costs
      and the cost of regulatory filings with the SEC.





There
      were no stock-based compensation expenses or other compensation expenses in
      either of the three month periods ended May 31, 2006 and 2005.





Mineral
      exploration in the three months ended May 31, 2006 increased to $252,261
      compared to $nil for the three months ended May 31, 2005. The Company was not
      in
      a developing exploration program during the three months ended May 31, 2005.
      We
      anticipate that exploration expenditures will increase in fiscal 2007 as a
      result of exploration activities on our Mexican mineral properties.





Acquisition
      of resource properties was $nil for both three months ended May 31, 2006 and
      2005.





Loss





Our
      net
      loss increased to $3,114,676 for the three months ended May 31, 2006 compared
      to
      $14,342 for the three months ended May 31, 2005, representing an increase of
      $3,100,334. This increase in our loss was primarily attributable to a beneficial
      conversion feature of $2,265,500 on convertible debentures issued in the three
      months ended May 31, 2006; which was recorded as interest expense. We anticipate
      that we will continue to incur losses until such time as we can commence the
      development stage of our operations and achieve significant revenues from sales
      of gold recovered from our Mexican mineral properties. There is no assurance
      that we will be able to commence the development stage of our operations at
      any
      of our Mexican mineral properties or achieve revenues.





**Liquidity
      and Capital Resources**





Since
      inception, we have undergone two unsuccessful business combinations, which
      have
      caused us to incur significant liabilities and have resulted in the accumulation
      of a substantial deficit during the exploration stage.  As of May 31, 2006,
      we have total assets of $2,150,308, total liabilities of $3,004,277, and a
      deficit of $33,553,799 accumulated during the exploration stage.





Cash
      and Working Capital









We
      had
      cash of $2,074,857 as of May 31, 2006, compared to cash of $479,950 as of
      February 28, 2006, and $9,950 as of May 31, 2005. We had working capital of
      $2,060,806 as of May 31, 2006, compared to working capital of $45,944 as of
      February 28, 2006, and a working capital deficiency of $736,459 as of May 31,
      2005.





Under
      our
      current business plan, we will not require additional financing this fiscal
      year. However, we will require additional financing during the current fiscal
      year if our planned exploration activities increase. We plan to spend
      approximately $850,000 in the next twelve months to carry out exploration and
      administration activities on our Mexican mineral properties, and in the event
      that our exploration is successful on our Cieneguita Property, we anticipate
      spending a further $1,500,000 on equipment and building a plant to put that
      property into production. We anticipate spending approximately $480,000 during
      the next twelve months on general and administrative costs. We presently do
      not
      have sufficient financing to enable us to complete these plans and will require
      additional financing to perform future exploration work on our Mexican mineral
      properties. Our actual expenditures on these activities will depend on the
      amount of funds we have available as a result of our financing efforts. There
      is
      no assurance that we will be able to raise the necessary financing.





Cash
      Used in Operating Activities





Cash
      used
      in operating activities increased to $873,211 for the three months ended May
      31,
      2006 compared to $10,172 for the three months ended May 31, 2005. The cash
      used
      in operating activities came primarily from convertible debt and equity sales
      of
      our common shares. It was primarily used for General and Administrative costs
      and for the acquisition of resource properties.





Investing
      Activities





Cash
      used
      in investing activities increased to $1,962 for the three months ended May
      31,
      2006 compared to $nil for the three months ended May 31, 2005. Cash used in
      investing activities was used to acquire office equipment for our office in
      Mexico.





Financing
      Activities





Cash
      provided by financing activities increased to $2,470,500 for the three months
      ended May 31, 2006 compared to cash used of $15,000 for the three months ended
      May 31, 2005. All cash provided by financing activities was provided by
      convertible debt and share issuances. Cash provided by financing activities
      was
      used to fund our operating and investing activities.





We
      anticipate continuing to rely on equity sales of our common stock or issuance
      of
      debt in order to continue to fund our business operations. Issuances of
      additional shares will result in dilution to our existing shareholders.





On
      April
      3, 2006 and May 31, 2006, the Company issued 550,000 common shares and 200,000
      common shares respectively and closed a private placement for total proceeds
      of
      $375,000. As at February 28, 2006, the Company had received $170,000 of
      subscriptions for this unit offering. Units consisted of one share of common
      stock and one-half of one warrant.  Each full warrant entitles the investor
      to purchase an additional share of the Company’s common stock at a price of
      $1.00 per share and is exercisable until April 30, 2008. The units were priced
      at $0.50 each.





On
      March
      4, 2006, the Company agreed to issue 1,651,200 common shares at a price of
      $0.25
      per share to settle $412,800 in promissory notes payable. As a condition, the
      promissory note holders waived all accrued interest payable on the notes. On
      April 6, 2006, these shares were issued and the Company recorded a $7,259 gain
      on settlement of debt.










During
      the quarter ended May 31, 2006, the Company issued a total of $2,265,500
      convertible debentures. The convertible debentures, with principal and accrued
      interest at 7% per year are convertible into units at the option of the holder.
       Each unit consists of a warrant to purchase 25,000 of the Company’s common
      shares at $1.00 and $25,000 of debt, which may be converted to common shares
      at
      $0.50 per share and is exercisable until April 30, 2008.  In addition, the
      warrants are redeemable by the Company, at $.01 per share, in the event the
      Company’s Common Stock closes with a bid price, on average, over $3.00 per share
      for a consecutive 20-day period. There were no convertible debentures issued
      on
      the three months ended May 31, 2005.





The
      amount of our convertible debt outstanding at May 31, 2006 was $2,917,500
      compared to $652,000 at February 28, 2006 and $705,000 at May 31, 2005.





In
      June
      2006, all of the holders of the $2,917,500 convertible debentures converted
      to
      common shares at $0.50 per share. The Company issued 5,835,000 common shares
      and
      2,917,500 warrants to debenture holders upon the conversion. We have paid to
      the
      convertible debenture holders a total of $58,817, which is their accumulated
      interest on the debentures.





We
      believe that the cash on hand derived from the sale of securities totaling
      $3,292,500 will be sufficient to fund our budgeted exploration and operation
      costs until April 2007.





Going
      Concern


Our
      financial statements have been prepared on a going concern basis, which assumes
      the realization of assets and settlement of liabilities in the normal course
      of
      business. Our ability to continue as a going concern is dependent upon our
      ability to generate profitable operations in the future and/ or to obtain the
      necessary financing to meet our obligations and repay our liabilities arising
      from normal business operations when they become due. The outcome of these
      matters cannot be predicted with any certainty at this time and raise
      substantial doubt that we will be able to continue as a going concern. Our
      financial statements do not include any adjustments to the amount and
      classification of assets and liabilities that may be necessary should we be
      unable to continue as a going concern.





The
      Company has a history of operating losses and will need to raise additional
      capital to fund its planned operations. The Company had working capital of
      $2,060,806 as of May 31, 2006, and an accumulated deficit of $35,557,226. These
      conditions raise substantial doubt about the Company’s ability to continue as a
      going concern.





The
      Company intends to reduce its cumulative loss through the attainment of
      profitable operations from its investment in a Mexican mining venture. There
      is
      no assurance that these operations will be profitable. In addition, the Company
      has conducted private placements of convertible debt and common stock, which
      have generated a portion of the initial cash requirements of its planned Mexican
      mining ventures.





**Off-Balance
      Sheet Arrangements**




We
      currently do not have any off-balance sheet arrangements which have or are
      reasonably likely to have a current or future effect on our financial condition,
      changes in financial condition, revenues or expenses, results of operations,
      liquidity, capital expenditures or capital resources that are material to our
      investors.





**ITEM
      3.**  **CONTROLS
      AND PROCEDURES**





***Evaluation
      of Disclosure Controls and Procedures*** :
      Disclosure controls and procedures are designed to ensure that information
      required to be disclosed in the reports filed or submitted under the Exchange
      Act is









recorded,
      processed, summarized and reported, within the time period specified in the
      SEC's rules and forms. Disclosure controls and procedures include, without
      limitation, controls and procedures designed to ensure that information required
      to be disclosed in the reports filed under the Exchange Act is accumulated
      and
      communicated to management, including the Chief Executive Officer and Chief
      Financial Officer, as appropriate, to allow timely decisions regarding required
      disclosure. As of the end of the period covered by this report, we carried
      out
      an evaluation, under the supervision and with the participation of our
      management, including our Chief Executive Officer and Chief Financial Officer,
      of the effectiveness of the design and operation of our disclosure controls
      and
      procedures. Based upon and as of the date of that evaluation, the Chief
      Executive Officer and Chief Financial Officer concluded that our disclosure
      controls and procedures are effective in ensuring that information required
      to
      be disclosed in the reports submitted under the Exchange Act is recorded,
      processed, summarized and reported as and when required.





***Changes
      in Internal Control over Financial Reporting*** :
      There
      were no changes in our internal controls or in other factors that could affect
      these controls subsequent to the date of their evaluation, including any
      deficiencies or material weaknesses of internal controls that would require
      corrective action.








**PART
      II - OTHER INFORMATION**





ITEM
      2.  UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.





In
      the
      quarter ended May 31, 2006, the Company issued $2,265,500 of convertible
      debentures, with principal and accrued interest at 7% per year, convertible
      into
      units at the option of the holder. Each unit consists of a warrant to
      purchase 25,000 common shares at $1.00 per share and $25,000 of debt, which
      may
      be converted to common shares at $0.50 per share and is exercisable until April
      30, 2008. These
      warrants are redeemable by the Company, at $0.01 per share, in the event the
      Company’s Common Stock closes with a bid price, on average, over $3.00 per share
      for a consecutive 20 day period.





The
      units
      were offered and sold to the Purchasers in a private placement transaction
      made
      in reliance upon exemptions from registration pursuant to Regulation S for
      offerings outside of the United States.  The units were not offered or sold
      to United States citizens, and no directed selling efforts were made within
      the
      United States.





During
      the quarter ended May 31, 2006, the
      Company issued 750,000 common shares pursuant to a private placement unit
      offering. Units consisted of one share of common stock and one-half of one
      warrant. Each full warrant entitles the investor to purchase an additional
      share
      of the Company’s common stock at a price of $1.00 per share and is exercisable
      until April 30, 2008.





These
      units were only offered to individuals or entities who qualified as accredited
      investors under the Securities Act of 1933.  The units were offered under
      an exemption from registration found in Rule 506 of Regulation D.





On
      March
      4, 2006, the Company agreed to issue 1,651,200 common shares at a price of
      $0.25
      per share to settle $412,800 in promissory notes payable and on April 6, 2006,
      these shares were issued.




ITEM
      6.  EXHIBITS.





The
      following exhibits are filed in reference:








2.1
              Securities
                  Purchase Agreement dated as of August 25, 2004 among Sunburst Acquisitions
                  IV, Inc. (and identified purchasers) (incorporated by reference
                  from
                  Current Report on Form 8-K and filed with the Securities and Exchange
                  Commission on August 31, 2004).  2.2
              Share Exchange Agreement, dated May 3, 2004, by
                and among
                Sunburst Acquisitions IV, Inc., a Colorado corporation, Sierra Minerals
                and Mining, Inc., a Nevada corporation, and the shareholders of Sierra
                Minerals & Mining, Inc. (incorporated
                by reference from Current Report on Form 8-K/A and filed with the
                Securities and Exchange Commission on August 9,
                2004).  2.3
              Joint
                Venture Agreement, dated April 26, 2004 and amended on June 1, 2004,
                by
                and between Sierra Mining and Minerals, Inc., a Nevada corporation,
                and
                Minera Rio Tinto S.A. de C.V., a Mexican company(incorporated
                by reference from Current Report on Form 8-K/A and filed with the
                Securities and Exchange Commission on August 9,
                2004).  2.4
              Amendment
                to Joint Venture Agreement dated June 1, 2004 (incorporated by reference
                from Current Report on Form 8-K/A and filed with the Securities and
                Exchange Commission on August 9, 2004).  3
                  (i)
              Articles
                  of Incorporation (incorporated by reference from Registration Statement
                  on
                  Form 10-SB/A filed with the Securities and Exchange Commission
                  on December
                  29, 1997).





3
                (ii)
            Bylaws
                (incorporated by reference from Registration Statement on Form 10-SB/A
                filed with the Securities and Exchange Commission on December 29,
                1997).




4.1
            Specimen
              Common Stock Certificate (incorporated by reference from Registration
              Statement on Form 10-SB/A filed with the Securities and Exchange
              Commission on December 29, 1997).  4.2
            Registration
                Agreement dated April 20, 2004, by and among Sunburst Acquisitions
                IV,
                Inc., a Colorado company, and each of the purchasers in a private
                placement of shares of Sunburst(incorporated
                by reference from Current Report on Form 8-K/A and filed with the
                Securities and Exchange Commission on August 9,
                2004).





10.1
            Distribution
                Agreement between EPI and Sunburst Acquisitions IV, Inc. (incorporated
                by
                reference from Form 10-KSB filed with the Securities and Exchange
                Commission on May 20, 2002).




10.2
            Distribution
              Agreement by and between Romlight International, Inc. and Sunburst
              Digital, Inc. (incorporated by reference from Form 10-KSB filed with
              the
              Securities and Exchange Commission on June 11,
              2003).







10.3
            Promissory
                Note between Sunburst Acquisitions IV, Inc. andMinera
                Rio Tinto S.A. de C.V. in the amount of $ 57,500 dated January 9,
                2004(incorporated
                by reference from Current Report on Form 8-K/A and filed with the
                Securities and Exchange Commission on August 9,
                2004).





10.4
            Promissory
                Note between Sierra Mineral and Mining, Inc. andMinera
                Rio Tinto S.A. de C.V. in the amount of $ 167,500, dated May 3, 2004(incorporated
                by reference from Current Report on Form 8-K/A and filed with the
                Securities and Exchange Commission on August 9,
                2004).







10.5
            Funds
                Escrow Agreement dated July 2005, among Sunburst Acquisitions IV,
                Inc.,
                Investment Fund, Ltd., Alpha Capital AG and Stonestreet LP, and Grushko
                & Mittman, P.C. (herein incorporated by reference from the Company’s
                current report on Form 8-K dated July 1, 2005 and filed with the
                Securities and Exchange Commission on August 17,
                2005).





10.6
            Repayment
                Agreement dated July 15, 2005 by and among Sunburst IV, Inc. and
                Investment Fund, Ltd., Alpha Capital AG and Stonestreet LP. (herein
                incorporated by reference from the Company’s current report on Form 8-K
                dated July 1, 2005 and filed with the Securities and Exchange Commission
                on August 17, 2005).





10.7
            Consulting
                Agreement dated July 1, 2005 between Tracy A. Moore and Sunburst
                Acquisitions IV, Inc. (herein incorporated by reference from the
                Company’s
                current report on Form 8-K dated July 1, 2005 and filed with the
                Securities and Exchange Commission on August 17,
                2005).







10.8
            SHARE
                OPTION AGREEMENT among Minera Rio Tinto, S.A. de C.V. a corporation
                duly
                incorporated and validly existing pursuant to the laws of the United
                Mexican States and having an office at Pascual Orozco No. 2117 -
                A
                Chihuahua, State of Chihuahua, Mexico 31310 and Sunburst Acquisitions
                IV,
                Inc., a corporation duly incorporated and validly existing pursuant
                to the
                laws of the State of Colorado, USA and having an office at Suite
                206, 595
                Howe St., Vancouver, B.C. Canada V6C 2T5 (herein incorporated by
                reference
                from the Company’s report on Form 8-K for report date August 22, 2005 and
                filed with the Securities and Exchange Commission on August 25,
                2005).




10.9
            AGREEMENT
                made and entered in the City of Chihuahua, State of Chihuahua as
                of the
                18th day of August, 2005 among COMPAÑÍA MINERA DE NAMIQUIPA, S. A. DE C.
                V. a company duly incorporated and validly existing pursuant to the
                laws
                of the United Mexican States, and MINERA RIO TINTO, S. A. DE C. V.
                a
                company duly incorporated and validly existing pursuant to the laws
                of the
                United Mexican States, and MARIO HUMBERTO AYUB TOUCHE having a domicile
                at
                San Antonio No. 2036 Chihuahua, Chihuahua and SUNBURST MINING DE
                MÉXICO,
                S. A. DE C. V., a company duly incorporated and validly existing
                pursuant
                to the laws of the United Mexican States (herein incorporated by
                reference
                from the Company’s report on Form 8-K for report date August 22, 2005 and
                filed with the Securities and Exchange Commission on August 25,
                2005).









10.10
            AGREEMENT
                made and entered at the City of Chihuahua, State of Chihuahua on
                this the
                18th day of August of the year 2005, among MINERA RIO TINTO, S. A.
                DE C.
                V. a company duly incorporated and validly existing pursuant to the
                laws
                of the United Mexican States, and SUNBURST MINING DE MÉXICO, S. A. DE C.
                V. a company duly incorporated and validly existing pursuant to the
                laws
                of the United Mexican States (herein incorporated by reference from
                the
                Company’s report on Form 8-K for report date August 22, 2005 and filed
                with the Securities and Exchange Commission on August 25,
                2005).




10.11
            OPERATOR’S
                AGREEMENT dated effective as of the 18th day of August, 2005, among
                Minera
                Rio Tinto, S.A. de C.V. a corporation duly incorporated and validly
                existing pursuant to the laws of the United Mexican States and having
                an
                office at Pascual Orozco No. 2117 - A Chihuahua, State of Chihuahua,
                Mexico 31310, and Sunburst de Mexico, S.A. de C.V. a corporation
                duly
                incorporated and validly existing pursuant to the laws of the United
                Mexican States and having an office at Suite 5, Avenida del Mar No.1022
                Zona Costera, Mazatlan, State of Sinaloa, Mexico (herein incorporated
                by
                reference from the Company’s report on Form 8-K for report date August 22,
                2005 and filed with the Securities and Exchange Commission on August
                25,
                2005).




10.12
            ASSIGNMENT
                OF CONTRACT AGREEMENT made and entered in the City of Chihuahua,
                State of
                Chihuahua as of this the 18th day of August, 2005 among MINERA RIO
                TINTO,
                S. A. DE C. V. a company duly incorporated and validly existing pursuant
                to the laws of the United Mexican States, and CORPORATIVO MINERO,
                S.A. DE
                C.V. a company duly incorporated and validly existing pursuant to
                the laws
                of the United Mexican States, and SUNBURST MINING DE MÉXICO, S. A. DE C.
                V. a company duly incorporated and validly existing pursuant to the
                laws
                of the United Mexican States (herein incorporated by reference from
                the
                Company’s report on Form 8-K for report date August 22, 2005 and filed
                with the Securities and Exchange Commission on August 25,
                2005).




10.13
            ASSIGNMENT
                OF CONTRACT AGREEMENT made and entered in the City of Chihuahua,
                State of
                Chihuahua as of this the 18th day of August, 2005, among MINERA RIO
                TINTO,
                S. A. DE C. V. a company duly incorporated and validly existing pursuant
                to the laws of the United Mexican States, and RAFAEL FERNANDO ASTORGA
                HERNÁNDEZ, having a domicile at Calle República de Uruguay No. 706 of the
                City of Chihuahua, Chih, and SUNBURST MINING DE MÉXICO, S. A. DE C. V. a
                company duly incorporated and validly existing pursuant to the laws
                of the
                United Mexican States (herein incorporated by reference from the
                Company’s
                report on Form 8-K for report date August 22, 2005 and filed with
                the
                Securities and Exchange Commission on August 25,
                2005).




10.14
            ASSIGNMENT
                OF CONTRACT AGREEMENT made and entered in the City of Chihuahua,
                State of
                Chihuahua as of this the 18th day of August, 2005 among MINERA RIO
                TINTO,
                S. A. DE C. V. a company duly incorporated and validly existing pursuant
                to the laws of the United Mexican States, having an office at Av.
                Pascual
                Orozco Number 2117- Altos, La Cima, C. P. 31310, Chihuahua, Chihuahua,
                and
                MINERA RACHASA, S.A. DE C.V., a company duly incorporated and validly
                existing pursuant to the laws of the United Mexican States, and having
                an
                office atNiños Héroes No. 410 Colonia Centro, Chihuahua, Chihuahua (RFC
                BMM-900120-8B6), and SUNBURST MINING DE MÉXICO, S. A. DE C. V. a company
                duly incorporated and validly existing pursuant to the laws of the
                United
                Mexican States (herein incorporated by reference from the Company’s report
                on Form 8-K for report date August 22, 2005 and filed with the Securities
                and Exchange Commission on August 25,
                2005).









10.15
            THE
                NEW AGREEMENT entered into on December 8, 2005 among the Company,
                Sunburst
                Mexico, and MRT (herein incorporated by reference from the Company’s
                report on Form 8-K for report date December 8, 2005 and filed with
                the
                Securities and Exchange Commission on December 14,
                2005).





10.16
            CREATION
                OF A DIRECT FINANCIAL OBLIGATION AND UNREGISTERED SALES OF SECURITIES
                ON
                MARCH 31, 2006 (herein incorporated by reference from the Company’s report
                on Form 8-K for report date March 31, 2006 and filed with the Securities
                and Exchange Commission on April 7,
                2006).





10.17
            AMENDMENT
                TO AGREEMENT ENTERED INTO ON DECEMBER 8, 2005, entered into on April
                6,
                2006 among Company, Sunburst Mexico, and MRT (herein incorporated
                by
                reference from the Company’s report on Form 8-K for report date April 6,
                2006 and filed with the Securities and Exchange Commission on April
                7,
                2006).





31.1
            Certification
                of Chief Executive Officer of Mexoro
                Minerals Ltd. pursuant to Rule 13a-14(a)/15d-14(a).*  31.2
            Certification
              of Chief Financial Officer of Mexoro
              Minerals Ltd. pursuant to Rule 13a-14(a)/15d-14(a).*




32.1
            Certification
                of Chief Executive Officer of Mexoro
                Minerals Ltd.. pursuant to 18 U.S.C. Section 1350.
                *  32.2
            Certification
              of Chief Financial Officer of Mexoro
              Minerals Ltd. pursuant to 18 U.S.C. Section 1350.*




*filed
      herewith











**SIGNATURE**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.








**MEXORO
      MINERALS LTD.**














By:
      /S/
      Robert Knight


Robert
      Knight, President and Director




Date:
      July 17, 2006