UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  Form 10-QSB/A   X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended November 30, 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)  Colorado0-2356184-1431797(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification Number)609 Granville Street, Suite 880
Vancouver, British Columbia
CanadaV7Y 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 January 15, 2007.  Transitional Small Business Disclosure Format (Check one): Yes __ No X     - 1 -    EXPLANATORY NOTE  We are filing this Form 10-QSB/A for the period ended November 30, 2006, to reflect changes in our controls and procedures disclosure.  Any items included in the original report on Form 10-QSB for the period ended November 30, 2006, that are not included herein, are not amended and remain in effect as of the date of the original filing thereof.  Additionally, this Form 10-QSB/A does not purport to provide a general update or discussion of any other developments subsequent to the original filing.  The filing of this Form 10-QSB/A shall not be deemed to be an admission that the original filing, when made, included any untrue statement of material fact or omitted to state a material fact necessary to make a statement contained therein not misleading.   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company)  Consolidated Financial Statements November 30, 2006 (Unaudited) (U.S. Dollars)    INDEXPageConsolidated Financial StatementsConsolidated Balance Sheets3Consolidated Statements of Operations and Retained Deficit4Consolidated Statements of Cash Flows5Notes to Consolidated Financial Statements6 - 20     - 2 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company)  Consolidated Balance Sheets (Unaudited) (U.S. Dollars) RESTATED  Note 2 November 30,February 28,20062006AssetsCurrentCash and cash equivalents$842,742$479,530Amounts receivable164,20110,069Prepaid expenses27,49048,2691,034,433537,868Equipment (note 5)135,345880Total assets$1,169,778$538,748LiabilitiesCurrentAccounts payable and accrued liabilities$118,958$79,124Promissory notes (note 7)-412,800118,958491,924Convertible debentures (note 8)-652,000Total liabilities118,9581,143,924Stockholders equity (deficiency)Capital stockPreferred stockAuthorized: 20,000,000 shares without par value (note 9)Issued: nil--Common stockAuthorized: 200,000,000 shares without par valueIssued: 21,036,102 (2006  12,799,902) (note 10)19,304,27715,573,977Additional paid-in capital7,966,8463,991,596Stock subscriptions-170,000Accumulated deficit from prior operations(2,003,427)(2,003,427)Accumulated deficit during the exploration stage(24,221,128)(18,338,373)Other comprehensive income4,2521,051Total stockholders equity (deficiency)1,050,820(605,176)Total liabilities and stockholders equity (deficiency)$1,169,778$538,748 Going concern (note 4) Commitments (note 6) Contingent liability (note 14) Subsequent events (note 15) The Accompanying Notes are an Integral Part of These Financial Statements.  - 3 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company)  Consolidated Statements of Operations and Accumulated Deficit (Unaudited) (U.S. Dollars) RESTATED  Note 2  Period fromInception ofExploration
StageThree Months EndedNine Months EndedMarch 1, 2004 toNovember 30,November 30,November 30,November 30,November 30,20062005200620052006ExpensesGeneral and administrative$160,496$148,594$958,256$232,458$1,655,003Stock-based compensation487,250-1,709,750-2,531,955Mineral exploration333,050-937,548-937,548Impairment of mineral property costs---150,00015,306,422Operating loss(980,796)(148,594)(3,605,554)(382,458)(20,430,928)Other income (expenses)Interest expense-(1,323)(2,320,973)(3,013)(3,967,157)Interest income12,395-36,513-36,513Gain on settlement of debt (notes 7 and 8)-133,1857,259133,185140,444Net loss(968,401)(16,732)(5,882,755)(252,286)(24,221,128)Accumulated deficit during theexploration stage, beginning (note 2)(23,252,727)(3,856,769)(18,338,373)(3,621,215)-Accumulated deficit during theexploration stage, ending$(24,221,128)$(3,873,501)$(24,221,128)$(3,873,501)$(24,221,128)Other comprehensive incomeForeign exchange gain (loss) on translation26,653(1,618)(4,252)4,554(4,252)Total comprehensive loss$(941,748)$(15,114)$(5,887,007)$(247,732)$(24,218,450)Total loss per share  basic and diluted$(0.05)$(0.01)$(0.33)$(0.14)Weighted average number of shares ofcommon stock  basic and diluted21,036,1021,782,02818,015,1811,763,738  The Accompanying Notes are an Integral Part of These Financial Statements.  - 4 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company)  Consolidated Statements of Cash Flows (Unaudited) (U.S. Dollars) RESTATED  Note 2 Period fromInception ofNine Months EndedExploration StageMarch 1, 2004 toNovember 30,November 30,November 30,200620052006Operating activitiesNet loss$(5,882,755)$(252,286)$(24,221,128)Adjustments to reconcile net income (loss) to
net cash flowsWrite off of note receivable--57,500Impairment of mineral property costs for stock-150,00013,065,000Issuance of shares for Consulting Services-100,000-Amortization15,192-15,192Discount on convertible debenture--175,000Non-cash component of gain on settlement of debt-(133,185)(175,000)Stock-based compensation1,709,750-4,144,955Beneficial conversion feature2,265,500-3,717,500Prepaid expense20,779-(21,010)Amounts receivable(154,132)(13,094)(155,995)Customer deposits--(44,809)Accounts payable and accrued liabilities39,83480,86396,765Cash used in operating activities(1,985,832)(67,702)(3,346,030)Investing activityPurchase of property and equipment(149,657)-(150,537)Cash used in investing activity(149,657)-(150,537)Financing activitiesProceeds from notes payable-455,300562,800Proceeds from convertible debentures2,240,500-3,692,500Proceeds from exercise of options-43,00078,000Proceeds from exercise of warrants50,000-50,000Repayment of notes payable-(28,500)(178,500)Repayment of convertible debentures-(541,815)(530,000)Stock subscriptions(170,000)107,500-Issuance of common stock375,000-647,109Cash provided by (used in) financing activities2,495,50035,4854,321,909Inflow of cash and cash equivalents360,011(32,217)825,342Effect of foreign currency translation on cash3,201(1,325)17,400Cash and cash equivalents, beginning479,53035,122-Cash and cash equivalents, ending$842,742$1,580$842,742Supplemental cash flow informationInterest paid$55,473$-$162,157Income taxes paid---Common stock issued on conversion of debt2,917,500-3,217,500Common stock issued on settlement of notes payable412,800-412,800Shares issued for services--90,000  The Accompanying Notes are an Integral Part of These Financial Statements.  - 5 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company)  Notes to Consolidated Financial Statements Nine Months Ended November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2  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 operation 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 6). On January 20, 2006, Sierra Minerals was dissolved.  These interim consolidated financial statements include all adjustments, which in the opinion of management, are necessary in order to make the financial statements not misleading.  2. RESTATEMENT  After further review, management has determined that, in the year ended February 28, 2006, shares issued for services and recorded as stock-based compensation expense totalling $3,898,000 should be amortized over the 24-month term of the contract. Accordingly, this amount has been corrected and is now recorded as $487,250 per quarter starting at December 1, 2005 and ending November 30, 2007. Therefore, these November 30, 2006 quarterly financial statements have been restated. The effect of this adjustment on the Companys consolidated financial condition is as follows:  November 30, 2006February 28, 2006RestatedOriginally reportedRestatedOriginally reportedAdditional paid-in capital7,966,8469,915,8463,991,5967,402,346Accumulated deficit(24,221,128)(26,170,128)(18,338,373)(21,749,123)   - 6 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2  2. RESTATEMENT (continued)  The effect of this adjustment on the Companys consolidated results of operations is as follows:  Period endedNovember 30, 2006
Three months endedNovember 30, 2006
Nine months endedRestatedOriginally reportedRestatedOriginally reportedStock-based compensation487,250-1,709,750248,000Net loss for the period(968,401)(481,151)(5,882,755)(4,421,005)Loss per share$  (0.05)$  (0.02)$  (0.33)$  (0.25)  In addition, in the nine months ending November 30, 2006, management revised the disclosure in the consolidated statement of cash flows reflecting the restated stock-based compensation and errors in the classification of financing activities.  The effect of these adjustments on the Companys consolidated statement of cash flows is as follows:  Period endedNovember 30, 2006RestatedOriginally ReportedOperating activitiesNet loss$    (5,882,755)$    (4,421,005)Stock-based compensation1,709,750248,000Financing activitiesProceeds of convertible debentures$      2,240,500$       (652,000)Proceeds from exercise of warrants50,000-Issuance of common stock375,0003,317,500  - 7 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2 3. 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 rate risk because the interest rate is fixed to maturity.  (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-U.S. operations into U.S. currency using rates approximating the average exchange rate for the year.  The exchange rate may vary from time to time.  Accordingly, there is a risk, does not incur significant transactions in-non-U.S. currency.  - 8 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)  (c) Equipment  Equipment is recorded at cost. Depreciation is provided on a declining-balance basis at 30% on computer equipment, 25% on vehicles and 10% on office equipment.  (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) Mineral property costs  The Company has been in the exploration stage since its inception on March 1, 2004, and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02, Whether Mineral Rights Are Tangible or Intangible Assets. The Company assesses the carrying costs for impairment under SFAS No. 144, Accounting for Impairment or Disposal of Long Lived Assets at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.  (f) 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 shares of common stock 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.  (g) 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.  - 9 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2 3. SIGNIGICANT ACCOUNTING POLICIES (Continued)  (h) 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  (i) 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.  (j) Stock-based compensation  Effective March 1, 2004, the Company adopted the fair value based method of accounting for stock-based employee compensation in accordance with the provisions of SFAS No. 123 Accounting for Stock-Based Compensation, using the prospective transition method. Accordingly the Company recognized the fair value of stock-based employee compensation for all awards made after March 1, 2004. The Company is in accordance with Emerging Issues Task Force No. 96-18 "Accounting for Equity Instruments That are Issued to Other than Employees for Acquiring, or in Conjunction with Selling, Goods or Services" ("EITF 96-18"), with respect to options and warrants issued to non-employees.  Effective March 1, 2005, the Company adopted the fair value recognition provisions of SFAS No. 123R Share Based Payments, using the modified prospective transition method. Under that transition method, compensation cost is recognized for all share-based payments granted prior to, but not yet vested as of March 1, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and compensation cost for all share-based payments granted subsequent to March 1, 2004, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R. Results for prior periods have not been restated. As of March 1, 2004, there were no unvested options; and therefore, there was no effect on the Companys reported loss from operations, cash flows or loss per share as a result of adopting SFAS No. 123R.  All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued (see note 11).  (k) 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.  - 10 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2 3. SIGNIFICANT ACCOUNTING POLICIES (Continued)  (l) Foreign currency translation  Mexoro and its subsidiary, Sunburst de Mexico, maintain accounting records in their functional currencies, U.S. dollars and Mexican pesos, respectively.  Mexoro and Sunburst de Mexico translate foreign currency transactions into the respective functional currencies in the following manners: at the transaction date, each asset, liability, revenue and expense is translated into the functional currency by the use of the exchange rate in effect at that date;  at the period end, foreign currency monetary assets and liabilities are re-evaluated into the functional currency by using the exchange rate in effect at the balance sheet date.  The resulting foreign exchange gains and losses are included in operations.  In preparing consolidated financial statements, the Company translates the assets and liabilities of its subsidiary into U.S. dollars at the exchange rate in effect at the balance sheet date.  Revenue and expenses are translated into U.S. dollars at the average exchange rate for the applicable period.  Any gain or loss from such translations are included in stockholders equity as a component of other comprehensive income.  (m) 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  (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  - 11 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2  3. SIGNIFICANT ACCOUNTING POLICIES (Continued)  (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 No. 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.  (vi) FIN 48, Accounting for Uncertainty in Income Taxes (Interpretation of FASB statement 109).  This Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes.  This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  The Company will adopt this interpretation effective March 1, 2007.    - 12 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2 4. 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 November 30, 2006, the Company had working capital of $915,475 (February 28, 2006 - $45,944) and a cumulative loss during the exploration stage of $24,221,128 (February 28, 2006 - $18,338,373).  These conditions raise substantial doubt about the Companys ability to continue as a going concern.   5. EQUIPMENT  November 30, 2006February 28, 2006AccumulatedCostDepreciationNetNetOffice equipment$16,573$(288)$16,285$880Vehicles103,115(9,963)93,152-Software16,205(4,051)12,153-Computers14,557(803)13,755-$150,450$15,105$135,345$880  6. 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.  After re-statements (see note 2), the issued common stock 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. After re-statements (see note 2), the fair value of these options 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, which had interests in exploration properties.     - 13 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2  6. 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, which took title to the properties.  The Company entered into additional agreements with MRT, which provided Sunburst de Mexico options on the concessions for the Guazapares properties and additional concessions for the Cienequita properties, and the right of first refusal on two additional 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.  Sahauyacan Property  On October 24, 2006, Sunburst de Mexico S.A. de C.V. entered into an Exploration And Sale Option Agreement Of Mining Concessions (the Exploration Agreement) with Minera Emilio, S.A. DE C.V. (Minera Emilio) for mineral concessions in Chihuahua, Mexico on the property referred to as the Sahauyacan Property. Under the Exploration Agreement, Minera Emilio granted the Company the exclusive right to conduct exploration on the Sahauyacan Property.  The Company must pay Minera Emilio $282,000 in the following manner:  (i) $30,000 paid at the execution of the Agreement (paid); (ii) $2,500 per month during the first year with an effective start date of  - 14 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2  6. MINERAL PROPERTIES (Continued)  August 21, 2006; (iii) $3,500 per month during the second year term; and (iv) $5,000 monthly, during the third, fourth, and fifth yearly term.  The term of the Exploration Agreement is five years from the date of execution by Minera Emilio, which expires on June 22, 2011.  Minera Emilio also granted the Company the option to purchase the Mineral Claim from Minera Emilio (the Option) for $300,000 or the equivalent of $500,000 in restricted shares of common stock of Mexoro based upon the market value of such shares during the thirty days preceding notice of the intent to exercise the Option.  The Option shall expire on June 22, 2011.  The Company must complete a feasibility survey within three years from the date the Option is exercised.  After exercising the Option, the Company must pay Minera Emilio royalties on any mineral ore that is sold from the Mineral Claim.  The rate of the royalties due varies based on the price of the Golden Ounce on the London Metal Exchange (the Price).  If the Price is less than or equal to $600 per ounce, the royalty due is 3% of Net Revenue.  If the Price is higher than $600 per ounce, the royalty due is 4% of the Net Revenue.  Net Revenue is calculated by subtracting smelting expenses, added value taxes, and all other taxes on production sales from revenue.      - 15 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2 7. PROMISSORY NOTES  As at November 30, 2006 the Company had $nil (February 28, 2006 - $412,800) of promissory notes outstanding and $nil (February 28, 2006 - $7,259) of accrued interest outstanding on the promissory notes.  On March 4, 2006, the Company agreed to issue 1,651,200 shares of common stock at a price of $0.25 per share to settle $412,800 in promissory notes payable. As a condition, to this arrangement the promissory note holders waived all accrued interest payable on the notes. On April 6, 2006, these shares were issued (note 10) and the Company recorded a $7,259 gain on settlement of debt.  8. 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, where 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.    - 16 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2  8. CONVERTIBLE DEBENTURES (Continued)  In December 2005, the Company issued $300,000 in convertible debentures 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 shares of common stock (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 and February 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 shares of common stock at $1.00 per share and $25,000 of debt, which at the option of the holder, may be converted to shares of common stock at $0.50 per share until April 30, 2008.  As at February 28, 2006, the Company had issued convertible debentures in the amount of $652,000  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.  During 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 consisted of a warrant to purchase 25,000 shares of common stock at $1.00 per share and $25,000 of debt, which at the option of the holder, may be converted to shares of common stock at $0.50 per share 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, and interest expense of $906,200 was recorded representing the relative fair value of the warrants (immediately exercisable) in relation to the convertible debt, and as a result, the aggregate sum of $2,265,500 was offset as additional paid in capital. As at May 31, 2006 there was $2,917,500 of convertible debentures outstanding.  During the quarter ended August 31, 2006, all of the $2,917,500 convertible debentures were converted into 5,835,000 shares of the Companys common stock at $0.50 per share. As at August 31, 2006 there were no convertible debentures outstanding.  The fair value of the warrants attached to the convertible debentures as discussed above was estimated at the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions:  112,500 Warrants  attached to $675,000 Convertible Debenture135,000 Additional Rights Warrants  attached to $675,000 Convertible Debenture2,917,500 WarrantsExpected life5 years5 years2 yearsExpected volatility107%107%107%Risk free interest rate5%5%5%Expected dividends---Exercise price$6.00$5.00$1.00Weighted average fair value of warrant$6.00$5.00$1.10Stock price at date of grant$6.50$6.50$1.45   - 17 -    MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2 9. 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.  10. COMMON STOCK  Numberof SharesAmountBalance, February 28, 200612,799,902$15,583,977Issued pursuant to private placement550,000275,000Issued pursuant to settlement of promissory notes1,651,200412,800Issued pursuant to private placement200,000100,000Issued pursuant to exercise of convertible debt5,835,0002,917,500Issued pursuant to exercise of warrants50,00050,000Shares returned to treasury(50,000)(25,000)Balance, November 30, 200621,036,102$19,314,277  On April 3, 2006 and May 31, 2006 the Company issued 550,000 and 200,000 shares of common stock 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 shares of common stock at a price of $0.25 per share to settle $412,800 in promissory notes payable (note 7). On April 6, 2006, these shares were issued.  On July 5, 2006, the Company issued 5,835,000 shares of common stock on the exercise of $2,917,500 of convertible debt at a price of $0.50 per share.  On August 10, 2006, the Company issued 50,000 shares of common stock on the exercise of 50,000 warrants where each warrants was exercisable into shares of common stock at a price of $1.00 per share.  On August 15, 2006, the Company returned to treasury 50,000 shares of common stock that were issued but not delivered pending payment with respect to the convertible debt converted into shares of common stock on July 5, 2006.    - 18 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2 11. 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 shares of common stock 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.  Pursuant to a Consulting Agreement (the Agreement) between the Company and GM Capital Partners Inc. (GM Capital), signed January 31, 2006, the Company granted 5,000,000 warrants (see note 12). The Agreement provides for the provisions of financial public relations services from December 1, 2005 to November 30, 2007. The fair value of the 5,000,000 warrants 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 an assumed dividend rate of 0% and totals $3,898,000. This amount will be amortized over the 24-month term of the contract and the Company will record $487,250 as a stock-based compensation expense and an offsetting credit to additional paid-in capital every quarter until November 30, 2007.  On February 27, 2006, the Company granted 800,000 ISOs under the ISO Plan to directors and  officers (600,000 stock options) and consultants (200,000 stock options) 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 $992,000 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.  On August 15, 2006, the Company granted 150,000 stock options to an employee at $1.04 (a 10% discount to market price on the day of acceptance), which vest over a three year period at a rate of 25,000 stock options every six months.  Compensation cost, being the fair value of the options, is calculated to be $171,000 of which $28,500 is expensed every six months as they vest.  The fair value of the 150,000 options was determined using the Black-Scholes option pricing model using a ten-year expected life of the option, a volatility factor of 143%, a risk-free rate of 4% and no assumed dividend rate.  The options are summarized as follows:  Weighted AverageOptionsExercise PriceOutstanding at February 28, 2006930,000$ 0.54Granted150,0001.04Outstanding at November 30, 20061,080,000$0.54  - 19 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2  11. STOCK COMPENSATION PROGRAM (Continued)  The following table summarizes options outstanding at November 30, 2006:  Exercise PriceNumber of Options IssuedNumber of Options ExercisableRemaining Contractual Life (Years)$0.50890,000490,0008.81$1.04150,00009.45$1.5040,00040,0003.501,080,000530,000  The Company has reserved 1,080,000 shares of common stock in the event that these options are exercised.  For the quarter ended November 30, 2006, there was no stock-based compensation expense related to stock options issued or vested.  12. WARRANTS As at November 30, 2006, the Company had a total of 8,217,500 (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 8,217,500 shares of common stock in the event that these warrants are exercised.  The warrants include 1,000,000 Series A Warrants exercisable at $0.50 per share, 1,000,000 Series B Warrants exercisable at $0.75 per share, 1,000,000 Series C Warrants exercisable at $1.00 per share, 1,000,000 Series D Warrants exercisable at $1.25 per share, and 1,000,000 Series E Warrants exercisable at $1.50 per share; of which all are exercisable at the option of the holder, have no redemption features, and are settled on a physical basis. The Series 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 series of Warrants will become exercisable only at the time that the immediately preceding series has been fully exercised.  Unless terminated earlier as a result of failure to vest, the Series B and Series C Warrants will each expire on December 31, 2007, and the Series D and Series E Warrants will each expire on December 31, 2008.  The fair value of the 5,000,000 warrants 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 and totals $3,898,000 of stock-based compensation expense which is amortized over the twenty four month term of the GM Capital contract at $487,250 every quarter until November 30, 2007.  The Company has also issued 2,917,500 warrants exercisable at $1.00 each pursuant to the issuance of convertible debentures (note 8). These warrants expire on April 30, 2008, 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 and are settled on a physical basis. On August 10, 2006, 50,000 warrants were exercised into 50,000 shares of common stock at a price of $1.00 per share. On August 15, 2006, 25,000 warrants were cancelled due to non-payment of funds with respect to a convertible debt subscription in the amount of $25,000 (note 10).   - 20 -   MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2  12. WARRANTS(Continued)  The fair value of the warrants discussed above was estimated at the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions:  2,917,500 Warrants1,000,000 Warrants issued to GM Capital  Series A1,000,000 Warrants issued to GM Capital  Series B1,000,000 Warrants issued to GM Capital  Series C1,000,000 Warrants issued to GM Capital  Series D1,000,000 Warrants issued to GM Capital  Series EExpected life (years)21.582.082.083.083.08Expected volatility107%152%152%152%152%152%Risk free interest rate5%5%5%5%5%5%Expected dividends------Exercise Price$1.00$0.50$0.75$1.00$1.25$1.50Weighted average fair value of warrant$1.10$0.78$0.78$0.74$0.81$0.79Stock price at date of grant$1.45$1.00$1.00$1.00$1.00$1.00  The Company has also issued 375,000 warrants exercisable at $1.00 each pursuant to a private placement unit offering from shares issued on April 3, 2006 and May 31, 2006. Each warrant entitles the investor at their option to purchase an additional share of the Companys common stock at a price of $1.00 per share, is exercisable until April 30, 2008, has no redemption features and is settled on a physical basis.    13. RELATED PARTY TRANSACTIONS  For the nine months ended November 30, 2006, the Company paid management fees of $158,900 (2005 - $15,000) to certain officers and directors and to companies controlled by directors. The Company also paid $38,499 (2005 - $nil) to certain officers and directors and to companies controlled by directors for travel, office and other related expenses.  As at November 30, 2006, accounts payable of $nil (2005 - $8,364) were owing to certain officers and directors of the Company and to companies controlled by directors.  All related party transactions are in the normal course of business at the exchange amount agreed to by each party.  - 21 -    MEXORO MINERALS LTD. (Formerly Sunburst Acquisitions IV, Inc.) (An Exploration Stage Company) Notes to Consolidated Financial Statements Nine Months Ended  November 30, 2006 (Unaudited) (U.S. Dollars) RESTATED  Note 2  14. CONTINGENT LIABILITY  On August 31, 2006, the Company entered into an Amended Consulting Agreement with G.M. Capital.  This agreement replaces the agreement signed with G.M. Capital in January 2006, which contained registration rights which requires the Company to use best efforts to file a registration statement registering the warrant shares within 45 days upon demand of 50% of the warrant holders and thereafter to use best efforts to cause such registration statement to be declared effective as soon as reasonably possible. Otherwise, the Company is obligated to sell to GM Capital as liquidated damages payment comprising of 1,000 shares per day at $0.001 per share until the default is cured. As at August 31, 2006, GM Capital had not demanded the Company to file a registration statement, and, in the Companys opinion, best efforts have been made to effect the registration of the warrant shares. Accordingly, the Company believes a liability did not and does not exist and accordingly no provision was made in the financial statements in this regard.  The Amended Consulting Agreement dated August 31, 2006, in part, removed the provision for the liquidated damages provision relating to the registration rights of the holders of the Warrants.   15. SUBSEQUENT EVENTS  (a) Promissory Notes  Subsequent to November 30, 2006, the Company shall offer Notes, up to $2,000,000 in principal amount together with warrants, where every $5.00 of principal amount can be converted into one warrant.  The Notes shall require quarterly payments of interest at 7% and shall be due and payable in full in one year.  In addition, the Company shall be required to apply all net operating income from the Cieneguita Property to repayment of the Notes until they are paid in full.  The Company also must apply the net proceeds of any funds received from the issuance of new equity or debt instruments until the Notes are repaid in full. The Warrants will be exercisable for a period of one year beginning one year after the date of the offering and will give the holder the right to buy one share of common stock for $1.00 for a period of one year. The Company will pay a finders fee of 7%.                      - 22 -   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 March 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. We 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.  For the twelve month period from May 2007 to April 2008, we will need to raise additional capital to maintain operations. To maintain basic operations, pay our taxes and property obligations, and to continue with our basic exploration plans, we will need to raise a minimum of $1,000,000 in additional capital. If our exploration during that time period is successful, we may need to raise additional capital to fund those exploration programs. At this time, we cannot assess with any accuracy our total capital needs to fund an expanded exploration program beyond our basic program. We also anticipate that we will need to raise an additional $2,200,000 for the purchase of milling equipment and to build the plant site for our Cieneguita property. We would anticipate raising the additional capital to maintain operations and to put the Cieneguita property into production through the sale of our common stock or through debt financing. At this time, we do not have any sources of additional capital to fund our operations beyond April 2007. We also believe that we will not generate any revenues that would allow us to continue operations. If we are unable to raise additional capital through debt or equity beyond April 2007, it is most likely that we would need to cease operations and forfeit our properties as we would be unable to make the necessary property payments.  We are planning to buy a plant or significant equipment in the next six months. We anticipate spending approximately $2,200,000 on equipment and building a plant to put the Cieneguita property into production. The ability for us to buy such equipment is dependent upon our cash position at that time and our ability to raise additional capital. We currently do not have sufficient working capital to purchase all of the needed equipment. If we should fail to raise additional capital through the sale of equity or debt, we will not be able to purchase the desired equipment and we will not be able to construct a production facility to process the ore. Currently we do not have any sources for such capital to purchase the mining equipment. Furthermore, the Cieneguita Property has no known ore reserves.  Plan of Operation  Cieneguita Property  Because we already have data from the previous exploration programs and mining records from Glamis Gold, our exploration program, planned until the end of April 2007, on the Cieneguita Property will focus mainly on identifying  - 23 -   mineralized zones of economic grade to allow for the property to be put into production as an open pit heap leach mine.  The following steps summarize the exploration we have done to date on the Cieneguita Property, as well as our plans.  1. Phase 1 Exploration.  Budget: We expected the Phase 1 exploration program to cost approximately $200,000.  From January 2006 to November 2006, we spent approximately $400,000, double the budgeted amount, on the phase 1 exploration of this project.  Of this, $300,000 was spent on the trenching, sampling and assaying on the property.  We also spent approximately $50,000 on column testing to determine the leachability of the ore.  The balance of the funds was spent in wages, camp costs and general administrative costs.  The funds that were expended came from our general working capital.  We plan to do some additional column testing to determine the leachablity of the ore.  The estimated cost for these additional tests will be approximately $50,000. The funds required for these additional tests will come from general working capital.  Milestones: The milestones for the phase 1 exploration program 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 also conducted cyanide testing on the rock to determine the best method of leaching the precious metals from the rock.  We plan to complete phase 1 by the end of December 2006.  In April 2006, we completed a sampling of the property that included more than 500 meters of deep trenches from which we took comprehensive channel sampling.  The trenches comprised 8 trenches approximately 200 meters long and 2 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.  One half of these samples were sent to ALS Chemexs laboratory in Chihuahua for assaying. The sampling protocol followed the best mining practices. The purpose of the sampling was to further define the ore grade and potential of the property.  We also completed detailed soil sampling and rock sampling outside of the trenches.  By December 2006, we plan to complete a detailed mapping of the property using existing information and drill results from previous operators, as well as incorporating our own data.  To this end, we will create a structural mineralization framework for the property.  We do not have any proven reserves on this property.  The other half of the sample was used to complete column tests to determine the leachability of the precious metals from the rock.  In this test, the ore was placed in PVC tubes, and different mixtures of a cyanide solution were dripped over the top of the columns at different flow rates.  The results from these tests will help determine the most effective solution to be used on the heap leach pads on the property.  These tests were done by qualified geologists employed by MRT as part of our office package costs.  The tests were scientifically conducted and monitored for quality control and efficacy.  These tests were done to ensure that the metallurgy of the minerals allows for economic recovery of the precious metals using a cyanide heap leach process.  The results of the column test indicate that up to 98% of the gold contained in the ore samples we took could be recovered from the ore if the ore is leached for a long enough period.  Under actual mining production conditions in the field, though, we would anticipate that the economic recovery levels of the ore would be approximately 70% to 75% recovery of gold from the ore.  The cost of the cyanide needed to produce the additional gold above the 85% level outweighs the value of the gold recovered.  We cannot guarantee that we would be able to achieve this level of recovery.  This is not an estimate of reserves on the property.  Additional tests will be needed to determine the most effective crush size of the ore, the most cost effective flow rates of the cyanide and most economical leaching time to be undertaken if we should ever put the property into production.  We anticipate these additional tests will begin in March 2007 and the tests should be completed approximately 90 days thereafter.  We hope that these tests will help us optimize the potential for extracting precious metals from the ore for the mining operation.  2. Phase 2 Exploration.  Budget: We plan to commence phase 2 of our exploration program  in March 2007 under the direction of our VP of Exploration after he has had sufficient time to review all of our data.  We have budgeted $200,000 for the Phase 2 Exploration; consisting of $50,000 for an additional trenching program, $50,000 for general administrative expenses and $100,000 for the cost of a drilling program, assaying and supervision included.  Milestones: The objectives for phase 2 of the exploration plan are to initiate a drill program and to continue the trenching program from phase 1 of exploration in order to further delineate the oxide ore mineralization to define where we plan to attempt to mine the ore.  We plan to complete this second phase of exploration by the end of March 2007.   - 24 -   Subject to the recommendation of our VP of Exploration, we may initiate a drill program consisting of 1,000 meters of reverse circulation drilling.  At this time, there is a high demand for drill rigs, and we cannot predict with any accuracy the timing to start the drilling program.  Once we do receive a rig, we anticipate the drilling program will take approximately one month, with assay results available one month later.  The funds for this drilling program will come from general working capital on hand.  We hope that the results from this drilling will help us to better delineate the mineralization of the oxide zone and provide an ore reserve calculation.  We do not intend to implement a feasibility study for the property in this phase of exploration.  Six of the drill holes will be drilled to a depth of 200 meters to test the sulphide potential of the mineral system.  The use of these deep holes will help us determine if there is an extension to the oxide mineralization in the underlying sulphides.  Our onsite geologist will determine where the holes will be drilled based on our earlier exploration and mapping of the property.  We are currently negotiating with several contractors to secure the use of a drill to undertake our drill program.  To date, we have not found a contractor able to supply drills to meet our time schedule.  We cannot, with any certainty, predict when a drill rig may become available to us.  The unavailability of such drill rigs could hamper our exploration plans, but management believes that we can generate sufficient information from the trenching program, to mine the oxide mineralization on the property.  We have not determined any known reserves on this property to date.  Because management determined that the results of our phase 1 exploration completed in November 2006 warranted further exploration, we plan to begin the next phase of exploration in March or April of 2007.  The trenching program will entail using a bulldozer to dig trenches.  Our on-site geologist will direct the bulldozer operator as where to dig the trenches. The geologist will base his decision on where to dig on the results of our previous exploration work.  Once the trenches are dug, the geologist will take samples of rock from all levels of the walls of the trench as if it were rock from a drill core.  The rock will be gathered up and marked from which part of the trench it came from.  The ore is pulverized and shipped out for assays.  The results from these assays are expected to be completed and mapped by May 2007, with the goal of further delineating the prospects of the property.  Even though the rock is fractured, the objective of the drill program will be to provide us with accurate information to make an ore calculation of the grade of the ore and the size of the mineralized zones.  One of the main purposes of this phase of exploration is to delineate the mineralized ore body and map the grade of the mineralization that will allow us to refine our plan to put the property into production.  If the exploration program does not provide us with the results we deem necessary to continue exploration, then, on a recommendation from our senior geologist or our VP of Exploration and managements concurrence on his findings, we will cease exploration on the property and any plans to put the property into production.  If no further exploration is warranted, then we will discontinue any payments to the concession holders and allow our option to lapse.  We will also then try to sell the mining equipment we have recently purchased.  If we allow the option to lapse, we will be obligated, by the Mexican Government, to complete some reclamation work on the property of approximately $50,000.  These funds would come from the bond we have already paid to the government in the amount of $67,000.   Any funds not expended on reclamation would be returned to us by the Government.   All of the money that we had invested in the exploration of the Cieneguita Property would be lost.  We have one geologist on the Cieneguita Property working full time, and he will continue to do so through April 2007 if the exploration results warrant the expenditure.  If the results do not warrant further work, we plan to move this geologist to one of our other properties to continue exploration on those properties.  3. Cieneguita Mine Design.   Budget: We budgeted $50,000 from general working capital to be used to create the mine design for the Cieneguita property.  Milestones: Concurrently with the second phase of exploration we will implement our plan to put the Cieneguita Property into production.  The mine design will help determine where and how we will mine the Cieneguita Property.  We plan to put the mine into production by the end of May 2007 if we are able to find available funding.  Coinciding with phase 2 of our exploration program, we have commissioned a mine design to determine how to put the Cieneguita Property into production.  At this time, we do not plan to implement a feasibility study for this property but feel we have sufficient information to put the property into production.  The mine design has been commissioned to a third party contractor with expertise in heap leach mining. This contractor, an engineering firm, is reviewing all of the data  - 25 -   that we have accumulated from Glamis Golds previous exploration and from the trenching and sampling we have completed on the property.  All of this information will be put on a map laying out the structure of the mineralized zone on our property to assist in mining the ore.  The key purpose of this map is to help enable our on-site geologist to monitor grade control during mining.  Additionally, from the information accumulated so far on the Cieneguita Property, the mining engineer has designed a heap leach mining operation best suited to the tonnage, grade of the ore and availability of land to build leaching pads.  The mine design calls for the mining operation to be run by a third party contractor, who will charge the company a flat fee per tonne of rock that is moved.  It is estimated by the engineer designing the mine that the cost per tonne of rock moved from the property to the mill site will be approximately $1.30 per tonne of rock.  This fee is only an estimate, as no contractor at this time has been engaged to mine the mineralized ore nor provided us with a firm quote on the cost of mining.  The actual cost of mining the ore may be much higher, and no assurance can be given as to the actual cost at this time.  The engineering firm designing the mine has stated that one of the key objectives at this stage of the mining operation will be grade control.  Because our sampling has shown that the gold mineralization is not consistent through out the ore, it will be imperative that our geologist on site directs the contractors on where to mine the ore.  The geologist will need to work daily using the interpretation from the results of our drilling program and will need to take samples of the rock and assay them on site to determine where the contractor should extract ore for the next day.  The proper grade of ore shipped to the milling site is imperative to ensure a profitable operation.  If the head grade is too low, we will not recover enough gold from the rock to maintain a profitable operation.  Conversely, a head grade of ore that is too high will shorten the life of the mine.  We are estimating that the total cost of mining and milling the ore will be approximately $13 per tonne.  If the price of gold fluctuates up or down, we may have to adjust our cut off grade, which is currently 1.5 grams per tonne, which will affect the over all life of the mine.  The milling of the ore at the mine site will also be contracted out to a third party.   The following is a brief description of the mining process pursuant to our mine design.  First, the ore is crushed by a crusher into a smaller size.  Second, the rock is deposited on a conveyor belt and moved to the agglomorator.  Third, the agglomorator mixes the rock with lime, and then the rock is moved to a stacker.  A stacker is a moveable conveyor belt that oscillates back and forth, distributing the rock equally onto a heap leach pad.  At that point, the rock is sprinkled with a cyanide mixture for approximately 30 days.  The fluid from the percolation through the rock is then pumped through carbon filters.  Waste rock is dumped into a ravine, per our permits, while the carbon filters are shipped to a third party for extraction of the precious metals.  The waste rock is completely free of any harmful chemicals and is restored to the original ph it had prior to mining.  We have identified and negotiated the purchase of a second hand crusher suitable for our type of operation and for the size of rock we will be mining.  We are in the process of negotiating the construction of the conveyor belts we will need for all the phases of the milling operation.  The conveyor belts will be manufactured in Chihuahua and assembled at the mine site of Cieneguita.  We have also identified and negotiated the purchase of a second hand agglomorator.  We have identified and negotiated the purchase of a used stacker suitable for this type of operation.    We have negotiated a purchase price for used carbon filters and pumps to be used for this stage of the milling process.  At this time, we do not know the cost associated with the process of having the precious metals extracted and minted into ore bars.  If our head grade is not accurate or the heap leach process is not effective, we may not extract enough gold from the carbon filters to pay for this complete operation and we would lose money from the mining operation.  If we lost money on the mining and milling operation, we may not be able to stay in business as we would expect the cash flow from operations to cover, at the minimum, the mining and milling operation.  Furthermore, we do not have any proven reserves on our property and the ability to find enough ore could severely hinder any mining operations.  We engaged an independent third part consultant to review the work of the engineering firm to verify and agree with the results of the mine design.  The independent third party engineers worked with the mining engineering firm to agree on a final design.  The mine design has been completed and cost approximately $50,000.  We paid for the work from our general working capital.  The milling equipment and cost of building the plant will be approximately $2,200,000.  We estimate that we will need approximately $1,100,000 for working capital during the first four months of operation of the mine.  There can be no assurance given that if the property is put into production that, after four months of operation, we will have recovered any precious metals from the milling process.  We will need to continue to fund working capital if the precious metals are not in the ore as predicted.  We will need to raise additional capital to put the property into production and to fund at least the first four months of working capital.  The funds would be raised through the sale of debt or equity.  We have not identified any additional sources of capital at this time.  Furthermore, once we have commenced production, we can give no assurance that we will be profitable or recover any gold.   - 26 -   Guazapares Property  1. Phase 1 Exploration.  Budget: Concurrently with the exploration of the Cieneguita Property, we have budgeted approximately $450,000 of our general working capital for exploration on our Guazapares Property until April 2007.  Of this amount, we have spent approximately $100,000 from March 2006 through the end of November 2006 in our first phase of exploration.  These funds came from our general working capital.  Milestones: The goals of the first phase of exploration on the Guazapares Property are to collect rock sample and complete the mapping of the property.  This phase has been completed.  Management has determined that further exploration is warranted, so we have begun phase 2 of exploration, as described below.  We believe that most of the mining concessions being explored in the Guazapares area are epithermal silver deposits similar to the Cieneguita Property.  However, because we do not have the same amount of detailed information on Guazapares as we do on Cieneguita, the exploration program will cost more than the exploration program on Cieneguita.  We have one full time geologist working on the Guazapares Property collecting rock samples and mapping the property.  The goal for this phase was the completion of mapping on the property at a scale of 1:5,000 with individual veins being mapped at a scale of 1:1,000.  Rock samples were taken from the property.  The rock samples from this phase were sent to Chemex ALS in Chihuahua for chemical analysis and assaying. The sampling protocol followed the best mining practices. The results from this first phase of the exploration program had the goal of determining whether subsequent exploration was warranted and if a drill program should be commenced.   This phase 1 of work included reviewing available data to create a structural mineralization framework.  We also mapped the topography and sampled the entire underground workings along the main level of the San Antonio mine. The distribution of the veins, lithology and alteration was also mapped. We have received the results from this first phase of exploration.  Management reviewed the results of this phase and determined, based on a recommendation from our lead geologist on the property, to continue to phase 2 of exploration.  2. Phase 2 Exploration.  Budget: We have budgeted $100,000 of the total of $450,000 for Phase 2 of exploration.  Of this, $50,000 is budgeted for a ground based geophysical exploration that will concentrate mainly on the area around the San Antonio mine and $50,000 for specific sampling and trenching on the San Francisco property.  These funds will come from general working capital of the company.  Milestones: The goals of phase 2 of exploration are to conduct more detailed soil and rock sampling, perform ground-based geophysical measurements, map the topography, and sample trenches in order to define the structural framework of the mineralized zone to facilitate a drilling program, if warranted.  This phase commenced in February 2007 and is expected to be completed by the end of May 2007.  The second phase of the exploration program, using two geologists, will include more detailed soil and rock sampling, ground-based geophysics measurements and mapping on all of the concessions at Guazaparez.  At this time, though, we do not have enough information to implement a drill program.  One of the objectives of this stage of exploration will be to conduct a ground based geophysical exploration that will concentrate mainly on the area around the San Antonio mine.  Another target will be to map the topography and sampled the surface trenches in the San Francisco area.  The purpose of this phase of exploration will be to define the structural mainframe of the mineralized zone to facilitate the placing of drill holes.  Once this information is obtained from phase two of the exploration project, our senior geologist and our VP of Exploration will review all of the data collected and make a recommendation to management.  Management, at that time, will review the exploration data collected and the recommendations and make a determination whether additional work is advisable.  If the management determines that additional exploration is not warranted, then we will likely discontinue exploration and make no further property payments, abandoning the concessions.  If we abandon the Guazapares Property, we will not have to make any further property payments as per our property purchase agreements.  We will, however, lose all the funds we have expended on the property to date including property payments made to date.  If management determines that further exploration is warranted, we will conduct phase 3 of our exploration program.  3. Phase 3  Drill Program.  - 27 -    Budget: If a drill program is warranted and implemented, we estimate that the initial expenditure will be $250,000 (the balance of the $450,000 budgeted for the property).  We will need to raise additional capital through the sale of equity or debt to fund a complete drilling program as only a small portion of the funds budgeted will be left in our general working capital to initiate the program.  Milestones: The goal of the third phase of exploration would be to gather information to determine if we should put the property into production.  We do not have enough information at this time to determine any specifics on how the drilling phase of the exploration program would be implemented.  We will be able to make this determination once we have all of the information back from the second phase of exploration.  Management and our VP of Exploration will review the information from phase 2 and decide whether or not to continue exploration.  If the decision is to continue, we will begin the third phase of exploration.  In this phase, if sufficient funds can be generated to pay for the drilling, and assuming drill rigs are available in the area, our plan would be to commence this program in June 2007, and it would last approximately 60 days.  The results of this drill program would take approximately 90 days to be assayed and interpreted.  Once those results are known, we would consult with our lead exploration geologists and our VP of Exploration to determine whether to abandon the Guazapares Property or continue with further drilling exploration.  If management 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.  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.  We have not identified any sources of funds to implement such a program.  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.  The Guazapares Property is without known reserves. Our proposed programs are exploratory in nature.  Encino Gordo  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 that was done by other companies.  The previous geochemical sampling that was done suggests a presence of mineralized structures. These structures are being investigated by geochemical sampling to determine if further exploration is warranted and to help refine the best exploration plan for the concessions.  1. Phase 1 Exploration.  Budget: We have planned for an exploration program, budgeted at approximately $200,000 from general working capital through April 2007, on our Encino Gordo Property.  Of this, $50,000 will be used for mapping and sampling, which we anticipate completing by February 2007.  We have spent $40,000 through the end of November 2006. The balance of the funds will be spent as directed by our VP Exploration.  The funds will come from general working capital.  Milestones: The goals of the first phase of exploration are to complete mapping of the property and to take geochemical samples from the property.  We currently have one geologist taking geochemical sampling and mapping this property.   The purpose of this initial program is to get a better understanding of the geology of the property.  We expect to complete this phase of the exploration program by the end of February 2007.  We intend to map the property at a scale of 1:5,000 with individual veins being mapped at a scale of 1:1,000. We met part of our mapping goal during the month of October, when mapping was completed along the extension of the structures hosting the Elyca vein located along the eastern edge of the Encino Gordo claims.  A total of 43 stream sediment samples were collected from the various arroyos cutting the property. Samples of greater than 1 kilogram were collected with material crushed to less than 1 mm size.  Samples of this rock will be analyzed by Chemex ALS for gold content plus 27 other mineral elements associated with the rock.The sampling protocol followed the best mining practices. The purpose of the sampling was to further define the ore grade and potential of the property.  To date, three samples returned anomalous results of gold which require follow-up to verify source areas.  We would expect the balance of the samples to be returned by the end of February 2007.   - 28 -   In October, we prepared a list of preliminary drill hole locations to accompany the SAMARNAT work permit application. We intend to file the application for the permit by the end of February 2007, with approval from SAMARNAT expected by the end of April 2007.  Once the work permit is approved, our goal will be to drill the targets as recommended by our VP of Exploration.  The VP of Exploration has not recommended any drilling program at this time.  We cannot predict with any accuracy when, if ever, we will commence drilling on this property and the cost of such drilling.  We are applying for drill permits before determining whether or not a drill program will be commenced in order to save time in the event a drill program is recommended.  Much additional exploration work must be completed and a definitive exploration plan needs to be prepared by our VP of Exploration before management can determine whether or not to continue to the next phase of exploration.  The actual drill hole locations are likely to change from those submitted with the working plan permit as drill targets are reviewed.  This change of targets will not affect the working permit as such a movement of locations is anticipated in the issuing of the permits.  Our goal is to have this further exploration completed by the end of February 2007, and a geological report prepared by our senior geologist on the Encino Gordo Property should be available 60 days thereafter.  Depending on the results of the report, as determined by management, we intend to either abandon the Encino Gordo Property, in which case no further payments would be made or would be due under our agreements to acquire these concessions, or to make additional expenditures to determine potential drill targets.  2. Phase 2 Drill Program.  Budget: If management decides to continue exploration by initiating a drill program, a budget will be prepared at that time, and the amount and source of the capital needed for additional expenditures will be determined.  If a drill program of any size is recommended, we do not have sufficient capital on hand to complete such a program because it would most likely 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.  Milestones: The second phase of exploration would be a drill program to gather more information.  Such information would be used to determine if we should put the property into production.  We do not know when this phase of exploration could be completed, as discussed above.  We estimate that the program would take approximately 60 days to complete, with results from the program being returned about 90 days after completion.  These are estimates, as the number of drill targets will determine the length of the drill program.  Once the results from the drill program are known, we would consult with our lead exploration geologists and our VP of Exploration to determine whether to abandon the Encino Gordo Property or continue with further drilling exploration.  Management and the VP of Exploration will review the information provided by the first phase of exploration and determine whether a drill program is recommended.  If a drill program is recommended and we have received our permits that have been applied for in advance, we do not have sufficient information at this time to estimate what that program would entail.  We need extensive information to determine the number of drill holes to drill, where they would be located and to what depth they would be drilled.  This information will be provided by the first phase of exploration.  The Encino Gordo Property is without known reserves. Our proposed programs are exploratory in nature.  Sahauyacan  The Sahauyacan Property is located near the Chihuahua-Sonora state boarder approximately 275 kilometers east-southeast of the city of Chihuahua and 50 kilometers south-southwest of the town of Mycoba in the state of Chihuahua, Mexico. The Sahauyacan Property comprises fourteen mineral concessions that total 649 hectares (approximately 2,575 acres). We have limited information available to us about this property from previous exploration.  The main vein in the area, the Santo Nino Vein, was the focus of a small scale underground gold mining operation in the late 1800s and early 1900s, with at least 3 main underground mine access drifts supplying feed to a centrally located mill, which is still present. The mine was closed at the time of the Mexican revolution and the Santo Nino vein system has never been evaluated using modern techniques and has not been explored by drilling.  This area will most likely be the main focus of our exploration program once we have a definitive plan in place.  We expect to have our exploration plan in place by April 2007.  - 29 -    1. Phase 1 Exploration:  Budget: Because we have recently acquired this property, we have no definitive budget plan in place at the moment for the exploration of the property.  However, we expect to budget approximately $150,000 from general working capital, through June 2007, to work on the Sahauyacan Property.  We have spent approximately $90,000 of this budget doing initial due diligence on the property and gathering initial information.  The funds spent to date have come from general working capital.  The estimated expenditures for future work will need to be raised 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 Sahauyacan Property warranted such a joint venture.  Milestones: We have completed our initial mapping of the property and intend to map the underground workings of the property by the end of February 2007.  At that point, our VP of Exploration will review the available information and create a complete exploration program.  As part of our due diligence on acquiring the properties, we had a surface geological mapping and sampling crew evaluate the property from September 2006 and through December 2006. Mapping on the property was completed at a scale of 1:5,000 with individual veins being mapped at a scale of 1:1,000. To date, a total of 309 samples have been taken from taken the property including 101 rock chip and channel samples, 41 stream sediment samples and, 158 soil samples. We expect to receive the results back from our sampling taken by the crew by the end of February 2007.  We intend to complete an evaluation of the underground workings to determine if they can be safely entered.  If so, we intend to map these workings by the end of February 2007.  Prior to optioning the property, we conducted some preliminary work on the property to verify certain data.  As part of or preliminary work, we had one geologist taking geochemical sampling and mapping this property so that we can get a better understanding of the geology of the property and provide that information to our VP of Exploration.  Once we have a better understanding of the geology of the property, we will be able to prepare a definitive exploration plan and exploration budget for this property.  Because we have recently acquired the Sahauyacan Property, the specific goals of our exploration program have not been clearly defined at this time.  We have done some preliminary work, as described above, but we have not yet prepared a detailed budget or exploration plan for this property.  We do not expect to have a definitive exploration plan for this property until our VP of Exploration has had an opportunity to review all of the available material on the property.  The Sahauyacan Property is without known reserves. Our proposed programs are exploratory in nature.    Although three 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 made a business decision to place a higher priority on the Cieneguita exploration program to define mineralized ore.  However, we intend to proceed with exploration on all four properties simultaneously.  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 management 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 senior geologist and VP of Exploration.  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  Revenues  - 30 -    We did not earn revenues during the three and nine months ended November 30, 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 three and nine months ended 2006 and 2005 due to the fact that we did not achieve production from exploration activities during either year.  Expenses  Our expenses during the three and nine months ended November 30, 2006 were $160,000 and $958,000 respectively, compared to $148,594 and $232,458 respectively, for the three and nine months ended November 30, 2005. The increase is primarily attributable to higher General and administrative expenses as there were no stock based compensation expense and developing exploration program in comparative periods in 2005.  The following table presents the general and administrative, stock-based compensation and mineral exploration expenses:  Three months ended November 30Nine months ended November 302006200520062005General and administrative160,496148,594958,256232,458Stock-based compensation487,250-1,709,750-Mineral exploration333,050-937,548-Impairment of mineral property costs---150,000  The increase in general and administrative cash expenses relates to higher management fees of $146,000 and $342,000 in the three and nine months ended November 30, 2006 respectively, from $66,000 and $98,000 in the three and nine months ended November 30, 2005. Finders fees increased to $285,000 in the nine months ended November 30, 2006 from $nil in the nine months ended November 30, 2005. The increase was attributable to two private placements; a unit offering and convertible debentures. Accounting and legal fees increased to $84,000 and $177,000 in the three and nine months ended November 30, 2006 respectively, from $32,000 and $77,000 in the three and nine months ended November 30, 2005. The increase in fees was primarily attributable to higher auditing costs and the cost of regulatory filings with the SEC.  Stock-based compensation expenses were $487,000 and $1,710,000 in the three and nine months ended November 30, 2006 compared to $nil in the three and nine months ended November 30, 2005. The $487,000 relates to three months of the quarterly amortization of warrants issued for services effective December 1, 2005, while the $1,710,000 relates to nine months of the quarterly amortization of warrants issued for services effective December 1, 2005, and $248,000 relates to 25% vesting amount of the 800,000 stock options granted in February 2006 at a price of $0.50 per share. As at November 30, 2006, 50% of the 800,000 stock options have vested.  Mineral exploration in the three and nine months ended November 30, 2006 increased to $333,050 and $938,000 respectively, compared to $nil for the nine months ended November 30, 2005. The Company was not in a developing exploration program during the nine months ended November 30, 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 in the nine months ended November 30, 2006 compared to $150,000 for the nine months ended November 30, 2005.  Loss  - 31 -    Our net loss increased to $968,000 and $5,883,000 for the three and nine months ended November 30, 2006 respectively, compared to $17,000 and $252,000 for the three and nine months ended November 30, 2005. The higher losses are attributed to increased expenses as stated above and expensing of $2,266,000 relating to the beneficial conversion feature on $2,241,000 of convertible debentures issued between March and May 2006. 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 February 28, 2006, we had total assets of $539,000, total liabilities of $1,144,000, and a deficit of $18,338,000 accumulated during the exploration stage.   As of November 30, 2006, we had total assets of $1,170,000, total liabilities of $119,000, and a deficit of $24,221,000 accumulated during the exploration stage.  Cash and Working Capital  We had cash of $842,742 as of November 30, 2006, compared to cash of $1,534,000 as of August 31, 2006 and $1,580 as of November 30, 2005. We had working capital of $915,475 as of November 30, 2006, compared to working capital of $1,450,000 as of August 31, 2006, and a working capital deficiency of $833,000 as of November 30, 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 $3,200,000 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 $2,200,000 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 $1,986,000 for the nine months ended November 30, 2006, compared to $68,000 for nine months ended November 30, 2005. The cash used in operating activities came primarily from convertible debt and equity sales of our shares of common stock. It was primarily used for general and administrative costs and for the exploration program.  Investing Activities  Cash used in investing activities increased to $150,000 for the nine months ended November 30, 2006 respectively, compared to $nil for the nine months ended November 30, 2005. Cash used in investing activities was used to acquire vehicles, office equipment, and computer equipment for our office in Mexico.  Financing Activities  Cash provided by financing activities amounted to $2,496,000 for the nine months ended November 30, 2006, compared to $35,000 for the nine months ended November 30, 2005. All cash provided by financing activities in the nine months ended November 30, 2006 was provided by convertible debt, share issuances and the exercise of warrants. 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.  - 32 -    On April 3, 2006 and May 31, 2006 the Company issued 550,000 and 200,000 shares of common stock 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.  The units were priced at $0.50 each.  On March 4, 2006, the Company agreed to issue 1,651,200 shares of common stock at a price of $0.25 per share to settle $412,800 in promissory notes payable (note 7). . 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 $25,000 units at the option of the holder.  Each unit consists of a warrant to purchase 25,000 of the Companys shares of common stock at $1.00 and $25,000 of debt, which may be converted to shares of common stock 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.  Further, under the terms of the debenture, until May 2007, the Company is prohibited from effecting or entering into an agreement to effect any subsequent financing involving a Variable Rate Transaction. The term Variable Rate Transaction means a transaction in which the Company issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities. The convertible debentures were originally issued as follows:  NamePrincipal Amount of DebenturesDated1471158 Ontario Ltd.$15,000.003/21/2006477291 BC Ltd$15,000.002/2/2006518464 BC Ltd.$50,000.003/14/2006601084 BC Ltd.$5,000.002/27/2006Adelaar, Jay$25,000.003/17/2006Alpine Atlantic Asset Management #1$100,000.002/2/2006Alpine Atlantic Asset Management #2$100,000.002/9/2006Alpine Atlantic Asset Management #3$250,000.003/4/2006Aslan Ltd.$100,000.004/4/2006Barrington-Foote, Joan$25,000.002/3/2006Banca del Gottardo$50,000.005/8/2006Barton, Sherri$5,000.002/2/2006Buchamer, Leslie$25,000.004/3/2006Cavendish Investments$50,000.002/2/2006Cousins, Dave$5,000.002/2/2006CR Innovations AG$100,000.003/31/2006D'Altroy, Curtis$25,000.003/14/2006Devlin, Dr. Paul G.$7,000.002/2/2006Fodor, Ignac$25,000.003/23/2006G.B Technical Services$50,000.002/9/2006Galan, Damon G$25,000.002/24/2006Gelima Capital$50,000.003/31/2006Gringots Venture Ltd.$15,000.003/12/2006Guy, Jarrett$12,500.003/8/2006Harrison, Patricia$25,000.003/8/2006  - 33 -    Hirji, Sam$5,000.002/2/2006Hsu, Chih Cheng$50,000.003/16/2006Hsu, Tseng Hui$50,000.003/6/2006Hseuh , Hsiu-Wei$50,000.003/10/2006Humber Trading Inc.$250,000.003/21/2006Jeboult, Barry Hugh$25,000.002/23/2006Jiao, Xiao Meng$50,000.003/28/2006Johal, Rummen$25,000.003/14/2006Johnston, Elston$30,000.002/2/2006Keiand Capital Corp.$25,000.003/17/2006Kennedy, Deborah$30,000.002/2/2006Kerasiotis, Vasilios John$25,000.003/8/2006Kimbell Holdings Limited$50,000.003/20/2006Kirwin, Harry$50,000.001/23/2006Kneir, Gary$5,000.002/2/2006L.E. Management, Ltd.$7,500.002/2/2006Lamont, Ryan D.$25,000.003/14/2006Levy, Jamie$25,000.003/16/2006Malette, Charles$10,000.002/2/2006Malkoc, Dean E$5,000.003/8/2006McGinnis, Anne$15,000.003/21/2006McGinnis, Mark$15,000.003/21/2006McKnight, David T$10,000.002/3/2006McKnight, Michael$50,000.002/9/2006McLean, Kirk A$50,000.002/22/2006Michie Family Trust$3,000.003/31/2006Monies, Thomas Steen$25,000.002/24/2006Monkman, Thomas W.$25,000.003/14/2006Morrison, Dorothy$25,000.003/17/2006Northwind Investments, Inc.$25,000.003/21/2006Norton, John W.$10,000.003/29/2006Nylund, Gary$10,000.003/17/2006Olea, Luis$25,000.003/31/2006PCD Club$25,000.002/27/2006Pedrosa, Maria$50,000.003/6/2006Porter, Vern$7,500.002/2/2006Poulson, David A.$15,000.003/21/2006Purewal, Harpreet Singh$12,500.003/14/2006Randhawa, Michael S.$12,500.003/14/2006Realprisma Vers Treuhand AG$10,000.004/6/2006Reaugh, Larry$5,000.002/2/2006Rechsheiner, Max$25,000.003/31/2006Ringoir, Tom$5,000.002/2/2006Rohner, Kurt$25,000.003/20/2006Ross, Peter$50,000.003/6/2006Roytor & Co.$50,000.004/4/2006RPC$10,000.004/6/2006  - 34 -    Rupp, Bernhard$10,000.003/31/2006RV Construction Inc.$12,500.003/8/2006Sage, Ryan A$12,500.003/8/2006Saloustros, Joe$10,000.002/23/2006Sausilito Ltd.$37,500.003/21/2006Schole, Mattias$50,000.003/31/2006Sheikh, Asad$25,000.003/21/2006Sheikh, Mazhar-Ul-Haq$25,000.003/21/2006Sklavenitis, Terry$25,000.003/17/2006Smith, Charles$10,000.002/2/2006Stark, Robert Paul$10,000.002/27/2006Stewart, Craig$25,000.003/8/2006Stuit, Brad$25,000.003/17/2006Tredger, Peter$5,000.002/2/2006Welsh, Jordon$5,000.002/2/2006Wittenberg, Gerald$50,000.002/7/2006Woo, Chang$12,500.003/14/2006Yaseniuk, Jeremy$25,000.003/14/2006Zacharuk, Ed$5,000.002/2/2006TOTAL$2,917,500  The holders of the debentures in the table above converted all of the debentures to shares of common stock at $0.50 per share in June 2006.  The Company issued 5,835,000 shares and 2,917,500 warrants to debenture holders upon the conversion. We have paid to the convertible debenture holders a total of $58,308, which is their accumulated interest on the debentures.  During August 2005, the Company cancelled 50,000 shares of common stock with respect to the conversion and 25,000 warrants with respect to this conversion due to non-payment of subscription funds.   The amount of our convertible debt outstanding at November 30, 2006 was $nil compared to $30,000 at November 30, 2005. Going Concern  Our consolidated 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 consolidated 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 $915,000 as of November 30, 2006, and an accumulated deficit during the exploration stage of $26,170,000. 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   - 35 -   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:  The Securities and Exchange Commission defines the term disclosure controls and procedures to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding 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 chief executive officer and principal accounting financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and principal accounting officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported with the time periods specified.  Our chief executive office and principal accounting officer also concluded that our disclosure controls and procedures were effective as of November 30, 2006 to provide reasonable assurance of the achievement of these objectives.  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.  After completing our evaluation, we received comments from the SEC staff in relation to our Registration Statement on Form SB-2.  After considering the staffs comments, our management concluded that we needed to restate certain of our financial statements to correct a calculation error in the recording of a beneficial conversion feature on warrants issued with convertible debentures, to reclassify accrued interest, and to correct an error in valuing the common stock issued by the Company.  Such restatements are described in more detail in Note 2 to our Financial Statements included in our Amended Annual Report on Form 10-KSB/A for the fiscal year ending February 28, 2006 and Amended Quarterly Reports on Form 10-QSB/A for the quarters ended May 31, 2006, August 31, 2006, and November 30, 2006.  Based on the foregoing, our principal executive officer and principal financial officer reviewed and reevaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded processed, summarized and reported within the time periods specified by the SEC.  Our principal executive officer and our principal financial officer determined that our disclosure controls and procedures were not effective at the reasonable assurance level as of the end of the period covered by this report.  The errors which occured were due to a lack of knowledge of GAAP requirements.  Our principal financial officer now has knowledge of the treatment of these items under GAAP.  PART II - OTHER INFORMATION  ITEM 4.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.  None.  ITEM 5.  EXHIBITS   - 36 -   The following exhibits are filed in reference:  2.1Securities 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).  2.2Share 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).  2.3Joint 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).  2.4Amendment 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).  4.1Specimen 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).  4.2Registration 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).  10.1Distribution 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).  10.2Distribution 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).  10.3Promissory Note between Sunburst Acquisitions IV, Inc. and Minera 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).  10.4Promissory Note between Sierra Mineral and Mining, Inc. and Minera 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).  10.5Funds 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).  10.6Repayment 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).  - 37 -      10.7Consulting 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).  10.8SHARE 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).  10.9AGREEMENT 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).  10.10AGREEMENT 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).  10.11OPERATOR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).  10.12ASSIGNMENT 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).  10.13ASSIGNMENT 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).  - 38 -      10.14ASSIGNMENT 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).  10.15THE 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).  10.16CREATION 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).  10.17AMENDMENT 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)  31.1Certification of Chief Executive Officer of Mexoro Minerals Ltd. pursuant to Rule 13a-14(a)/15d-14(a). *  31.2Certification of Chief Financial Officer of Mexoro Minerals Ltd. pursuant to Rule 13a-14(a)/15d-14(a). *  32.1Certification of Chief Executive Officer of Mexoro Minerals Ltd.. pursuant to 18 U.S.C. Section 1350. *  32.2Certification 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,




CEO

 and Director  Date:

 April 4, 2007   - 39 -