UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





Form
      10-QSB








X
      QUARTERLY REPORT
      UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For
      the quarter ended November 30, 2007





_
      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.)


(Exact
      name of
      small business issuer as specified in its charter)





Colorado
            0-23561
            84-1431797(State
                or
                other jurisdiction of incorporation)
            Commission
                file number
            (IRS
                Employer
                Identification No.)





C.
                General
                Retana #706
              Col.
                San
                Felipe,
              Chihuahua,
                Chih., Mexico
            C.P.
                31203(Address
                of
                principal executive offices)
            (Zip
                Code)





Issuer’s
      telephone
      number:  (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
      ____





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 issuers involved in bankruptcy proceedings during the preceding 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
      ___





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: 25,405,502 at January 11,
      2008.





Transitional
      Small
      Business Disclosure Format (Check one):


Yes
      __ NoX




-1-














MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)








CONSOLIDATED
      FINANCIAL STATEMENTS


(Unaudited)


(Expressed
      in U.S. Dollars)





NOVEMBER
      30, 2007














-2-


MEXORO
      MINERALS
      LTD.


(An
      Exploration Stage Company)


Consolidated
      Balance Sheets


(Unaudited)
      (Expressed in U.S. Dollars)


November
                30,
            
            
            February
                28,2007
            
            
            2007(Unaudited)
            
            
            (Audited)AssetsCurrentCash
                and cash
                equivalents
            
            $
            859,394
            
            
            $
            13,148Accounts
                receivable
            
            
            289,375
            
            
            
            165,897Prepaid
                expenses
            
            
            166,506
            
            
            
            173,8571,315,275
            
            
            
            352,902Equipment
                (note 4)
            
            
            354,514
            
            
            
            351,335Total
                assets
            
            $
            1,669,789
            
            
            $
            704,237LiabilitiesCurrentAccounts
                payable and accrued liabilities
            
            $
            911,650
            
            
            $
            263,145Current
                portion of loans payable (note 7)
            
            
            66,358
            
            
            
            25,400Promissory
                notes (note 6)
            
            
            1,072,521
            
            
            
            109,3372,050,529
            
            
            
            397,882Loans
                payable (note 7)
            
            
            36,581
            
            
            
            36,863Total
                liabilities
            
            
            2,087,110
            
            
            
            434,745Stockholders’
                deficiencyCapital
                stockPreferred
                stockAuthorized:
                20,000,000 shares without par value (note 8)Issued:
                nil
            
            
            -
            
            
            
            -Common
                stockAuthorized:
                200,000,000 shares without par valueIssued:
                25,380,502 (2007 – 21,036,102) (note 9)
            
            
            22,978,654
            
            
            
            19,304,277Additional
                paid-in capital
            
            
            11,006,077
            
            
            
            8,702,096Stock
                subscriptions
            
            
            25,000
            
            
            
            -Accumulated
                deficit from prior operations
            
            
            (2,003,427
            )
            
            
            (2,003,427
            )Accumulated
                deficit during the exploration stage
            
            
            (32,420,175
            )
            
            
            (25,731,407
            )Other
                comprehensive income (loss)
            
            
            (3,450
            )
            
            
            (2,047
            )Total
                stockholders’ equity (deficiency)
            
            
            (417,321
            )
            
            
            269,492Total
                liabilities and stockholders’ equity (deficiency)
            
            $
            1,669,789
            
            
            $
            704,237





Going
      concern (note 3)


Commitments
      (notes 5, 10, 11 and 13)


Subsequent
      events (note 14)





The
      accompanying notes are an integral part of these consolidated financial
      statements.




-3-


MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Consolidated
      Statements of Operations and Deficit


(Unaudited)
      (Expressed in U.S. Dollars)


Period
                fromInception
                ofExplorationStageThree
                Months Ended
            
            
            Nine
                Months Ended
            
            
            (March
                1, 2004)November
                30,
            
            
            November
                30,
            
            
            November
                30,
            
            
            November
                30,
            
            
            To
                November 30,2007
            
            
            2006
            
            
            2007
            
            
            2006
            
            
            2007ExpensesGeneral
                and
                administrative
            $
            529,511
            
            
            $
            160,496
            
            
            $
            1,821,633
            
            
            $
            958,256
            
            
            $
            3,831,272Stock-based
                compensation (note 10)
            
            630,603
            
            
            
            487,250
            
            
            
            2,303,981
            
            
            
            1,709,750
            
            
            
            5,571,186Mineral
                exploration (note 5)
            
            714,283
            
            
            
            -
            
            
            
            1,946,918
            
            
            
            -
            
            
            
            3,036,416Acquisition
                of resource properties
            
            580,000
            
            
            
            333,050
            
            
            
            580,000
            
            
            
            937,548
            
            
            
            16,145,422Operating
                loss
            
            (2,454,397
            )
            
            
            (980,796
            )
            
            
            (6,652,532
            )
            
            
            (3,605,554
            )
            
            
            (28,584,296
            )Other
                income (expenses)Foreign
                exchange
            
            (7,249
            )
            
            
            -
            
            
            
            (4,311
            )
            
            
            -
            
            
            
            (4,311
            )Interest
                expense
            
            (28,796
            )
            
            
            -
            
            
            
            (31,925
            )
            
            
            (2,320,973
            )
            
            
            (3,972,012
            )Interest
                income
            
            -
            
            
            
            12,395
            
            
            
            -
            
            
            
            36,513
            
            
            
            -Gain
                on
                settlement of debt
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            7,259
            
            
            
            140,444Net
                loss
            
            (2,490,442
            )
            
            
            (968,401
            )
            
            
            (6,688,768
            )
            
            
            (5,882,755
            )
            
            
            (32,420,175
            )Accumulated
                deficit, beginning
            
            (29,929,733
            )
            
            
            (23,252,727
            )
            
            
            (25,731,407
            )
            
            
            (18,338,373
            )
            
            
            -Accumulated
                deficit, ending
            $
            (32,420,175
            )
            
            $
            (24,221,128
            )
            
            $
            (32,420,175
            )
            
            $
            (24,221,128
            )
            
            $
            (32,420,175
            )Other
                comprehensive incomeForeign
                exchange gain (loss) on translation
            
            (12,448
            )
            
            
            26,653
            
            
            
            (1,402
            )
            
            
            (4,252
            )
            
            
            (3,450
            )Total
                comprehensive loss
            $
            (2,502,890
            )
            
            $
            (941,748
            )
            
            $
            (6,690,170
            )
            
            $
            (5,887,007
            )
            
            $
            (32,423,625
            )Total
                loss per share–
                basic and diluted
            $
            (0.10
            )
            
            $
            (0.05
            )
            
            $
            (0.30
            )
            
            $
            (0.33
            )
            
            $
            -Weighted
                average number of shares of common stock – basic and
                diluted
            
            23,935,659
            
            
            
            21,036,102
            
            
            
            22,484,877
            
            
            
            18,015,181
            
            
            
            -











The
      accompanying notes are an integral part of these consolidated financial
      statements.




-4-


MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Consolidated
      Statements of Cash Flows


(Unaudited)
      (Expressed in U.S. Dollars)


Period
                fromNine
                Months Ended
            
            
            Inception
                ofNovember
                30,
            
            
            November
                30,
            
            
            Exploration
                to2007
            
            
            2006
            
            
            November
                30, 2007Cash
                flows from operating activitiesNet
                loss
            
            $
            (6,688,769
            )
            
            $
            (5,882,755
            )
            
            $
            (32,420,174
            )Adjustments
                to reconcile net income (loss) to net cash flowsWrite
                off of
                note receivable
            
            
            -
            
            
            
            -
            
            
            
            57,500Acquisition
                of resource properties for stock
            
            
            580,000
            
            
            
            -
            
            
            
            13,645,000Issuance
                of
                shares for consulting services
            
            
            -
            
            
            
            -
            
            
            
            90,000Depreciation
            
            
            47,827
            
            
            
            15,192
            
            
            
            72,756Discount
                on
                convertible debenture
            
            
            -
            
            
            
            -
            
            
            
            175,000Non-cash
                component of gain on settlement of debt
            
            
            -
            
            
            
            -
            
            
            
            (182,259
            )Stock-based
                compensation
            
            
            2,303,981
            
            
            
            1,709,750
            
            
            
            7,094,186Beneficial
                conversion feature
            
            
            -
            
            
            
            2,265,500
            
            
            
            3,717,500Prepaid
                expense
            
            
            11,293
            
            
            
            20,779
            
            
            
            (157,661
            )Accounts
                receivable
            
            
            (121,643
            )
            
            
            (154,132
            )
            
            
            (277,759
            )Customer
                deposits
            
            
            -
            
            
            
            -
            
            
            
            (44,809
            )Notes
                payable
            
            
            -
            
            
            
            -
            
            
            
            109,337Accounts
                payable and accrued liabilities
            
            
            1,087,507
            
            
            
            39,834
            
            
            
            1,335,718Cash
                used in operating activities
            
            
            (2,779,803
            )
            
            
            (1,985,832
            )
            
            
            (6,785,665
            )Investing
                activityPurchase
                of
                property and equipment
            
            
            (44,011
            )
            
            
            (149,657
            )
            
            
            (420,275
            )Cash
                used in investing activity
            
            
            (44,011
            )
            
            
            (149,657
            )
            
            
            (420,275
            )Financing
                activitiesProceeds
                from
                loans payable
            
            
            39,404
            
            
            
            -
            
            
            
            114,752Proceeds
                from
                notes payable
            
            
            518,392
            
            
            
            -
            
            
            
            1,081,192Proceeds
                from
                convertible debentures
            
            
            -
            
            
            
            2,240,500
            
            
            
            3,692,500Proceeds
                from
                exercise of options
            
            
            -
            
            
            
            -
            
            
            
            78,000Proceeds
                from
                exercise of warrants
            
            
            3,094,377
            
            
            
            50,000
            
            
            
            3,144,377Repayment
                of
                loans payable
            
            
            -
            
            
            
            -
            
            
            
            (13,085
            )Repayment
                of
                notes payable
            
            
            -
            
            
            
            -
            
            
            
            (178,500
            )Repayment
                of
                convertible debentures
            
            
            -
            
            
            
            -
            
            
            
            (530,000
            )Stock
                subscriptions
            
            
            25,000
            
            
            
            (170,000
            )
            
            
            195,000Issuance
                of
                common stock
            
            
            -
            
            
            
            375,000
            
            
            
            477,109Cash
                provided by financing activities
            
            
            3,677,173
            
            
            
            2,495,500
            
            
            
            8,061,345Net
                change in cash
            
            
            853,359
            
            
            
            360,011
            
            
            
            855,405Effect
                of foreign currency translation on cash
            
            
            (7,113
            )
            
            
            3,201
            
            
            
            (18,088
            )Cash
                and cash equivalents, beginning
            
            
            13,148
            
            
            
            479,530
            
            
            
            22,077Cash
                and cash equivalents, ending
            
            $
            859,394
            
            
            $
            842,742
            
            
            $
            859,394Supplemental
                cash flow informationInterest
                paid
            
            $
            -
            
            
            $
            55,473
            
            
            $
            162,157Common
                stock
                issued on conversion of debt
            
            
            -
            
            
            
            2,917,500
            
            
            
            3,217,500Common
                stock
                issued on settlement of notes payable
            
            
            -
            
            
            
            412,800
            
            
            
            412,800Shares
                issued
                for services
            
            
            500,000
            
            
            
            -
            
            
            
            590,000





The
      accompanying notes are an integral part of these consolidated financial
      statements.




-5-


MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




1.
            BASIS
                OF PRESENTATION




Mexoro
      Minerals
      Ltd. ("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 was engaged in two
      business acquisitions and one business opportunity, none of which generated
      a
      significant profit or created 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 of the Company. 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 a 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 of the Company. In August 2005, the Company cancelled
      the joint venture agreement in order to directly pursue the mineral exploration
      opportunities through a wholly-owned Mexican subsidiary, Sunburst Mining 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 (note
      5).
      On January 20, 2006, Sierra Minerals was dissolved.




The
      accompanying
      unaudited consolidated financial statements have been prepared in accordance
      with United States generally accepted accounting principles (“US GAAP”) for
      interim financial information and with the instructions to Form 10-QSB and
      Item
      310 of Regulation S-B. Accordingly, they do not include all of the information
      and footnotes required by generally accepted accounting principles for complete
      consolidated financial statements. In the opinion of management, all adjustments
      (consisting of normal recurring accruals) considered necessary for a fair
      presentation have been included. Operating results for the three and nine months
      ended November 30, 2007 are not necessarily indicative of the results that
      may
      be expected for the year ending February 29, 2008. For further information,
      refer to the consolidated financial statements and footnotes thereto included
      in
      the Company’s annual report on Form 10-KSB for the year ended February 28,
      2007.




-6-


MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




2.
            SIGNIFICANT
                ACCOUNTING POLICIES




(a)
            Recent
                accounting pronouncements







(i)
            In
                February
                2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
                155, “Accounting for Certain Hybrid Financial Instruments, an amendment
                of
                FASB Statements No. 133 and 140” (“SFAS 155”). This Statement permits fair
                value re-measurement for any hybrid financial instrument that contains
                an
                embedded derivative that otherwise would require bifurcation. It
                establishes a requirement to evaluate interests in securitized financial
                assets to identify interests that are freestanding derivatives or
                that are
                hybrid financial instruments that contain an embedded derivative
                requiring
                bifurcation. In addition, SFAS 155 clarifies which interest-only
                strips
                and principal-only strips are not subject to the requirements of
                Statement
                No. 133. It also clarifies that concentrations of credit risk in
                the form
                of subordination are not embedded derivatives. SFAS 155 amends Statement
                No. 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 did not have
                a
                material effect on the Company’s results of operations or financial
                position.




(ii)
            In
                September
                2006, the United States Securities and Exchange Commission (“SEC”)
                released SAB No. 108, “Considering the Effects of Prior Year Misstatements
                when Quantifying Misstatements in Current Year Financial Statements” (“SAB
                108”). SAB 108 provides interpretive guidance on the SEC’s views on how
                the effects of the carryover or reversal of prior year misstatements
                should be considered in quantifying a current year misstatement.
                The
                Company adopted SAB 108 during the fourth quarter of 2006. The adoption
                did not have a material impact on the Company’s financial position, cash
                flows or results of operations.




(iii)
            In
                September
                2006, FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS
                157”).  SFAS 157 provides guidance for using fair value to
                measure assets and liabilities.  It clarifies that for items
                that are not actively traded, such as certain kinds of derivatives,
                fair
                value should reflect the price in a transaction with a market participant,
                including adjustment for risk, not just the company’s mark-to-model
                value.  SFAS 157 also requires expanded disclosure of the effect
                on earnings for items measured using unobservable data.  Fair
                value refers to the price that would be received to sell an asset
                or paid
                to transfer a liability in an orderly transaction between market
                participants in the market in which the reporting entity transacts.
                SFAS
                157 is effective for financial statements issued for fiscal years
                beginning after November 15, 2007.




-7-




MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




2.
            SIGNIFICANT
                ACCOUNTING POLICIES (CONTINUED)




(a)           
      Recent accounting pronouncements (continued)




(iv)
            In
                July 2006,
                FASB issued Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty
                in Income Taxes – An Interpretation of FASB Statement No.
                109.  FIN 48 clarifies the accounting for uncertainty in income
                taxes recognized in an enterprise’s financial statements in accordance
                with FASB Statement No. 109, and also 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. FIN 48 is effective for financial statements issued for fiscal
                years beginning after December 15, 2006.  The adoption of this
                standard did not have a significant impact on the Company’s consolidated
                financial statements.




(v)
            On
                February
                15, 2007, the FASB issued SFAS Statement No. 159, “The Fair Value Option
                for Financial Assets and Financial Liabilities” (“SFAS 159”). This
                Statement permits companies and not-for-profit organizations to make
                a
                one-time election to carry eligible types of financial assets and
                liabilities at fair value, even if fair value measurement is not
                required
                under US GAAP. SFAS 159 is effective for fiscal years beginning after
                November 15, 2007. The Company is currently evaluating the effect
                of the
                adoption of SFAS 159.






3.
            GOING-CONCERN




The
      accompanying
      consolidated 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, 2007, the Company had working capital deficiency of $735,254
      (February 28, 2007 – working capital deficiency of $44,980) and a cumulative
      loss during the exploration period of $32,420,175 (February 28, 2007 -
      $25,731,407). 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 planned Mexican mining ventures (note 5).  In addition,
      the Company has conducted private placements of convertible debt and common
      stock (note 9), which have generated a portion of the initial cash requirements
      of its planned Mexican mining ventures (note 5).




-8-




MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




4.
            EQUIPMENT




November
                30,
                2007
            February
                28,2007Cost
            Accumulated
                Depreciation
            Net
                Book
            Net
                BookValue
            ValueSoftware
            $     23,774
            $      14,179
            $      9,595
            $       15,521Machinery
            204,191
            13,877
            190,314
            213,219Vehicles
            151,144
            34,902
            116,242
            87,747Computers
            29,693
            8,179
            21,514
            19,202Office
                equipment
            18,821
            1,972
            16,849
            15,646$   427,623
            $      73,109
            $  354,514
            $     351,335




5.
            MINERAL
                PROPERTIES




The
      Company
      incurred exploration expenses as follows in the nine months ended November
      30,
      2007:




Cieneguita
            Sahuayacan
            Guazapares
            San
                Antonio
            San
                Francisco
            Encino
                Gordo
            TotalDrilling
                and
                sampling
            $  94,476
            $336,454
            $320,992
            $-
            $-
            $-
            $  751,922Geological,
                geochemical, geophysics
            33,585
            82,406
            34,478
            -
            -
            62,926
            213,395Land
                use
                permits
            77,109
            75,650
            8,477
            431
            30,265
            2,078
            194,010Automotive
            8,189
            65
            1,125
            -
            -
            -
            9,379Travel
            21,268
            15,103
            27,567
            -
            -
            6,708
            70,646Consulting
            175,335
            30,519
            106,206
            -
            -
            19,812
            331,872Equipment
            80,644
            -
            18,875
            -
            -
            2,568
            102,087General
            157,280
            -
            115,854
            -
            -
            474
            273,608$647,886
            $  540,197
            $  633,574
            $   431
            $
                30,265
            $94,565
            $
                1,946,918




-9-




MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




5.
            MINERAL
                PROPERTIES (CONTINUED)




The
      Company
      incurred exploration expenses as follows in the nine months ended November
      30,
      2006:




Cieneguita
            Sahuayacan
            Guazapares
            San
                Antonio
            San
                Francisco
            Encino
                Gordo
            TotalGeological,
                geochemical, geophysics
            $  88,726
            $1,039
            $1,264
            $      -
            $        -
            $910
            $91,939Land
                use
                permits
            90,890
            46,904
            31,409
            1,080
            22,187
            24,369
            216,839Automotive
            35,760
            3,464
            2,562
            -
            -
            -
            41,786Travel
            16,623
            5,932
            9,330
            -
            -
            53
            31,938Consulting
            232,139
            21,774
            39,438
            -
            -
            -
            293,351Equipment
            13,827
            36,276
            6,390
            -
            -
            586
            57,079General
            149,691
            43,535
            10,011
            -
            -
            1,379
            204,616$627,656
            $158,924
            $100,404
            $1,080
            $22,187
            $27,297
            $937,548






Since
      May 2004, the
      Company has held interests in exploration properties in Mexico.




In
      August 2005, the
      Company formed its wholly-owned subsidiary, Sunburst de Mexico, which allowed
      the Company to take title to the properties into the name of Sunburst Mexico.
      On
      August 25, 2005 the Company entered into property agreements with MRT, which
      provided Sunburst Mexico options to purchase the mineral concessions of the
      Cieneguita and Guazapares properties and the right of refusal on two Encino
      Gordo properties. The Company also entered into an exploration and sale
      agreement, in October 2006, with Minera Emilio S.A. de C.V. (“Minera Emilio”)
      for mineral concessions of the Sahauyacan Property.




In
      August 2005 the
      parties also entered into an operator’s agreement, that gave MRT the sole and
      exclusive right and authority to manage the Cieneguita Property, and a share
      option agreement which granted MRT the exclusive option to acquire up to 100%
      of
      all outstanding shares of Sunburst de Mexico if the Company did not comply
      with
      the terms of the property agreements. The operating agreement and share option
      agreement were subsequently cancelled.




-10-




MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




5.
            MINERAL
                PROPERTIES (CONTINUED)




The
      material
      provisions of the property agreements are as follows:




Cieneguita




MRT
      assigned to
      Sunburst de Mexico, with the permission of the Cieneguita owner, Corporativo
      Minero, S.A. de C.V. (“Corporativo Minero”), all of MRT’s rights and obligations
      acquired under a previous agreement, the Cieneguita option agreement, including
      the exclusive option to acquire the Cieneguita Property for a price of
      $2,000,000. As the Cieneguita Property was not in production by May 6, 2006,
      Sunburst de Mexico was required to pay $120,000 to Corporativo Minero to extend
      the contract. Corporativo Minero agreed to reduce the obligation to $60,000,
      of
      which $10,000 was paid in April 2006 and the balance paid on May 6,
      2006.  The Company made this payment to Corporativo Minero so the
      contract was extended.




The
      Company has the
      obligation to pay a further $120,000 per year for the next 13 years and the
      balance of the payments in the 14th
      year,
      until the total amount of $2,000,000 is paid. The Company renegotiated the
      payment due May 6, 2007, to $60,000 payable on November 6, 2007, which was
      paid
      and the balance of $60,000 payable on December 14, 2007.




In
      the alternative,
      if the Cieneguita Property is put into production, of which there is no
      guarantee, the Company must pay the Cieneguita owners $20 per ounce of gold
      produced, if any, from the Cieneguita Property to the total $2,000,000 due.
      In
      the event that the price of gold is above $400 per ounce, the property payments
      payable to the Cieneguita owners from production will be increased by $0.10
      for
      each dollar increment over $400 per ounce.  The total payment of
      $2,000,000 does not change with fluctuations in the price of gold. Non-payment
      of any portion of the $2,000,000 total payment will constitute a
      default.  In such case, the Cieneguita owners will retain ownership of
      the concessions, but the Company will not incur any additional default
      penalty.  MRT retained no interest in the Cieneguita
      Property.






Guazapares




MRT
      assigned to
      Sunburst de Mexico, with the consent of the Guazapares Property owner Compañía
      Minera, S.A. de C.V. (“Compañía Minera”), MRT’s rights and obligations
      concerning the Guazapares Property, including the exclusive option, for a term
      of four years, to purchase seven of the Guazapares Property concessions upon
      payment of $810,000. The total payments for the Company to acquire and retain
      100% ownership of all eight concessions are as follows: October 31, 2006 -
      $60,000 (this payment date was extended to February 28, 2007, then to May 31,
      2007 and then to August 31, 2007- see below), August 2, 2007 - $140,000 (see
      below), August 2, 2008 - $110,000 and August 2, 2009 - $500,000.




On
      September 19,
      2007, Sunburst de Mexico, Mexoro and MRT entered into an agreement to defer
      any
      and all property payments regarding Guazapares, currently owing to MRT and
      which
      would otherwise become due by December 31, 2007, until such time as Sunburst
      de
      Mexico and Mexoro have sufficient funds to make the payments, in the opinion
      of
      the disinterested directors of Mexoro.




Mexoro
      agreed to
      issue 250,000  shares to MRT and/or assignees, in consideration for
      the deferral of any and all Guazapares property payments currently outstanding
      and those arising on or before December 31, 2007.




In
      return, Sunburst
      de Mexico granted MRT a 2.5% net smelter rate (“NSR”) and the right to extract
      from the Guazapares Property up to 5,000 tons per month of rock material; this
      right will terminate on exercise of the option to purchase the Guazapares
      Property concessions.  Otherwise, MRT retained no interest in the
      Guazapares Property.




-11-




MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




5.
            MINERAL
                PROPERTIES (CONTINUED)




San
      Francisco (Guazapares)




MRT
      assigned to
      Sunburst de Mexico, for a term of 60 months, commencing from June 25, 2004
      (the
“Option Period”), with the consent of the San Francisco concessions owner Minera
      Rachasa, S.A. de C.V. (“Minera Rachasa”), MRT’s rights and obligations acquired
      under the San Francisco option agreement, including the option to purchase
      the
      San Francisco concessions for a price of $250,000 on June 25, 2009.




To
      maintain the
      option, Sunburst de Mexico assumed the obligation to pay to the San Francisco
      owner cumulative annual payments totaling $90,000. The payments are: $20,000
      on
      June 25, 2006 (paid); $30,000 on June 25, 2007 (paid); and $40,000 on June
      25,
      2008.




If
      the option is
      exercised prior to the expiration of the Option Period by payment of the
      purchase price of $250,000; the obligation to pay the annual payments will
      be
      terminated. MRT and the San Francisco owner reserved a combined 2.5% NSR. MRT
      reserved no other rights on the San Francisco concessions.






San
      Antonio (Guazapares)




MRT
      assigned to
      Sunburst de Mexico, with the consent of the San Antonio concessions owner
      (Rafael Fernando Astorga Hernández), MRT’s rights and obligations acquired under
      the San Antonio option agreement, including the option to purchase the San
      Antonio concessions for a total price of $500,000, commencing on January 15,
      2004, the signing date of the San Antonio option agreement, and due on January
      15, 2010.




To
      maintain the
      option, Sunburst de Mexico assumed the obligation to pay to the San Antonio
      owner cumulative annual payments. The remaining payments are: $30,000 on January
      15, 2007 (paid), $50,000 on January 15, 2008 and $50,000 on January 15,
      2009.




If
      the option is
      exercised prior to the expiration of the option period by payment of the
      purchase price; the obligation to pay the annual payments will be terminated.
      The San Antonio owner reserved the right to extract from the San Antonio
      concessions up to 50 tonnes per day of rock material; this right will terminate
      on the date of the exercise of the option. MRT and the San Antonio owner
      reserved a combined 2.5% NSR to be paid to them. MRT reserved no other rights
      on
      the San Antonio concessions.






Encino
      Gordo




Sunburst
      de Mexico
      purchased two of the Encino Gordo concessions from MRT for a price of 1,000
      pesos (approximately U.S. $100), and MRT assigned to Sunburst de Mexico a first
      right of refusal to acquire three additional Encino Gordo concessions. The
      total
      payments to acquire 100% of these three additional concessions are as follows:
      $10,000 on June 30, 2006 (paid); $25,000 on December 31, 2006 (paid), $50,000
      on
      December 31, 2007, $75,000 on December 31, 2008 and $100,000 on December 31,
      2009.




-12-


MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




5.
            MINERAL
                PROPERTIES (CONTINUED)






Sahauyacan




On
      October 24,
      2006, Sunburst de Mexico entered into an exploration and sale option agreement
      of mining concessions with Minera Emilio for mineral concessions of the
      Sahauyacan Property. Minera Emilio granted the Company the exclusive right
      to
      conduct exploration on the Sahauyacan Property and the Company must pay $282,000
      in the following manner: $20,000 on date of signing agreement (paid); $10,000
      due December 1, 2006 (paid); $2,500 per month effective from August 21, 2006
      to
      July 21, 2007, for a total of $30,000 (paid); $3,500 per month effective from
      August 21, 2007 to August 21, 2008 for a total of $45,500 (all payments up
      to
      date); $5,000 per month effective September 21, 2008 to July 21, 2011
      for  a total of $175,000 and $1,500 on August 21, 2011.




On
      December 8,
      2005, the Company and Sunburst de Mexico entered into a “New Agreement” with MRT
      to exercise their option under the sale and purchase of mining concessions
      agreement, dated August 18, 2005, 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.




The
      following are
      additional material terms of the New Agreement:




(a)
            The
                share
                option 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. On April 6, 2006, MRT agreed to waive
                its
                option to purchase the shares of Sunburst de Mexico and also waived
                the
                Company’s obligation to transfer $1,500,000 to Sunburst de
                Mexico;





(c)
            The
                property
                agreements were modified to change the NSR to a maximum of 2.5% for
                all
                properties covered by the agreements. The property agreements contained
                NSRs ranging from 0.5% to 7%;





(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 and $2,100,000 was charged to operations
                for the year ended February 28, 2006. This issuance fulfilled the
                Company’s payment obligations under the previous property
                agreements;





(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; and,





(f)
            The
                operator’s agreement with MRT was
                cancelled.





-13-


MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




6.
            PROMISSORY
                NOTES






As
      at November 30,
      2007, the Company had $1,072,521 (February 28, 2007 - $109,337) of promissory
      notes outstanding:




During
      the nine
      months ended November 30, 2007, the Company converted accounts payable of
      $452,852 into promissory notes. The interest rate on the notes is 7.5% p.a.
      payable semi-annually. The principal and interest on the notes become due and
      payable on April 30, 2008.




Promissory
      notes in
      the amount of $619,669 are due to related parties and close associates that
      bear
      no interest and have no terms of repayment (see note 12).






7.
            LOANS
                PAYABLE




As
      at November 30,
      2007 there were loans payable in the amount of $102,939 of which $66,358 is
      a
      current liability and $36,581 is a long-term liability. The loans are repayable
      in monthly instalments of $7,630 including interest ranging from 10.24% to
      15.6%
      per annum and are secured by specified automotive equipment.






8.
            PREFERRED
                STOCK




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






9.
            COMMON
                STOCK




In
      the nine months
      ended November 30, 2007, the Company issued 1,000,000 shares of common stock
      on
      the exercise of 1,000,000 warrants where each warrant was exercisable into
      shares of common stock at the price of $0.50 per share. The warrants were to
      expire on June 30, 2007.




In
      the nine months
      ended November 30, 2007, the Company issued 1,000,000 shares of common stock
      on
      the exercise of 1,000,000 warrants where each warrant was exercisable into
      shares of common stock at the price of $0.75 per share. The warrants were to
      expire on December 31, 2007.




In
      the nine months
      ended November 30, 2007, the Company issued 670,000 shares of common stock
      on
      the exercise of 670,000 warrants where each warrant was exercisable into shares
      of common stock at the price of $1.00 per share. The warrants were to expire
      on
      December 31, 2007.




In
      the nine months
      ended November 30, 2007, the Company issued 1,174,000 shares of common stock
      on
      the exercise of 1,174,400 warrants where each warrant was exercisable into
      shares of common stock at the price of $1.00 per share. The warrants were to
      expire on April 30, 2008.




-14-




MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




9.
            COMMON
                STOCK (CONTINUED)




In
      the nine months
      ended November 30, 2007, the Company issued 250,000 shares of common stock
      pursuant to an agreement in consideration of deferral of any and all Guazapares
      property payments currently outstanding and those arising on or before December
      31, 2007. The shares were valued at $1.16 per share, based on the closing quoted
      market price on September 18, 2007.




In
      the nine months
      ended November 30, 2007, the Company issued 250,000 shares of common stock
      pursuant to Encino Gordo contract. The shares were valued at $1.16 per share,
      based on the closing quoted market price on September 18, 2007.




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.




On
      August 10, 2006,
      the Company issued 50,000 shares of common stock on the exercise of 50,000
      warrants where each warrant was exercisable into shares of common stock at
      a
      price of $1.00 per share.




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
      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. On April 6, 2006,
      these shares were issued.






10.
            STOCK
                COMPENSATION PROGRAM




On
      February 26,
      2007 the board of directors approved the granting of stock options according
      to
      a Nonqualified Stock Option Plan (“NQSO Plan”). This stock option plan has the
      purpose (a) to ensure the retention of the services of existing executive
      personnel, key employees and directors of the Company or its affiliates; (b)
      to
      attract and retain competent new executive personnel, key employees, consultants
      and directors; (c) to provide incentive to all such personnel, employees,
      consultants and directors to devote their utmost effort and skill to the
      advancement and betterment of the Company, by permitting them to participate
      in
      the ownership of the Company and thereby in the success and increased value
      of
      the Company; and (d) allowing vendors, service providers, consultants, business
      associates, strategic partners, and others, with or that the board of directors
      anticipates will have an important business relationship with the Company or
      its
      affiliates, the opportunity to participate in the ownership of the Company
      and
      thereby to have an interest in the success and increased value of the
      Company.




This
      plan
      constitutes a single “omnibus” plan, but is composed of two parts. The first
      part is the NQSO Plan, which provides grants of nonqualified stock options.
      The
      second part is the Restricted Shares Plan (“Restricted Shares Plan”) which
      provides grants of restricted shares of Company common stock (“Restricted
      Shares”). The maximum number of shares of common stock that may be purchased
      under the plan is 6,000,000.




-15-


MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




10.
            STOCK
                COMPENSATION PROGRAM (CONTINUED)




Pursuant
      to a
      consulting agreement between the Company and GM Capital Partners Inc. (“GM
      Capital”), signed January 31, 2006, the Company granted 5,000,000 warrants
      (Series A to E, see note 11). The consulting 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 totalled $3,898,000
      and was determined using the Black-Scholes option pricing model using weighted
      averages: 2.38 year expected life of the warrants, a volatility factor of 152%,
      a risk-free rate of 5% and an assumed dividend rate of 0% The weighted average
      fair value of the warrant was $0.78 per warrant, while the weighted average
      stock price on the dates granted was $1.00. The fair value 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.




In
      the nine months
      ended November 30, 2007, the Company awarded 1,890,000 options to purchase
      common shares (2006 – $nil) and recorded stock-based compensation expense of
      $825,232 (2006 - $248,000). The weighted average fair value of each option
      granted for the nine months ended November 30, 2007 was $0.89. The following
      weighted average assumptions were used for the Black-Scholes option-pricing
      model used to value stock options granted in 2007 and 2006:




2007
            
            2006Expected
                volatility
            
            67%
                -
                73%
            
            152%Weighted-average
                volatility
            
            71%
            
            152%Expected
                dividend rate
            
            -
            
            -Expected
                life
                of options in years
            
            3
                -
                10
            
            10Risk-free
                rate
            
            4.60%
            
            5.00%




There
      were no
      capitalized stock-based compensation costs at November 30, 2007 or November
      30,
      2006.




The
      summary of
      option activity under the stock option plan as of November 30, 2007, and changes
      during the period then ended is presented below:




Weighted-
            
            
            Number
                of
            
            
            Weighted-
            
            
            AggregateAverage
            
            
            Shares
            
            
            Average
            
            
            IntrinsicExercise
            
            
            
            
            
            Remaining
            
            
            ValuePrice
            
            
            
            
            
            ContractualOptions
            
            
            
            
            
            
            
            TermBalance
                at
                February 28, 2007
            
            $
            0.54
            
            
            
            910,000Options
                granted
            
            
            1.10
            
            
            
            1,890,000Options
                exercised
            
            
            -
            
            
            
            -Options
                cancelled
            
            $
            1.23
            
            
            
            (291,667
            )Balance
                at
              November
                30,
                2007
            
            $
            0.88
            
            
            
            2,508,333
            
            
            
            8.20
            
            
            $
            605,100Exercisable
                at
              November
                30,
                2007
            
            $
            0.74
            
            
            
            1,451,667
            
            
            
            8.06
            
            
            $
            552,450




The
      weighted-average grant-date fair value of options granted during the nine months
      ended November 30, 2007 and November 30, 2006 was $0.90 and $nil,
      respectively.




-16-


MEXORO
      MINERALS
      LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




10.
            STOCK
                COMPENSATION PROGRAM (CONTINUED)




A
      summary of the
      status of the Company’s nonvested options as of November 30, 2007, and changes
      during the nine month period ended November 30, 2007, is presented
      below:




Weighted-averagegrant-dateNon-vested
                options
            
            Shares
            
            
            fair
                valueNonvested
                at
                February 28, 2007
            
            
            200,000
            
            
            $
            1.24Granted
            
            
            1,890,000
            
            
            
            0.72Vested
            
            
            (741,667
            )
            
            
            1.11Nonvested
                at
                November 30, 2007
            
            
            1,348,333
            
            
            $
            0.86




As
      of November 30,
      2007, there was an estimated $824,651 of total unrecognized compensation cost
      related to nonvested share-based compensation arrangements granted under the
      NQSO Plan. That cost is expected to be recognized over a weighted-average period
      of approximately 1.88 years. The actual amount of future stock-based
      compensation will be dependent on the Company stock price at future vesting
      dates.






11.
            WARRANTS




As
      at November 30,
      2007, the Company had a total of 4,486,100 (February 28, 2007 – 8,217,500)
      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
      4,486,100 shares of common stock in the event that these warrants are
      exercised.




During
      the nine
      months ended November 30, 2007, the Company issued 113,000 warrants under a
      ‘Promissory Note and Warrant Purchase Agreement’, where one warrant is issued
      for each CHF5.00 of promissory notes issued. The warrants can be exercised
      at
      any time beginning on April 1, 2008 and prior to January 31, 2010. The fair
      value of the 113,000 warrants totalled $64,000 and was determined using the
      Black-Scholes option pricing model using weighted averages: 1.83 years expected
      life of the warrants, a volatility factor of 68%, a risk-free rate of 3.66%
      and
      an assumed dividend rate of 0% The weighted average fair value of the warrant
      was $0.57 per warrant, while the weighted average stock price on the date
      granted was $1.26. Stock-based compensation for these warrants of $64,000 is
      being amortized over the six month term of the promissory notes starting on
      October 17, 2007.




During
      the nine
      months ended November 30, 2007, there were 3,844,400 warrants exercised for
      gross proceeds of $3,094,377.




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. All the Warrants were fully
      vested upon issuance. The series C Warrants are exercisable at any time
      following their issuance but will expire on December 31, 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 D and Series E Warrants
      will
      each expire on December 31, 2008.




-17-


MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




11.
                WARRANTS (CONTINUED)




The
      fair value of
      the 5,000,000 warrants totalled $3,898,000 and was determined using the
      Black-Scholes option pricing model using weighted averages: 2.38 year expected
      life of the warrants, a volatility factor of 152%, a risk-free rate of 5% and
      an
      assumed dividend rate of 0% The weighted average fair value of the warrant
      was
      $0.78 per warrant, while the weighted average stock price on the dates granted
      was $1.00. The fair value has been amortized over the 24-month term of the
      contract and the Company has recorded $487,250 as a stock-based compensation
      expense and an offsetting credit to additional paid-in capital 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. These warrants expire on April 30, 2008,
      are
      redeemable by the Company, at $0.01 per share, in the event the Company’s common
      stock closes with a bid price, on average, over $3.00 per share for a
      consecutive 20 day period 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.




The
      Company has
      also issued 375,000 warrants exercisable at $1.00 each pursuant to the issuance
      of a private placement unit offering (note 9). These warrants expire on April
      30, 2008, are redeemable by the Company, at $0.10 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.




The
      following table
      summarizes the continuity of the Company’s share purchase warrants:




Number
                of
              warrants
            
            
            Weighted
                average exercise price
              ($)Balance,
                February 28, 2006
            
            5,652,000
            
            
            
            1.00Issued
            
            2,640,500
            
            
            
            1.00Cancelled
            
            (25,000
            )
            
            
            1.00Exercised
            
            (50,000
            )
            
            
            1.00Balance,
                February 28, 2007
            
            8,217,500
            
            
            
            1.00Issued
            
            113,000
            
            
            
            1.00Cancelled
            
            -
            
            
            
            -Exercised
            
            (3,844,400
            )
            
            
            0.80Balance
                November 30, 2007
            
            4,486,100
            
            
            
            1.17







As
      at November 30,
      2007, the following share purchase warrants were outstanding:




Number
                of
                Warrants
            Exercise
                Price
            
            Expiry
                Date330,000
            $
                1.00
            
            December
                31,
                20072,043,100
            $
                1.00
            
            April
                30,
                20081,000,000
            $
                1.25
            
            December
                31,
                20081,000,000
            $
                1.50
            
            December
                31,
                2008113,000
            $
                1.00
            
            January
                31,
                20104,373,100




-18-




MEXORO
      MINERALS LTD.


(An
      Exploration Stage Company)


Notes
      to Consolidated Financial Statements


Nine
      Months Ended November 30, 2007


(Unaudited)
        (Expressed in U.S. Dollars)




12.
            RELATED
                PARTY TRANSACTIONS




For
      the nine months
      ended November 30, 2007, the Company paid or accrued management fees of $99,000
      (November 30, 2006 - $158,900) to certain officers and directors and to
      companies controlled by directors. The Company also paid or accrued $64,938
      (November 30, 2006 - $38,000) to certain officers and directors and to companies
      controlled by directors for travel, office and other related
      expenses.




As
      at November 30,
      2007, accounts payable of $53,580 (November 30, 2006 - $nil) were owing to
      companies controlled by directors. In addition, promissory notes of $252,669
      (November 30, 2006 - $nil) were owed to companies controlled by directors (note
      6).




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






13.
            COMMITMENTS




During
      the year
      ended February 28, 2007 the Company entered into an agreement for the lease
      of
      new office premises for a two-year period, commencing on September 15, 2006
      and
      ending on September 14, 2008. The Company is committed to spend approximately
      $22,800 under this arrangement.






14.
            SUBSEQUENT
                EVENTS




a)
            Change
                of
                auditor





Subsequent
      toNovember 30, 2007,SmytheRatcliffe
      Chartered Accountantsresigned asthe
      auditor for the Company. On December
      7, 2007, the Company’s board ofdirectors
      appointed the firm of Meyler
& Company, LLC,located
      atOne Arin Park, 1715
      Highway 35, Middletown, NJ 07748, as the independent auditor of the Company
      for
      the fiscal year ending February 28, 2008.







b)
            GM
                Capital
                warrants





OnDecember
      31, 2007, GM Capital indicated
      intent to
      exercise the remaining 330,000 Series C warrants at $1.00. These warrants expire
      onDecember 31,
      2007. The shares will be
      issued as payment towards a portion of debt.







c)
            Consulting
                Agreement




OnDecember
      20, 2007, the Company entered
      into an agreement(‘Consulting Agreement’)with
      MCSI Consulting
      ServicesInc.
      for corporate financial advisory
      services. The Consulting
      Agreement can be terminated by either party by providing seven days written
      notice.







d)
            Options
                granted





OnDecember
      20, 2007,the
      Company granted25,000stockoptions
      toSalil Dhaumyaas
      part of the Consulting Agreement with
      MCSI Consulting Services Inc.The fair value of the25,000stock
      options amount to$18,000
      andisdetermined
      using the Black-Scholes
      option pricing model using weighted averages:10year
      expected life of theoptions,
      a volatility factor of69.94%,
      a risk-free rate of4.04%
      and an assumed dividend rate of
      0%.





-19-




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 Operations"
      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 theUnited StatesSecurities
      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 commenced in May 2004. As ofNovember 30,
      2007wehad$859,000in
      our bank account anddo not have sufficient
      cash to maintain
      our operations after
      January 2008. Currently, officers of the Company are providing the necessary
      working capital to maintain our current operations. The funds coming from the
      officers are interest free loans with no terms of repayment and unsecured.
      The
      officers are committed to providing the necessary working capital for the
      Company to keep its operations going until January 2008, but they are not
      contractually obligated to do so. It is unlikely that the officers of our
      Company can contribute additional working capital after January 2008. If no
      additional capital is raised prior to the end of January 2008, we will most
      likely have to cease operations. Furthermore, 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 have raised sufficient
      funds
      in our private placement offering and loans from our officers to allow us to
      continue in business until January 2008, we maynot 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. We do not have any arrangements
      in place at this time to raise additional capital for the Company other than
      non-binding commitments from the officers of our company to provide working
      capital as needed.





For
      the12month
      period fromDecember 2007 to November
      2008,we will need to raise
      additional capital to maintain operations.We will need to raise
      a minimum of
      $550,000 for property payments and an additional $1,400,000 for general and
      administrative costs.This
      does not include any capital to execute our exploration programs as detailed
      below. The following table shows our contractual property payments that are
      due
      until November 2008:





Name
            Date
            Payment
                Type
            USDEncino
                Gordo Property
            December
                31,
                2007 (paid)
            Property
                payment
            $50,000San
                Antonio
            January
                2008
            Property
                payment
            $50,000San
                Francisco
            June
                2008
            Property
                payment
            $40,000Sahauyacan
                Property
            August
                2008
            Property
                payments
            $180,000Guazapares
                Property
            August
                31,
                2008*
            Property
                payment
            $110,000*
                extension
                agreement1Cieneguita
                Property
            October
                2008
            Property
                payment
            $120,000




-20-




Additionally,
      if our exploration during
      the 12 month period from December2007 toNovember2008
      issuccessful, we will 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 additional 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.
      We do not have any sources of additional capital to fund ouroperations beyondJanuary
      2008. 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 January
      2008,it
      ismost likely that we
      will have to cease operations and forfeit our properties as we would be unable
      to make the necessary property payments.





We
      plan to buy a plant or significant
      equipment within the next six months. To date, we have spent approximately$550,000 of our $2,200,000budget for equipment
      and
      building a plant to put the Cieneguita Property into production. Our ability
      to
      buy the remaining 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


Summary





Our
      business plan is to proceed with the
      exploration of our Mexican mineral properties to determine whether they contain
      commercially exploitable reserves of gold, silver or other metals. We do not
      have sufficient capital to fund our current exploration plans or to meet our
      monthly general and administrative costs. Our officers have committed to lend
      additional capital to the Company pursuant to non-interest bearing unsecured
      loans with no terms of repayment. The officers are under no contractual
      obligation to provide these funds. The funds should be sufficient to enable
      the
      Company to operateuntil
      the end ofJanuary
      2008.After that
      time, we will neither have sufficient funds to continue our exploration plans
      nor funds for general administrative expenses.  As a minimum, we will
      need to raise additional working capital to maintain basic operations. We would
      plan to raise those funds through the sale of equity or debt. At this time
      we do
      not have any sources to raise additional capital for the company and no
      assurance can be given that we will be able to find sources to raise additional
      capital. Failure to raise any additional capital would most likely require
      us to
      cease operations and abandon all of our exploration
      ventures.





In
      the event that our exploration
      program finds targets that warrant additional exploration work including
      exploration by drilling, we will not have enough cash available to fund an
      expanded exploration program. If we decide to expand our exploration program,
      we
      would need to raise additional capital to meet these needs. We currently do
      not
      have any sources of additional capital available to us and we may not have
      any
      in the future.  The failure to raise additional capital would severely
      curtail our ability to conduct any additional exploration work that might be
      warranted following the results of our current exploration
      program.





We
      are not involved in any research and
      development on our exploration properties. We have no known reserves on the
      Cieneguita property, but in anticipation of favourable results, we plan to
      put
      the property into production, subject to the availability of funding. As there
      is a high demand for mining and milling equipment,we paid a deposit of
      $25,000 towards the
      purchase of milling equipmentonFebruary
      28, 2007andanticipate
      building a processing plant
      at our Cieneguita Property over the nextsix months,
      assuming we can raise the necessary
      capital to proceed. We have the necessary permits in place to construct such
      a
      plant in the city ofChihuahua,Mexico.





In
      the event we purchase milling
      equipment and do not find sufficient ore reserves on the Cieneguita Property,
      we
      may lose all of our capital investment. In that event, we would try to re-sell
      the equipment we purchase, but no assurances can be given that we would be
      able
      to sell the equipment at a price to recover close to our original investment,
      or
      at all.





-21-




In
      the event that we discover a mineral
      deposit on any of our properties other than the Cieneguita Property, of which
      there is no guarantee, we would need to expend substantial amounts of capital
      to
      put such properties into production, if so warranted. The amount of such
      expenditures is indeterminable at this time as our exploration programs have
      not
      advanced far enough to provide us with results to establish this
      information.





Such
      expenditures are dependent upon the
      size of the ore body, the grade of the ore and the type of mining required
      to
      extract any minerals that may be found. Regardless, we do not have enough
      capital available to us to make any such expenditure that would be required
      to
      put any mineral property into production, and we would have to raise additional
      capital or, if possible, enter into a joint venture for the production phase.
      If
      we were to form a joint venture, we cannot assess what our final position in
      the
      project would be. We do not have any sources of capital available to us at
      this
      time to fund such a project if one should be discovered.





We
      hiredour currentVP
      of Exploration onMarch 1, 2007.
      We also hired an office administratorforour
      office inChihuahua.
      We hired one geologist at the end ofAugust2006,
      another geologist in January 2007 and
      two more geologists in August 2007to work on our exploration
      programs.We
      do not expect any significant change
      in additional contractors to conduct exploration over the next 12
      months.Other
      than the VP of Exploration
      andour
      geologists, all of the
      employees we hire are contracted from third parties specializing in providing
      employees for Mexican companies. In usingthird party contractors,
      we minimize our exposure to Mexican employment
      law, and allliabilities are undertaken
      by the third partycontractorsproviding
      the services.  We
      pay a flat rate to the thirdpartiesfor
      their services.





In
      the event that we should find a
      mineable reserve, it is management’s intention to contract the mining and
      milling of ore reserves out to third parties. As we plan to put the CieneguitaProperty
      into production in the nextsixmonths,
      we anticipate hiring one mine
      manager to oversee the work done by the third party contractors. We do not
      have
      any known reserves at this time.







Cieneguita
      Property




Based
      on the data obtained from the
      previous exploration programs and mining records from Glamis Gold Ltd. (“Glamis
      Gold”), our exploration program, planned until the end ofMarch 2008,on
      the Cieneguita Property will focus
      mainly on identifying mineralized zones of economic grade to allow for the
      property to be put into production as an open pit heap leach mine. 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 phase 1 of the exploration
      program to cost approximately $200,000. From January 2006 to February 2007
      we
      spent approximately $400,000, double the budgeted amount, on 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 have recently completed additional
      column testing to determine the leachability of the ore. The cost for these
      additional tests was approximately $25,000. The funds required for these
      additional tests came from general working capital.





Milestones:The
      milestones for phase 1 of the
      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 have completed phase 1 of our
      exploration program.





In
      April 2006, we completed a sampling
      of the propertythat
      included more than 500 meters of deep trenches from which we took comprehensive
      channel sampling.The
      trenches comprised eight trenches approximately 200 meters long and two to
      10
      meters deep spaced equally along the 1,000 meter 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’slaboratory inChihuahuafor
      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.





-22-




In
      December 2006, we completed 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
      have created 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 former office rental
      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 long enough
      periods. 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 hope that these tests will
      help
      us optimize the potential for extracting precious metals from the ore for the
      mining operation.





We
      have received the results of the
      sampling programs and after review of the material, including the results of
      our
      column tests, management has determined that it is warranted to continue
      exploration on the property in phase 2 to delineate ore grade material for
      a
      heap leach open pit mining operation.We do not intend to implement
      a
      feasibility study for the property.








2.           
      Phase 2
      Exploration





Budget:Under
      the direction of our VP of
      Exploration, we commenced phase 2 of our exploration program in April 2007,
      which was completed in July 2007. We budgeted $585,000 for the phase 2
      exploration; including $50,000 for an additional geochemical sampling program
      and $50,000 for general administrative expenses.We
      have spent a total of$123,000on
      this phase of
      exploration.





Milestones:Phase2ofexplorationwasdesigned
      to identify newveins and/or mineralized
      zones.The geological mapping
      and
      sampling activities carried out within phase2of
      the exploration program at Cieneguita
      has resulted in the discovery of high grade gold zonesinthree
      different locations along
      Cieneguita’s mineralized body. The three new high grade gold locations have been
      identified just on the outlined limit of the known mineralized body opening
      the
      potential to the southeast in the Pit 1 South area, to the northin the Central area andto the north in the Pit 2
      area,respectively.





According
      to our VPofExploration,
      the results from the last
      mapping and sampling campaign provided evidence thatthepotential
      for the discovery of new areas
      with gold grades still remains open as shown bythe discovery ofthe
      Pit 1 South, Central and Pit 2 North
      areas.Thisexploration
      program,consisting
      ofdetailed mapping and
      sampling on these
      three newly discovered zones, was completed in August
      2007.





Our
      lead geologist, in conjunction with
      management and our VP of Exploration, believes that the sampling results warrant
      putting the property into production even though we have not conducted any
      feasibility study on the property. Management believes that the cost of a
      feasibility study is too expensive to undertake relative to the estimated size
      of the mineralization. Furthermore, we have determined, based on the results
      of
      the sampling, that continued exploration on the property, is warranted to
      further delineate the mineralization to be used in the heap leach open pit
      mining operation. We will be concurrently conducting further exploration on
      the
      property and beginning the process of putting the mine into production. We
      have
      not determined if there are any known reserves on this property to
      date.





3.           
      Phase 3
      Exploration





Budget:We
      budgeted $570,000 for the cost of a
      3,000 meter drilling program, including assaying and
      supervision.





-23-




Milestones:The
      objectives for phase 3 of the
      exploration plan are to initiate a drill program from phase 2 of the exploration
      plan in order to further delineate the oxide ore mineralization and define and
      plan where to mine the ore.We have completed phase
      2 of the
      exploration plan.





At
      the recommendation of our VP of
      Exploration, we have initiated a drill program consisting of 3,000 meters of
      reverse circulation drilling. The drilling program at Cieneguita commenced
      onDecember 18, 2007and
      we anticipate it to
      continue until approximately the middle of March 2008. We have a drilling
      contract in place with GDA Servicios Mineros y de Exploration, a Chilean
      drilling contractor.





The
      purpose of this program is to test
      the sulphide body that has been identified from previous drilling to be
      underneath the oxide body which runs from surface to a depth of 20 meters.
      We
      hope that the results from this program will help us to better delineate the
      mineralization of the oxide zone, provide an ore reserve calculation and to
      determine how the gold is distributed through the sulphide ore body and the
      controls of that ore body. Previous drilling on this property stopped at a
      100
      meter depth and encountered mineralization of 2,4 g/t Au. Another previous
      hole
      stopped in mineralization at a depth of 300 meters and returned values of 170
      g/t Ag at that depth.





The
      drill program is designed to further
      test new high grade zones that have been found in recent exploration of Pit
      1
      and Pit 2. These high grade zones include a two meter channel sample located
      75
      meters to the NE of the known Pit 1 area which has a value of 31.6 g/t Au.
      This
      high-grade gold sample is part of the NE Pit 1 area, a 20 meter expose area
      averaging 5.43 g/t Au.





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 on-site geologist will determine where the holes
      are
      to be drilled based on our earlier exploration and mapping 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. The funds for this drilling
      program will come from general working capital on hand. We have not determined
      any known reserves on this property to date.





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 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.Allof
      the money that we had
      invested in the exploration of the  Property could be
      lost.





We
      have two geologists working full time
      on the Cieneguita Property and they will continue to do so through March2008,subject
      to availability of funding and
      subject to exploration results justifying the expenditure. If the results do
      not
      warrant further work, we plan to move the geologists to one of our other
      properties to continue exploration on those properties.








4.           
      Cieneguita Mine
      Design





Budget:We
      budgeted $50,000 from general working
      capital to create the mine design for the Cieneguita Property. The mine design
      has been completed and cost approximately $50,000. We paid for the work from
      our
      general working capital.





Milestones:Concurrently,
      with phase 2 of the
      exploration plan, we 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 bythe end of July 2008.  It will take approximately 120 days to put the
      mine into production once we have received adequate funds to implement the
      plan.  Currently, we do not have enough funds on hand to implement the
      plan.





Coinciding
      with phase 2 and 3 of our
      exploration plan, we 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




-24-




property
      but feel we have sufficient
      information to put the property into production. The mine designwascommissioned
      to a third party contractor
      with expertise in heap leach mining. This contractor, an engineering firm,
      reviewedall
      of the data that we accumulated from
      Glamis Gold Ltd.’s previous exploration and from the trenching and sampling we
      completed on the property.  All of this informationwas tobe
      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 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 $1.50
      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 samplingto datehas
      shown that the gold mineralization
      is not consistent through out the ore, it will be imperative that our
      on-site
      geologist directs the contractors
      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$15 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 and this 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 contractor. 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 the rock is then 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 contractor 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 also have onsite and ready for construction
      the conveyor belts we will need for all phases of the milling operation. The
      conveyor belts were manufactured inChihuahuaand
      have been assembled at the
      Cieneguita mine site. We have identified and purchased a second hand
      agglomorator, a used stacker and used carbon columns and pumps suitable for
      the
      milling stage.





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 inability to find enough ore could
      severely hinder our mining operations.





We
      engaged an independent third party
      consultant to review the work of the engineering firm to verify and agree with
      the results of the mine design. The independent third party consultants worked
      with the mining engineering firm to agree on a final design. The mine design
      is
      complete 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 mine operation. 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 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.




-25-





Guazapares
      Property





1.           
      Phase 1
      Exploration





Budget:Concurrently
      with the exploration of the
      Cieneguita Property,we
      budgeted approximately $668,000,
      which includes $596,000for
      a drilling program, of our general
      working capital for exploration on our Guazapares Property, to December 2007.
      Of
      this amount, we spent approximately $100,000 from March
      2006 through
      to the end of December 2006 for phase 1 of the exploration plan.Approximately $624,000
      was spent on this property from
      January 2007 toNovember2007.These
      funds came from our general
      working capital.





Milestones:The
      goals of phase 1 of the exploration
      plan on the Guazapares Property were to collect rock samples 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
      the
      exploration plan, as described below.





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. Rock samples were taken from the property and were sent to ALS Chemex
      inChihuahuafor
      chemical analysis and assaying. The
      sampling protocol followed the best mining practices. The results from phase
      1
      of the exploration plan were to determine whether subsequent exploration was
      warranted and if a drill program should be commenced. 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 theSan
      Antonioarea. The
      distribution of the veins, lithology and alteration were also mapped. We have
      received the results from this phase 1 of exploration.  Management
      reviewed the results of this phase and determined, based on a recommendation
      from our lead geologist on the property, to continue with phase 2 of the
      exploration plan.





2.           
      Phase 2
      Exploration





Budget:We
      budgeted $100,000 from the total of
      $668,000 for phase 2 of the exploration plan.  Of this, $50,000 was
      budgeted for specific sampling and trenching in theSan Franciscoconcession
      area. These funds came from
      general working capital of the company.





Milestones:The
      goals of phase 2 of the exploration
      plan were to conduct more detailed geological mapping, rock sampling 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
      andwascompletedat
      theend ofJune2007.





The
      information from phase 2 of the
      explorationplan has been
      reviewed by our senior geologist and VP of Exploration and they have made a
      recommendation to managementthat further exploration
      iswarranted.  Four drilling
      targets were identified as part of this mapping process:San Antonio,San
      Francisco, El Cantilito, and Montana
      de Oro. A
      3,000 to 4,000 meter drillingprogram hasbeen
      implemented to test the three main
      areas:San
      Antonio,San
      Franciscoand El Cantilito. We
      willcontinue toconduct
      phase 3 of our explorationplan, subject to
      availability of funding.





3.           
      Phase 3 Drill
      Program





Budget:We
      estimated that the initial drill
      program expenditure will be $668,000. We are in the process of raising
      additional capital through the sale of equity or debt to fund the drill program,
      as only a small portion of the funds budgeted are left in our general working
      capital to continue the program.





Milestones:A
      3,000 meter drill program, consisting
      of 27 diamond holes will be completed to evaluate the Guazapares project. The
      drilling program was designed to:





·
            Explore
                the high-grade ore-shoots
                down plunge and along strike already identified within the Guazapares
                system.


·
            Test
                for potential zones of
                high-grade or economic mineralization based on surface
                indications.


·
            Gather
                information on the system
                regarding alteration patterns, metal zoning, level of erosion and
                vector
                to the most prospective areas of the
                system.





-26-




This
      phase commenced in July 2007 and we
      have drilled 19 holes.  We anticipated that once the drill program is
      completed, the results would take approximately 30 days to be assayed and
      interpreted. Unfortunately, due to the current economic climate in the industry,
      it takes up to 120 days to receive the drill results.  Once these
      results are known, we will consult our lead geologists and our VP of Exploration
      to determine whether  to abandon the Guazapares Property or to
      continue with further drilling.





The
      drilling commenced on theSan Antonio
      Area, where three diamond
      holes (GU-01, GU-02, and GU-03) have been drilled for 452.85 meters. All three
      holes intersected mineralization at a depth of approximately 100 meters. Surface
      and underground sampling fromSan Antonioindicates
      the mineralization extends
      from surface to a depth of at lease 135 meters with a width varying from 1.2
      meters to 12 meters in thickness. The mineralized structure has a strike length
      of 800 meters and is open to the northwest and southeast as well as to
      depth.





The
      GU-01, GU-02 and GU-03 holes have
      been focused on extending zones of high-grade mineralization encountered in
      theSan Antonioadit.
      The following indicates reported
      intervals and drill hole intercepts from the three drill
      holes:








Drill
      Hole GU-01





Sample
            From
            To
            Width
            Au
            Ag
            Au
                Eq
            Mineralized
                InterceptID
            (m)
            (m)
            (m)
            (g/t)
            (g/t)
            (g/t)
            m
                @ g/t Au
                Eq25149
            50.23
            51.73
            1.50
            0.762
            17.1
            1.071783
            1.5
                m @
                1.07125152
            51.73
            53.23
            1.50
            0.119
            3
            0.17334825153
            53.23
            54.73
            1.50
            0.488
            11.9
            0.7035825154
            54.73
            56.23
            1.50
            1.305
            15.6
            1.587609
            5.37
                m @
                2.03825155
            56.23
            57.60
            1.37
            0.283
            27.7
            0.78481225156
            57.60
            58.60
            1.00
            4.63
            24.7
            5.07746425157
            58.60
            60.10
            1.50
            0.292
            7.8
            0.43330425158
            60.10
            61.60
            1.50
            0.204
            7.4
            0.33805825159
            61.60
            63.10
            1.50
            1.585
            8.2
            1.733551
            1.5
                m @
                1.73325184
            91.30
            92.80
            1.50
            0.466
            3
            0.52034825185
            92.80
            94.40
            1.60
            0.603
            2.8
            0.65372525186
            94.40
            95.33
            0.93
            0.292
            4.5
            0.37352225187
            95.33
            96.83
            1.50
            0.787
            4.3
            0.86489925188
            96.83
            98.33
            1.50
            2.76
            9.5
            2.932101
            5.97
                m @
                1.49425189
            98.33
            99.80
            1.47
            1.095
            11.2
            1.29789925191
            99.80
            101.30
            1.50
            0.615
            15.3
            0.892174





-27-





Drill
      Hole GU-02





Sample
            From
            To
            Width
            Au
            Ag
            Au
                Eq
            Mineralized
                InterceptID
            (m)
            (m)
            (m)
            (g/t)
            (g/t)
            (g/t)
            m
                @ g/t Au
                Eq25285
            57.80
            58.30
            0.50
            0.228
            18
            0.55408725286
            58.30
            58.95
            0.65
            0.18
            43
            0.95898625287
            58.95
            59.75
            0.80
            0.503
            81.2
            1.974014
            1.98
                m @
                1.26725288
            59.75
            60.28
            0.53
            0.273
            32.9
            0.86901425289
            60.28
            61.05
            0.77
            0.278
            26.2
            0.75263825291
            61.05
            61.61
            0.56
            0.191
            18.7
            0.52976825292
            61.61
            62.82
            1.21
            0.198
            39.5
            0.9135825293
            62.82
            64.32
            1.50
            0.336
            19.3
            0.68563825294
            64.32
            65.82
            1.50
            0.254
            14.4
            0.5148725335
            112.75
            113.55
            0.80
            0.101
            25.3
            0.55933325336
            113.55
            114.85
            1.30
            0.111
            47.6
            0.97331925337
            114.85
            116.10
            1.25
            0.486
            22.1
            0.88636225338
            116.10
            117.45
            1.35
            2.54
            2.7
            2.58891325339
            117.45
            118.75
            1.30
            0.879
            2
            0.91523225341
            118.75
            120.25
            1.50
            0.436
            3.6
            0.501217
            6.35
                @
                1.34425342
            120.25
            121.15
            0.90
            1.165
            4.6
            1.24833325343
            121.15
            122.45
            1.30
            0.534
            51.6
            1.46878325355
            135.45
            136.60
            1.15
            1.31
            12.2
            1.531014
            1.15
                m @
                1.531








Drill
      Hole GU-03





Sample
            From
            To
            Width
            Au
            Ag
            Au
                Eq
            Mineralized
                InterceptID
            (m)
            (m)
            (m)
            (g/t)
            (g/t)
            (g/t)
            m
                @ g/t Au
                Eq25367
            0.00
            1.50
            1.50
            3.17
            42.6
            3.926392
            1.5
                m@ 3.9225455
            103.70
            105.20
            1.50
            0.165
            50.3
            1.058111
            1.50
                m @
                1.0525470
            119.65
            121.05
            1.40
            0.882
            18.5
            1.21048
            1.40
                m @
                1.2125480
            132.35
            133.85
            1.50
            0.293
            46.3
            1.115088
            1.50
                m @
                1.11








Diamond
      drilling of theSan Antoniosystem
      encountered mineralization in the
      three drill holes. The highest grades occurred within vein-breccias, quartz
      veins and quartz stock worked veins exhibiting multiple pulses of hydrothermal
      activity.





Analysis
      of the mineralization and
      alteration assemblages, structural setting and geochemistry of theSan Antoniotarget
      area indicates that the high gold
      values tend to cluster in two main mineralization styles:




1.
            Ore-shoots
                developed along the extensive San Antonio vein
                system.


2.
            Large
                and
                structurally controlled breccia bodies or structural zones developed
                in
                the intersections of mainly NW and NE trending faults and
                structures.





Holes
      GU-01, GU-02 and GU-03 confirm the
      emergence at San Antonio of one of the high-grade ore-shoot identified in the
      San Antonio adit where a new high grade gold zone in the underground samples
      returned grades as high as 37 g/t gold and 1,000 g/t silver over 2 meters.
      These
      two drill holes also provide the evidence that the main mineralization tends
      to
      cluster as ore-shoots controlled by mainly by the intersection of northwest,
      east-west, and northeast structures.





-28-




If
      management decides to continue
      drilling, we will need to raise additional funding through the sale of debt
      or
      equity because we do not have sufficient capital to continue such 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 additional sources of funding to implement
      such a program. If we can not obtain additional financing, we could seek a
      joint
      venture partner if the drilling results warranted it. We do not have any joint
      venture partners at this time and can give no assurance that we will 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 five
      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 undertaken by other companies. The previous geochemical
      sampling that was carried out 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, with a total budget of approximately $719,000from
      general working capital, throughAugust,2008,
      on our Encino Gordo
      Property.We budgeted
      $50,000 for mapping and sampling, which was completed in February 2007. We
      spent
      $50,000, as budgeted, through the end of February 2007. Our VP of Exploration
      has reviewed all of the initial material on the property and the results of
      exploration completed in February 2007 and a second phase of mapping and
      sampling has been planned. The proposed exploration will consist of mapping
      the
      Encino Gordo and Vinorama concessions at a scale of 1:5,000 initially and then
      1:1,000 on pre-determined sections. The focus will be on lithology, structure,
      alteration and veining to determine the potential of the near-mesothermal
      (porphyry-type) system present at Encino Gordo and the epithermal vein deposits
      on the Vinorama concession.





The
      balance of the budgeted funds will
      be spent as directed by our VP of Exploration once he has reviewed all of the
      initial material on the property and the results of the exploration completed
      in
      February 2007.From January
      toAugust2007
      we spent $18,000on
      exploration.At
      this timewe do not have the necessary
      working
      capital to proceed. The funds for this additional exploration, if warranted,
      will come from general working capital if and when available. We can give no
      assurances that we will be able to raise sufficient capital to continue
      exploration on this property.





Milestones:The
      goals of phase one were to complete
      mapping of the property and to take geochemical samples from the property.
      The
      purpose of this initial program was to get a better understanding of the geology
      of the property.  We completed this phase of the exploration program
      at the end of February 2007.





We
      mapped 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 in October 2007, when mapping was completed along the extension
      of the structures hosting the Elyca vein located along the eastern edge of
      the
      Encino Gordo claims, with the balance of the mapping completed at the end of
      February 2007.





A
      total of 43 stream sediment samples
      were collected from the various arroyos cutting the property. Samples of greater
      than one kilogram were collected with material crushed to less than one
      millimetre in size. Samples of this rock will be analyzed by ALS Chemex 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 have returned
      anomalous results of gold which require follow-up to verify source
      areas.





In
      October 2006, weprepared a list of preliminary
      drill
      hole locations to accompany
      the SEMARNAT work permit
      application.We are
      currently preparing the documents for SEMARNAT work permits on the Encino Gordo
      Propertyand it is expected
      to be approved in March 2008.Our goal is to drill
      the targets as
      recommended by our VP of Exploration. 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 the 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.





-29-




Further
      explorationon the Encino Gordo Property
      wascompletedatthe
      end of August 2007.Our
      goalwasto
      have a geological report, prepared by
      our senior geologistby the
      end of 2007; however, due to lack of working capital this has not been completed
      yet.  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 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 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:Phase
      2 of the exploration plan would be
      to initiate 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 geologist and
      our
      VP of Exploration to determine whether to abandon the Encino Gordo Property
      or
      continue with further drilling exploration.





Management
      and our VP of Exploration
      will review the information provided by phase 1 of the exploration plan 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
      the
      drill 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 phase 1 of the
      exploration plan.





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 border approximately 275 kilometers east-southeast
      of
      the city ofChihuahuaand
      50 kilometers
      south-southwest of the town ofMaycobain
      the state ofChihuahua,Mexico.
      The Sahauyacan Property comprises 14
      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 three 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 is the main focus of our exploration
      program.





1.           
      Phase 1
      Exploration





Budget:We
      have spentapproximately $557,000from
      general working capital,from January 2007 to
      November2007, on
      exploration of this property.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




-30-




give
      no assurance that we would be able
      to find one if the Sahauyacan Property warranted such a joint
      venture.





MilestonesWe
      completed our initial mapping of the
      property,including
      the underground
      workings.





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 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 300samples
      have been taken
      from the property including 101 rock chip and channel samples, 41 stream
      sediment samples and 158 soil samples.We
      received the results back from our
      sampling. The underground workings were evaluated for safe entry and the mine
      has been deemed unsafe to open. A limited part of the mine was opened and bulk
      samples were taken.





We
      met one of our milestones in phase 1
      of the exploration plan, which was determining drill hole locations. Our VP
      of
      Exploration determined from our phase 1 work that a 13 hole drill program was
      warranted.





2.           
      Phase 2 Drill
      Program





Budget:Webudgeted$365,000
      to complete a 13 hole drill
      program. The contractor doing the drilling has completed the
      drilling.





Milestones:Our
      VP of Exploration recommended a 13
      hole drill program on this property.  Reconnaissance and detailed
      mapping programs from phase 1 on the Sahauyacan Property have identified four
      significant drilling targets: Santo Niño, La Cumbre, Cerro Cacho and Santa
      Teresa. The goal of this phase of exploration was to determine if we should
      continue exploration with a further drill program.We filed the application
      for theworkpermit
      in February 2007and it was approved by
      SEMARNAT.We
      completed the drilling in May
      2007.





Current
      Drilling
      program:  To
      date a total of approximately 2,000
      meters have been drilled in 13 diamond drill holes. Eight holes were drilled
      in
      the Santo Niño vein-structure (SDH-1, through SDH-4 and SDH-7 through SDH-10),
      two diamond drill holes (SDH-5 and SDH-6) were drilled in La Cumbre mineralized
      area and two holes(SDH-11
      and SDH-12)on the Santa Theresa
      vein.





SDH-1through
      SDH-4 and SDH-7 through SDH-10
      were collared along the Santo Niño mineralized vein. Drill Hole SDH-1
      intersected two zones of gold mineralization over the 165.05 meters drilled
      in
      this hole, including 7.50 meters with 2.56 g/t Au and 11.00 meters with 2.24
      g/t
      Auincluding 8.00 meters
      with 2.98 g/t Au.





The
      two mineralized zones intersected by
      SDH-1 are hosted by volcaniclastic rocks interbedded with several andesitic
      tuffs and breccias. The mineralized zone, intersected from 65.0 to 72.5 meters,
      is characterized by multiple stages of hydrothermal activity exhibiting quartz
      veinlets and quartz stockwork mineralization with moderate to weak argillic
      alteration (illite-kaolin) and propylitic alteration characterized by epidote,
      chlorite, and calcite. The second mineralized zone intersected from 96.4 to
      107.5 meters in SDH-1 is mainly characterized by a weak to moderate
      silicification exhibiting quartz and calcite veinlets. Areas show dissemination
      of pyrite as fine crystals are common in the mineralized
      zones.





In
      addition, the low values of silver
      may suggest that we are still high in the mineralized system and our VP of
      Exploration believes that the silver and other base metal content may increase
      with depth and consequently the Ag:Au ratio will change.





A
      summary of the assay results of the
      two mineralized zones intersected by the SDH-1 is provided in the table
      below.





Drillhole
            From
                (meters)
            To
                (meters)
            Interval
                (meters)
            Au
                (g/t)
            Ag
                (g/t)
            Au
                Eq.
                (g/t)SDH-1
            65.00
            66.50
            1.50
            2.02
            0.866.50
            68.00
            1.50
            8.09
            2.868.00
            69.50
            1.50
            0.26
            1.269.50
            71.00
            1.50
            0.233
            1.371.00
            72.50
            1.50
            2.23
            2.196.50
            98.00
            1.50
            6.13
            49.498.00
            98.50
            0.50
            9.24
            21.1  -31-
  98.50
            99.50
            1.00
            0.529
            0.799.50
            100.50
            1.00
            1.695
            1.2100.50
            101.50
            1.00
            1.415
            9.2101.50
            102.50
            1.00
            3.81
            10.5102.50
            103.50
            1.00
            0.038
            0.09103.50
            104.50
            1.00
            1.00
            5.9104.50
            105.50
            1.00
            0.363
            7.3105.50
            106.50
            1.00
            0.341
            9.6106.50
            107.50
            1.00
            0.111
            10.5





The
      remaining holes did not return
      encouraging assay results. The results fromdrill
      holes SDH-3 and SDH-4 show goldanomalies varying from 0.01 to 0.02
      g/t. Geological and structural mapping surveys alongthe Santo Niño veinhaveidentified
      a NE structure that is
      displacing the mineralized zone. Current field investigations are aimed to
      define in more detail the structural setting on this part of the mineralized
      vein-structure.





Drill
      Holes SDH-5 and SDH-6 were
      collared in the Le Cumbre zone. The two holes intersected mineralization from
      surface to 175 metres. Only the SDH-5 intersected severaltwo-meter-wide
      intercepts with gold mineralization
      ranging from 1.03 to 1.905 g/t.  Other gold values ran between0.2
      to0.5
      grams/tonne. Our VPofExplorationbelieves
      that the gold in these zones is
      free gold and is contained in the fractures in the oxides.  As the
      drilling consumes massive quantities of water, we believe the free gold has
      been
      washed away from the core. As a result, we plan to re-drill the Le Cumbre zone
      using reverse circulation drilling to ensure all the particles are captured
      while drilling. No assurance, though, may be given that any gold values will
      be
      found when it is redrilled using reverse circulation drilling. A detailed
      evaluation ofthese
      goldvalues and their
      correspondent geological conditions is in progress.





The
      final area tested at Sahauyacan was
      the Santa Theresa target, where two drill holes (SDH-11 and SDH-12) were
      completed. SDH-12 has intersected a high grade mineralized zone, consisting
      of
      7.5 meters with 56.01 g/t Au and 283.22 g/t Ag. The following are the assay
      intercepts from the Santa Theresa structure.








Drillhole
            From
                (meters)
            To
                (meters)
            Interval
                (meters)
            Au
                (g/t)
            Ag
                (g/t)SDH-12
            74.50
            76.00
            1.50
            6.21
            14876.00
            77.50
            1.50
            0.716
            8.577.50
            79.00
            1.50
            268.75
            121579.00
            80.50
            1.50
            2.46
            39.880.50
            82.00
            1.50
            1.93
            4.8





Additional
      check assays of the core from
      77.50 to 79.00 returned values of 431 g/t Au and 1.490 g/t Ag over 1.5 meters.
      These results have not been qualified or confirmed by the
      Company.





Surface
      mapping and drilling results
      suggest that high gold values tend to cluster at certain areas along the Santo
      Nino and the Santa Theresa vein structures. SDH-11 returned anomalous gold
      zones
      in the structure. SDH-12 shows potential for a significant increase in the
      Santa
      Theresa mineralization area.





Drill
      Holes SDH-11 returned only
      anomalous gold zones in the structure. SDH-12 shows that the potential for
      a
      significant increase in the Santa Theresa mineralization area. The
      mineralization is controlled by NWN structures running from the Santa Theresa
      target to the north to the La Cumbre target. The Company’s VP of Exploration
      will evaluate these results and further evaluation the Sahauyacan Property
      by
      reverse circulation drilling at La Cumbre and diamond drilling at Santa Theresa
      and Santo Nino to test the veins. This program will help to define the potential
      volume and grade of a large portion of the mineralized vein systems at
      Sahauyacan.




Despite
      these results, the Sahauyacan
      Property has no known orestimated resources or reserves.





3.           
      Phase 3
      Exploration.





Management
      including our VP of
      Exploration will review the information provided by the second phase of
      exploration and determine whether further exploration is recommended. If further
      exploration is recommended, we do not have sufficient information at this time
      to estimate what that program would entail.  This information will be
      provided by the second phase of exploration.




-32-




The
      Sahauyacan Property is without known
      reserves. Our proposed programs are exploratory in nature.





Although
      three of our four 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 CieneguitaPropertyexploration
      program to define
      mineralized ore. However, we intend to proceed with exploration on all four
      properties simultaneously.If
      our exploration programs
      warrant drilling programson the properties, we anticipate contracting two geologists, one junior geologist
      andfour assistants for
      supervising the
      drilling work and taking splits for the drilling samples.





Once
      we receive results from these
      exploration programs, 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 sufficient enough 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




Nine
      months ended November 30, 2007 compared to the nine months ended November 30,
      2006.





In
      this discussion ofMexoro’s
      results of operations and financial
      condition, amounts, other than per-share amounts, have been rounded to the
      nearest thousand dollars.





Revenues





We
      did not earn revenues during the
      threeor ninemonths
      endedNovember30,
      2007 or 2006 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 thethree and nine
      months ended November 30, 2007 or 2006due to the fact that
      we did not achieve
      production from exploration activities during either year.





Expenses





Our
      expenses increased to$2,454,000 and $6,653,000forthe
      three and nine months ended November
      30,2007 compared to$981,000
      and $3,606,000forthe
      three and nine months ended November
      30,2006,
      respectively.The
      increase is primarily attributable
      to higher administrative costs, stock-based compensation to officers, directors
      and consultants and developing the exploration program.





General
      and administrative cash expenses
      increased to $530,000 and $1,822,000 in the three and nine months ended November
      30, 2007 respectively, compared to $160,000 and $958,000 in the three and nine
      months ended November 30, 2006.





Management
      feesdecreasedto
      $141,000in
      the three monthsandincreased
      to$390,000in
      theninemonths
      endedNovember30,
      2007, from$146,000 and $342,000in
      the three andninemonths
      endedNovember30,
      2006, respectively. Finders’ fees
      decreased to $nil in the nine months ended November 30, 2007 from $285,000
      in
      the nine months ended November 30, 2006.Accounting and legal
      feesincreased to$130,626in
      the three monthsanddecreased
      to$119,720in
      theninemonths
      endedNovember30,
      2007, from $84,000 and $177,000
      in the three
      and nine months ended November 30, 2006, respectively. The increase in fees
      was
      primarily attributable to higher auditing costs and the cost of regulatory
      filings.




-33-




Stock-based
      compensation expense
      increased to $631,000 and $2,304,000 in the three and nine months ended November
      30, 2007 respectively, from $487,000 and $1,710,000 in the three and nine months
      ended November 30, 2006.The 2007 amount relates
      to warrants
      issued and stock options granted to management and key personnel for$1,479,000 and
      $825,000,respectively.





Mineral
      exploration in the three and
      nine months ended November 30, 2007 increased to $714,000 and $1,947,000
      respectively, compared to$333,000 and $938,000for
      the three and nine months ended
      November 30, 2006. We anticipate that exploration expenditures will increase
      in
      fiscal 2008 as a result of exploration activities on our Mexican mineral
      properties.





Loss





Our
      net lossincreasedto$2,490,000
      and $6,689,000forthe
      three and nine months ended November
      30,2007respectively,compared
      to $968,000 and $5,883,000forthe
      three and nine months ended November
      30,2006.





Thischange
      inour loss was primarily
      attributable to
      higherinvestor relations
      expenses, stock-based compensation and exploration expensein 2007.The
      net losses in both 2007 and 2006
      were comprised of items not requiring an outlay of cash. In 2007, the non-cash
      component of stock-based compensation was $2,304,000.
      In 2006, the non-cash component is
      attributable to $487,000 of stock-based compensation and to a beneficial
      conversion featureof
      $2,266,000 on convertible debentures issued in the threemonths ended May 31,
      2006; which was
      recorded as interest expense.We anticipate that we
      will continue to
      incur a loss 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, if ever. There is no assurance that we will
      commence the development stage of our operations at anyofour
      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 ofNovember30,
      2007, we have total assets of$1,670,000,total
      liabilities of$2,087,000and
      a deficit of$32,420,000accumulated
      during the exploration
      stage.





Cash
      and Working
      Capital





We
      had cash and cash equivalents of
      $859,000 as of November 30, 2007, compared to cash of $46,000 as of August
      31,
      2007 and $843,000 as of November 30, 2006. We had working capital deficiency
      of
      $735,000 as of November 30, 2007, compared to $1,276,000 as of August 31,
      2007and
      a working capital deficiency of
      $915,000 as of November 30, 2006.





We
      will require additional financing
      during the current fiscal year according to our planned exploration activities.We plan to spend
      approximately$3,900,000
      from December 2007 to August 2008tocarry
      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$2,200,000on
      milling equipment and
      building a plant to put that property into production. We anticipate spending
      approximately$1,400,000during
      the next 12 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.





The
      amount of working capital could be
      adversely affected further in the event claims are made against us alleging
      that
      certain shares we previously issued pursuant to Form S-8 registration statements
      constituted an illegal public offering because the company was a “shell company”
at the time and, as a result, was not eligible to use Form S-8 for registration
      of shares under the Securities Act of 1933. In August and October of 2005,
      the
      Company issued shares of common stock to an officer of the Company, as
      compensation for consulting services. The two share issuances were for a
      combined total of 30,000 shares and each of the share issuances was made
      pursuant to a registration statement on Form S-8 under the Securities Act of
      1933.  Although the Company believes these shares were properly
      issued, a claim could be made that issuance of




-34-




the
      shares constituted an illegal public
      offering because the Company was a “shell company” at the time.  Shell
      companies  [i.e. companies which have no or nominal operations and
      either (i) no or nominal assets; (ii) assetsconsisting solely of
      cash and cash
      equivalents; or (iii) assets consisting of any amount of cash and cash
      equivalents and nominal other assets] are not eligible to use Form S-8 for
      registration under the Securities Act of 1933. If either of these transactions
      did violate federal securities laws, subsequent purchasers of the shares may
      have claims against us for damages or for rescission of their purchase
      transaction and recovery of the full subscription price paid, together with
      interest. As of the date of this annual report, no one has made or threatened
      any claim against us alleging violation of the federal securities laws. In
      the
      event such claims were successfully asserted there is no assurance that we
      would
      have sufficient funds available to pay and it is likely that we would be
      required to use funds currently designated as working capital for that purpose.
      That would substantially reduce the amount of working capital available for
      other purposes and, in that event, we could be forced to cease or discontinue
      certain operations and to liquidate certain assets to pay our liabilities,
      including, but not limited to, rescission claims.





Cash
      Used in Operating
      Activities





Cash
      used in operating activities
      increased to$2,780,000for
      theninemonths
      endedNovember30,
      2007 compared to $1,986,000for
      theninemonths
      endedNovember30,
      2006. The cash used in operating
      activitieswasprimarilyfor
      general and administrativeexpenses and exploration
      costs.





Cash
      Used in Investing
      Activities





The
      Company used cash of $44,000for purchase of equipment
      for thenine
      months endedNovember
      30, 2007 compared tocash
      used of$150,000for
      thenine months ended November
      30,
      2006.





Financing
      Activities





Cash
      provided by financing activitiesamountedto$3,677,000for
      thenine months ended November
      30,2007 compared to
      $2,496,000for
      thenine months ended November
      30,2006.Almost
      all of thecash provided by financing
      activities
      wasfromexercise
      of warrants andnotes payables.Cash
      provided by financing activities
      was used to fund our operating and investing activities.





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





On
      March 4, 2006, the Company agreed to
      issue 1,651,000 common shares at a price of $0.25 per share to settle $413,000
      in promissory notes payable. As a condition, the promissory note holders waived
      all accrued interest payable on the notes. On April 6, 2006, these shares were
      issued and the Company recorded a $7,000 gain on settlement of
      debt.





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





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 were convertible
      into $25,000 units at the option of the holder. Each unit consisted 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 $0.01 per share, in the event the Company’s common stock closes
      with a bid price, on average, over $3.00 per share for a consecutive 20-day
      period. Further, under the terms of the debenture, until May 2007, the Company
      is prohibited from effecting or entering into an agreement to affect 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.





-35-




The
      holders of the debentures 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
      2006, 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.





Going
      Concern





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





The
      Company has a history of operating
      losses and will need to raise additional capital to fund its planned operations.
      As atNovember 30,
      2007,the Company had
      working capital deficiency of$735,000(November
      30,2006 - $915,000working
      capital),and
      an accumulated deficit during the
      exploration stage of$32,420,000(November30,
      2006 – $26,170,000).These
      conditions raise substantial doubt
      about the Company’s ability to continue as a going concern.





There
      is no assurance that our
      operations will be profitable. The Company has conducted private placements
      of
      convertible debt and common stock, which have generated funds to satisfy all
      of
      the initial cash requirements of its planned Mexican mining
      ventures.





Off-Balance
      Sheet Arrangements




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








ITEM
      3.                      
CONTROLS AND PROCEDURES





The
      Company maintains disclosure
      controls and procedures that are designed to ensure that information required
      to
      be disclosed in its SEC reports are recorded, processed, summarized and reported
      within the time periods specified in the SEC's rules and forms, and that such
      information is accumulated and communicated to the Company’s management, including
      its president
      and chieffinancialofficer,
      as appropriate, to allow timely
      decisions regarding required disclosure. In designing and evaluating the
      disclosure controls and procedures, management recognized that any controls
      and
      procedures, no matter how well designed and operated, can provide only
      reasonable assurance of achieving the desired control objectives, as thecompaniesare
      designed to do, and management
      necessarily was required to apply its judgment in evaluating the cost-benefit
      relationship of possible controls and procedures.





Our
      independent registered public
      accounting firm reported to our board of directors certain conditions involving
      internal controls which they believe represent material weaknesses in our
      internal control environment. These matters are with regard to insufficient
      personnel resources within the accounting function, based on the size and
      complexity of the organization, to affect timely financial close process and
      to
      effectively evaluate and resolve certain routine and non-routine and/or complex
      accounting transactions. A material weakness is a significant deficiency, or
      combination of significant deficiencies, that results in more than a remote
      likelihood that a material misstatement of the annual or interim financial
      statements will not be prevented or detected. Significant deficiencies are
      control issues that could have a significant adverse effect on the ability
      to
      record, process, summarize and report financial data in the financial
      statements.





Our
      management and the board of
      directors agreed with our independent registered public accounting firm on
      the
      matter raised in their report and agreed to address the material
      weakness.




-36-




To
      remediate our internal control
      weaknesses, management intends to implement the following measures: the Company
      will add sufficient accounting personnel to properly segregate duties and to
      effect a timely, accurate preparation of the financial statements.The Company plans to
      have this
      implemented by the end of the fiscal year 2008.





Changes
      in internal controls: There were
      no changes in internal controls over financial reporting, known to the president
      or chief financial officer that occurred during the period covered by this
      report that has materially affected, or is likely to materially effect, the
      Company’s internal control over financial reporting.








PART
      II - OTHER INFORMATION





ITEM
                4.
            UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





None.




-37-




ITEM
      5.                      
EXHIBITS





The
      following exhibits are filed in
      reference:





Exhibit
              Number
            Description3.1
            Articles
                of
                Incorporation, as amended on December 10, 2001 and February 13, 2006
                (Herein incorporated by reference from the Registration Statement
                on Form
                SB-2 filed with the Securities and Exchange Commission on April 7,
                2006).3.2
            Bylaws
                of the
                Corporation (Herein incorporated by reference from the Registration
                Statement on Form SB-2/A filed with the Securities and Exchange Commission
                on September 25, 2006.)4.1
            Registration
                Agreement dated April 20, 2004, by and among Sunburst Acquisitions
                IV,
                Inc., and each of the purchasers in a private placement of shares
                of
                Sunburst (Herein incorporated by reference from the Registration
                Statement
                on Form SB-2/A filed with the Securities and Exchange Commission
                on
                September 25, 2006.)4.2
            Promissory
                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 filed with the Securities
                and
                Exchange Commission on June 3, 2004).4.3
            Promissory
                Note between Sierra Minerals 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 filed with the Securities
                and
                Exchange Commission on June 3, 2004).4.4
            Securities
                Purchase Agreement with exhibits entered in connection with the $1,350,000
                original issued discount secured convertible debenture financing
                dated
                August 25, 2004 (Herein incorporated by reference from the Registration
                Statement on Form SB-2/A filed with the Securities and Exchange Commission
                on September 25, 2006.)4.5
            Secured
                Convertible Debenture by and between Bristol Capital, LLC and Sunburst
                Acquisitions IV, Inc. dated January 15, 2004 (Herein incorporated
                by
                reference from the Registration Statement on Form SB-2/A filed with
                the
                Securities and Exchange Commission on July 10, 2006).4.6
            Transaction
                Fee Agreement dated April 22, 2004 between Sunburst Acquisitions
                IV Inc.
                and T.R. Winston & Company LLC (Herein incorporated by reference from
                the Registration Statement on Form SB-2 filed with the Securities
                and
                Exchange Commission on April 7, 2006).4.7
            Finder’s
                Fee
                Agreement dated 2004 between Sunburst Acquisitions IV, Inc. and Liberty
                Management, LLC (Herein incorporated by reference from the Registration
                Statement on Form SB-2/A filed with the Securities and Exchange Commission
                on September 25, 2006.)4.8
            Convertible
                Debenture template used to sell debentures and units of Mexoro Minerals
                Ltd. for the offering that occurred in January through May of 2006
                (Herein
                incorporated by reference from the Registration Statement on Form
                SB-2
                filed with the Securities and Exchange Commission on April 7,
                2006).4.9
            Stock
                option
                plan approved by the shareholders of Mexoro Minerals, Ltd. on February
                13,
                2006. (Herein incorporated by reference from the Registration Statement
                on
                Form SB-2 filed with the Securities and Exchange Commission on April
                7,
                2006).4.10
            Subscription
                Agreement template used to sell units of Mexoro Minerals Ltd. for
                the
                offering that occurred in February and March of 2006 and was offered
                to
                accredited investors under Regulation D (Herein incorporated by reference
                from the Registration Statement on Form SB-2/A filed with the Securities
                and Exchange Commission on September 25, 2006.)4.11
            Convertible
                Debentures issued December 8, 2005 to Daimler Capital, James Longshore,
                and Spectrum International in the amount of $300,000 (Herein incorporated
                by reference from the Registration Statement on Form SB-2/A filed
                with the
                Securities and Exchange Commission on September 25,
                2006.)  -38-
  10.1
                Share
                    Exchange Agreement, dated May 3, 2004, by and among Sunburst
                    Acquisitions
                    IV, Inc., a Colorado corporation, Sierra Minerals and Mining,
                    Inc., a
                    Nevada corporation, and the shareholders of Sierra Minerals & Mining,
                    Inc. (Herein incorporated by reference from the Registration
                    Statement on
                    Form SB-2/A filed with the Securities and Exchange Commission
                    on September
                    25, 2006.)10.2
                Joint
                    Venture
                    Agreement, dated April 26, 2004 and amended on June 1, 2004,
                    by and
                    between Sierra Mining and Minerals, Inc., a Nevada corporation,
                    and Minera
                    Rio Tinto S.A. de C.V., a Mexican company (Herein incorporated
                    by
                    reference from the Registration Statement on Form SB-2/A filed
                    with the
                    Securities and Exchange Commission on September 25,
                    2006.)10.3
                Amendment
                    to
                    Joint Venture Agreement dated June 1, 2004. (Herein incorporated
                    by
                    reference from the Registration Statement on Form SB-2/A filed
                    with the
                    Securities and Exchange Commission on September 25,
                    2006.)10.4
                SHARE
                    OPTION
                    AGREEMENT among Minera Rio Tinto, S.A. de C.V. a corporation
                    duly
                    incorporated and validly existing pursuant to the laws of the
                    United
                    Mexican States and having an office at Pascual Orozco No. 2117
                    - A
                    Chihuahua, State of Chihuahua, Mexico 31310 and Sunburst Acquisitions
                    IV,
                    Inc., a corporation duly incorporated and validly existing pursuant
                    to the
                    laws of the State of Colorado, USA and having an office at Suite
                    206, 595
                    Howe St., Vancouver, B.C. Canada V6C 2T5 (Herein incorporated
                    by reference
                    from the Registration Statement on Form SB-2/A filed with the
                    Securities
                    and Exchange Commission on September 25, 2006.)10.5
                AGREEMENT
                    made and entered in the City of Chihuahua, State of Chihuahua
                    as of the
                    18th day of August, 2005 among COMPAÑÍA MINERA DE NAMIQUIPA, S. A. DE C.
                    V. a company duly incorporated and validly existing pursuant
                    to the laws
                    of the United Mexican States, and MINERA RIO TINTO, S. A. DE
                    C. V. a
                    company duly incorporated and validly existing pursuant to the
                    laws of the
                    United Mexican States, and MARIO HUMBERTO AYUB TOUCHE having
                    a domicile at
                    San Antonio No. 2036 Chihuahua, Chihuahua and SUNBURST MINING
                    DE MÉXICO,
                    S. A. DE C. V., a company duly incorporated and validly existing
                    pursuant
                    to the laws of the United Mexican States  (herein incorporated
                    by reference from the Company’s report on Form 8-K for report date August
                    22, 2005 and filed with the Securities and Exchange Commission
                    on August
                    25, 2005).10.6
                AGREEMENT
                    made and entered at the City of Chihuahua, State of Chihuahua
                    on this the
                    18th day of August of the year 2005, among MINERA RIO TINTO,
                    S. A. DE C.
                    V. a company duly incorporated and validly existing pursuant
                    to the laws
                    of the United Mexican States, and SUNBURST MINING DE MÉXICO, S. A. DE C.
                    V. a company duly incorporated and validly existing pursuant
                    to the laws
                    of the United Mexican States (Encino Gordo) (Herein incorporated
                    by
                    reference from the Registration Statement on Form SB-2/A filed
                    with the
                    Securities and Exchange Commission on September 25,
                    2006.)10.7
                OPERATOR’S
                    AGREEMENT dated effective as of the 18th day of August, 2005,
                    among Minera
                    Rio Tinto, S.A. de C.V. a corporation duly incorporated and validly
                    existing pursuant to the laws of the United Mexican States and
                    having an
                    office at Pascual Orozco No. 2117 - A Chihuahua, State of Chihuahua,
                    Mexico 31310, and Sunburst de Mexico, S.A. de C.V. a corporation
                    duly
                    incorporated and validly existing pursuant to the laws of the
                    United
                    Mexican States and having an office at Suite 5, Avenida del Mar
                    No.1022
                    Zona Costera, Mazatlan, State of Sinaloa, Mexico (Herein incorporated
                    by
                    reference from the Registration Statement on Form SB-2/A filed
                    with the
                    Securities and Exchange Commission on September 25,
                    2006.)
  -39-
 
 10.8
                  ASSIGNMENT
                      OF
                      CONTRACT AGREEMENT made and entered in the City of Chihuahua,
                      State of
                      Chihuahua as of this the 18th day of August, 2005 among MINERA
                      RIO TINTO,
                      S. A. DE C. V. a company duly incorporated and validly existing
                      pursuant
                      to the laws of the United Mexican States, and CORPORATIVO MINERO,
                      S.A. DE
                      C.V. a company duly incorporated and validly existing pursuant
                      to the laws
                      of the United Mexican States, and SUNBURST MINING DE MÉXICO, S. A. DE C.
                      V. a company duly incorporated and validly existing pursuant
                      to the laws
                      of the United Mexican States (herein incorporated by reference
                      from the
                      Company’s report on Form 8-K for report date August 22, 2005 and filed
                      with the Securities and Exchange Commission on August 25,
                      2005).10.9
                  ASSIGNMENT
                      OF
                      CONTRACT AGREEMENT made and entered in the City of Chihuahua,
                      State of
                      Chihuahua as of this the 18th day of August, 2005, among MINERA
                      RIO TINTO,
                      S. A. DE C. V. a company duly incorporated and validly existing
                      pursuant
                      to the laws of the United Mexican States, and RAFAEL FERNANDO
                      ASTORGA
                      HERNÁNDEZ, having a domicile at Calle República de Uruguay No. 706 of the
                      City of Chihuahua, Chih, and SUNBURST MINING DE MÉXICO, S. A. DE C. V. a
                      company duly incorporated and validly existing pursuant to
                      the laws of the
                      United Mexican States (San Antonio) (herein incorporated by
                      reference from
                      the Company’s report on Form 8-K for report date August 22, 2005 and filed
                      with the Securities and Exchange Commission on August 25,
                      2005).10.10
                  ASSIGNMENT
                      OF
                      CONTRACT AGREEMENT made and entered in the City of Chihuahua,
                      State of
                      Chihuahua as of this the 18th day of August, 2005 among MINERA
                      RIO TINTO,
                      S. A. DE C. V. a company duly incorporated and validly existing
                      pursuant
                      to the laws of the United Mexican States, having an office
                      at Av. Pascual
                      Orozco Number 2117- Altos, La Cima, C. P. 31310, Chihuahua,
                      Chihuahua, and
                      MINERA RACHASA, S.A. DE C.V., a company duly incorporated and
                      validly
                      existing pursuant to the laws of the United Mexican States,
                      and having an
                      office at Niños 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 (San Francisco) (herein incorporated by reference
                      from the
                      Company’s report on Form 8-K for report date August 22, 2005 and filed
                      with the Securities and Exchange Commission on August 25,
                      2005).10.11
                  THE
                      NEW
                      AGREEMENT entered into on December 8, 2005 among the Company,
                      Sunburst de
                      Mexico, and MRT (herein incorporated by reference from the
                      Company’s
                      current report on Form 8-K for report date December 8, 2005
                      and filed with
                      the Securities and Exchange Commission on December 14,
                      2005).10.12
                  Funds
                      Escrow
                      Agreement dated July 2005, among Sunburst Acquisitions IV,
                      Inc.,
                      Investment Fund, Ltd., Alpha Capital AG and Stonestreet LP,
                      and Grushko
                      & Mittman, P.C. (herein incorporated by reference from the Company’s
                      current report on Form 8-K dated July 1, 2005 and filed with
                      the
                      Securities and Exchange Commission on August 17, 2005).10.13
                  Repayment
                      Agreement dated July 15, 2005 by and among Sunburst IV, Inc.
                      and
                      Investment Fund, Ltd., Alpha Capital AG and Stonestreet LP.
                      (herein
                      incorporated by reference from the Company’s current report on Form 8-K
                      dated July 1, 2005 and filed with the Securities and Exchange
                      Commission
                      on August 17, 2005).10.14
                  Consulting
                      Agreement dated July 1, 2005 between Tracy A. Moore and Sunburst
                      Acquisitions IV, Inc. (herein incorporated by reference from
                      the Company’s
                      current report on Form 8-K dated July 1, 2005 and filed with
                      the
                      Securities and Exchange Commission on August 17, 2005).10.15
                  Consulting
                      Agreement with G.M. Capital Partners, Ltd. dated January 30,
                      2006
                      (incorporated by reference from Current Report on Form 8-K
                      filed with the
                      Securities and Exchange Commission on February 7,
                      2006).10.17
                  Amendment
                      to
                      the New Agreement, dated April 6, 2006 by and among Mexoro
                      Minerals, Ltd.,
                      Sunburst Mining de Mexico S.A. de C.V., and Minera Rio Tinto,
                      S.A. de C.V.
                      (Herein incorporated by reference from the Registration Statement
                      on Form
                      SB-2/A filed with the Securities and Exchange Commission on
                      September 25,
                      2006.)
  -40-
  10.18
                  Addendum
                      To
                      Purchase Contract Of Mining Rights To Lump Sum Entered Into
                      On May 6, 2004
                      by Corporativo Minero, S.A. De C.V. And Sunburst Mining De
                      Mexico, S.A. De
                      C.V., dated March 24, 2006 (Herein incorporated by reference
                      from the
                      Registration Statement on Form SB-2/A filed with the Securities
                      and
                      Exchange Commission on September 25, 2006.)10.19
                  Agreement
                      to
                      Extend August Payment Due Date, entered into on July 18, 2006
                      by Minera
                      Rio Tinto and Sunburst de Mexico (Herein incorporated by reference
                      from
                      the Registration Statement on Form SB-2/A filed with the Securities
                      and
                      Exchange Commission on September 25, 2006.10.20
                  Amended
                      Agreement with G.M. Capital Partners Ltd. dated August 31,
                      2006 (herein
                      incorporated by reference to the Current Report on Form 8-K
                      dated August
                      31, 2006 and filed on September 21, 2006.10.21
                  Letter
                      Employment Agreement with Matthew Wunder, dated August 15,
                      2006 (herein
                      incorporated by reference from the Registration Statement on
                      Form SB-2/A
                      filed with the Securities and Exchange Commission on September
                      25,
                      2006.10.22
                  Original
                      Agreement between MRT and Corporativo Minero dated 2004 concerning
                      the
                      Cieneguita Property (herein incorporated by reference from
                      the
                      Registration Statement on Form SB-2/A filed with the Securities
                      and
                      Exchange Commission on December 18, 2006.)10.23
                  Agreement
                      between MRT and La Empresa Denominada Minera Rachasa dated
                      2004 concerning
                      the San Francisco concessions (herein incorporated by reference
                      from the
                      Registration Statement on Form SB-2/A filed with the Securities
                      and
                      Exchange Commission on September 25, 2006.)10.24
                  Agreement
                      between MRT and Rafael Astorga Hernandez, dated July 20, 2006,
                      concerning
                      the San Antonio concessions (herein incorporated by reference
                      from the
                      Registration Statement on Form SB-2/A filed with the Securities
                      and
                      Exchange Commission on September 25, 2006.)10.25
                  Consent
                      of
                      MRT to assign the Agreement between MRT and Rafael Astorga
                      Hernandez to
                      Sunburst de Mexico (herein incorporated by reference from the
                      Registration
                      Statement on Form SB-2/A filed with the Securities and Exchange
                      Commission
                      on December 18, 2006.)10.26
                  Exploration
                      and Sale Option Agreement of Mining Concessions Entered By
                      and Between
                      Minera Emilio, S.A. de C.V. and Sunburst Mining de Mexico,
                      S.A. de C.V.
                      (herein incorporated by reference from the Current Report on
                      Form 8-K
                      filed with the Securities and Exchange Commission on October
                      30,
                      2006.)10.27
                  Agreement
                      to
                      Defer Guazapares Property Payments, entered into on September
                      19, 2007 by
                      Sunburst de Mexico S.A. de C.V., Mexoro and MRT (herein incorporated
                      by
                      reference to the Current Report on Form 8-K dated September
                      19, 2007 and
                      filed on October 9, 2007.)10.28
                  Agreement
                      to
                      Defer Cieneguita Property Payments, entered into on May 4,
                      2007 by
                      Corporativo Minero S.A. de C.V. and Sunburst de Mexico S.A.
                      de C.V.
                      *14.1
                  Code
                      of
                      Ethics (herein incorporated by reference from the Registration
                      Statement
                      on Form SB-2 filed with the Securities and Exchange Commission
                      on April 7,
                      2006.)16.1
                  Responsive
                      letter of Comiskey & Co. (herein incorporated by reference from
                      Current Report on Form 8-K filed with the Securities and Exchange
                      Commission on July 16, 2004.)21.1
                  Subsidiaries
                      of the Registrant (herein incorporated by reference from the
                      Registration
                      Statement on Form SB-2 filed with the Securities and Exchange
                      Commission
                      on April 7, 2006.)31.1
                  Certification
                      of Chief Executive
                      Officerand Chief
                      Financial Officerof
                      Mexoro Minerals Ltd. pursuant to Rule 13a-14(a)/15d-14(a).
                      *32.1
                  Certification
                      of Chief Executive
                      Officerand Chief
                      Financial Officerof
                      Mexoro Minerals Ltd. pursuant to 18 U.S.C. Section 1350.
                      *


*filed
                herewith





-41-


SIGNATURES





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





MEXORO
      MINERALS LTD.














By:
      /S/ Robert
      Knight


Robert
      Knight, President,Chief
      Financial OfficerandDirector


Date:January
      14, 2008








-42-