**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**Form
      10** - **QSB**








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


**For
      the
      quarter ended May 31, 2007**





_
      TRANSITION REPORT
      UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the
              transition period from
            ____
              to _____Commission
              file number
            0-23561




**MEXORO
      MINERALS LTD.**


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


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





Colorado
            
            84-1431797(State
                or
                other jurisdiction of incorporation)
            
            (IRS
                Employer
                Identification No.)





C.
                General
                Retana #706
              Col.
                San
                Felipe,
              Chihuahua,
                Chih., Mx
            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: 22,626,102 at July 12, 2007.





Transitional
      Small
      Business Disclosure Format (Check one): Yes
      __
      No X





































**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**








**CONSOLIDATED
      FINANCIAL STATEMENTS**


**(Unaudited)**


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





**MAY
      31,
      2007**


























**MEXORO
      MINERALS LTD.**


(Formerly
      Sunburst
      Acquisitions IV, Inc.)


(An
      Exploration
      Stage Company)


Consolidated
      Balance Sheets


(Expressed
      in U.S.
      Dollars)


(Unaudited,
      Prepared by Management)


**May
                31, 2007**
              **(Unaudited)**
            
            
            
            **February
                28, 2007**
              **(Audited)****Assets****Current**Cash
                and cash
                equivalents
            
            $
            38,177
            
            
            $
            13,148Accounts
                receivable
            
            
            235,683
            
            
            
            165,897Prepaid
                expenses
            
            
            204,634
            
            
            
            173,857478,494
            
            
            
            352,902**Equipment
                (note 4)**
            
            
            361,779
            
            
            
            351,335**Total
                assets**
            
            $
            840,273
            
            
            $
            704,237**Liabilities****Current**Accounts
                payable and accrued liabilities
            
            $
            1,018,472
            
            
            $
            263,145Current
                portion of loans payable (note 7)
            
            
            48,054
            
            
            
            25,400Promissory
                notes (note 6)
            
            
            647,326
            
            
            
            109,3371,713,852
            
            
            
            397,882**Loans
                payable (note 7)**
            
            
            50,900
            
            
            
            36,863**Total
                liabilities**
            
            
            1,764,752
            
            
            
            434,745**Stockholders’
                Deficiency****Capital
                stock**Preferred
                stockAuthorized:
                20,000,000 shares without par value (note 9)Issued:
                nil
            
            
            -
            
            
            
            -Common
                stockAuthorized:
                200,000,000 shares without par valueIssued:
                21,811,102 (2007 - 21,036,102) (note 10)
            
            
            19,704,277
            
            
            
            19,304,277Additional
                paid-in capital
            
            
            9,639,804
            
            
            
            8,702,096Accumulated
                deficit from prior operations
            
            
            (2,003,427
            )
            
            
            (2,003,427
            )Accumulated
                deficit during the exploration stage
            
            
            (28,279,013
            )
            
            
            (25,731,407
            )Other
                comprehensive income (loss)
            
            
            13,880
            
            
            
            (2,047
            )**Total
                stockholders’ equity (deficiency)**
            
            
            (924,479
            )
            
            
            269,492**Total
                liabilities and stockholders’ equity (deficiency)**
            
            $
            840,273
            
            
            $
            704,237




**Going
      concern (note 3)**


**Commitments
      (notes 5, 11,12 and 14)**


**Subsequent
      events (note 15)**





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







**MEXORO
      MINERALS LTD.**


(Formerly
      Sunburst
      Acquisitions IV, Inc.)


(An
      Exploration
      Stage Company)


Consolidated
      Statements of Operations and Deficit


(Expressed
      in U.S.
      Dollars)


(Unaudited,
      Prepared by Management)


**Three
                Months Ended****May
                31, 2007**
            
            
            **May
                31, 2006**
            
            
            **Period
                from Inception of Exploration (March 1, 2004) To May 31,
                2007****Expenses**General
                and
                administrative
            $
            935,264
            
            $
            570,288
            
            $
            2,944,902Stock-based
                compensation (note 11)
            
            937,708
            
            
            487,250
            
            
            4,204,913Mineral
                exploration
            
            668,276
            
            
            252,261
            
            
            1,757,774Impairment
                of
                mineral property costs
            
            -
            
            
            -
            
            
            15,565,422**Operating
                loss**
            
            (2,541,248
            )
            
            (1,309,799
            )
            
            (24,473,012
            )**Other
                income (expenses)**Interest
                expense
            
            (6,358
            )
            
            (2,305,441
            )
            
            (3,952,500
            )Interest
                income
            
            -
            
            
            6,055
            
            
            6,055Gain
                on
                settlement of debt (notes 6 and 8)
            
            -
            
            
            7,259
            
            
            140,444**Net
                loss**
            
            (2,547,606
            )
            
            (3,601,926
            )
            
            (28,279,013
            )**Accumulated
                deficit, beginning**
            
            (25,731,407
            )
            
            (18,338,373
            )
            
            -**Accumulated
                deficit, ending**
            $
            (28,279,013
            )
            $
            (21,940,299
            )
            $
            (28,279,013
            )**Other
                comprehensive income**Foreign
                exchange gain (loss) on translation
            
            15,927
            
            
            (32,612
            )
            
            (36,939
            )**Total
                comprehensive loss**
            $
            (2,531,679
            )
            $
            (3,634,538
            )
            $
            (28,315,9521
            )**Total
                loss per share -**basic
                and
                diluted
            $
            (0.12
            )
            $
            (0.26
            )**Weighted
                average number of shares of****common
                stock -**basic
                and
                diluted
            
            21,171,156
            
            
            14,159,872










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







**MEXORO
      MINERALS LTD.**


(Formerly
      Sunburst
      Acquisitions IV, Inc.)


(An
      Exploration
      Stage Company)


Consolidated
      Statements of Cash Flows


(Expressed
      in U.S.
      Dollars)


(Unaudited,
      Prepared by Management)


**Three
                Months Ended****May
                31, 2007**
            
            
            **May
                31, 2006**
            
            
            **Period
                from Inception of Exploration to May 31,
                2007****Cash
                flows from operating activities**Net
                loss
            $
            (2,547,606
            )
            $
            (3,601,926
            )
            $
            (28,279,013
            )Write
                off of
                note receivable
            
            -
            
            
            -
            
            
            57,500Acquisition
                of resource properties costs for stock
            
            -
            
            
            -
            
            
            13,065,000Issuance
                of
                shares for consulting services
            
            -
            
            
            -
            
            
            90,000Amortization
            
            14,708
            
            
            117
            
            
            39,637Discount
                on
                convertible debenture
            
            -
            
            
            -
            
            
            175,000Non-cash
                component of gain on settlement of debt
            
            -
            
            
            -
            
            
            (182,259
            )Stock-based
                compensation
            
            937,708
            
            
            487,250
            
            
            5,727,913Beneficial
                conversion feature
            
            -
            
            
            2,265,500
            
            
            3,717,500Prepaid
                expense
            
            (30,778
            )
            
            38,269
            
            
            (147,337
            )Accounts
                receivable
            
            (69,786
            )
            
            (52,657
            )
            
            (227,477
            )Customer
                deposits
            
            -
            
            
            -
            
            
            (44,809
            )Notes
                payable
            
            -
            
            
            -
            
            
            109,337Accounts
                payable and accrued liabilities
            
            755,327
            
            
            7,653
            
            
            1,003,538**Cash
                used in operating activities**
            
            (940,427
            )
            
            (855,794
            )
            
            (4,895,470
            )**Investing
                activity**Purchase
                of
                property and equipment
            
            (25,152
            )
            
            (1,962
            )
            
            (401,416
            )**Cash
                used in investing activity**
            
            (25,152
            )
            
            (1,962
            )
            
            (401,416
            )**Financing
                activities**Proceeds
                from
                loans payable
            
            45,915
            
            
            -
            
            
            121,263Proceeds
                from
                notes payable
            
            537,989
            
            
            -
            
            
            1,100,789Proceeds
                from
                convertible debentures
            
            -
            
            
            2,265,500
            
            
            3,692,500Proceeds
                from
                exercise of options
            
            -
            
            
            -
            
            
            78,000Proceeds
                from
                exercise of warrants
            
            400,000
            
            
            -
            
            
            450,000Repayment
                of
                loans payable
            
            (9,224
            )
            
            -
            
            
            (22,309
            )Repayment
                of
                notes payable
            
            -
            
            
            -
            
            
            (178,500
            )Repayment
                of
                convertible debentures
            
            -
            
            
            -
            
            
            (530,000
            )Stock
                subscriptions
            
            -
            
            
            (170,000
            )
            
            170,000Issuance
                of
                common stock
            
            -
            
            
            375,000
            
            
            477,109**Cash
                provided by financing activities**
            
            974,680
            
            
            2,470,500
            
            
            5,358,852**Outflow
                of cash and cash equivalents**
            
            9,101
            
            
            1,612,744
            
            
            61,966**Effect
                of foreign currency translation on cash**
            
            15,928
            
            
            (17,417
            )
            
            (45,866
            )**Cash
                and cash equivalents, beginning**
            
            13,148
            
            
            479,530
            
            
            22,077**Cash
                and cash equivalents, ending**
            $
            38,177
            
            $
            2,074,857
            
            $
            38,177**Supplemental
                cash flow information**Interest
                paid
            $
            -
            
            $
            39,941
            
            $
            162,157Common
                stock
                issued on conversion of debt
            
            -
            
            
            -
            
            
            3,217,500Common
                stock
                issued on settlement of notes payable
            
            -
            
            
            412,800
            
            
            412,800Shares
                issued
                for services
            
            
            
            
            
            
            
            90,000





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







**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




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




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




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




On
      May 25, 2004,
      the Company completed a share exchange transaction with Sierra Minerals and
      Mining, Inc. (“Sierra Minerals”), a Nevada corporation, which caused Sierra
      Minerals to become a wholly-owned subsidiary. Sierra Minerals held certain
      rights to properties in Mexico that the Company now owns or has an option to
      acquire. Through Sierra Minerals, the Company entered into 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 pursue directly 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 financial statements have been prepared in accordance with accounting
      principles generally accepted in the United States of America 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 accounting principles for complete 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 six months ended May 31, 2007
      are
      not necessarily indicative of the results that may be expected for the year
      ending February 28, 2008. For further information, refer to the financial
      statements and footnotes thereto included in the Company’s Annual Report on Form
      10-KSB for the year ended February 28, 2007.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




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




a)
            Recent
                accounting pronouncements




(i)
            In
                February
                2006, the FASB issued SFAS No. 155, “*Accounting
                for Certain Hybrid Financial Instruments, an amendment of FASB Statements
                No. 133 and 140”.*This
                statement permits fair value re-measurement for any hybrid financial
                instrument that contains an embedded derivative that otherwise would
                require bifurcation. It establishes a requirement to evaluate interests
                in
                securitized financial assets to identify interests that are freestanding
                derivatives or that are hybrid financial instruments that contain
                an
                embedded derivative requiring bifurcation. In addition, SFAS 155
                clarifies
                which interest-only strips and principal-only strips are not subject
                to
                the requirements of Statement 133. It also clarifies that concentrations
                of credit risk in the form of subordination are not embedded derivatives.
                SFAS 155 amends Statement 140 to eliminate the prohibition on a qualifying
                special purpose entity from holding a derivative financial instrument
                that
                pertains to a beneficial interest other than another derivative financial
                instrument. This statement is effective for all financial instruments
                acquired or issued after the beginning of an entity’s first fiscal year
                that begins after September 15, 2006. The adoption of this standard
                is 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 No. 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 No. 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 No. 157 is effective for financial statements issued for fiscal
                years
                beginning after November 15, 2007.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(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”. 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 U.S. generally accepted accounting principles (“U.S.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
                No. 159.




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




The
      accompanying
      financial statements have been prepared on a going-concern basis. The Company
      has a history of operating losses and will need to raise additional capital
      to
      fund its planned operations. As at May 31, 2007, the Company had working capital
      deficiency of $1,235,358 (February 28, 2007 - working capital deficiency of
      $44,980) and a cumulative loss during the exploration period of $28,279,013
      (February 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 a Mexican mining venture (note 5). In addition, the Company
      has conducted private placements of convertible debt and common stock (notes
      8
      and 10), which have generated a portion of the initial cash requirements of
      its
      planned Mexican mining ventures (note 5).









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




**4.**
            **EQUIPMENT**




February
                28,
                2007
            May
                31, 2007Net
            
            
            Additions(Adjustments)
            
            
            Accumulated
              Amortization
            
            
            NetSoftware
            $
            15,521
            
            $
            290
            
            $
            (2,026
            )
            $
            13,785Machinery
            
            213,219
            
            
            (19,925
            )
            
            (4,351
            )
            
            188,943Vehicles
            
            87,747
            
            
            40,147
            
            
            (6,745
            )
            
            121,149Computers
            
            19,202
            
            
            4,738
            
            
            (1,893
            )
            
            22,047Office
                equipment
            
            15,646
            
            
            638
            
            
            (430
            )
            
            15,854Totals
            $
            351,335
            
            $
            25,888
            
            $
            (15,445
            )
            $
            361,779




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




Since
      May, 2004,
      the Company has held interests in gold 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 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.




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), 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 was paid on May 6, 2006. The Company made this payment
      to
      Corporativo Minero so the contract has been extended.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




**5** **.** **MINERAL
      PROPERTIES (continued)**




The
      Company has the
      obligation to pay a further $120,000 per year for the next 13 years and the
      balance of payments in the 14 th year, until the
      total of $2,000,000 is paid The Company has not made the required payment due
      May 6, 2007 as required by the written agreement as an oral agreement between
      the two parties has determined that the property payments will continue on
      the
      date when production on the property commences.




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 up 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
      Sunburst de Mexico, with the consent of the Guazapares Property owner (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 and then to May 31, 2007. The May 31, 2007 payment is in
      default and an oral agreement between the two parties has deferred payment
      until
      August 31, 2007), August 2, 2007 - $140,000, August 2, 2008 - $110,000 and
      August 2, 2009 - $500,000.




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.




**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.), MRT’s rights and obligations acquired under the
      San Francisco option agreement, including the option to purchase the San
      Francisco concession for a price of $250,000 (the “Purchase Price”) due 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 subsequent to May 31,
      2007
      quarter end); 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; 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 in the San Francisco Property.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)
      (U.S. Dollars)**




**5** **.** **MINERAL
      PROPERTIES (continued)**




**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 price of $500,000, due on January 15, 2010, commencing
      from January 15, 2004, the date of signing of the San Antonio option agreement.




To
      maintain the
      option, Sunburst de Mexico assumed the obligation to pay to the San Antonio
      owner cumulative annual payments. The 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 Francisco Property.




**Encino
      Gordo**




Sunburst
      de Mexico
      purchased two of the Encino Gordo concessions from MRT for a price of 1,000
      pesos (approximately US$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.




**Sahauyacan**




On
      October 24,
      2006, Sunburst de Mexico entered into an exploration and sale option agreement
      of mining concessions with Minera Emilio SA de CV (“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
      $
      27,500 till June 21, 2007); $3,500 per month effective from August 21, 2007
      to
      August 21, 2008 for a total of $45,500; $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.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




**5** **.** **MINERAL
      PROPERTIES (continued)**




On
      December 8,
      2005, the Company and Sunburst de Mexico entered into the “New Agreement” with
      MRT to exercise their option under the August 18, 2005 sale and purchase of
      mining concessions agreement to obtain two mining concessions in the Encino
      Gordo region. The New Agreement also provided the Company the option to obtain
      three additional concessions in the Encino Gordo region. These properties are
      located in the state of Chihuahua, Mexico.




The
      following are
      additional material terms of the New Agreement:




(a)
            The
                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)
            Theproperty
                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 February23, 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.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




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




As
      at May 31, 2007,
      the Company had $647,326 (February 28, 2007 - $109,337) promissory notes
      outstanding to related parties that bear no interest with no due date and no
      terms of repayment (see notes 13 and 15(b)).




**7.**
            **LOAN****S
                PAYABLE**




As
      at May 31, 2007
      there were loans payable in the amount of $98,954 of which $48,054 is current
      and $50,900 is long-term. The loans are repayable in monthly instalments of
      $4,815 including interest at 15.6% per annum and are secured by specified
      automotive equipment.




**8.**
            **CONVERTIBLE****DEBENTURES**




In
      June 2006,
      $2,917,500 convertible debentures were converted into 5,835,000 shares of the
      Company’s common stock at $0.50 per share.




In
      March and April,
      2006 the Company issued $2,265,500 of convertible debentures, with principal
      and
      accrued interest at 7% per year, convertible into units at the option of the
      holder. Each unit consisted of a warrant to purchase 25,000 shares of common
      stock at $1.00 per share and $25,000 of debt, which at the option of the holder,
      may be converted to shares of common stock at $0.50 per share until April 30,
      2008. 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. A beneficial
      conversion feature of $1,359,300 was recorded in interest expense as to the
      anticipated conversion of these debentures, and interest expense of $906,200
      was
      recorded representing the relative fair value of the warrants (immediately
      exercisable) in relation to the convertible debt (EITF 00-27), and as a result,
      the aggregate sum of $2,265,500 was offset as additional paid in capital.




The
      fair value of
      the warrants attached to the convertible debentures as discussed above was
      estimated at the date of grant using the Black-Scholes option pricing model
      using a two-year expected life, a volatility factor of 152%, a risk-free rate
      of
      5%, an assumed dividend rate of 0%. The weighted average fair value of the
      warrant was $1.04 per warrant, while the weighted average stock price on the
      dates granted was $1.33.










**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




**9.**
            **PREFERRED
                STOCK**




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




**10.**
            **COMMON****STOCK**




On
      May 31, 2007,
      the Company issued 400,000 shares of common stock on the exercise of 400,000
      warrants where each warrant was exercisable into shares of common stock at
      a
      price of $0.50 per share.




On
      May 17, 2007,
      the Company issued 25,000 shares of common stock on the exercise of 25,000
      warrants where each warrant was exercisable into shares of common stock at
      a
      price of $1.00 per share.




On
      May 2, 2007, the
      Company issued 300,000 shares of common stock on the exercise of 300,000
      warrants where each warrant was exercisable into shares of common stock at
      a
      price of $0.50 per share.




On
      April 9, 2007,
      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 $0.50 per share.




On
      August 15, 2006,
      the Company returned to treasury 50,000 shares of common stock that were issued
      but not delivered pending payment with respect to the convertible debt converted
      into shares of common stock on July 5, 2006.




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 (note 6). On April
      6,
      2006, these shares were issued.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)
      (U.S. Dollars)**


**11.**
            **STOCK
                COMPENSATION PROGRAM**




On
      February 26,
      2007 the board of directors approved the granting of stock options according
      to
      a Nonqualified Stock Option 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 Nonqualified Stock Option Plan (“NQSO Plan”) which provides grants
      of nonqualified stock options (“NQSOs”). 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.




On
      March 1, 2007,
      the Company had granted 660,000 stock options to employees and consultants
      at a
      price of $1.04 per share. These stock options vest over 30 months with 1/6
      vested at the date of grant and 1/6 every six-months thereafter. Compensation
      cost, being the fair value of the options, is calculated to be $620,000 of
      which
      $155,000 was expensed on the date of issue and $51,667 will be expensed every
      quarter as the remainder vest.




The
      fair value of
      the 660,000 options was determined using the Black-Scholes option pricing model
      using a ten-year expected life of the option, a volatility factor of 73%, a
      risk-free rate of 4.6% and no assumed dividend rate.




On
      April 15, 2007,
      the Company also granted 900,000 stock options to officers and directors at
      a
      price of $1.15 per share. These stock options vest over 30 months with 1/6
      vested at the date of grant and 1/6 every six-months thereafter. Compensation
      cost, being the fair value of the options, is calculated to be $823,000 of
      which
      $171,458 was expensed on the date of issue and $68,583 will be expensed every
      quarter as the remainder vest.




The
      fair value of
      the 900,000 options was determined using the Black-Scholes option pricing model
      using a ten-year expected life of the option, a volatility factor of 71%, a
      risk-free rate of 4.6% and no assumed dividend rate.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)
      (U.S. Dollars)**




**11** **.** **STOCK
      COMPENSATION PROGRAM (continued)**




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




On
      February 27,
      2006, the Company granted 800,000 ISOs under the ISO Plan to directors and
      officers (600,000 stock options) and consultants (200,000 stock options) at
      a
      price of $0.50 per common stock for a period of ten years. The ISOs vest in
      four
      equal instalments, at the time of the grant and then every six months
      thereafter. Compensation cost, being the fair value of the options, is
      calculated to be $992,000 of which $248,000 is expensed on the date of issue
      and
      as the remainder vest.




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




On
      August 15, 2006,
      the Company granted 150,000 stock options to an employee at $1.04 (a 10%
      discount to market price on the day of acceptance), which vest over a three
      year
      period at a rate of 25,000 stock options every six months. Compensation cost,
      being the fair value of the options, was calculated to be $171,000 of which
      $28,500 is expensed every six months as they vest. These options were cancelled
      before the first vesting period.




The
      fair value of
      the 150,000 options was determined using the Black-Scholes option pricing model
      using a ten-year expected life of the option, a volatility factor of 143%,
      a
      risk-free rate of 4% and no assumed dividend rate.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)
      (U.S. Dollars)**




**11** **.** **STOCK
      COMPENSATION PROGRAM (continued)**




Pursuant
      to a
      consulting agreement (the “Agreement”) between the Company and GM Capital
      Partners Inc. (“GM Capital”), signed January 31, 2006, the Company granted
      5,000,000 warrants (Series A to E, see note 12). The Agreement provides for
      the
      provisions of financial public relations services from December 1, 2005 to
      November 30, 2007. The fair value of the 5,000,000 warrants 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.




The
      following table
      shows total stock-based compensation expense included in the “Consolidated
      Statement of Operations and Deficit”:


2007
            
            
            
            
            
            2006Stock-based
                compensation:
            $
            
            
            
            
            
            $Warrants
            
            487,250
            
            
            
            
            
            487,250Options
            
            450,458
            
            
            
            
            
            -Impairment
                of
                mineral property
            
            -
            
            
            
            
            
            -Pre-tax
                stock
                based compensation expense
            
            937,708
            
            
            
            
            
            487,250Income
                tax
                benefits
            
            -
            
            
            
            
            
            -Total
                stock-based compensation expense
            $
            937,708
            
            
            
            
            $
            487,250




Total
      unrecognized
      compensation costs related to non-vested stock awards at May 31, 2007 is
      $2,215,042 and is expected to be recognized over a weighted-average period
      of
      1.40 years.




There
      were no
      capitalized stock-based compensation costs at May 31, 2007 or May 31,
      2006.







**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)
      (U.S. Dollars)**




**11** **.** **STOCK
      COMPENSATION PROGRAM (continued)**




The
      following table
      summarizes options activity under the stock option plans during 2007 and
      2006


Weighted
                Average Exercise Price
            
            Number
                of
                shares under optionBalance
                at
                March 1, 2007
            $
            0.54
            
            930,000Options
                granted
            
            1.10
            
            1,560,000Options
                exercised
            
            -
            
            -Options
                cancelled
            
            -
            
            -Balance
                at
                May 31, 2007
            $
            0.54
            
            2,490,000Exercisable
                at May 31, 2007
            $
            0.70
            
            990,000





The
      shares under
      option at May 31, 2007, were in the following exercise price range:





Options
              outstanding
            
            Exercise
                price
            
            Number
                of
                shares under option
            
            Aggregate
                intrinsic value
            
            Weighted
                average remaining contracual life (in years)$
            0.50
            
            890,000
            $
            605,200
            
            8.061.04
            
            660,000
            
            92,400
            
            9.751.15
            
            900,000
            
            27,000
            
            9.871.50
            
            40,000
            
            -
            
            2.502,490,000
            $
            724,600Options
                exercisable$
            0.50
            
            690,000
            $
            469,200
            
            8.721.04
            
            110,000
            
            15,400
            
            9.751.15
            
            150,000
            
            4,500
            
            9.871.50
            
            40,000
            
            -
            
            2.50990,000
            $
            489,100









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




**12.**
            **WARRANTS**




As
      at May 31, 2007,
      the Company had a total of 7,442,500 (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
      7,442,500 shares of common stock in the event that these warrants are
      exercised.




During
      the quarter
      ended May 31, 2007, there were 775,000 warrants exercised for gross proceeds
      of
      $400,000.




The
      warrants
      include 1,000,000 Series A Warrants exercisable at $0.50 per share, 1,000,000
      Series B Warrants exercisable at $0.75 per share, 1,000,000 Series C Warrants
      exercisable at $1.00 per share, 1,000,000 Series D Warrants exercisable at
      $1.25
      per share, and 1,000,000 Series E Warrants exercisable at $1.50 per share;
      of
      which all are exercisable at the option of the holder, have no redemption
      features, and are settled on a physical basis. The Series A Warrants were fully
      vested upon issuance. They are exercisable at any time following their issuance
      but will expire on June 30, 2007 to the extent they are not exercised. The
      remaining series of Warrants will become exercisable only at the time that
      the
      immediately preceding series has been fully exercised.




Unless
      terminated
      earlier as a result of failure to vest, the Series B and Series C Warrants
      will
      each expire on December 31, 2007, and the Series D and Series E Warrants will
      each expire on December 31, 2008. The fair value of the 5,000,000 warrants
      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.




The
      Company has
      also issued 2,917,500 warrants exercisable at $1.00 each pursuant to the
      issuance of convertible debentures (note 8). These warrants expire on April
      30,
      2008, are redeemable by the Company, at $.01 per share, in the event the
      Company’s common stock closes with a bid price, on average, over $3.00 per share
      for a consecutive 20 day period and are settled on a physical basis. On August
      10, 2006, 50,000 warrants were exercised into 50,000 shares of common stock
      at a
      price of $1.00 per share. On August 15, 2006, 25,000 warrants were cancelled
      due
      to non-payment of funds with respect to a convertible debt subscription in
      the
      amount of $25,000 (note 8).




The
      Company has
      also issued 375,000 warrants exercisable at $1.00 each pursuant to the issuance
      of a private placement unit offering (note 10). 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.









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




**12** **.** **WARRANTS
      (continued)**




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
            
            
            -
            
            
            -Cancelled
            
            
            -
            
            
            -Exercised
            
            
            (775,000
            )
            
            (0.53
            )Balance
                May
                31, 2007
            
            
            7,442,500
            
            
            1.05




As
      at May 31, 2007,
      the following share purchase warrants were outstanding:




Number
                of
                Warrants
            Exercise
                Price
            
            Expiry
                Date250,000
            $
                0.50
            
            June
                30,
                20071,000,000
            $
                0.75
            
            December
                31,
                20071,000,000
            $
                1.00
            
            December
                31,
                20073,192,500
            $
                1.00
            
            April
                30,
                20081,000,000
            $
                1.25
            
            December
                31,
                20081,000,000
            $
                1.50
            
            December
                31,
                20087,442,500









**MEXORO
      MINERALS LTD.**


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


**(An
      Exploration Stage Company)**


**Notes
      to
      Consolidated Financial Statements**


**Three
      Months Ended May 31, 2007**


**(Unaudited)** **(U.S.
      Dollars)**




**13.**
            **RELATED
                PARTY TRANSACTIONS**




For
      the three
      months ended May 31, 2007, the Company paid management fees of $60,030 (May
      31,
      2006 - $57,000) to certain officers and directors and to companies controlled
      by
      directors. The Company paid $6,861 (May 31, 2006 - $18,137) to certain officers
      and directors and to companies controlled by directors for travel, office and
      other related expenses.




As
      at May 31, 2007,
      accounts payable of $24,000 (May 31, 2006 - $175) were owing to certain officers
      and directors of the Company and $58,793 (May 31, 2006 - $5,339) was owing
      to
      companies controlled by directors. In addition, promissory notes of $350,326
      (May 31, 2006 - $nil) was owing to a company controlled by a director (note
      6).




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




**14.**
            **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.




**15.**
            **SUBSEQUENT
                EVENTS**




a)
            Warrants





Subsequent
      to May
      31, 2007, the Company received proceeds of $665,000 on exercise of 815,000
      warrants.




b)
            Promissory
                notes





Subsequent
      to May
      31, 2007, one promissory note in the amount of $70,000 was issued to a party
      with a vested interest in the Company. The promissory note bears no interest,
      no
      due date and no terms of repayment.









**ITEM
      2.**


**MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS**





**CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**





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





**Overview**




We
      are a start-up
      exploration stage company and have not yet generated or realized any revenues
      from our exploration projects, which commenced in May 2004. As of May 31, 2007
      we had $38,000 in our bank account and do not have sufficient cash to maintain
      our operations after August 2007. 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 August 2007
      but they are not contractually obligated to do so. It is unlikely that the
      officers of our Company can contribute additional working capital after August
      2007. If no additional capital is raised prior to the end of August 2007, 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 August 2007, we may not
      be
      able to continue in business beyond that date unless we obtain additional
      capital. We have not generated any revenues, and no revenues are anticipated
      unless and until mineralized material is discovered on the properties in which
      we have an interest. 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
      the twelve
      month period from June 2007 to May 2008, we will need to raise additional
      capital to maintain operations. We will need to raise a minimum of $540,000
      for
      taxes and property payments and an additional $460,000 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 and tax payments that are due until April
      2008:





Name
            Date
            Payment
                Type
            
            USDCieneguita
                Claims
            October,
                2007
            Property
                payment
            
            $120,000Guazapares
                Claims
            August
                31,
                2007
            Property
                payment
            
            $60,000August
                2,
                2007
            Property
                payment
            
            $140,000January
                15,
                2008
            Property
                payment
            
            $50,000Encino
                Gordo
                2 claim
            December
                7,
                2007
            Property
                payment
            
            $50,000Sahauyacan
                Claims
            April-July
                21, 2007
            Property
                payments
            
            $2,500
                per
                monthAugust
                21,
                2007 -
            Property
                payments
            
            $3,500
                per
                monthAugust
                21,
                2008










Additionally,
      if
      our exploration during the twelve month period from May 2007 to April 2008
      is
      successful, we may need to raise additional capital to fund those exploration
      programs. At this time, we cannot assess with any accuracy our total capital
      needs to fund an expanded exploration program beyond our basic program. We
      also
      anticipate that we will need to raise an additional $1,700,000 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 our operations beyond August 2007. We also believe
      that we will not generate any revenues that would allow us to continue
      operations. If
      we are unable to
      raise additional capital through debt or equity beyond August 2007, it is most
      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 $530,000 of our $2,200,000 budget 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. Currently, we do not have sufficient capital to fund our
      current exploration plans and or to meet our monthly general and administrative
      costs. Our officers have committed to lend additional capital to Mexoro 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 operate until the end of August 2007. 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 properties.





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 this property, but in anticipation of favourable results from our
      exploration activities, we are planning to put the property into production.
      As
      there is a high demand for mining and milling equipment, we have paid a deposit
      towards the purchase of milling equipment and anticipate building a processing
      plant at our Cieneguita Property over the next three months, assuming we can
      raise the necessary capital to proceed. 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 or sell it at a price to reasonably recoup our original
      investment.





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









therefore
      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
      hired a VP of
      Exploration in August 2006 to conduct our exploration programs and a geologist
      to assist him. In November 2006 the VP of Exploration resigned from his position
      with the Company. We hired a new VP of Exploration who began work for us on
      March 1, 2007. We also hired an office administrator for our office in
      Chihuahua. We hired one more geologist at the end of December 2006 to work
      on
      our exploration programs. Other than one additional geologist, we do not expect
      any significant change in additional contractors to conduct exploration over
      the
      next 12 months. Other than the VP of Exploration, all of the employees we hire,
      including those involved in the exploration work we are conducting, are
      contracted from third parties specializing in providing employees for Mexican
      companies. In using third party contractors, we minimize our exposure to Mexican
      employment law and liabilities are undertaken by the third party contractors
      providing the services. We pay a flat rate to the third party for their
      services.





In
      the event that
      we should find a mineable reserve, it is management’s intention to contract the
      mining and milling of any ore reserves out to third parties. As we plan to
      put
      the Cieneguita Property into production in the next six months, 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***




Because
      we already
      have data from the previous exploration programs and mining records from Glamis
      Gold, our exploration program, planned until the end of December 2007, 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 the
      phase 1 exploration program to cost approximately $200,000. From January 2006
      to
      December 2006, we spent approximately $400,000, double the budgeted amount,
      on
      the phase 1 exploration of this project. Of this, $300,000 was spent on the
      trenching, sampling and assaying on the property. We also spent approximately
      $50,000 on column testing to determine the leachability of the ore. The balance
      of the funds was spent in wages, camp costs and general administrative costs.
      The funds that were expended came from our general working capital. We plan
      to
      do some additional column testing to determine the leachablity of the ore.
      The
      estimated cost for these additional tests will be approximately $50,000. The
      funds required for these additional tests will come from general working
      capital.





Milestones: The
      milestones for
      the phase 1 exploration program included the review of available data to create
      a structural mineralization framework, detailed soil and rock sampling,
      resampling existing trenches, the extension of existing trenches and the
      creation of new trenches. We also conducted cyanide testing on the rock to
      determine the best method of leaching the precious metals from the rock. We
      have
      completed phase 1 of our exploration program.





In
      April 2006, we
      completed a sampling of the property that included more than 500 meters of
      deep
      trenches from which we took comprehensive channel sampling. The trenches
      comprised 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’s laboratory in Chihuahua for assaying.
      The sampling protocol followed the best mining practices. The purpose of the
      sampling was to further define the ore grade and potential of the property.
      We
      also completed detailed soil sampling and rock sampling outside of the
      trenches.





By
      December 2006,
      we 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 a long enough
      period. Under actual mining production conditions in the field, though, we
      would
      anticipate that the economic recovery levels of the ore would be approximately
      70% to 75% recovery of gold from the ore. The cost of the cyanide needed to
      produce the additional gold above the 85% level outweighs the value of the
      gold
      recovered. We cannot guarantee that we would be able to achieve this level
      of
      recovery. This is not an estimate of reserves on the property. Additional tests
      will be needed to determine the most effective crush size of the ore, the most
      cost effective flow rates of the cyanide and most economical leaching time
      to be
      undertaken if we should ever put the property into production. These additional
      tests began in May 2007 and the tests should be completed approximately 90
      days
      thereafter. We hope that these tests will help us optimize the potential for
      extracting precious metals from the ore for the mining operation.





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: We
      commenced phase 2 of our exploration program in April 2007 under the direction
      of our VP of Exploration. We have budgeted $585,000 for the phase 2 exploration;
      including $50,000 for an additional geochemical sampling program and $50,000
      for
      general administrative expenses.





Milestones: The
      phase 2 exploration is now in progress and has been designed to identify new
      veins and/or mineralized zones. The geological mapping and sampling activities
      carried out within phase 2 of the exploration program at Cieneguita has resulted
      in the new discovery of high grade gold zones on three different locations
      along
      Cieneguita’s mineralized body. The new three 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 north in the Central
      area, and to the north in the Pit 2 area respectively.





According
      to our VP
      of Exploration, the results from the last mapping and sampling campaign have
      provided evidence that the potential for the discovery of new areas with gold
      grades still remains open as shown by the discovery of the Pit 1 South, Central
      and Pit 2 North areas. The next step in our exploration program will consist
      of
      detailed mapping and sampling on these three newly discovered zones.





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
      have budgeted
      $100,000 for the cost of a drilling program, including assaying and supervision.
      We plan to commence phase 3 of the exploration plan by August 2007.





Milestones: The
      objectives for
      phase 3 of the exploration plan are to initiate a drill program and to continue
      the trenching program from phase 2 of the exploration plan in order to further
      delineate the oxide ore mineralization and define where we plan to mine the
      ore.
      We plan to complete phase 2 of the exploration plan by the end of August
      2007.





Subject
      to the
      recommendation of our VP of Exploration, we may initiate a drill program
      consisting of 1,000 meters of reverse circulation drilling. At this time, there
      is a high demand for drill rigs and we cannot predict with any accuracy the
      timing to start the drilling program. Once we do receive a rig, we anticipate
      the drilling program will take approximately one month, with assay results
      available one month later. The funds for this drilling program will come from
      general working capital on hand. We hope that the results from this drilling
      will help us to better delineate the mineralization of the oxide zone and
      provide an ore reserve calculation. We do not intend to implement a feasibility
      study for the property in this phase of exploration. Six of the drill holes
      will









be
      drilled to a
      depth of 200 meters to test the sulphide potential of the mineral system. The
      use of these deep holes will help us determine if there is an extension to
      the
      oxide mineralization in the underlying sulphides. Our onsite geologist will
      determine where the holes are to be drilled based on our earlier exploration
      and
      mapping of the property. We are currently negotiating with several contractors
      to secure the use of a drill to undertake our drill program. To date, we have
      not found a contractor able to supply drills to meet our time schedule. We
      cannot, with any certainty, predict when a drill rig may become available to
      us.
      The unavailability of such drill rigs could hamper our exploration plans, but
      management believes that we can generate sufficient information from the
      trenching program, to mine the oxide mineralization on the property. We have
      not
      determined any known reserves on this property to date.





The
      trenching
      program will entail using a bulldozer to dig trenches. Our on-site geologist
      will direct the bulldozer operator where to dig the trenches. The geologist
      will
      base his decision where to dig the trenches on the results of our previous
      exploration work. Once the trenches are dug, the geologist will take samples
      of
      rock from all levels of the walls of the trench as if it were rock from a drill
      core. The rock will be gathered up and marked to indicate which part of the
      trench it came from. The ore is pulverized and shipped out for assays. The
      results from these assays are expected to be completed and mapped by October
      2007 with the goal of further delineating the prospects of the property.





Even
      though the
      rock is fractured, the objective of the drill program will be to provide us
      with
      accurate information to make an ore calculation of the grade of the ore and
      the
      size of the mineralized zones.





One
      of the main
      purposes of this phase of exploration is to delineate the mineralized ore body
      and map the grade of the mineralization, which will allow us to refine our
      plan
      to put the property into production. If the exploration program does not provide
      us with the results we deem necessary to continue exploration, then, on a
      recommendation from our senior geologist, or our VP of Exploration and
      managements’ concurrence on his findings, we will cease exploration on the
      property and any plans to put the property into production. If no further
      exploration is warranted, then we will discontinue any payments to the
      concession holders and allow our option to lapse. We will also then try to
      sell
      the mining equipment we have recently purchased. If we allow the option to
      lapse, we will be obligated, by the Mexican Government, to complete some
      reclamation work on the property of approximately $50,000. These funds would
      come from the bond we have already paid to the government in the amount of
      $67,000. Any funds not expended on reclamation would be returned to us by the
      Government. All of the money that we had invested in the exploration of the
      Cieneguita Property could be lost.





We
      have one
      geologist on the Cieneguita Property working full time and he will continue
      to
      do so through July 2007 if the exploration results warrant the expenditure.
      If
      the results do not warrant further work, we plan to move this geologist to
      one
      of our other properties to continue exploration on those properties.




4 Cieneguita
      Mine
      Design





Budget: We
      budgeted $50,000
      from general working capital to create the mine design for the Cieneguita
      Property.





Milestones: Concurrently,
      with
      phase 2 of the exploration plan, we will implement our plan to put the
      Cieneguita Property into production. The mine design will help determine where
      and how we will mine the Cieneguita Property. We plan to put the mine into
      production by the end of October or November 2007, if we are able to find
      available funding.





Coinciding
      with
      phase 2 and 3 of our exploration plan, we have commissioned a mine design to
      determine how to put the Cieneguita Property into production. At this time,
      we
      do not plan to implement a feasibility study for this property but feel we
      have
      sufficient information to put the property into production. The mine design
      has
      been commissioned to a third party contractor with expertise in heap leach
      mining. This contractor, an engineering firm, is reviewing all of the data
      that
      we have accumulated from Glamis Gold Ltd.’s previous exploration and from the
      trenching and sampling we have completed on the property. All of this
      information will be put on a map laying out the structure of the mineralized
      zone on our property to assist in mining the ore. The key purpose of this map
      is
      to help enable our on-site geologist to monitor grade control during mining.
      Additionally, from the information accumulated so far on the Cieneguita
      Property, the mining engineer has designed a heap leach mining operation best
      suited to the tonnage, grade of the ore and availability of land to build
      leaching pads.





The
      mine design
      calls for the mining operation to be run by a third party contractor, who will
      charge the company a flat fee per tonne of rock that is moved. It is estimated
      by the engineer designing the mine that the cost per tonne of rock moved from
      the property to the mill site will be approximately $1.30 per tonne of rock.
      This fee is only an estimate, as no contractor at this time has been engaged
      to
      mine the mineralized ore nor









provided
      us with a
      firm quote on the cost of mining. The actual cost of mining the ore may be
      much
      higher, and no assurance can be given as to the actual cost at this time. The
      engineering firm designing the mine has stated that one of the key objectives
      at
      this stage of the mining operation will be grade control. Because our sampling
      has shown that the gold mineralization is not consistent through out the ore,
      it
      will be imperative that our 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 are in the process
      of
      negotiating the construction of the conveyor belts we will need for all the
      phases of the milling operation. The conveyor belts will be manufactured in
      Chihuahua and assembled at the Cieneguita mine site. We have identified and
      negotiated the purchase of a second hand agglomorator and have identified and
      negotiated the purchase of a used stacker suitable for this type of operation.
      We have also negotiated a purchase price for used carbon filters and pumps
      to be
      used for this stage of the milling process.





At
      this time, we do
      not know the cost associated with the process of having the precious metals
      extracted and minted into ore bars. If our head grade is not accurate or the
      heap leach process is not effective, we may not extract enough gold from the
      carbon filters to pay for this complete operation and we would lose money from
      the mining operation. If we lost money on the mining and milling operation,
      we
      may not be able to stay in business as we would expect the cash flow from
      operations to cover, at the minimum, the mining and milling operation.
      Furthermore, we do not have any proven reserves on our property and the
      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 has been completed and cost approximately $50,000.
      We
      paid for the work from our general working capital. The milling equipment and
      cost of building the plant will be approximately $2,200,000. We estimate that
      we
      will need approximately $1,100,000 for working capital during the first four
      months of 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.





***Guazapares
      Property***





1. Phase
      1
      Exploration





Budget: Concurrently
      with
      the exploration of the Cieneguita Property, we have budgeted approximately
      $647,000, which includes $437,000 for 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. 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
      believe that
      most of the mining concessions being explored on the Guazapares Property are
      epithermal silver deposits similar to the Cieneguita Property. However, because
      we do not have the same amount of detailed information on Guazapares as we
      do on
      Cieneguita, the exploration program will cost more than the exploration program
      on the Cieneguita Property.





We
      have one full
      time geologist working on the Guazapares Property collecting rock samples and
      mapping the property. The goal for this phase was the completion of mapping
      on
      the property at a scale of 1:5,000 with individual veins being mapped at a
      scale
      of 1:1,000. Rock samples were taken from the property and were sent to ALS
      Chemex in Chihuahua for 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
      the San Antonio area. 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 to with
      phase 2 of the exploration plan.





2. Phase
      2
      Exploration





Budget: We
      have budgeted
      $100,000 from the total of $647,000 for phase 2 of the exploration plan. Of
      this, $50,000 is budgeted for a ground based geophysical exploration that will
      concentrate mainly on the area around the San Antonio area and $50,000 for
      specific sampling and trenching on the San Francisco area. These funds will
      come
      from general working capital of the company.





Milestones: The
      goals of phase
      2 of the exploration plan are to conduct more detailed soil and rock sampling,
      perform ground-based geophysical measurements, map the topography, and sample
      trenches in order to define the structural framework of the mineralized zone
      to
      facilitate a drilling program, if warranted. This phase commenced in February
      2007 and is expected to be completed by the end of July 2007.





The
      second phase of
      the exploration program, using two geologists, will include more detailed soil
      and rock sampling, ground-based geophysics measurements and mapping on all
      of
      the concessions at Guazapares. At this time, though, we do not have enough
      information to implement a drill program. One of the objectives of this stage
      of
      exploration will be to conduct a ground based geophysical exploration that
      will
      concentrate mainly on the area around the San Antonio area. Another target
      will
      be to map the topography and sampled the surface trenches in the San Francisco
      area.





The
      purpose of this
      phase of exploration is to define the structural mainframe of the mineralized
      zone to facilitate the placing of drill holes. The information from phase 2
      of
      the exploration plan
      has been
      reviewed by our senior geologist and VP of Exploration and they have made a
      recommendation to management that further exploration is warranted. We will
      continue to conduct phase 3 of our exploration plan.





3. Phase
      3 Drill
      Program





Budget: We
      estimate that
      the initial drill program expenditure will be $437,000 (the balance of the
      $647,000 budgeted for the property). We will need to raise additional capital
      through the sale of equity or debt to fund a complete drilling program, as
      only
      a small portion of the funds budgeted will be left in our general working
      capital to initiate the program.





Milestones: The
      goal of phase 3
      of the exploration drill program would be to gather information to determine
      if
      we should put the property into production.





We
      are currently
      formulating how the drilling phase of the exploration program will be
      implemented. If sufficient funds can be generated to pay for the drilling,
      assuming drill rigs are available in the area, our plan is to commence this
      program in July 2007, and it would last approximately 60 days. The results
      of
      this drill program would take approximately 90 days to be assayed and
      interpreted. Once those results are known, we would consult our lead exploration
      geologists and our VP of Exploration to determine whether to abandon the
      Guazapares Property or to continue with further drilling exploratio n.





If
      management
      decides to continue with further drilling, we would need to raise additional
      funding through the sale of debt or equity because we do not have sufficient
      capital to continue an exploration program. Additional drilling would cost
      a
      significant amount of money and there is no assurance that we would be able
      to
      raise









such
      additional
      amounts of money. We have not identified any sources of funds to implement
      such
      a program. If we could not obtain additional financing, we could seek a joint
      venture partner if the results warranted it. We do not have any joint venture
      partners at this time and can give no assurance that we would be able to find
      one if the Guazapares Property warranted such a joint venture.





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




***Encino
      Gordo***





The
      Encino Gordo
      Property comprises four mining concessions that total 1,042 hectares
      (approximately 2,575 acres). We have limited information available to us about
      this property from previous exploration that was done by other companies. The
      previous geochemical sampling that was done suggests a presence of mineralized
      structures. These structures are being investigated by geochemical sampling
      to
      determine if further exploration is warranted and to help refine the best
      exploration plan for the concessions.





1. Phase
      1
      Exploration





Budget: We
      have planned for an exploration program, with a total budget of approximately
      $705,000 from general working capital, through December 2007, 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. 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. At
      this
      time, he has not completed his initial review of the property and the results
      of
      the exploration. We anticipate that he should complete his review by the end
      of
      August 2007. The funds for this additional exploration, if warranted, will
      come
      from general working capital when and if available. We can give no assurances
      that we will be able to raise sufficient capital to continue the exploration
      on
      this property.


Milestones: The
      goals of the first phase of exploration were to complete mapping of the property
      and to take geochemical samples from the property. We currently have one
      geologist taking geochemical sampling and mapping this property. The purpose
      of
      this initial program 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 during the month of October, when
      mapping was completed along the extension of the structures hosting the Elyca
      vein located along the eastern edge of the Encino Gordo claims, 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 returned anomalous results
      of
      gold which require follow-up to verify source areas.





In
      October 2006, we
      prepared a list of preliminary drill hole locations to accompany the SAMARNAT
      work permit application. We filed the application for the permit in February
      2007, with approval from SAMARNAT expected by the end of July 2007. Once the
      work permit is approved, our goal is to drill the targets as recommended by
      our
      VP of Exploration. The VP of Exploration has not finished his review of the
      exploration material, as such, has not recommended any drilling program at
      this
      time. We cannot predict with any accuracy when, if ever, we will commence
      drilling on this property and the cost of such drilling. We are applying for
      drill permits before determining whether or not a drill program will be
      commenced in order to save time in the event a drill program is recommended.
      Much additional exploration work must be completed and a definitive exploration
      plan needs to be prepared by our VP of Exploration before management can
      determine whether or not to continue to the next phase of exploration. The
      actual drill hole locations are likely to change from those submitted with
      the
      working plan permit, as 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.





Our
      goal is to have
      this further exploration completed by the end of August 2007 and a geological
      report on the Encino Gordo Property, prepared by our senior geologist, should
      be
      available 60 days thereafter. Depending on the results of the report, as
      determined by management, we intend to either abandon the Encino Gordo Property,
      in which case no further payments would be made or would be due under our
      agreements to acquire these concessions, or make additional expenditures to
      determine potential drill targets.









2. Phase
      2 Drill
      Program





Budget: If
      management
      decides to continue exploration by initiating a drill program, a budget will
      be
      prepared at that time, and the amount and source of the capital needed for
      additional expenditures will be determined. If a drill program of any size
      is
      recommended, we do not have sufficient capital on hand to complete such a
      program because it would most likely require the expenditure of significant
      amounts of money. We would need to raise additional capital through the sale
      of
      debt or equity. We can give no assurance that we would be able to raise such
      capital, as we have not identified any source of capital for such a program
      at
      this time. If we could not raise additional funds, we would consider seeking
      a
      joint venture partner if the results warranted it. We do not have any joint
      venture partners at this time and can give no assurance that we would be able
      to
      find one if the Encino Gordo Property warranted such a joint
      venture.





Milestones: Phase
      2 of the
      exploration plan would be a drill program to gather more information. Such
      information would be used to determine if we should put the property into
      production. We do not know when this phase of exploration could be completed,
      as
      discussed above. We estimate that the program would take approximately 60 days
      to complete, with results from the program being returned about 90 days after
      completion. These are estimates, as the number of drill targets will determine
      the length of the drill program. Once the results from the drill program are
      known, we would consult with our lead exploration 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 of Chihuahua and 50 kilometers
      south-southwest of the town of Mycoba in the state of Chihuahua, 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 spent approximately $760,000 from general working capital, through June
      2007, on initial sampling and mapping of this property. Of that, we spent
      approximately $90,000 doing initial due diligence on the property and gathering
      initial information before acquiring the 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 give no assurance that we would be able to find one if the Sahauyacan
      Property warranted such a joint venture.





Milestones: We
      have completed our initial mapping of the property and intend to map the
      underground workings of the property by the end of July 2007. At that point,
      our
      VP of Exploration will review the available information and create a complete
      exploration program.





As
      part of our due
      diligence on acquiring the properties, we had a surface geological mapping
      and
      sampling crew evaluate the property from September 2006 and through December
      2006. Mapping on the property was completed at a scale of 1:5,000 with
      individual veins being mapped at a scale of 1:1,000. To date, a total of









309
      samples have
      been taken from 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 an 11
      hole drill program was warranted.





2. Phase
      2 Drill
      Program





Budget: We
      had
      budgeted $365,000 to complete an 11 hole drill program. The contractor doing
      the
      drilling has completed the drilling .





Milestones: Our
      VP of
      Exploration recommended a 11 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 completed the
      drilling May 2007.





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





SDH-1
      through
      SDH-4, and SDH-7 through SDH-10, were collared along the Santo Niño mineralized
      vein. Drillhole 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
      8.00 meters with 2.98 g/t Au or 11.00 meters with 2.24 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
            21.198.50
            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 from drillholes SDH-3
      and
      SDH-4 show gold anomalies varying from 0.01 to 0.02 g/t. Geological and
      structural mapping surveys along the Santo Niño vein has identified 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.





Drillholes
      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 several
      two meter wide intercepts with gold mineralization ranging from 1.03 to 1.905
      g/t. Other gold values ran between 0.2 to 0.5 grams/tonne. Our VP of Exploration
      believes 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 of these gold values and their
      correspondent geological conditions is in progress. Despite these results,
      the
      Sahauyacan Property has no know or estimated resources or reserves.





3. Phase
      3
      Exploration.





Management
      and 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.





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 Cieneguita Property
      exploration program to define mineralized ore. However, we intend to proceed
      with exploration on all four properties simultaneously. If our exploration
      programs warrant drilling programs on the properties, we anticipate contracting
      two geologists and four assistants for supervising the drilling work and taking
      splits for the drilling samples.





Once
      we receive
      results from these exploration programs, 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**




***Three
      months ended May 31, 2007 compared to the three months ended May 31,
      2006.***





In
      this discussion
      of Mexoro’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 three months ended May 31, 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 the years ended 2007 and 2006 due to the fact that
      we
      did not achieve production from exploration activities during either
      year.





Expenses





Our
      expenses
      increased to $2,541,000
      for the
      three months ended May 31, 2007 compared to $1,310,000 for the three months
      ended May 31, 2006, representing an increase of $1,231,000. The increase is
      primarily attributable to higher administrative costs, stock-based compensation
      to officers, directors and consultants, and developing exploration program.





General
      and
      administrative cash expenses increased to $935,000 in the three months ended
      May
      31, 2007 compared to $570,000 in the three months ended May 31, 2006,
      representing an increase of $365,000. Management fees increased to $173,000
      in
      the three months ended May 31, 2007 from $88,000 in the three months ended
      May
      31, 2006. The increase was attributable to a new management team appointed
      in
      the prior fiscal quarter. Accounting and legal fees increased to $73,000 in
      the
      three months ended May 31, 2007 from $41,000 in the three months ended May
      31,
      2006. The increase in fees was primarily attributable to higher auditing costs
      and the cost of regulatory filings.





Stock-based
      compensation expense increased to $938,000 in the three months ended May 31,
      2007 from $487,000 in the three months ended May 31, 2006. The 2007 amount
      relates to warrants issued and stock options granted to management and key
      personnel for $487,000 and $450,000 respectively.





Mineral
      exploration
      in the three months ended May 31, 2007 increased to $668,000 compared to
      $252,000 for the three months ended May 31, 2006. We anticipate that exploration
      expenditures will increase in fiscal 2007 as a result of exploration activities
      on our Mexican mineral properties.





Acquisition
      of
      resource properties was $nil for both three months ended May 31, 2007 and
      2006.





Loss





Our
      net loss
      decreased to $2,548,000 for the three months ended May 31, 2007 compared to
      $3,602,000 for the three months ended May 31, 2006, representing a decrease
      of
      $1,054,000.





This
      decrease in
      our loss was primarily attributable to a decrease in interest expense offset
      by
      higher general and administrative, stock-based compensation and exploration
      expense in 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 $938,000. In 2006, the non-cash component is attributable
      to
      $487,000 of stock-based compensation and to a beneficial conversion feature
      of
      $2,266,000 on convertible debentures issued in the three months ended May 31,
      2006; which was recorded as interest expense. We anticipate that we will
      continue to incur 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 any our Mexican
      mineral properties or achieve revenues.




**Liquidity
      and Capital Resources**





Since
      inception, we
      have undergone two unsuccessful business combinations, which have caused us
      to
      incur significant liabilities and have resulted in the accumulation of a
      substantial deficit during the exploration stage. As of May 31, 2007, we have
      total assets of $840,000,
      total
      liabilities of $1,765,000 and a deficit of $28,279,000 accumulated during the
      exploration stage.





Cash
      and Working
      Capital





We
      had cash and
      cash equivalents of $38,000 as of May 31, 2007, compared to cash of $13,000
      as
      of February 28, 2007. We had working capital deficiency of $1,235,000 as of
      May
      31, 2007, compared to a
      working capital deficiency of $45,000 as of February 28, 2007 and compared
      to a
      working capital of $2,061,000 as of May 31, 2006.





We
      will require
      additional financing during the current fiscal year according to our planned
      exploration activities. We plan to spend approximately $1,000,000 from May
      2007
      to August 2008 to carry out exploration and administration activities on our
      Mexican mineral properties and in the event that our exploration is successful
      on our Cieneguita Property, we anticipate spending a further $2,200,000 on
      milling equipment and building a plant to put that property into production.
      We
      anticipate spending approximately $480,000 during 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 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 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) assets consisting
      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 $940,000
      for the
      three months ended May 31, 2007 compared to $856,000 for the three months ended
      May 31, 2006. The cash used in operating activities was primarily for general
      and administrative expenses and exploration costs .





Cash
      Used in
      Investing Activities





The
      Company used
      cash of $25,152 for purchase of equipment for
      the three
      months ended May 31, 2007 compared to cash used of $2,000 for the three months
      ended May 31, 2006.




Financing
      Activities










Cash
      provided by
      financing activities decreased
      to
      $975,000 for the three months ended May 31, 2007 compared to $2,471,000 for
      the
      three months ended May 31, 2006. All cash provided by financing activities
      was
      provided by convertible debt, exercise of warrants and share issuances. Cash
      provided by financing activities was used to fund our operating and investing
      activities.





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





On
      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.





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.





The
      amount of our
      convertible debt outstanding at May 31, 2007 was $nil compared to $nil at
      February 28, 2007 and $2,917,500 at May 31, 2006.




Subsequent
      to May
      31, 2007, the Company received proceeds of $665,000 on exercise of 815,000
      warrants. In addition, we also issued a promissory note for $70,000 to a party
      with a vested interest in the Company. The promissory note bears no interest,
      no
      due date and no terms of repayment.




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 at May 31, 2007, the Company had working capital
      deficiency of $1,235,000 (May 31, 2006 -









$2,061,000
      working
      capital) and an accumulated deficit during the exploration stage of $28,279,000
      (May 31, 2006 - $21,940,000). 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
      Compa ny’s
      management,
      including its president and chief financial officer, 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 the
      Company’s are 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.





To
      remediate our
      internal control weaknesses, management has commenced implementation of the
      following measures: the Company will continue to 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 during the second quarter of 2008.





Changes
      in internal
      controls: There were no changes in internal controls over financial reporting,
      known to the chief executive officer 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.




**ITEM
      6.** **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.)









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.)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.)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.)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 Officer and
                Chief Financial Officer of Mexoro Minerals Ltd. pursuant to Rule
                13a-14(a)/15d-14(a). *32.1
            Certification
                of Chief Executive Officer and
                Chief Financial Officer of Mexoro Minerals Ltd. pursuant to 18 U.S.C.
                Section 1350. *





*filed
      herewith





**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 Officer and Director


Date:
      July 16,
      2007