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|--|
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|  |

SECURITIESAND EXCHANGE COMMISSION

Washington, D.C.20549

FORM20-F-A

|        |                                                                                             |
|--------|---------------------------------------------------------------------------------------------|
|   | REGISTRATIONSTATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGEACT OF1934 |

OR

|        |                                                                                                                               |
|--------|-------------------------------------------------------------------------------------------------------------------------------|
|   | ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934For the Fiscal Year Ended December  31,2005 |

OR

|        |                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------|
|   | TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934[NO FEEREQUIRED] |

OR

|        |                                                                                                            |
|--------|------------------------------------------------------------------------------------------------------------|
|   | SHELLCOMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 [NO FEEREQUIRED] |

For the transition periodfrom                       to                  

Commissionfile number – 0-50822

NORTHWESTERN MINERALVENTURES INC.

(Exact name of Registrant asspecified in its charter)

NORTHWESTERN MINERALVENTURES INC.

(Translation ofRegistrant's name into English)

Province ofOntario, Canada

(Jurisdiction ofincorporation or organization)

36 TorontoStreetSuite 1000Toronto, Ontario M5C2C5

(Address of principal executiveoffices)

Securities registered or to be registeredpursuant to Section 12(g) of theAct:

CommonShares

(Title ofClass)

Securities for which there is areporting obligation pursuant to Section 15(d) of theAct:

None

(Title ofClass)

Indicate the number of outstanding shares of each ofthe issuer's classes of capital or common shares as of the closeof the period covered by the annualreport.

80,226,090

|  |
|--|
|  |  |  |  |
|  |

Indicateby check mark if the Registrant is a well-known seasoned issuer, asdefined in Rule 405 of the Securities Act.Yes . No.

If this report is an annual or transition report,indicate by check mark if the Registrant is not required to filereports pursuant to Section 13 or 15(d) of the Securities Exchange Actof 1934.         Yes . No .

Indicate by checkmark whether the Registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that theRegistrant was required to file such reports), and (2) has been subjectto such filing requirements for the past 90 days.         Yes. No .

Indicate by check mark whether theRegistrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of ‘‘acceleratedfiler and large accelerated filer’’ in Rule 12b-2 of theExchange Act. (Check one)

Large accelerated filer.                                                        Acceleratedfiler.                                                Non-acceleratedfiler .

Indicate by check mark which financial statementitem the Registrant has elected to follow.         Item 17. Item 18 

If this is an annual report, indicateby check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).         Yes. . No.

All references herein are to Canadian dollars.Reference is made to ‘‘Item 3. KeyInformation.’’ for exchange rate information for theCanadian Dollar.

|  |
|--|
|  |
|  |
|  |
|  |

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TABLE OFCONTENTS

|                                                                                                                                                                                                                                                                         |  |  |  |  |   |  |  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|---|--|--|
| TABLEOF CONTENTS                                                                                                                                                                                                                                                        |  |  |  |  | i |  |  |
| PARTI                                                                                                                                                                                                                                                                   |  |  |  |  | 1 |  |  |
| Item 1.    Identityof Directors, Senior Management andAdvisers                                                                                                                                                                                      |  |  |  |  | 1 |  |  |
| Item2.    Offer Statistics and ExpectedTimetable                                                                                                                                                                                                    |  |  |  |  | 1 |  |  |
| Item3.    KeyInformation                                                                                                                                                                                                                            |  |  |  |  | 1 |  |  |
| SelectedFinancialData                                                                                                                                                                                                                                                   |  |  |  |  | 2 |  |  |
| Capitalizationand Indebtedness                                                                                                                                                                                                                                          |  |  |  |  | 2 |  |  |
| Reasons for theOffer and Use of Proceeds                                                                                                                                                                                                                                |  |  |  |  | 2 |  |  |
| RiskFactors Affecting the Company                                                                                                                                                                                                                                       |  |  |  |  | 3 |  |  |
| WeHave No Ongoing Mining Operations, None of our Mineral PropertiesContain a Known Commercially Mineable Mineral Deposit, We Have NeverReceived Any Revenues From Mining Operations, and Our Chances ofReaching the Development Stage on Any of our Properties isRemote |  |  |  |  | 3 |  |  |
| We Will Need to RaiseSubstantial Funding in Order to Carry Out OurActivities                                                                                                                                                                                            |  |  |  |  | 3 |  |  |
| Lack of RevenueProducing Operations                                                                                                                                                                                                                                     |  |  |  |  | 4 |  |  |
| We CouldLose our Interests in our Properties if Minimum Annual Work is NotConducted and Option Payments are notMade                                                                                                                                                     |  |  |  |  | 4 |  |  |
| Title To Our MiningProperties Has Not BeenVerified.                                                                                                                                                                                                                     |  |  |  |  | 4 |  |  |
| The Value of ourMineral Properties is Dependent Upon Commodity Prices Which CanFluctuate Widely                                                                                                                                                                         |  |  |  |  | 4 |  |  |
| We Are NotEngaged in Mining Operations; In the Event We Engage in MiningOperations in the Future, We Would Face SubstantialRegulation                                                                                                                                   |  |  |  |  | 5 |  |  |
| Titles to the MexicanProperties in which the Company has an Interest are not Registered inthe Name of the Company, which may Result in Potential Title DisputesHaving a Negative Impact on theCompany.                                                                  |  |  |  |  | 5 |  |  |
| The Properties in Whichthe Company has Interests in Mexico are Subject to Changes inGovernmental Laws, Regulations, Economic Conditions or Shifts inPolitical Attitudes or Stability inMexico                                                                           |  |  |  |  | 5 |  |  |
| Mexican Foreign Investmentand Income Tax Laws apply to theCompany                                                                                                                                                                                                       |  |  |  |  | 5 |  |  |
| Foreign currencyfluctuations and inflationary pressures may have a negative impact onthe Company's financial position andresults                                                                                                                                        |  |  |  |  | 6 |  |  |
| Regulation of MiningOperations in Mexico is VeryExtensive                                                                                                                                                                                                               |  |  |  |  | 6 |  |  |
| Risks related to theCompany’s Foreign Investments andOperations                                                                                                                                                                                                   |  |  |  |  | 6 |  |  |
| There is a Risk thatwe will be Unable to Compete for Mineral Properties, Investment Fundsand Technical Expertise                                                                                                                                                        |  |  |  |  | 6 |  |  |
| We Do NotHave Insurance; We Will Not be Able to Insure Against All PossibleRisks                                                                                                                                                                                        |  |  |  |  | 6 |  |  |
| If We are Unable toMaintain the Infrastructure for Our Exploration Activities, We Could beAdversely Affected                                                                                                                                                            |  |  |  |  | 7 |  |  |
| Management MayBe Subject to Conflicts of Interest Due to Affiliations with OtherResource Companies                                                                                                                                                                      |  |  |  |  | 7 |  |  |
| Our ManagementMay Not Be Subject to U.S. LegalProcess                                                                                                                                                                                                                   |  |  |  |  | 7 |  |  |
| Prices for PreciousMetals such as Gold are Volatile and CouldDecline                                                                                                                                                                                                    |  |  |  |  | 7 |  |  |
| Our Stock will be a PennyStock which Imposes Significant Restrictions on Broker-DealersRecommending the Stock ForPurchase                                                                                                                                               |  |  |  |  | 8 |  |  |
| Our Stock Price Could beVolatile                                                                                                                                                                                                                                        |  |  |  |  | 8 |  |  |
| We Do Not Plan to PayAny Dividends in the ForeseeableFuture                                                                                                                                                                                                             |  |  |  |  | 8 |  |  |
| The Company has Only OneFull-Time Consultant Acting in a ManagementCapacity                                                                                                                                                                                             |  |  |  |  | 8 |  |  |
| Future Sales of CommonShares by ExistingShareholders                                                                                                                                                                                                                    |  |  |  |  | 8 |  |  |
| Item4.    Information on theCompany                                                                                                                                                                                                                 |  |  |  |  | 9 |  |  |
|                                                                                                                                                                                                                                                                         |

i

----

|                                                                           |  |  |  |  |    |  |  |
|---------------------------------------------------------------------------|--|--|--|--|----|--|--|
| History andDevelopment of theCompany                                      |  |  |  |  | 9  |  |  |
| BusinessOverview                                                          |  |  |  |  | 9  |  |  |
| Forward-LookingStatements                                                 |  |  |  |  | 9  |  |  |
| General                                                                   |  |  |  |  | 9  |  |  |
| Descriptionof MiningIndustry                                              |  |  |  |  | 10 |  |  |
| Regulation ofMiningIndustry                                               |  |  |  |  | 11 |  |  |
| Canada                                                                    |  |  |  |  | 11 |  |  |
| Mexico                                                                    |  |  |  |  | 12 |  |  |
| Republicof Niger                                                          |  |  |  |  | 12 |  |  |
| OrganizationalStructure                                                   |  |  |  |  | 13 |  |  |
| Property, Plants andEquipment                                             |  |  |  |  | 13 |  |  |
| PicachosProject, Durango State,Mexico                                     |  |  |  |  | 13 |  |  |
| Summaryof 2004 Minimum Work Exploration Program andBudget                 |  |  |  |  | 16 |  |  |
| Summaryof First Phase 2005 ExplorationProgram                             |  |  |  |  | 16 |  |  |
| Summaryof Proposed Second Phase 2005-2006 ExplorationProgram              |  |  |  |  | 16 |  |  |
| Managementof PicachosProject                                              |  |  |  |  | 17 |  |  |
| B.    UraniumConcession, Niger,Africa                 |  |  |  |  | 17 |  |  |
| PropertyDescription                                                       |  |  |  |  | 17 |  |  |
| Access toProperties                                                       |  |  |  |  | 18 |  |  |
| Work Programand Budget for the First Three-YearPeriod                     |  |  |  |  | 18 |  |  |
| History                                                                   |  |  |  |  | 19 |  |  |
| WaterburyUranium Project, Saskatchewan,Canada                             |  |  |  |  | 19 |  |  |
| Location andAccess                                                        |  |  |  |  | 20 |  |  |
| Climate                                                                   |  |  |  |  | 20 |  |  |
| HistoryofExploration                                                      |  |  |  |  | 21 |  |  |
| Geology                                                                   |  |  |  |  | 21 |  |  |
| NorthRae Uranium Project, Northern Quebec,Canada                          |  |  |  |  | 21 |  |  |
| Location andAccess                                                        |  |  |  |  | 22 |  |  |
| History ofExploration                                                     |  |  |  |  | 23 |  |  |
| Geology                                                                   |  |  |  |  | 23 |  |  |
| SegueneyUranium Property, Charlevoix County, Quebec,Canada                |  |  |  |  | 23 |  |  |
| CashPayments                                                              |  |  |  |  | 24 |  |  |
| ShareIssuances                                                            |  |  |  |  | 24 |  |  |
| GLOSSARY                                                                  |  |  |  |  | 25 |  |  |
| Item5.    Operating and Financial Review andProspects |  |  |  |  | 28 |  |  |
| Overview                                                                  |  |  |  |  | 28 |  |  |
| OperatingResults                                                          |  |  |  |  | 28 |  |  |
| Liquidity andCapitalResources                                             |  |  |  |  | 29 |  |  |
| Research anddevelopment, patents and licenses,etc                         |  |  |  |  | 30 |  |  |
| TrendInformation                                                          |  |  |  |  | 30 |  |  |
| Off-BalanceSheetArrangements                                              |  |  |  |  | 30 |  |  |
| TabularDisclosure of ContractualObligations                               |  |  |  |  | 30 |  |  |
| Item6.    Directors, Senior Management andEmployees   |  |  |  |  | 31 |  |  |
| Directors andSeniorManagement.                                            |  |  |  |  | 31 |  |  |
| Compensation                                                              |  |  |  |  | 33 |  |  |
| TerminationAgreements for Executive Officers andDirectors.                |  |  |  |  | 34 |  |  |
| Stock OptionPlan                                                          |  |  |  |  | 34 |  |  |
| Options/SARsGranted during Fiscal Year Ended December  31,2005            |  |  |  |  | 34 |  |  |
| BoardPractices                                                            |  |  |  |  | 35 |  |  |
| Compositionof the Audit Committee                                         |  |  |  |  | 35 |  |  |
|                                                                           |

ii

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|                                                                                                             |  |  |  |  |    |  |  |
|-------------------------------------------------------------------------------------------------------------|--|--|--|--|----|--|--|
| Pre-ApprovalPolicies andProcedures                                                                          |  |  |  |  | 35 |  |  |
| CompensationCommittee                                                                                       |  |  |  |  | 35 |  |  |
| Employees                                                                                                   |  |  |  |  | 35 |  |  |
| ShareOwnership                                                                                              |  |  |  |  | 36 |  |  |
| Item7.    Major Shareholders and Related PartyTransactions                              |  |  |  |  | 37 |  |  |
| MajorShareholders                                                                                           |  |  |  |  | 37 |  |  |
| RelatedPartyTransactions                                                                                    |  |  |  |  | 37 |  |  |
| Item8.    FinancialInformation                                                          |  |  |  |  | 37 |  |  |
| ConsolidatedStatements and Other FinancialInformation                                                       |  |  |  |  | 37 |  |  |
| SignificantChanges                                                                                          |  |  |  |  | 37 |  |  |
| Item9.    The Offer andListing                                                          |  |  |  |  | 37 |  |  |
| Offer andListing Details                                                                                    |  |  |  |  | 37 |  |  |
| Plan ofDistribution                                                                                         |  |  |  |  | 40 |  |  |
| Markets                                                                                                     |  |  |  |  | 40 |  |  |
| SellingShareholders                                                                                         |  |  |  |  | 40 |  |  |
| Dilution                                                                                                    |  |  |  |  | 40 |  |  |
| Expensesof theIssue                                                                                         |  |  |  |  | 40 |  |  |
| Item10.    AdditionalInformation                                                        |  |  |  |  | 40 |  |  |
| ShareCapital                                                                                                |  |  |  |  | 40 |  |  |
| Certificate andArticles ofIncorporation                                                                     |  |  |  |  | 40 |  |  |
| ARTICLESANDBY-LAWS                                                                                          |  |  |  |  | 42 |  |  |
| General                                                                                                     |  |  |  |  | 42 |  |  |
| Directors                                                                                                   |  |  |  |  | 42 |  |  |
| Annualand specialmeetings                                                                                   |  |  |  |  | 42 |  |  |
| MaterialContracts                                                                                           |  |  |  |  | 43 |  |  |
| ExchangeControls                                                                                            |  |  |  |  | 44 |  |  |
| Taxation                                                                                                    |  |  |  |  | 45 |  |  |
| CertainCanadian Federal Income TaxConsequences                                                              |  |  |  |  | 45 |  |  |
| DividendsonShares                                                                                           |  |  |  |  | 45 |  |  |
| Dispositionof Shares                                                                                        |  |  |  |  | 45 |  |  |
| Statements byExperts                                                                                        |  |  |  |  | 46 |  |  |
| Documents onDisplay                                                                                         |  |  |  |  | 46 |  |  |
| SubsidiaryInformation                                                                                       |  |  |  |  | 46 |  |  |
| Item11.    Quantitative and Qualitative Disclosures About MarketRisk.                   |  |  |  |  | 46 |  |  |
| Item12.    Description of Securities Other than EquitySecurities                        |  |  |  |  | 46 |  |  |
| Item13.    Defaults, Dividend Arrearages, andDelinquencies.                             |  |  |  |  | 46 |  |  |
| Item14.    Material Modifications to the Rights of Security Holders andUse of Proceeds. |  |  |  |  | 46 |  |  |
| Item.15.    Controls andProcedures.                                                     |  |  |  |  | 46 |  |  |
| Item 16A.    AuditCommittee FinancialExpert.                                            |  |  |  |  | 47 |  |  |
| Item16B.    Code ofEthics.                                                              |  |  |  |  | 47 |  |  |
| Item16C.    Principal Accountant Fees andServices.                                      |  |  |  |  | 47 |  |  |
| Item.16D.    Exemptions from the Listing Standards forAudit                             |  |  |  |  | 48 |  |  |
| Item16E.    Purchases of Equity Services by the Issuer and AffiliatedPurchasers.        |  |  |  |  | 48 |  |  |
| Item17.    FinancialStatements.                                                         |  |  |  |  | 48 |  |  |
| Item18.    FinancialStatements.                                                         |  |  |  |  | 48 |  |  |
| Item19.    Exhibits.                                                                    |  |  |  |  | 48 |  |  |
|                                                                                                             |

iii

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Table of Contents

PARTI

Item 1.    Identity of Directors, SeniorManagement and Advisers.

Not Applicable.

Item2.    Offer Statistics and Expected Timetable.

Notapplicable.

Item 3.    Key Information.

All dollaramounts in this Annual Report are expressed in Canadian dollars. Thefollowing tables set forth the exchange rates for one Canadian dollarexpressed in terms of one U.S. dollar for the years 2001-2005 and forthe period December  31,  2005 through May31,  2006.

|      |  |  |               |  |       |  |
|------|--|--|---------------|--|-------|--|
| YEAR |  |  | AVERAGE  |
| 2001 |  |  |               |  | .6579 |  |
| 2002 |  |  |               |  | .6776 |  |
| 2003 |  |  |               |  | .7186 |  |
| 2004 |  |  |               |  | .7702 |  |
| 2005 |  |  |               |  | .8276 |  |
|      |

|              |  |  |           |  |       |            |  |  |  |  |       |  |
|--------------|--|--|-----------|--|-------|------------|--|--|--|--|-------|--|
|         |  |  | LOW  |  |       | HIGH  |
| May2006      |  |  |           |  | .8903 |            |  |  |  |  | .9100 |  |
| April2006    |  |  |           |  | .8534 |            |  |  |  |  | .8926 |  |
| March2006    |  |  |           |  | .8531 |            |  |  |  |  | .8834 |  |
| February2006 |  |  |           |  | .8638 |            |  |  |  |  | .8771 |  |
| January2006  |  |  |           |  | .8528 |            |  |  |  |  | .8744 |  |
| December2005 |  |  |           |  | .8521 |            |  |  |  |  | .8690 |  |
|              |

Theexchange rates are based upon the noon buying rate in New York City forcable transfers in foreign currencies as certified for customs purposesby the Federal Reserve Bank of New York. At June  27,2006, one Canadian dollar, as quoted by Reuters and other sources at 4P.M. Eastern Time for New York foreign exchange selling rates (for banktransactions of at least $1,000,000), equaled $.8909 in U.S. dollars.(Source: The Wall Street Journal)

|  |          |                         |
|--|----------|-------------------------|
|  | A.  | SelectedFinancial Data. |

Following is selected financial data of theCompany, expressed in Canadian dollars, for the period from theCompany’s incorporation on September  26,  2003through December  31,  2005, the date of its auditedconsolidated financial statements, which were prepared in accordancewith Canadian generally accepted accounting principles(‘‘Canadian GAAP’’), which differsubstantially from United States generally accepted accountingprinciples (‘‘US GAAP’’). Reference is madeto Note 15 to the audited consolidated financial statements for theperiod ended December  31,  2005, which is contained belowin ‘‘Item 18. FinancialStatements.’’ Note 15 provides a description of thedifferences between Canadian and United States generally acceptedaccounting principles, and how these differences could affect theCompany’s financial statements. On July  27,  2004the Company completed a 2 for 1 stock split, pursuant to which eachissued Share of the Company was subdivided into two Shares. OnSeptember  6,  2005, the Company completed an additional 2for 1 stock split, pursuant to which each issued Share of the Companywas subdivided into two Shares. The outstanding warrants and stockoptions were also sub-divided at the same ratio as the common shares.Shares and per Share amounts in this Annual Report and in the SelectedFinancial Data have been retroactively adjusted to reflect the stocksplits.

1

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Table of Contents

CANADIAN GAAPCan$

|                                    |  |  |                                                   |  |           |                                                   |  |  |                                       |  |           |                                       |  |  |                                                            |  |           |   |  |  |  |  |           |   |  |  |  |  |         |   |
|------------------------------------|--|--|---------------------------------------------------|--|-----------|---------------------------------------------------|--|--|---------------------------------------|--|-----------|---------------------------------------|--|--|------------------------------------------------------------|--|-----------|---|--|--|--|--|-----------|---|--|--|--|--|---------|---|
|                               |  |  | ThreeMonthPeriod ended March 31, 2006(unaudited)$ |  |           | Three MonthPeriod endedMarch 31,2005(unaudited) $ |  |  | Year EndedDecember 31,2005 (audited)$ |  |           | Year EndedDecember 31,2004 (audited)$ |  |  | Period fromSeptember26, 2003 toDecember 31, 2003(audited)$ |
| Revenues                           |  |  |                                                   |  | —   |                                                   |  |  |                                       |  | —   |                                       |  |  |                                                            |  | —   |   |  |  |  |  | —   |   |  |  |  |  | — |   |
| Lossfor thePeriod                  |  |  |                                                   |  | 280,119   |                                                   |  |  |                                       |  | 135,479   |                                       |  |  |                                                            |  | 1,780,074 |   |  |  |  |  | 1,121,460 |   |  |  |  |  | 33,097  |   |
| LossPerShare                       |  |  |                                                   |  | 0.00      |                                                   |  |  |                                       |  | 0.00      |                                       |  |  |                                                            |  | 0.02      |   |  |  |  |  | 0.02      |   |  |  |  |  | 0.01    |   |
| CashFlows from OperatingActivities |  |  |                                                   |  | (257,791  | )                                                 |  |  |                                       |  | (348,225  | )                                     |  |  |                                                            |  | (851,997  | ) |  |  |  |  | (587,006  | ) |  |  |  |  | (23,097 | ) |
| CashFlows from FinancingActivities |  |  |                                                   |  | (692,828  | )                                                 |  |  |                                       |  | (237,347  | )                                     |  |  |                                                            |  | (707,330  | ) |  |  |  |  | (735,006  | ) |  |  |  |  | — |   |
| TotalAssets                        |  |  |                                                   |  | 3,242,203 |                                                   |  |  |                                       |  | 2,086,254 |                                       |  |  |                                                            |  | 2,856,700 |   |  |  |  |  | 1,896,035 |   |  |  |  |  | 172,413 |   |
| CurrentAssets                      |  |  |                                                   |  | 1,366,352 |                                                   |  |  |                                       |  | 1,114,825 |                                       |  |  |                                                            |  | 1,774,293 |   |  |  |  |  | 1,161,660 |   |  |  |  |  | 172,413 |   |
| Liabilities                        |  |  |                                                   |  | 176,286   |                                                   |  |  |                                       |  | 21,773    |                                       |  |  |                                                            |  | 170,817   |   |  |  |  |  | 197,625   |   |  |  |  |  | 10,000  |   |
| ShareCapital                       |  |  |                                                   |  | 6,280,667 |                                                   |  |  |                                       |  | 3,354,517 |                                       |  |  |                                                            |  | 5,620,514 |   |  |  |  |  | 2,852,967 |   |  |  |  |  | 195,510 |   |
| Deficit                            |  |  |                                                   |  | 3,214,750 |                                                   |  |  |                                       |  | 1,290,036 |                                       |  |  |                                                            |  | 2,934,631 |   |  |  |  |  | 1,154,557 |   |  |  |  |  | 33,097  |   |
| Shareholders’Equity          |  |  |                                                   |  | 3,065,917 |                                                   |  |  |                                       |  | 2,064,481 |                                       |  |  |                                                            |  | 2,685,883 |   |  |  |  |  | 1,698,410 |   |  |  |  |  | 162,413 |   |
|                                    |

Thefollowing table sets forth how the Selected Financial Datapresented above would be presented under US GAAP for the fiscalyears ended December  31,  2005 and December31,  2004, and the period from September  26,  2003through December  31,  2003:

USGAAPCan$

|                                    |  |  |                                         |  |            |                                         |  |  |                                                              |  |            |   |  |  |  |  |         |   |
|------------------------------------|--|--|-----------------------------------------|--|------------|-----------------------------------------|--|--|--------------------------------------------------------------|--|------------|---|--|--|--|--|---------|---|
|                               |  |  | Yearended December 31, 2005 (audited) $ |  |            | Yearended December 31, 2004 (audited) $ |  |  | Periodfrom September 26, 2003 to December 31, 2003(audited)$ |
| Loss for thePeriod                 |  |  |                                         |  | 2,170,175  |                                         |  |  |                                                              |  | 1,852,260  |   |  |  |  |  | 33,097  |   |
| LossPerShare                       |  |  |                                         |  | 0.03       |                                         |  |  |                                                              |  | 0.03       |   |  |  |  |  | 0.00    |   |
| CashFlows from OperatingActivities |  |  |                                         |  | (1,554,381 | )                                       |  |  |                                                              |  | (1,317,806 | ) |  |  |  |  | (23,097 | ) |
| CashFlows From InvestingActivities |  |  |                                         |  | (707,330   | )                                       |  |  |                                                              |  | (735,006   | ) |  |  |  |  | — |   |
| TotalAssets                        |  |  |                                         |  | 1,780,999  |                                         |  |  |                                                              |  | 1,165,235  |   |  |  |  |  | 172,413 |   |
| Deficit                            |  |  |                                         |  | 4,055,532  |                                         |  |  |                                                              |  | 1,885,357  |   |  |  |  |  | 33,097  |   |
|                                    |

|  |          |                                 |
|--|----------|---------------------------------|
|  | B.  | Capitalizationand Indebtedness. |

Not applicable.

|  |           |                                           |
|--|-----------|-------------------------------------------|
|  | C.   | Reasons for the Offer and Use ofProceeds. |

Notapplicable.

|  |          |              |
|--|----------|--------------|
|  | D.  | RiskFactors. |

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RISKFACTORS AFFECTING THE COMPANY

The business of the Companyentails significant risks, and an investment in the Shares should beconsidered highly speculative for a variety of reasons. An investmentin the Shares should only be undertaken by persons who have sufficientfinancial resources to enable them to assume such risks. In addition tothe usual risks associated with investment in a business, the followingis a general description of significant risk factors, which should beconsidered.

We Have No Ongoing Mining Operations, None of ourMineral Properties Contain a Known Commercially Mineable MineralDeposit, We Have Never Received Any Revenues From Mining Operations,and Our Chances of Reaching the Development Stage on Any of ourProperties are Remote.  Since our inception, we have never engagedin any mining operations and the Company has not generated any revenuesfrom mining operations. Our activities have been limited to the highlyspeculative business of acquiring and exploring properties in the hopethat commercial quantities of gold, uranium or other minerals, will bediscovered. At the present time, none of our properties contain a knowncommercially mineable mineral deposit. We believe that the probabilityof our reaching the development stage on any of our properties isremote for a number of reasons. The exploration for and development ofmineral deposits involves significant risks, which even a combinationof careful evaluation, experience and knowledge may not eliminate.While the discovery of an ore body may result in substantial rewards,few properties, which are explored, are ultimately developed intoproducing mines. Major expenses may be required to locate and establishmineral reserves, to develop metallurgical processes and to constructmining and processing facilities at a particular site. Whether amineral deposit will be commercially viable depends on a number offactors, including, but not limited to the following: the particularattributes of the deposit, such as size, grade and proximity toinfrastructure; metal prices, which are highly cyclical; and governmentregulations, including regulations relating to prices, taxes,royalties, land tenure, land use, importing and exporting of mineralsand environmental protection. Because so few properties which areexplored ever become producing mines, investors must be prepared forthe possibility that we will be unsuccessful and that they could losetheir entire investment.

In the remote possibility that we placeany of our properties into production, of which there can be noassurance, we would face numerous risks associated with miningoperations. These risks include adverse environmental conditions,industrial accidents, labor disputes, unusual or unexpected geologicalconditions, ground or slope failures, cave-ins, changes in theregulatory environment and natural phenomena such as inclement weatherconditions, floods and earthquakes, and the inability to maintain theinfrastructure for our production activities. Mining and miningexploration is risky, presenting potentially dangerous conditions forworkers. Large, heavy equipment and machinery is used and toxicsubstances are utilized and encountered in exploration, extraction, andprocessing. Misuse and accidents could result in serious injury anddeath to personnel. Such events could be caused by numerous factorsincluding faulty equipment, unsafe practices, explosions, fires,natural phenomenon (such as lightning, mudslides, cave-ins, etc.),which may be impossible to avoid and protect against. In the event ofany such misuse, accidents or natural disasters, personnel could beinjured and killed, and mining operations suspended or terminated. Inaddition, any future development activities, of which there can be noassurance, would depend, to one degree or another, on adequateinfrastructure. Reliable roads, bridges, power sources and water supplyare important factors, which affect capital and operating costs.Unusual or infrequent weather phenomena, sabotage, government or otherinterference in the maintenance or provision of such infrastructurecould make it very difficult, if not impossible, to engage in anydevelopment activities and force us to incur expenses that we had notplanned on spending.

We Will Need to Raise SubstantialFunding in Order to Carry Out Our Activities.    The Companyhas substantial financial obligations, including exploration fundingrequirements and purchase payment obligations, relating to its existingproperty interests. It will be necessary in the near and over the longterm to raise substantial funds to maintain existing propertyinterests, acquire, explore, and if warranted, develop mineralproperties. In addition, in the event it is determined that any of ourproperties contain a commercially mineable mineral deposit, of whichthere can be no assurance, it is anticipated the Company would requiresubstantial funds to place such property into production. 

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However, there can be no assurance we would beable to raise the necessary funds. Reference is made to‘‘Item 4. Information on the Company. D. Property,Plants and Equipment’’ and Item 5. Operating andFinancial Review and Prospects. F. Tabular Disclosure of ContractualObligations’’ for a description of theCompany’s financial commitments relating to its various propertyinterests. In our audited consolidated financial statements for theyear ended December  31,  2005, our auditors expressedsubstantial doubt as to our ability to continue as a going concern. InMay  2006, the Company raised gross proceeds of approximately$17.9  million in a private offering of its securities. Althoughthe funds raised in May  2006 will allow the Company to meet itsexisting financial obligations over the next 24 months, there is noassurance that in the future we will be able to raise the necessaryfunds on acceptable terms, or at all. If we do not raise these funds,investors could lose their investment. If we are able to raise thesefunds, it is likely that investors will experience dilution of theirinterests, which could result in a decrease in the value of theirShares.

Lack of Revenue ProducingOperations.    Since inception, the Company has not generatedany revenues from mining operations. As of December  31,2005, the Company had an accumulated deficit of $2,934,631.Accordingly, the Company’s business operations are subject toall of the risks inherent in companies without cash flow or earnings.The future earnings, if any, and cash flow, if any, from operations ofthe Company are dependent, in part, on its ability to locate propertiescontaining commercially mineable mineral deposits, of which there canbe no assurance.

We Could Lose our Interests in ourProperties if Minimum Annual Work is Not Conducted. and Option Paymentsare not Made.    In order to maintain our interests in all ofour various properties, the Company is required to complete certainannual work commitments on each property and make certain option orpurchase payments In the event such work is not completed or therequired payments are not made, the Company could lose its interest inthat property. Reference is made to ‘‘Item 4. Informationon the Company. D. Property, Plants and Equipment.’’for a description of the Company’s work and paymentcommitments on its various properties.

Title To Our MiningProperties Has Not Been Verified.    Although the title to theproperties in which the Company holds interests were reviewed by or onbehalf of us, and title opinions were delivered to us, no assurancescan be given that there are no title defects affecting such properties.Title insurance generally is not available for mining claims in Canada,and that our ability to ensure that it has obtained secure claim toindividual mineral properties or mining concessions may be severelyconstrained. The Company has not conducted surveys of the claims inwhich it holds direct or indirect interests; therefore, the precisearea and location of such claims may be in doubt. Accordingly, theproperties may be subject to prior unregistered liens, agreements,transfers or claims, including native land claims, and title may beaffected by, among other things, undetected defects. In addition, theCompany may be unable to operate its properties as permitted or toenforce its rights with respect to its properties.

The Valueof our Mineral Properties is Dependent Upon Commodity Prices Which CanFluctuate Widely.    The price of our Shares, ourfinancial results and exploration, development and mining activitiesmay in the future be significantly adversely affected by declines inthe price of gold, copper, or other minerals. Gold, uranium, copper,and other mineral prices fluctuate, like many resource commodities, andare affected by numerous factors beyond the Company’s controlsuch as the sale or purchase of such commodities by various centralbanks and financial institutions, interest rates, exchange rates,inflation or deflation, fluctuation in the value of the United Statesdollar and foreign currencies, global and regional supply and demand,and the political and economic conditions of major gold, uranium,copper or other mineral-producing countries throughout the world.Although the prices of gold, copper or other minerals have increased inrecent years, and future price declines could cause continueddevelopment of and commercial production from the Company’sproperties to be impracticable. Depending on the price of gold, copper,uranium or other minerals, cash flow from mining operations may not besufficient and the Company could be forced to discontinue productionand may lose its interest in, or may be forced to sell, some of itsproperties. Future production from the Company’s miningproperties is dependent on gold and uranium or other mineral pricesthat are adequate to make these properties economic.

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In addition to adversely affecting theCompany’s reserve estimates and its financial condition,declining commodity prices can impact operations by requiring areassessment of the feasibility of a particular project. Such areassessment may be the result of a management decision or may berequired under financing arrangements related to a particular project.Even if the project is ultimately determined to be economically viable,the need to conduct such a reassessment may cause substantial delays ormay interrupt operations until the reassessment can becompleted.

We Are Not Engaged in Mining Operations; In theEvent We Engage in Mining Operations in the Future, We Would FaceSubstantial Regulation.    We are not engaged in any miningoperations at the present time and there can be no assurance we willever engage in any mining operations in the future. All of our currentactivities are exploratory in nature.There can be no assurance, that wewill discover any precious or base metals, establish the feasability ofmining a deposit, or, if warranted, develop a property to productionand maintain production activities, either alone or as a joint ventureparticipant. Furthermore, there can be no assurance that we would beable to sell either the deposit or the Company on acceptable terms.Mining operations in Canada are subject to federal, provincial andlocal laws relating to the protection of the environment, includinglaws regulating the removal of natural resources from the ground andthe discharge of materials into the environment. Mining operations arealso subject to federal, provincial and local laws which seek tomaintain health and safety standards by regulating the design and useof mining methods and equipment. Various permits from government bodiesare required for mining operations to be conducted; no assurance can begiven that such permits will be received. No assurance can be giventhat environmental standards imposed by federal, provincial or localauthorities will not be changed with material adverse effect on theCompany's activities. Moreover, compliance with such laws maycause substantial delays and require capital outlays in excess of thoseanticipated, thus causing an adverse effect on the Company.Additionally, the Company may be subject to liability for pollution orother environmental damage which it may elect not to insure against dueto prohibitive premium costs and other reasons.

Titles to theMexican Properties in which the Company has an Interest are notRegistered in the Name of the Company, Which may Result in PotentialTitle Disputes Having a Negative Impact on the Company.    Allof the agreements under which the Company may earn interests inproperties have either been registered or been submitted forregistration with the Mexican Public Registry of Mining, but titlerelating to the properties in which the Company may earn its interestsare held in the names of parties other than the Company. Any of suchproperties may become the subject of an agreement which conflicts withthe agreement pursuant to which the Company may earn its interest, inwhich case the Company may incur expenses in resolving any disputerelating to its interest in such property and such a dispute couldresult in the delay or indefinite postponement of further explorationand development of properties with the possible loss of suchproperties.

The Properties in Which the Company has Interestsin Mexico are Subject to Changes in Governmental Laws, Regulations,Economic Conditions or Shifts in Political Attitudes or Stability inMexico.    The Company has property interests that are locatedin Mexico. Any changes in governmental laws, regulations, economicconditions or shifts in political attitudes or stability in Mexico arebeyond the control of the Company and may adversely affect itsbusiness. Reference is made to ‘‘Item 4. Information onthe Company – Business Overview – Regulation of MiningIndustry – Mexico.’’

MexicanForeign Investment and Income Tax Laws apply to theCompany.    Corporations in Mexico are taxed only by theFederal Government.  Mexico has a general system for taxingcorporate income, ensuring that all of a corporation’s earningsare taxed only once, in the fiscal year in which profits are obtained. There are two federal taxes in Mexico that apply tothe Picachos Project; an asset tax and a corporate income tax. Corporations have to pay a federal tax on assets at 1.8%of the average value of assets less certain liabilities. Corporate income tax is credited against this tax. Mexican corporate taxes are calculated based on gross revenuedeductions for all refining and smelting charges, direct operatingcosts, and all head office general and administrative costs; anddepreciation deductions.  The 2005 corporate tax rate in Mexicois 30%.

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Foreign currency fluctuations andinflationary pressures may have a negative impact on theCompany's financial position and results.    TheCompany's property interests in Mexico make it subject to foreigncurrency fluctuations and inflationary pressures which may adverselyaffect the Company's financial position and results. As theCompany maintains its accounts in Canadian and US dollars, anyappreciation in Mexican currency against the Canadian or US dollar willincrease our costs of carrying out operations in Mexico. Further, anydecrease in the US dollar against the Canadian dollar will result in aloss on our books to the extent we hold funds in US dollars. The stepstaken by management to address foreign currency fluctuations may noteliminate all adverse effects and, accordingly, the Company may sufferlosses due to adverse foreign currency fluctuations. The Company alsobears the risk of incurring losses occasioned as a result of inflationin Mexico.

Regulation of Mining Operations in Mexico is VeryExtensive.    Regulatory requirements to which the Company issubject to in Mexico include certain permits that require periodic orannual renewal with governmental and regulatory authorities. Inaddition, the Company is required to comply with existing permitconditions. Although the Company believes that it is currently in fullcompliance with existing permit conditions, and although its permitshave been renewed by governmental and regulatory authorities in thepast, there are no assurances that the applicable governmental andregulatory authorities will renew the permits as they expire, or thatpending or future permit applications will be granted, or that existingpermits will not be revoked. In the event that the required permits arenot granted or renewed in a timely manner, or in the event thatgovernmental and regulatory authorities determine that the Company isnot in compliance with its existing permits, the Company may be forcedto suspend operations.

Risks related to the Company’sForeign Investments and Operations.    The Company conductsexploration activities in Canada, Mexico and Niger.  TheCompany’s foreign mining investments are subject to the risksnormally associated with the conduct of business in foreign countries.The occurrence of one or more of these risks could have a material andadverse effect on the Company’s earnings or the viability of itsaffected foreign operations, which could have a material and adverseeffect on the Company’s future cash flows, results of operationsand financial condition.

Risks may include, among others, labordisputes, invalidation of governmental orders and permits, corruption,uncertain political and economic environments, war, civil disturbancesand terrorist actions, arbitrary changes in laws or policies ofparticular countries, foreign taxation, delays in obtaining or theinability to obtain necessary governmental permits, opposition tomining from environmental or other non-governmental organizations,limitations on foreign ownership, limitations on the repatriation ofearnings, limitations on gold exports and increased financing costs.These risks may limit or disrupt the Company’s projects,restrict the movement of funds or result in the deprivation of contractrights or the taking of property by nationalization or expropriationwithout fair compensation.

There is a Risk that we will beUnable to Compete for Mineral Properties, Investment Funds andTechnical Expertise.    Significant and increasing competitionexists for the limited number of gold, uranium, and other preciousmetal acquisition opportunities available in North, South and CentralAmerica and elsewhere in the world. As a result of this competition,some of which is with large, established mining companies withsubstantially greater financial and technical resources than us, we maybe unable to acquire additional attractive precious metal miningproperties on terms we consider acceptable. Moreover, this competitionmakes it more difficult for us to attract and retain mining experts,and to secure financing for our operations. Accordingly, there can beno assurance that our exploration and acquisition programs will besuccessful or result in any commercial mining operation.

WeDo Not Have Insurance; We Will Not be Able to Insure Against AllPossible Risks.    The Company’s business is subject toa number of risks and hazards generally, including adverseenvironmental conditions, industrial accidents, labor disputes, unusualor unexpected geological conditions, ground or slope failures,cave-ins, changes in the regulatory environment and natural phenomenasuch as inclement weather conditions, floods and earthquakes. Suchoccurrences could result in damage to mineral properties or productionfacilities, personal injury or death, environmental damage to theCompany’s properties or the properties of others, delays,monetary losses and possible 

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legal liability. Although the Company intendsto obtain insurance to protect against certain risks in such amounts asit considers to be reasonable, it does not have any insurance at thepresent time. If and when insurance is obtained, of which there can beno assurance, the insurance will not cover all the potential risksassociated with a mining company’s operations. Moreover, theCompany may also be unable to maintain insurance to cover these risksat economically feasible premiums. Insurance coverage may not continueto be available or may not be adequate to cover any resultingliability. Moreover, insurance against risks such as environmentalpollution or other hazards as a result of exploration and production isnot generally available to the Company or to other companies in themining industry on acceptable terms. The Company might also becomesubject to liability for pollution or other hazards which may not beinsured against or which the Company may elect not to insure againstbecause of premium costs or other reasons. Losses from these events maycause the Company to incur significant costs that could have a materialadverse effect upon its financial performance and results ofoperations. Should a catastrophic event arise, investors could losetheir entire investment.

If We are Unable to Maintain theInfrastructure for Our Exploration Activities, We Could be AdverselyAffected.    Our exploration activities depend, to one degree oranother, on adequate infrastructure. Reliable roads, bridges, powersources and water supply are important factors which affect capital andoperating costs. Unusual or infrequent weather phenomena, sabotage,government or other interference in the maintenance or provision ofsuch infrastructure could adversely affect the Company’sexploration activities and its financialcondition.

Management May Be Subject to Conflicts of InterestDue to Affiliations with Other Resource Companies.    Becausesome of our directors and officers serve as officers and/or directorsof other resource exploration companies which are themselves engaged inthe search for additional opportunities, situations may arise wherethese persons are presented with, or identify, resource explorationopportunities that may be or perceived to be in competition with us forexploration opportunities. Since all of our officers and directors havea financial interest in other resource issuers to which they owe afiduciary duty, it is likely our management may never be financiallydisinterested in such potential conflict of interest situations. It islikely that these other companies will be in competition with us forproperties, funds, and personnel. Although it is anticipated that suchpotential conflicts will be dealt with in accordance with corporate andcommon law of the Province of Ontario, there can be no assurance anyconflicts will be dealt with in a way that is best for the Company.

Although directors are required to declare and refrain from votingon any matter in which such directors may have a conflict of interestin accordance with the procedures set forth in the BusinessCorporations Act (Ontario) and other applicable laws, this couldresult in a situation where it will be difficult to have a totallydisinterested board of directors deciding on a matter.

OurManagement May Not Be Subject to U.S. Legal Process.    Theenforcement by investors of civil liabilities under the United Statesfederal securities laws may be adversely affected by the fact that allof our officers and directors are neither citizens nor residents of theUnited States. There can be no assurance that (a) U.S. stockholderswill be able to effect service of process within the United States uponsuch persons, (b) U.S. stockholders will be able to enforce, in UnitedStates courts, judgments against such persons obtained in such courtspredicated upon the civil liability provisions of United States federalsecurities laws, (c) appropriate foreign courts would enforce judgmentsof United States courts obtained in actions against such personspredicated upon the civil liability provisions of the federalsecurities laws, and (d) the appropriate foreign courts would enforce,in original actions, liabilities against such persons predicated solelyupon the United States federal securities laws.

Prices forPrecious Metals such as Gold are Volatile and CouldDecline.    Historically, gold prices have fluctuated, so thatthere is no assurance, even if substantial quantities of gold arediscovered, that we can make a profit. The prices of uranium, preciousand base metals fluctuate on a daily basis and have experiencedvolatile and significant price movements over short periods of time.Prices are affected by numerous factors beyond our control, includinginternational economic and political trends, expectations of inflation,currency exchange fluctuations (specifically, the U.S. dollar relativeto 

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other currencies), interest rates, centralbank transactions, world supply for precious and base metals,international investments, monetary systems, and global or regionalconsumption patterns (such as the development of gold coin programs),speculative activities and increased worldwide production due toimproved mining and production methods. The effect of these factorscannot be accurately predicted, and the combination of these factorsmay result in us not receiving adequate returns on invested capital orthe investments retaining their respective values. There is noassurance that the price of gold and of other precious and base metalswill be high enough so that our properties, assuming that we everdiscover substantial quantities of gold, could be mined at aprofit.

Our Stock will be a Penny Stock which ImposesSignificant Restrictions on Broker-Dealers Recommending the Stock ForPurchase.    The Securities and Exchange Commission (SEC) hasadopted regulations that define ‘‘pennystock’’ to include common stock that has a market priceof less than $5.00 per share, subject to certain exceptions. Theserules include the following requirements: broker-dealers must deliver,prior to the transaction, a disclosure schedule prepared by the SECrelating to the penny stock market; broker-dealers must disclose thecommissions payable to the broker-dealer and its registeredrepresentative; broker-dealers must disclose current quotations for thesecurities; if a broker-dealer is the sole market-maker, thebroker-dealer must disclose this fact and the broker-dealer’spresumed control over the market; and a broker-dealer must furnish itscustomers with monthly statements disclosing recent price informationfor all penny stocks held in the customers’ account andinformation on the limited market in penny stocks. Additional salespractice requirements are imposed on broker-dealers who sell pennystocks to persons other than established customers and accreditedinvestors. For these types of transactions, the broker-dealer must makea special suitability determination for the purchaser and must havereceived the purchaser’s written consent to the transactionprior to sale. If our Shares become subject to these penny stock rulesthese disclosure requirements may have the effect of reducing the levelof trading activity in the secondary market for the Shares, if suchtrading market should ever develop, of which there can be no assurance.Accordingly, this may result in a lack of liquidity in the Shares andyou may be unable to sell your Shares on terms you considerreasonable.

Our Stock Price Could beVolatile.    The market price of our Shares, like that of thecommon shares of many other natural resource companies, has been and islikely to remain highly volatile. Results of exploration activities,the price of gold, copper, uranium, and other precious metals,period-to-period fluctuations in our operating results, changes inestimates of the Company's performance by securities analysts,market conditions for shares of natural resource companies in general,and other factors beyond the control of the Company, could have asignificant, adverse impact on the market price of the Shares.

We Do Not Plan to Pay Any Dividends in the ForeseeableFuture.    The Company has never paid a dividend and it isunlikely that the Company will declare or pay a dividend untilwarranted based upon the factors outlined below. The declaration,amount and date of distribution of any dividends in the future will bedecided by the Board of Directors from time-to-time, based upon, andsubject to, the Company’s earnings, financial requirements andother conditions prevailing at the time.

The Company WillHave Only One Full-Time Consultant Acting in a ManagementCapacity.    The Company has two management consultants, eachacting in their respective capacities as Chairman of the Board ofDirectors and President and CEO. Mr.  Kabir  Ahmed acts asthe Company’s Chairman and Mr.  Marek  Kreczmer actsas the Company’s President and CEO. Messrs. Ahmed and Kreczmerare the Company’s only full-time service providers. Mr.Ahmed intends to resign from all of his positions with the Company,including its Board of Directors on or about July  7,2006. Mr.  Errol  Farr, our Chief Financial Officer, worksfor the Company on a part-time basis, devoting approximately ten tofifteen hours a month on the Company’s affairs. Upon theresignation of Mr.  Ahmed,  Mr.  Kreczmer will be theCompany’s only full-time service provider. The loss ofMr.  Kreczmer, for any reason, or our inability to attract andretain additional highly skilled employees, may adversely affect ourbusiness and future operations. We do not carry key-man insurance onany members of our management

Future Sales of Common Sharesby Existing Shareholders.    Sales of a large number of ourShares in the public markets, or the potential for such sales, coulddecrease the trading price of the Shares 

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and could impair the Company’s abilityto raise capital through future sales of Shares. The Company haspreviously issued Shares at an effective price per share which is lowerthan the effective price of the Shares in the Company’s publicoffering of its Shares completed in February  2004. Accordingly,certain shareholders of the Company have an investment profit in theShares that they may seek to liquidate.

Item 4.    Informationon the Company.

|  |          |                                        |
|--|----------|----------------------------------------|
|  | A.  | History and Development ofthe Company. |

The Company was incorporated under the laws ofthe Province of Ontario, Canada on September  26,2003.

The principal business office of the Company is located at36 Toronto Street, Suite 1000, Toronto, Ontario M5C 2C5 Canada. Itstelephone number is (416) 365-6580. The Company does not have an agentin the United States.

Its registered and records office islocated at 200 King Street West, Suite 2300, Toronto, Ontario M5H 3W5Canada. Its telephone number is (416)595-2300.

|  |          |                    |
|--|----------|--------------------|
|  | B.  | BusinessOverview*. |

|  |              |                                                                         |
|--|--------------|-------------------------------------------------------------------------|
|  | •  | See Glossary on pages39-42 for terms used throughout this AnnualReport. |

Forward-Looking Statements

SafeHarbor Statement under the United States Private Securities LitigationReform Act of 1995: Except for the statements of historical factcontained herein, the information presented constitutes‘‘forward-looking statements’’ within themeaning of the Private Securities Litigation Reform Act of 1995. Often,but not always, forward-looking statements can be identified by the useof words such as ‘‘plans’’,‘‘expects’’,‘‘budget’’,‘‘scheduled’’,‘‘estimates’’,‘‘forecasts’’,‘‘intends’’,‘‘anticipates’’,‘‘believes’’, or variation of such words andphrases that refer to certain actions, events or results to be taken,occur or achieved. Forward-looking statements involve known and unknownrisks, uncertainties and other factors which may cause the actualresults, performance or achievements of the Company to be materiallydifferent from any future results, performance or achievementsexpressed or implied by such forward-looking statements. Such factorsinclude, among others, the actual results of exploration activities,the estimation or realization of mineral reserves and resources,capital expenditures, costs and timing of the development of newdeposits, requirements for additional capital, future prices of gold,possible variations in ore grade or recovery rates, failure of plant,equipment or processes to operate as anticipated, accidents, labordisputes and other risks of the mining industry, delays in obtaininggovernmental approvals, permits or financing or in the completion ofdevelopment or construction activities, currency fluctuations, titledisputes or claims limitations on insurance coverage and the timing andpossible outcome of pending litigation, as well as those factorsdiscussed under Item 3 in the section entitled‘‘Risk Factors’’. Although the Company hasattempted to identify important factors that could cause actualactions, events or results to differ materially from those described inforward-looking statements, there may be other factors that causeactions, events or results not to be as anticipated, estimated orintended. There can be no assurance that such statements will prove tobe accurate as actual results and future events could differ materiallyfrom those anticipated in such statements. Accordingly, readers shouldnot place undue reliance on forward-looking statements.

General

The Company was founded on September26,  2003 to explore for precious and base metals and uranium.The Company is currently focused on properties with potential gold andsilver deposits, and uranium. The Company is an exploration stagecompany and is not engaged in any mining operations, and there can beno assurance it will ever engage in mining operations. To date, itsonly mining interests are (i) an option to acquire a 100%interest in properties in Mexico's Durango state (the

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‘‘PicachosProject’’), (ii) the acquisition in March  2006 ofthe right to explore two uranium properties in the Republic of Niger,Africa, (iii) an option to acquire up to a 65% interest in theNorth Rae Uranium Project, Northern Quebec, Canada, (iv) an option toacquire a 75% interest in the Waterbury Project, which consistsof nine uranium claims in the Athabasca Basin, Saskatchewan, Canada,and (v) a Letter of Intent dated June  9,  2006 granting itthe right to conduct due diligence and to potentially enter into anoption agreement to acquire the Saguenay Uranium Property, located inCharlevoix County, Quebec. In December  2005 the Company acquiredan option to acquire a 100% interest of the Firefly Project, inthe La Sal uranium district in southeastern Utah, but in June2006 decided to let the option lapse. In addition, during the yearended December  31,  2005 the Company dropped its option toacquire a 50% interest in the Bear Project, Longtom Property,located in the Northwest Territories, Canada because it wanted toconcentrate more of its resources on the Picachos Project, which itbelieved had more potential. The Company had spent approximately$600,000 on the Bear Project. Reference is made to ‘‘Item4. Information on the Company. D. Property, Plants andEquipment.’’ for a detailed description of theCompany’s mining interests.

There can be no assurance thata commercially mineable mineral deposit exists on any of theseproperties.

On May  11,  2006 Mr.Marek  Kreczmer, the Company’s President, assumed theposition of Chief Executive Officer. Mr.  Kabir  Ahmed,formerly the Chief Executive Officer, was appointed Chairman of theCompany’s Board of Directors. On May  25,  2006, Mr.Wayne Beach, Jon North, and J. Scott Waldie resigned from the Board ofDirectors and were replaced by Anton Esterhuizen, Simon Lawrence, andJoseph D. Horne. On or about July  7,  2006 Mr.Kabir  Ahmed intends to resign from the Company’s Board ofDirectors. Reference is made to ‘‘Item 6. Directors,Senior Management and Employees.’’

Description of Mining Industry

Our business ishighly speculative. We are exploring for base and precious metals andother mineral resources. Ore is rock containing particles of aparticular mineral (and possibly other minerals which can be recoveredand sold), which rock can be legally extracted, and then processed torecover the minerals which can be sold at a profit. Although mineralexploration is a time consuming and expensive process with no assuranceof success, the process is straight forward. First, we acquire therights to enable us to explore for, and if warranted, extract andremove ore so that it can be refined and sold on the open market todealers. Second, we explore for precious and base metals by examiningthe soil, rocks on the surface, and by drilling into the ground toretrieve underground rock samples, which can then be analyzed. Thiswork is undertaken in staged programs, with each successive stage builtupon the information gained in prior stages. If exploration programsdiscover what appears to be an area which may be able to be profitablymined, we will focus our activities on determining whether that isfeasible, while at the same time continuing the exploratory activitiesto further delineate the location and size of this potential ore body.Things that will be analyzed by us in making a determination of whetherwe have a deposit which can be feasibly mined at a profitinclude:

|  |          |                                                                                                                                                         |
|--|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 1.  | The amount of mineralization whichhas been established, and the likelihood of increasing the size of themineralized deposit through additionaldrilling; |

|  |          |                              |
|--|----------|------------------------------|
|  | 2.  | The expected miningdilution; |

|  |          |                                           |
|--|----------|-------------------------------------------|
|  | 3.  | The expected recovery rates inprocessing; |

|  |          |                                |
|--|----------|--------------------------------|
|  | 4.  | The cost of mining thedeposit; |

|  |          |                                                                                                                                   |
|--|----------|-----------------------------------------------------------------------------------------------------------------------------------|
|  | 5.  | The cost of processing the ore toseparate the gold or uranium from the host rocks, including refiningthe precious or base metals; |

|  |          |                                                                               |
|--|----------|-------------------------------------------------------------------------------|
|  | 6.  | The costs toconstruct, maintain, and operate mining and processingactivities; |

|  |          |                                                                                                           |
|--|----------|-----------------------------------------------------------------------------------------------------------|
|  | 7.  | Other costs associated withoperations including permit and reclamation costs upon cessation ofoperations; |

|  |          |                       |
|--|----------|-----------------------|
|  | 8.  | The costs of capital; |

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|  |          |                                                                  |
|--|----------|------------------------------------------------------------------|
|  | 9.  | The costs involved inacquiring and maintaining the property; and |

|  |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 10.  | The price of the precious or base minerals.For example, the price of one ounce of gold for the years 2001-2005ranged from a low of $271 U.S. in 2001, to a high of $536.50 U.S. in2005. At June  28,  2006, the price of gold was $582.75U.S. perounce1.. The price of one pound of uranium for the years 2001-2005 ranged froma low of $7.25 U.S. in 2001, to a high of $36.25 U.S. in 2005. AtJune  26,  2006, the price of uranium was $45.50 U.S. perpound. |

Our analysis will rely upon the estimates the plans ofgeologists mining engineers, metallurgists and others.

If wedetermine that we have a feasible mining project, we will considerpursuing alternative courses of action,including:

|  |              |                                                            |
|--|--------------|------------------------------------------------------------|
|  | •  | seeking to sell the depositor the Company to thirdparties; |

|  |              |                                                                                |
|--|--------------|--------------------------------------------------------------------------------|
|  | •  | entering into a joint venturewith larger mining company to mine the deposit;or |

|  |              |                                                |
|--|--------------|------------------------------------------------|
|  | •  | placing the property into productionourselves. |

There can be no assurance, that we will discover anyprecious or base metals, establish the feasability of mining a deposit,or, if warranted, develop a property to production and maintainproduction activities, either alone or as a joint venture participant.Furthermore, there can be no assurance that we would be able to selleither the deposit or the Company on acceptable terms, or at all, enterinto such a joint venture on acceptable terms, or be able to place aproperty into production ourselves. If we do enter actual miningoperations, which is unlikely in the near future, our operations willbe subject to various factors and risks generally affecting the miningindustry, many of which are beyond our control. These include the priceof precious or base metals declining, the possibility that a change inlaws respecting the environment could make operations unfeasible, orour ability to conduct mining operations could be adversely affected bygovernment regulation. Reference is made to ‘‘Item. 3. Key Information. D. RiskFactors.’’

Regulation of MiningIndustry

Canada

Although each province ofCanada has its own regulations for the mining industry, generally thefollowing is true. Prior to commencing any exploration activities inCanada, and depending on the provincial jurisdiction, the Company orthe party intending to carry out a work program on a mineral propertymay be required to apply to the appropriate local government agenciesfor a number of permits or licenses related to mineral explorationactivities. These permits or licenses may include water and surface usepermits, occupation permits, fire permits, and timber permits. Prior tobeing issued the various permits or licenses, the applicant may have tofile a detailed work plan with the applicable government agency.Permits are issued on the basis of the work plan submitted and approvedby the governing agency. Additional work on a given mineral property ora significant change in the nature of the work to be completed wouldrequire an amendment to the original permit or license.

As partof the permit or licensing requirements, the applicant is required topost an environmental reclamation bond in respect to the work to becarried out on the mineral property. The amount of such bond isdetermined by the amount and nature of the work proposed by theapplicant. The amount of a bond may also be increased with increasedlevels of development on the property.

The Company has or willmake application to the appropriate agencies for permits and licensesrelating to those properties upon which the Company intends to carryout work during the 2006 exploration season. For those mineralproperties in which the Company has an interest but is not the operatorof the work programs, application for the required permits and licensesand the posting of the reclamation bonds will be made by the partyentitled to carry out exploration work on the property. The Companybelieves that it is currently in compliance with all applicableenvironmental laws and regulations in Canada.

|  |
|--|

|   |                                                         |
|---|---------------------------------------------------------|
| 1 | Basedupon the Average Spot Price of Gold, London PMfix. |

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Mexico

The explorationand exploitation of minerals in Mexico may be carried out by Mexicancitizens or Mexican companies incorporated under Mexican law by meansof obtaining exploration and exploitation concessions. Explorationconcessions are granted by the Mexican federal government for a periodof six years from the date of their recording in the Public Registry ofMining and are not renewable. Holders of exploration concessions may,prior to the expiration of such exploration concessions, apply for oneor more exploitation concessions covering all or part of the areacovered by one exploration concession. Failure to apply prior to theexpiration of the term of the exploration concession will result intermination of the concession. An exploitation concession has a term of50 years, generally renewable for a further 50 years uponapplication within five years prior to the expiration of suchconcession. Both exploration and exploitation concessions are subjectto annual work requirements and payment of surface taxes which areassessed and levied on a semiannual basis. Such concessions may betransferred or assigned by their holders, but such transfers orassignments must comply with the requirements established by theMexican Mining Law and be registered before the Public Registry ofMining in order to be valid against third parties.

Mineralexploration and exploitation concessions may also be obtained byforeign citizens or foreign corporations, in this latter case, throughthe establishment of a branch or subsidiary in Mexico, and in the caseof foreign citizens, provided that they comply with certainrequirements set forth in the Foreign Investment Law. Foreign citizensare required to apply for the corresponding authorization before theMinistry of Foreign Affairs and register their investment in theNational Registry of Foreign Investment. In the case of a branch offoreign corporations, in addition to registration in the NationalRegistry of Foreign Investment, additional authorization from theMinistry of Economy is required in order to obtain subsequentregistration in the corresponding local Public Registry ofCommerce.

Mexican mining law does not require payment offinder's fees or royalties to the Government, except for adiscovery premium in connection with national mineral reserves,concessions in marine zones and claims or allotments contracteddirectly from the Council of Mineral Resources. None of the propertyinterests held by the Company are under such fee regime. However,holders of exploration and exploitation concessions are required to paysurface taxes which are assessed and levied on a semi-annualbasis.

Republic of Niger

There are four types oflicenses available for companies and individuals interested inexploration and development of mineral resources. A ProspectingAuthorization gives the holder the right to search for one or a numberof minerals. It is non-exclusive and confers to the holder any rightsto an exclusive exploration permit within the limits and time validityof the Authorization.

Prospecting Authorizations are valid forone year, renewable indefinitely for one year periods. Only surfaceprospecting is permitted, including remote sensing techniques. Theobjective of the prospecting program must be stated in the application,although there are no fee or land holding requirements.

AnExploration Permit is valid for three-years, renewable for two furtherthree-year periods subject to certain land holding reduction criteriaand field works. The area held under a permit cannot exceed 2,000km2 in a rectangular block.

An Exploration Permit confersto the holder the right to dispose of any minerals obtained duringexploration and test work, and also confers the right to a MiningPermit if a viable reserve is discovered. Applications must stipulatethe minerals sought (additional minerals can be included later), and atime and expenditure schedule. A variable fee (CFA F 300.000) is tiedto the permit, and holders are required to submit progress reports tothe Government on their activities.

A Mining Permit will begranted in the case of successful exploration, subject to the right ofthe Government to participate in the project. A ’smallmine’ permit is valid for five years, renewable 3times for five-year periods, while a ‘large mine’ permitlasts for 20 years initially, renewable 2 times per period of 10 years.Further extensions are possible if commercial reserves remain.

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Companies applying for Mining Permitsmust conform to Nigerien Company law. The Government requires aninitial 10% share in the mining project, free of all costs,which can be later increased to a maximum of 30 % through sharepurchases. Fees for mining permits are around $1,400 and $2,000 forsmall and large mining permits respectively.

The fourth type oflicense is the Authorization for Small-Scale Mining, and it concernsartisanal level of production.

The Government of Niger has statedthat it welcomes overseas private investment as a key to relaunchingits national economy, and its mining code contains a number ofincentives for potential investors. These include income tax holidaysand many exemptions (customs duty exemption, exemption in some casesfrom value-added tax, the right to remit dividends freely) equalopportunities for overseas and national investors, and guaranteedfreedom from nationalization or expropriation.

Mining companiesare subject to a number of fees and taxes:

Annual area fees arerelated to the licenses except to the prospecting authorization.

Mining royalties are payable at a rate of 5.5% of the finalselling price of the mineral commodity produced. Royalties are,however, deductible from income tax, which is levied at a rate of35% after the deduction of operating and production costs. Smallmines enjoy a two-year income tax holiday, while for large mines thisperiod extends to five years from the start of commercial production.Dividends distributed to share holders attract a 16% capitalgains tax. Other charges include stamp duty, public notary fees, valueadded tax and social security contributions for employees.

Customs duties are not charged on equipment imported for use fordirect mining operations, or temporarily for exploration programs.Mineral products may be exported free of duty.

Niger uses theCFA francs, which is tied to the Euros and is fully convertible (1 Euro= 656 Fcfa). Foreign exchange regulations are very liberal, althoughwith the requirement that overseas transactions must be authorized bythe Ministry of Finance and made through a registeredbank.

|  |          |                          |
|--|----------|--------------------------|
|  | C.  | OrganizationalStructure. |

The Company has one inactive U.S. subsidiary.

|  |          |                                |
|--|----------|--------------------------------|
|  | D.  | Property, Plants andEquipment. |

|  |          |                                        |
|--|----------|----------------------------------------|
|  | A.  | Picachos Project,Durango State, Mexico |

In July  2004, the Companyentered into an option agreement with RNC Gold Inc.(‘‘RNC’’) to acquire a 50% interestin two silver-gold properties in Mexico's Durango and Sinaloaprovinces (the ‘‘Picachos Project’’).Subsequently, in October  2005, the Company amended its optionagreement to acquire the remaining 50% interest in the PicachosProject. The Picachos property portfolio originally included the7,700-hectare (19,000-acre) silver-gold Picachos property area inDurango State and the 17,800-hectare (43,900-acre) Tango gold claims inSinaloa State. In 2005 the Company decided to focus its exploration onthe 7,700 hectare silver-gold Picachos Property, so on November17,  2005 the Company dropped its interest in the Tango goldclaims in Sinaloa State.

In order to earn its initial 50%interest in the Picachos Project, the Company must expend $1,500,000 inexploration expenditures on or before December  31,  2006.To March  31,  2006, the Company has spent approximately$786,000 in exploration expenditures on the project and is expected tospend approximately $1  million during the balance of the year.Also, as part of the Picachos Option Agreement, the Company must byJuly  2007 generate a feasibility study for the production of aminimum of 25,000 ounces of gold per year (‘‘FeasibilityStudy’’).

Subsequently, in October  2005,the Company amended its agreement with RNC to acquire an option toacquire a 100% interest in the Picachos Project. After theCompany earns a 50% interest in the project, the Company will begranted the right to acquire RNC’s remaining 50% stake inthe Picachos Project. The purchase price for acquiring the remaining50% interest would be $20,000,000, payable as follows:

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|  |          |                                                           |
|--|----------|-----------------------------------------------------------|
|  | 1.  | $3,000,000 at the timethe Feasibility Study is completed; |

|  |          |                                                       |
|--|----------|-------------------------------------------------------|
|  | 2.  | $9,000,000at the Commencement of CommercialProduction |

|  |          |                                                                                                          |
|--|----------|----------------------------------------------------------------------------------------------------------|
|  | 3.  | $2,000,000 on each of the firstthrough fourth anniversaries of the Commencement of CommercialProduction. |

In addition, the Company issued RNC 200,000 Shares.To retain its acquisition rights, the Company must keep the claimscomprising the Picachos Project in good standing by undertaking minimumwork commitments of approximately $50,000 annually.

Kabir Ahmed,currently the Chairman of the Company’s Board of Directors, wasa director of RNC at the time the original option agreement was enteredinto in 2004, but he has resigned his position as a director of RNCduring 2005, prior to the October  2005 amendment to the optionagreement.

The properties comprising the Picachos Project do notcontain a known commercially mineable mineral deposit and theCompany’s proposed exploration programs are exploratory innature.

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PropertyDescription, Location and Access 

The following informationregarding the Picachos Project’s location, access, history,planned exploration activities, and related topics are summarized froma report titled ‘‘A Technical Review of the PicachosSilver-Gold Prospects, Western Durango State, Mexico for NorthwesternMineral Ventures Inc.,’’ prepared by Watts, Griffis andMcOuat Limited (‘‘WGM’’), ConsultingGeologists and Engineers, and dated November  24,  2004(the ‘‘WGM Report’’). There is no knowncommercially mineable mineral deposit on any of the propertiescomprising the Picachos Project.

The Picachos area is located inthe western portion of Durango State, 100 kilometers west-southwest ofthe state capital, Durango. It is situated within the Zona Minera LaVentana of the Sierra Madre Occidental Mountains. The explorationconcessions or licenses are owned by Minera Tango S.A. de CV.(‘‘Tango’’), a Mexican corporation, whichis 75% owned by RNC Gold Inc.(‘‘RNC’’), and 25% owned by MineraCamargo S.A. de C.V. (‘‘Camargo’’), a Mexicancompany. Prior to Tango acquiring the licenses, Camargo acquired thelicenses based on the presence of a large number of old nativesilver-gold mine workings and a favorable geological setting. Most ofthe mine workings were enlarged as a result of the interest of theearly Spanish settlers.

The Los Cochis prospect portion of theproperty is located just below the village of La Mesa de Los Negros,about 5 kilometers from the main regional highway between Durango andMazatlan, the capital of neighboring Sinaloa State. It is on the southcentral part of the ‘‘Camargo’’ concession,part of a larger land package in the southeastern quadrant of a calderacomplex in the Western Sierra Madre.

According to the WGM Report,the Picachos concession (4,225.4 hectares) was registered with SECOFI(the Mexican Mining Recorder) July  12,  1999 by Camargo.Camargo is a private Mexican corporation, owned 80% by MichelleRobinson, MASc, P.Eng., and 20% by Jose Vargas Gaytan, a Mexicanprospector. The legal survey was completed and filed September6,  1999. The legal survey for the Camargo concession (2,577.5hectares) was filed with SECOFI on May  16,  2002. Legaltitle was recorded for both claims on July  9,2002.

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Temperatures are subject to seasonalvariations, which are largely dependent on elevation. Above 2,000meters, the climate is drier and temperatures range from over30°C in summer to below freezing at night in the winter withsome snowfall. Below 2,000 meters, the climate gradually becomes morehot and humid, with temperatures ranging from 10°C in winter to38°C in summer. Irrespective of season, nightfall can bringsubstantial drops in temperature. The rainy season is from July toOctober.

According to the WGM Report, there is a ready supply oflabor in the immediate area of the prospects. People living in thePicachos area are mainly farmers, cattle ranchers, and fruit growers. A230 KV electrical transmission line runs parallel to Highway 40.Neveros is connected to the power grid via a branch line. The villageof La Mesa de Los Negros has grid electricity and atelephone.

The Picachos Property covers small past silver andgold producers and several significant silver/gold showings that remainto be fully explored. Camargo and Tango have carried out a significantamount of ground work, including geochemical sampling and two drillholes.

Based on its comparisons with other mines and mineraldeposits in the Sierra Madre, including the Tayoltita Mine located ashort distance to the north, the WGM Report concluded that the Picachosarea has the potential to host an economically significant silver-golddeposit. In addition, the silver-gold values found on the propertydemonstrate a potential for bulk tonnage scale mineralization. However,there is no known commercially mineable mineral deposit on any of theproperties comprising the Picachos Project and the Company’sproposed exploration programs are exploratory innature.

Summary of 2004 Minimum Work Exploration Program andBudget

In 2004, the Company completed a limited workprogram of trenching, soil sampling and geochemistry analysis on bothof its silver-gold properties in Mexico. The limited work program,which was completed in December  2004, was required as part ofthe Company’s minimum work commitments to keep all of the claimsin good standing. The Company expended approximately $50,000 towardsthe limited work program.

Summary of First Phase 2005Exploration Program 

In 2004, the geological andengineering firm of Watts, Griffis and McOuat Limited(‘‘WGM’’), proposed a first phaseexploration program costing $526,000 for the Company. This first phaseexploration program consisted of additional land acquisition; theacquisition and study of remote sensing imagery; a fixed-wing airbornemagnetometer survey; hand trenching, soil geochemical surveying andsampling at three of the most prospective targets for gold (El Toro,Los Cochis and Guadalupe targets); and preparations for undergrounddevelopment and diamond drilling at a fourth site, the El Pinotarget.

The Company’s first phase exploration program wascompleted during the third quarter of 2005, at a cost of $620,980. TheCompany completed all aspects of the WGM first phase explorationprogram — but has postponed the airborne survey and preparationsfor underground development at El Pino, which will be carried out inthe Company’s second phase exploration program, which isexpected to cost $1.0  million.

The results of the firstphase exploration program have been generally positive. Results areavailable for 7,056 samples from Los Cochis, El Toro and Guadalupe. Thehighest gold values to date were returned from the El Toro samples,which define a strong polymetallic geochemical anomaly. Several ofthese samples contained in excess of 500 ppb gold, and values of 2,424ppb gold occurred in soils near the previous mine workings. Thisdiscovery at El Toro is in addition to the large Los Cochis anomaly,which returned the highest silver values to date and has already beenidentified by the Company as a compelling drilltarget.

Summary of Proposed Second Phase 2005-2006Exploration Program 

The Company is expected to prepare asecond phase exploration program, costing $1.0  million, which isexpected to be completed by December  30,  2006. The secondphase exploration program will 

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be designed to further develop the LosCochis, El Toro and Guadalupe targets; airborne survey of the Picachosproperties; and underground development of the El Pino target. TheCompany intends to fully fund the second phase exploration program fromits existing working capital. In order to retain its option interest inthe Picachos Project, the Company must expend an additional $1.0million in exploration by December  30,2006.

Management of Picachos Project

MichelleRobinson, MASc, P.Eng., a professional engineer, is the personresponsible for overseeing and carrying out the Company’sexploration programs on the Picachos Project in Mexico.

|  |          |                                   |
|--|----------|-----------------------------------|
|  | B.  | Uranium Concession, Niger, Africa |

OnMarch  8,  2006 the Company completed the acquisition oftwo uranium concessions in Niger, Africa. These concessions, the InGall Concession and the Irhazer Concession, cover a total 4,000 squarekilometers (988,000 acres) and were selected for their favorablegeology, exploration potential and strategic location — situatedin the same stratigraphy as two operating uranium mines which togetheryield almost 10% of worldwide production, according to theInternational Atomic Energy Agency, a division of the United Nations.The Company’s objective in applying for the uranium concessionsin the Republic of Niger is to minimize its exploration risk byattempting to diversify the Company’s property portfolio.

The Company was required to file a formal concession application forwith the Ministry of Mines & Energy, Niger. The work commitmentshave been negotiated with the Director of Mines and the application wasthereafter referred to the Minister of Mines & Energy for review.After its approval by the Minister of Mines & Energy theapplication was then forwarded to the Ministers Council for formalapproval.

The concessions were granted to the Company for aperiod of thirty years. Under the terms of the concessions, the Companyis required to spend a total of $4.4  million U.S. on explorationof the concessions over the next three years, as set forth below:

|       |  |  |                         |  |                                                |               |  |  |  |  |                                                |  |
|-------|--|--|-------------------------|--|------------------------------------------------|---------------|--|--|--|--|------------------------------------------------|--|
| YEAR  |  |  | AMOUNTFOR EACH PROPERTY |  |                                                | TOTAL FORYEAR |
| Year1 |  |  |                         |  | $   200,000   US |               |  |  |  |  | $   400,000   US |  |
| Year2 |  |  |                         |  | $   600,000   US |               |  |  |  |  | $1,200,000   US                 |  |
| Year3 |  |  |                         |  | $1,400,000   US                 |               |  |  |  |  | $2,800,000   US                 |  |
|       |

TheCompany’s concessions provide it with the right to dispose ofany minerals obtained during exploration and test work, and alsoconfers on the Company the right to a mining permit, if a viablereserve is discovered.

The Government of Niger is automaticallygranted an initial ten (10%) percent non-participating interestin the project. In addition, the Government of Niger can subscribe to amaximum twenty (20%) percent interest of the operating companyto be formed to develop the properties. In the event the Government ofNiger does not subscribe for its 20% interest at the time ofincorporation, it will lose its right to subscribe for suchinterest.

A Mining Convention signed on March  8,2006 by the Company and the Government of Niger guarantees for thirtyyears the stability of administrative, judicial, fiscal, customs,financial, economic and social conditions during the duration of theConvention , covering both exploration and exploitationactivities.

The Company had prepared a ‘‘TechnicalEvaluation Report 43-101, Northwestern Mineral Ventures Inc., UraniumProperties, Niger, West Africa,’’ dated March9,  2006, prepared by Claude Jobin, P.Eng. M.Sc., and El HametMai Ousmane, Ph.D. (‘‘Irhazer and In Gall TechnicalReport’’).

PropertyDescription

The Irhazer and In Gall concessions are locatedin the Agades area, department of Techirozrine, Niger. Each concessionconsists of approximately two thousand (2,000) square kilometers. Therainy 

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season is from June to September with annualrainfall averaging 93 millimeters in Agades. The temperature rangesfrom 15 degrees Centigrade to 40 degrees centigrade.

Accessto Properties

The properties may be accessed from thecapital, Niamey, by paved road up to In Gall village and from there byfour wheel drive vehicles. In addition, a flight may be taken fromNiamey to Arlit, from where the properties can be accessed by fourwheel drive vehicles.

Work Program and Budget for the FirstThree-Year Period

The Irhazer and In Gall Technical Reporthas recommended a three-year exploration program for the twoconcessions, costing each a total of $2,200,000 U.S., which the Companyintends to follow. According to the Irhazer and In Gall TechnicalReport, the work program and budget is the same for both properties.The proposed exploration programs are as follows:

The first workprogram will include an airborne high sensitivity magnetic/gamma raysurvey of 5,000 kilometers, along lines 200 meters apart, with a groundfollow up of theanomalies.

|                                   |  |  |     |   |         |  |
|-----------------------------------|--|--|-----|---|---------|--|
| FIRSTYEAREXPENSES                 |  |  | $US |
| Contributionto technical training |  |  |     | $ | 20,000  |  |
| Wages ofexpatriate personnel      |  |  |     |   | 15,000  |  |
| Wages of localpersonnel           |  |  |     |   | 30,000  |  |
| Airborne Survey 5,000 km x$14     |  |  |     |   | 70,000  |  |
| Vehicle                           |  |  |     |   | 15,000  |  |
| Equipment                         |  |  |     |   | 10,000  |  |
| Office,field camp                 |  |  |     |   | 10,000  |  |
| Travel,communication              |  |  |     |   | 10,000  |  |
| Consumables,fuel                  |  |  |     |   | 10,000  |  |
| Miscellaneous                     |  |  |     |   | 10,000  |  |
| TOTAL:                            |  |  |     | $ | 200,000 |  |
|                                   |

Thesecond year work program will include 6000 meters of reversecirculation drilling at an average depth of 400 meters; samples will beassayed for uranium and multielements.

|                                           |  |  |     |   |         |  |
|-------------------------------------------|--|--|-----|---|---------|--|
| SECONDYEAREXPENSES                        |  |  | $US |
| Contributionto technical training         |  |  |     | $ | 20,000  |  |
| Wages ofexpatriate personnel              |  |  |     |   | 40,000  |  |
| Wages of localpersonnel                   |  |  |     |   | 30,000  |  |
| Reverse circulationdrilling 6,000 m x $50 |  |  |     |   | 300,000 |  |
| Down holeradiometric 6,000 x $10          |  |  |     |   | 60,000  |  |
| Chemicalassays 6,500 x$8                  |  |  |     |   | 52,000  |  |
| Vehicle                                   |  |  |     |   | 15,000  |  |
| Equipment                                 |  |  |     |   | 15,000  |  |
| Office,field camp                         |  |  |     |   | 15,000  |  |
| Travel andcommunications                  |  |  |     |   | 15,000  |  |
| Consumables,fuel                          |  |  |     |   | 15,000  |  |
| Miscellaneous                             |  |  |     |   | 23,000  |  |
| TOTAL:                                    |  |  |     | $ | 600,000 |  |
|                                           |

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The third year program could include15,500 meters of drilling if encouraging results were obtained from thepreviousyear

|                                            |  |  |     |   |           |  |
|--------------------------------------------|--|--|-----|---|-----------|--|
| THIRDYEAREXPENSES                          |  |  | $US |
| Contributionsto technical training         |  |  |     | $ | 20,000    |  |
| Wages ofexpatriate personnel               |  |  |     |   | 70,000    |  |
| Wages of localpersonnel                    |  |  |     |   | 75,000    |  |
| Reverse circulationdrilling 15,500 m x $50 |  |  |     |   | 775,000   |  |
| Down holeradiometric 15,500 m x $10        |  |  |     |   | 155,000   |  |
| Chemicalassays 16,500 x$8                  |  |  |     |   | 132,000   |  |
| Equipment                                  |  |  |     |   | 25,000    |  |
| Office,field camp                          |  |  |     |   | 40,000    |  |
| Travel andcommunications                   |  |  |     |   | 30,000    |  |
| Consumables,fuel                           |  |  |     |   | 25,000    |  |
| Miscellaneous                              |  |  |     |   | 53,000    |  |
| TOTAL:                                     |  |  |     | $ | 1,400,000 |  |
|                                            |

TheCompany intends to pay for the exploration programs from its workingcapital.

The Company’s President and CEO, Marek Kreczmer,will be supervising the exploration activities through an explorationteam composed of Nigerien geologists and expatriate technicalprofessionals.

History

There is no history ofexploration on the Irhazer or In Gall concessions. Uranium was firstdiscovered in Niger in 1957. Since that time there have been a numberof uranium discoveries, with two open pit mines and one undergroundmine established. The established mines are located approximately 150kilometers from the Company’s concessions. However, there can beno assurance that there is a commercially mineable deposit of uraniumon any of the Company’s properties. The Company’sactivities will be exploratory in nature.

There is no knowncommercially mineable mineral deposit on either the Irhazer or In Gallconcessions.

|  |          |                                                |
|--|----------|------------------------------------------------|
|  | C.  | Waterbury Uranium Project,Saskatchewan, Canada |

Pursuant to an agreement datedNovember  9,  2005 with Canalaska Ventures Ltd.(‘‘Canalaska’’), the Company acquired anoption to acquire up to a 75% interest in the Waterbury UraniumProject, Saskatchewan, Canada (‘‘WaterburyProject’’). The Waterbury Project covers 12,417 hectaresand includes nine prospective uranium claims located in the AlthabascaBasin, Saskatchewan, Canada.

To acquire the 75% interestin the Waterbury Project, the Company would first acquire a 50%interest, with options to acquire additional 10% and 15%interests.

To acquire the initial 50% interest, theCompany is required to (i) make cash payments to Canalaska of $150,000,by April  1,  2008, (ii) issue Canalaska a total of 300,000Shares by April  1,  2007, (iii) incur $2,000,000 ofexploration expenditures by April  1,  2008, and (iv) grantCanalaska a 3% net smelter royalty(‘‘NSR’’) on any production, if any, from theWaterbury Project, as set forth below.

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The Company is required to pay Canalaska$150,000 asfollows:

|                                                                                      |  |  |  |   |        |  |
|--------------------------------------------------------------------------------------|--|--|--|---|--------|--|
| Onor prior to the earlier of December  9,  2005 and the datethe agreement was signed |  |  |  | $ | 25,000 |  |
| On or priorto April  1,  2006                                                        |  |  |  | $ | 25,000 |  |
| On orprior to April  1,2007                                                          |  |  |  | $ | 50,000 |  |
| On or prior to April1,  2008                                                         |  |  |  | $ | 50,000 |  |
|                                                                                      |

The Company isrequired to issue Canalaska 300,000 Shares, as follows:

|                                                                                    |  |  |                |
|------------------------------------------------------------------------------------|--|--|----------------|
| Onor prior to the earlier of December  9,  2005 and the datethe agreement issigned |  |  | 100,000Shares  |
| On or prior to April  1,2006                                                       |  |  | 100,000 Shares |
| On or prior toApril  1,  2007                                                      |  |  | 100,000Shares  |
|                                                                                    |

In addition, the Company is required toincur a total of $2,000,000 in exploration expenditures on theWaterbury Project as follows:

|                               |  |  |  |   |         |  |
|-------------------------------|--|--|--|---|---------|--|
| Onor prior to April  1,2006   |  |  |  | $ | 500,000 |  |
| On or prior to April1,  2007  |  |  |  | $ | 750,000 |  |
| On or prior toApril  1,  2008 |  |  |  | $ | 750,000 |  |
|                               |

Uponthe Company satisfying the above requirements, it will have acquired a50% interest in the Waterbury Project.

As of June28,  2006 the Company has made all requirements payments andshare issuances to Canalaska.

To acquire an additional10% interest in the Waterbury Project (60% interest intotal), the Company will be required to incur an additional $2,000,000in exploration expenditures within two years of acquiring the50% interest, with a minimum expenditure of $500,000 in eachyear.

To acquire an additional 15% interest (75%interest in total), the Company will be required to (i)  completea feasibility study on the Waterbury Project within two years ofacquiring the 60% interest (‘‘DevelopmentStage’’), (ii) issue Canalaska 200,000 Shares, (iii) andincur a minimum of $500,000 in annual exploration expenditures for twoyears. The Company may extend the Development Stage for two years bypaying Canalaska a fee of $250,000 in advance for each year ofextension.

Upon the Company acquiring its 50% interest inthe Waterbury Project, the Company and Canalaska will be deemed to haveformed a joint venture, with Canalaska acting as the operator of thejoint venture. If the Company increases its interest to 60%, itwill be become the operator of the Waterbury Project at that time.After the formation of the joint venture, the party’sobligations to financially contribute to the joint venture will bebased upon their respective ownership interests. If any party’sinterest in the joint venture falls below 10%, then thatparty’s interest will revert to a 3% NSR, which in thecase of Canalaska, would be in addition to its existing 3% NSR,for a total NSR of 6%.

Location andAccess

The Waterbury Project is located in the easternportion of the Athabasca Basin in Saskatchewan, Canada. The ninemineral claims are located seven miles (12 kilometers) east of theCigar Lake Deposit and six miles (10 kilometers) south of the MidwestMine.

Private roads maintained by major uranium producerstraverse the property area and provide access to the property, as donumerous drill roads. Daily air service and a provincial highway alsoserve the area.

Climate

The climate in theAthabasca Basin varies from -50 degrees Celsius in winter to 30 degreesin the summer. Generally, freeze up begins in late October and break upoccurs in mid-to-late May. 

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Precipitation is moderate. According toclimate conditions, exploration can occur during the winter months oncethe ground is solidly frozen and in the summer when the break up iscompleted.

History of Exploration

A large amountof work has been carried out by major uranium producers on areasadjoining the present project claims, with a small portion of thisexploration covering the present property. The work included airborneand ground electromagnetic and magnetic surveys, boulder prospectingand geochemistry, lake water and sediment geochemistry and diamonddrilling.

Geology

Bedrock throughout theproperties is overlain by a pervasive layer of unconsolidated deposits;surface investigation of bedrock lithology and geochemistry istherefore achieved mainly from glacially transported boulders.

Flat-lying Athabasca Group sandstones unconformably overlie theArchean and Aphebian basement rocks throughout the properties withdepths to the unconformity varying from about 150 meters in the moreeasterly blocks to perhaps 400 meters in the north end of claimS-107965.

The boundary between the Wollaston and MudjaticDomains trends northeast-southwest through the cluster of claimblocks.

Archean granitoid domes (magnetic highs) and Aphebianmetasediments as interpreted from magnetic data. The properties arelargely within interpreted Aphebian metasediments in places (as inS-107967) bordering Archean domes.

Two major fault systems withwhich major uranium deposits are associated traverse the area; thenortheast-southwest trending Collins Bay is a broad zone of shearinglying southeast of claim S-107967 and a prominent east-west linearpasses through the Cigar Lake and Sand Lake-Wolf Lake deposits.Inferred faults trending 105 degrees appear to offset basementformations on claims S107965 and S-107967.

The main structurescontrolling mineralization at Cigar Lake and the uranium occurrencetrend east-west. Other uranium deposits in the district appear torelate more to northeast-southwest structures.

Magnetic data onclaim S-107965 suggest east-west trending metasediments adjacent to anArchean dome and one electromagnetic conductor trending 080 degrees,which indicates possible graphitic horizons. The depth to basement isat, or beyond, the depth range of previous airborne electromagneticsystems and there would appear to be a good chance of detectingadditional basement conductors with deeper penetrating systems nowavailable.

There is no known commercially mineable mineraldeposit on the Waterbury Project.

|  |          |                                                   |
|--|----------|---------------------------------------------------|
|  | D.  | North RaeUranium Project, Northern Quebec, Canada |

On March2,  2006 the Company signed a Letter of Intent to acquire up to a65% interest in a uranium project in the Ungava Bay region ofnorthern Quebec, Canada, from Azimut Exploration Inc.(‘‘Azimut’’). The ‘‘North RaeUranium Project’’ consists of three blocks representing668 claims with a total area of 298.9 square kilometers or 73,835 acres(29,890 hectares). 

In order to acquire its initial50% interest in the North Rae Uranium Project, the Company isrequired to (i) make cash payments totaling $210,000 over five years,(ii) issue Azimut a total of 150,000 Shares, and (iii) incur a total of$2,900,000 in exploration expenditures over five years, as set forthbelow.

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Under the terms of the Letter of Intentthe Company is required to make the following cash payments, totaling$210,000, toAzimut:

|                       |  |  |                                                |
|-----------------------|--|--|------------------------------------------------|
| CashPayments toAzimut |  |  |                                           |
| $50,000               |  |  | Onexecution of Letter of Intent (March 2,2006) |
| $30,000               |  |  | March  2,2007                                  |
| $30,000               |  |  | March  2,2008                                  |
| $40,000               |  |  | March  2,2009                                  |
| $60,000               |  |  | March  2,2010                                  |
|                       |

Upon receipt of confirmation of acceptance ofthe filing of the Letter of Intent by the TSX Venture Exchange(‘‘Acceptance Date’’), the Company isrequired to issue Azimut 100,000 Shares. On the first anniversary ofthe Acceptance Date, the Company will be required to issue anadditional 50,000 Shares to Azimut.

In addition to the cashpayments and shares issuance described above, the Company is requiredto incur the following exploration expenditures on the North RaeUranium Project, totaling$2,900,000.

|                                                                     |  |  |                             |
|---------------------------------------------------------------------|--|--|-----------------------------|
| Minimum andCumulativeWorkExpenditures onthe North RaeUraniumProject |  |  |                        |
| $400,000                                                            |  |  | Onor before March  2,2007   |
| $400,000                                                            |  |  | On or before March2,  2008  |
| $700,000                                                            |  |  | On or beforeMarch  2,  2009 |
| $700,000                                                            |  |  | On orbefore March  2,2010   |
| $700,000                                                            |  |  | On or before March2,  2011  |
|                                                                     |

If and when the Company has madethe cash payments totalling $210,000, issued Azimut a total of 150,000Shares, and incurred the minimum work expenditures totalling$2,900,000, the Company will have acquired a 50% undividedinterest in the North Rae Uranium Project, and a joint venture betweenthe Company and Azimut will be deemed to be have been established. Theinitial, actual and deemed expenditures of each party to the jointventure shall be $2,900,000. Upon the Company acquiring a 50%interest in the North Rae Uranium Project, Azimut will retain a2% yellow cake royalty(‘‘YCR’’).

To increase its interestto 65% the Company will be required to (i) issue Azimut anadditional 100,000 Shares, (ii) pay Azimut $20,000 per year for fiveyears, (iii) incur annual minimum exploration expenditures of $200,000,for a five year period ($1,000,000 in total), and (iv) during this fiveyear period provide Azimut with a Bankable Feasibility Study. If theCompany decides not to increase its interest to 65%, it will berequired to make a $100,000 payment to Azimut, within two months of itsacquiring its 50% interest.

The requirement to provideAzimut with a Bankable Feasibility Study may be extended for threesubsequent, annual and consecutive periods of one year each by payingAzimut $50,000 per year.

The Company will act as operator of theproject.

Location and Access

The North RaeProject is located in the Ungava Bay region of northern Quebec. TheNorth Rae property is located six to 12 miles (10-20 kilometers) fromtide-water and approximately 99 miles (160 kilometers) eastof the town of Kuujjuaq. Access to the property is by fixed-wingaircraft or helicopter from Kuujjuaq, which has daily scheduled airservice from Montreal.

Climate

The climate isarctic with an average annual temperature between 23°F and18.5°F (-5°C and -7.5°C). The Ungava Bay areareceives about 15 inches to 19 inches (400 millimeters to 

22

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500 millimeters) of precipitationannually, with about 45% of this total falling as snow. Eachyear, there are between 20 and 40 frost-free days. Explorationgenerally occurs in the summer months.

History ofExploration

The blocks were staked by Azimut ExplorationInc., Northwestern’s joint venture partner on the North Raeproperty, based on its review of provincial geochemical lake sedimentdata released during the 1980s, and 1990s, and as recently as 2000 whenthe most relevant data set was made public by the provincial geologicalsurvey. Management of the Company is not aware of any meaningfulexploration that has been conducted on theproperty.

Geology

According to an independentthird-party report, the North Rae Project blocks contain geochemicallake sediment anomalies as high as 1,800 parts per million (ppm)uranium. Many values in the range of 100 ppm to 508 ppm were alsorecorded. According to the report, ‘‘anomalies at 200 ppmuranium exceed the anomalies associated with known uranium deposits atLac Turgeon (Quebec), Strange Lake (Quebec) and Michelin (Labrador) andseveral other newly discovered deposits.’’ In aprovincial context, most of the area has a high uranium backgroundfalling above the 85th percentile. Three main target anomalies, whichwere defined by Azimut using its proprietary methodology, exhibit 25 to60 times enrichment in uranium above the local background, while themagnitude and percentage increase in the anomalies suggests a localsource for the lake sediment uranium.

The remainder of thegeochemical package shows significant cerium enrichment, elevatedmolybdenum and spotty enrichment in copper, all generating truestatistical uranium anomalies on a provincial and localbasis.

There is no known commercially mineable mineral deposit onthe North Rae Project.

|  |          |                                                             |
|--|----------|-------------------------------------------------------------|
|  | E.  | Saguenay UraniumProperty, Charlevoix County, Quebec, Canada |

Pursuant to aLetter of Intent dated June  9,  2006 with Mr.Edward  Bawolak (‘‘Bawolak’’) theCompany was granted the right to acquire a 100% interest in theSaguenay Uranium Property (the‘‘Property’’), located in CharlevoixCounty, Quebec.

The Property covers approximately 4,000 acresand consists of more than 100 claims and is located near the mouth ofthe Saguenay River near the north shore of the St. Lawrence River,about 190 km (120 miles) east of Quebec City.

The Letter ofIntent granted the Company the exclusive right to conduct due diligenceon the Property, including an investigation of any environmentalliabilities and a site visit by a qualified geologist appointed by theCompany. In consideration of the Company being granted the exclusiveright to conduct a due diligence review, the Company is required tomake the following cash payments toBawolak:

|                                 |  |  |  |   |        |  |
|---------------------------------|--|--|--|---|--------|--|
| Onor prior to June  10,2006     |  |  |  | $ | 15,000 |  |
| On or prior to July10,  2006    |  |  |  | $ | 15,000 |  |
| On or prior toAugust  15,  2006 |  |  |  | $ | 15,000 |  |
|                                 |

Inthe event the Company decides to proceed, the Company will be grantedan option to acquire a 100% interest in the Property, subject toit making the following cash payments and stock issuances toBawolak:

23

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CashPayments

|                                                                                                                                                                                                                                                                                                 |  |  |  |   |         |  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|---|---------|--|
| Uponthe later of (i) the date that final approval of the acquisition isobtained from the TSX Venture Exchange, and (ii) the date a definitiveoption agreement between the Company and Bawolak is fully executed(such later date is referred to as the ‘‘ApprovalDate’’) |  |  |  | $ | 50,000  |  |
| On or prior tothe first anniversary of the ApprovalDate                                                                                                                                                                                                                                         |  |  |  | $ | 100,000 |  |
| On or prior to the secondanniversary of the Approval Date                                                                                                                                                                                                                                       |  |  |  | $ | 150,000 |  |
| Onor prior to the third anniversary of the ApprovalDate                                                                                                                                                                                                                                         |  |  |  | $ | 200,000 |  |
|                                                                                                                                                                                                                                                                                                 |

ShareIssuances

|                                                           |  |  |                  |
|-----------------------------------------------------------|--|--|------------------|
| Uponthe Approval Date                                     |  |  | 100,000Shares    |
| On or prior to the first anniversary of theApproval Date  |  |  | 300,000 Shares   |
| On or prior tothe second anniversary of the Approval Date |  |  | 500,000Shares    |
| On or prior to the third anniversary of theApproval Date  |  |  | 1,100,000 Shares |
|                                                           |

Upon theCompany making the cash payments and stock issuances to Bawolak, theCompany will obtain a 100% interest in the Property.

Inaddition to the payments described above, in the event an economicallyviable bankable feasibility is completed on the Property, the Companyis required to make an additional $500,000 payment to Bawolak, within30 days of the completion of such bankable feasibilitystudy.

Additionally, Bawolak will be entitled to a net smelterroyalty (‘‘NSR’’) of 2% ofproduction generated from the Property. The Company has the right toacquire one half of Bawolak’s NSR (1% NSR) for a purchaseprice of $1,000,000 if the Company elects within 30 days following thecompletion of an economically viable bankable feasibilitystudy.

Pending the results of the Company’s due diligenceon the Property, the Company and Bawolak agree to negotiate in goodfaith to execute a definitive option agreement, containing thecustomary representations, warranties, condition, and covenantscustomarily found in agreements covering these types of transactions.However, there can be no assurance the Company and Bawolak will be ableto enter into a definitive option agreement.

There is no knowncommercially mineable mineral deposit on theProperty.

**************************************

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 GLOSSARY

Followingis a glossary of terms used throughout thisAnnualReport.

|      |  |                                                                          |
|------|--|--------------------------------------------------------------------------|
| adit |  | a horizontal tunnel in an underground mine driven from ahillside surface |
|      |  |                                                                          |

|       |  |                                                                              |
|-------|--|------------------------------------------------------------------------------|
| assay |  | a precise and accurateanalysis of the metal contents in an ore or rocksample |
|       |  |                                                                              |

|         |  |                                             |
|---------|--|---------------------------------------------|
| bornite |  | a copper ore; a sulphide ofcopper and iron. |
|         |  |                                             |

|         |  |                                                                          |
|---------|--|--------------------------------------------------------------------------|
| breccia |  | a fragmented rock, thecomponents of which are angular, and notwaterworn. |
|         |  |                                                                          |

|              |  |                               |
|--------------|--|-------------------------------|
| chalcopyrite |  | a sulphide of copperand iron. |
|              |  |                               |

|             |  |                                                                                                                       |
|-------------|--|-----------------------------------------------------------------------------------------------------------------------|
| concentrate |  | a concentrate of mineralsproduced by crushing, grinding and processing methods such as gravity,flotation or leaching. |
|             |  |                                                                                                                       |

|                |  |                                                                                                                                                   |
|----------------|--|---------------------------------------------------------------------------------------------------------------------------------------------------|
| contained gold |  | totalmeasurable gold in grams or ounces estimated to be contained within amineral deposit; does not imply that the deposit is economicallyviable. |
|                |  |                                                                                                                                                   |

|               |  |                                                                                                                                                        |
|---------------|--|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| cut-off grade |  | deemed grade ofmineralization, established by reference to economic factors, abovewhich material is considered ore and below which is consideredwaste. |
|               |  |                                                                                                                                                        |

|               |  |                                                                                                          |
|---------------|--|----------------------------------------------------------------------------------------------------------|
| diamond drill |  | a largemachine that produces a more or less continuous core sample of the rockor material being drilled. |
|               |  |                                                                                                          |

|          |  |                                                                                                                                                                                                   |
|----------|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| dilution |  | thecontamination of ore with barren wall rock; this means that in miningore, adjacent waste is also extracted (see definition of cut-offgrade), which mixes with and reduces the grade of theore. |
|          |  |                                                                                                                                                                                                   |

|                   |  |                                                                                                                               |
|-------------------|--|-------------------------------------------------------------------------------------------------------------------------------|
| feasibility study |  | a detailed reportassessing the feasibility, economics and engineering of placing amineral deposit into commercial production. |
|                   |  |                                                                                                                               |

|            |  |                  |
|------------|--|------------------|
| g/mtor gpt |  | grams per tonne. |
|            |  |                  |

|             |  |                                               |
|-------------|--|-----------------------------------------------|
| golddeposit |  | means a mineral deposit mineralized withgold. |
|             |  |                                               |

|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-----------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| gold equivalent |  | amethod of presenting combined gold and silver concentrations or weightsfor comparison purposes. Commonly involves expressing silver as itsproportionate value in gold based on the relative values of the twometals. When gold equivalent is used to express metal sold, thecalculation is based on actual prices received. When grades areexpressed in gold equivalent, the relative recoveries of the two metalsare also taken into account. |
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

|                      |  |                                                                                                                                           |
|----------------------|--|-------------------------------------------------------------------------------------------------------------------------------------------|
| grams per cubicmeter |  | alluvial mineralization measured by grams ofgold contained per cubic meter of material, a measure of gold contentby volume not by weight. |
|                      |  |                                                                                                                                           |

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|             |  |                                                                          |
|-------------|--|--------------------------------------------------------------------------|
| lode mining |  | mining of goldbearing rocks, typically in the form of veins orstockworks |
|             |  |                                                                          |

|                            |  |                                                                        |
|----------------------------|--|------------------------------------------------------------------------|
| net profit interest or NPI |  | a royaltybased on the net profits generated after recovery of allcosts |
|                            |  |                                                                        |

|                            |  |                                                                                                                                             |
|----------------------------|--|---------------------------------------------------------------------------------------------------------------------------------------------|
| net smelter royalty or NSR |  | a royaltybased on the gross proceeds received from the sale of minerals less thecost of smelting, refining, freight and other relatedcosts. |
|                            |  |                                                                                                                                             |

|               |  |                                                                                                                                                                |
|---------------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| nugget effect |  | an effect of highvariability of gold assays, due to the gold occurring in discreetcoarse grains such that their content in any given sample is highlyvariable. |
|               |  |                                                                                                                                                                |

|     |  |                                                                                                                                                                                                      |
|-----|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ore |  | a naturally occurring rock ormaterial from which minerals, such as gold, can be extracted at aprofit; a determination of whether a mineral deposit contains ore isoften made by a feasibility study. |
|     |  |                                                                                                                                                                                                      |

|              |  |                                                               |
|--------------|--|---------------------------------------------------------------|
| ounce or oz. |  | a troy ounce or 20 pennyweights or 480 grains or31.103 grams. |
|              |  |                                                               |

|     |  |                    |
|-----|--|--------------------|
| opt |  | troy ounces perton |
|     |  |                    |

|                       |  |                                                                                                                |
|-----------------------|--|----------------------------------------------------------------------------------------------------------------|
| patented mining claim |  | a claim to which apatent has been obtained from the government by compliance with lawsrelating to such claims. |
|                       |  |                                                                                                                |

|          |  |                                                                                                          |
|----------|--|----------------------------------------------------------------------------------------------------------|
| prospect |  | an areaprospective for economic minerals based on geological, geophysical,geochemical and other criteria |
|          |  |                                                                                                          |

|        |  |                                            |
|--------|--|--------------------------------------------|
| pyrite |  | amineral – a common sulphide ofiron. |
|        |  |                                            |

|        |  |                                                                    |
|--------|--|--------------------------------------------------------------------|
| quartz |  | a rock-forming mineral of siliconand oxygen, often found in veins. |
|        |  |                                                                    |

|       |  |                                                                               |
|-------|--|-------------------------------------------------------------------------------|
| raise |  | avertical or inclined tunnel in an underground mine driven upwards frombelow. |
|       |  |                                                                               |

|      |  |                                                                       |
|------|--|-----------------------------------------------------------------------|
| ramp |  | an inclined tunnel in anunderground mine driven downwards fromsurface |
|      |  |                                                                       |

|         |  |                                                                                                                                                                                                                                                                                                                                                |
|---------|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| reserve |  | ore – the economicallymineable part of a measured or indicated resource demonstrated by atleast a preliminary feasibility study. This study must include adequateinformation on mining, processing, metallurgical, economic, and otherrelevant factors that demonstrate, at the time of reporting, thateconomic extraction is justified. |
|         |  |                                                                                                                                                                                                                                                                                                                                                |

|                          |  |                                                                                            |
|--------------------------|--|--------------------------------------------------------------------------------------------|
| reversecirculation drill |  | a large machine that produces acontinuous chip sample of the rock or material beingdrilled |
|                          |  |                                                                                            |

|       |  |                                                                                 |
|-------|--|---------------------------------------------------------------------------------|
| shaft |  | a vertical orinclined tunnel in an underground mine driven downward fromsurface |
|       |  |                                                                                 |

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|       |  |                                                                           |
|-------|--|---------------------------------------------------------------------------|
| shear |  | a tabular zone offaulting within which the rocks are crushed andflattened |
|       |  |                                                                           |

|                 |  |                                                                                                                      |
|-----------------|--|----------------------------------------------------------------------------------------------------------------------|
| stock or pluton |  | a body of intrusiverock that covers less than 40 square miles, has steep dips and isdiscordant with surroundingrock. |
|                 |  |                                                                                                                      |

|           |  |                                                                                                                                 |
|-----------|--|---------------------------------------------------------------------------------------------------------------------------------|
| stockwork |  | multiple small veins ofmineralization that have so penetrated a rock mass that the whole rockmass can be consideredmineralized. |
|           |  |                                                                                                                                 |

|              |  |                                                                                                                                               |
|--------------|--|-----------------------------------------------------------------------------------------------------------------------------------------------|
| stratigraphy |  | Branch of geologywhich treats the formation, composition, sequence, and correlation ofthe stratified rocks as part of the Earth’scrust. |
|              |  |                                                                                                                                               |

|               |  |                                                                       |
|---------------|--|-----------------------------------------------------------------------|
| strike length |  | the longest horizontaldimensions of a body or zone of mineralization. |
|               |  |                                                                       |

|                |  |                                                                                              |
|----------------|--|----------------------------------------------------------------------------------------------|
| strippingratio |  | the ratio of waste material to ore that is estimatedfor or experienced in mining an orebody. |
|                |  |                                                                                              |

|         |  |                                                                                                                                                               |
|---------|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| sulfide |  | a mineral compound of sulphur andanother metallic element such as iron, copper, lead, zinc, and nickel,commonly forming minerals of great economicimportance. |
|         |  |                                                                                                                                                               |

|     |  |                          |
|-----|--|--------------------------|
| ton |  | short ton (2,000pounds). |
|     |  |                          |

|       |  |                               |
|-------|--|-------------------------------|
| tonne |  | metric tonne (2,204.6pounds). |
|       |  |                               |

|           |  |                                                                               |
|-----------|--|-------------------------------------------------------------------------------|
| trenching |  | the surface excavation of alinear trench to expose mineralization forsampling |
|           |  |                                                                               |

|                         |  |                                                                                                                                                                     |
|-------------------------|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| unpatented mining claim |  | mining claimsto which a deed from the United States government has not beenreceived, and which are subject to annual assessment work in order tomaintain ownership. |
|                         |  |                                                                                                                                                                     |

|         |  |                                                |
|---------|--|------------------------------------------------|
| uranium |  | a radioactive,silvery-white, metallic element. |
|         |  |                                                |

|          |  |                                                               |
|----------|--|---------------------------------------------------------------|
| vanadium |  | agray or white, malleable, ductile, polyvant metallicelement. |
|          |  |                                                               |

|      |  |                                                                                                                                                              |
|------|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| vein |  | a tabular body of rock typicallyof narrow thickness and often mineralized occupying a fault, shear,fissure or fracture crosscutting another pre-existingrock |
|      |  |                                                                                                                                                              |

For ease of reference, the followingconversion factors areprovided:

|        |  |  |                    |  |  |                         |  |  |               |
|--------|--|--|--------------------|--|--|-------------------------|--|--|---------------|
| 1mile  |  |  | = 1.609 kilometers |  |  | 2,204  pounds           |  |  | = 1tonne      |
| 1 yard |  |  | = 0.9144 meter     |  |  | 2,000pounds/1 short ton |  |  | = 0.907 tonne |
| 1acre  |  |  | = 0.405 hectare    |  |  | 1 troy ounce            |  |  | = 31.103grams |
|        |

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Item 5.    Operating and FinancialReview and Prospects.

The following is a discussion of theresults of operations of the Company for the period commencing on thedate of incorporation of the Company (September 26, 2003) and endingMarch  31,  2006, and should be read in conjunction withthe audited consolidated financial statements of the Company for theperiod ending December  31,  2005, and the unauditedinterim financial statements for the Company for the period endingMarch  31,  2006, such periods, together with theaccompanying notes, included elsewhere in this Annual Report. Allreferences herein are to Canadian dollars. Please see‘‘Item 3. Key Information.’’ forexchange rate information for the Canadian dollar.

The financialstatements have been prepared in accordance with Canadian generallyaccepted accounting principles. Reference is made to Note 15 of theaudited consolidated financial statements for a discussion of thematerial differences between Canadian and United States generallyaccepted accounting principles, and their effect on theCompany’s financial statements. In addition to historicalinformation, the following discussion contains forward-lookingstatements that involve risk and uncertainties. The Company’sactual results could differ significantly from those anticipated inthese forward-looking statements as a result of certain factors,including those discussed in ‘‘RiskFactors’’ and elsewhere in this AnnualReport.

Overview

The Company was incorporatedSeptember  26,  2003 to engage in the acquisition,exploration, and, if warranted, the development of propertiescontaining precious and base metals and uranium. In particular, theCompany’s activities since incorporation have focused on thefinancing of its exploration of the following projects

|                    |  |  |             |  |  |                              |  |  |         |
|--------------------|--|--|-------------|--|--|------------------------------|--|--|---------|
| Project            |  |  | Type        |  |  | Location                     |  |  | Status  |
| Picachos           |  |  | Copper,Gold |  |  | Mexico                       |  |  | Active  |
| Irhazer and InGall |  |  | Uranium     |  |  | Niger                        |  |  | Active  |
| Waterbury          |  |  | Uranium     |  |  | Saskatchewan,Canada          |  |  | Active  |
| North RaeUranium   |  |  | Uranium     |  |  | Quebec,Canada                |  |  | Active  |
| Saguenay           |  |  | Uranium     |  |  | Quebec,Canada                |  |  | Active  |
| Bear               |  |  | Copper,Gold |  |  | Northwest Territories,Canada |  |  | Dropped |
| FireFly            |  |  | Uranium     |  |  | Utah, UnitedStates           |  |  | Dropped |
|                    |

On July  27,2004 the Company completed a 2 for 1 stock split, pursuant to whicheach issued Share of the Company was subdivided into two Shares. OnSeptember  6,  2005 the Company completed a second 2 for 1stock split, pursuant to which each issued Share of the Company wassubdivided into two Shares. Per Share amounts in this Annual Reporthave been retroactively adjusted to reflect the stocksplits.

A. Operating Results

TheCompany commenced operations during September  2003. FromSeptember  26,  2003 to March  31,  2005,Management devoted most of its time and resources toward (i) organizingthe Company, (ii) negotiating the property acquisition agreements and(iii) evaluating properties for acquisition. During this time, norevenues were realized.

The Company funded operations during theperiod from incorporation (September 26, 2003) to December31,  2004 through the net proceeds of various financings. OnJanuary  27,  2005, the Company completed a non-brokeredprivate placement of 1,333,334 units at a price of $0.375 per unit forgross proceeds of $500,000. Each unit consists of one common share andonce common share purchase warrant exercisable at a price of $0.465until July  27,  2006. In October  2005,455,000 share purchase warrants, at an exercise price of $0.475, wereexercised, resulting in proceeds of $216,125. On December21,  2005, the Company completed a private placement of 1,707,665flow-through common shares at a price of $0.60 per Share and 909,091units at a price of $0.55 per unit. Each unit consists of one commonshare and one-half of one common share purchase warrant exercisable ata price of 

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$0.70 per Share until December21,  2006. The Company paid a broker a commission of $106,700 andissued broker warrants entitling it to acquire 63,636 units at anexercise price of $0.55 per unit until December  21,2006.

On October  14,  2005, 1,900,000 stock optionswere granted to the Company’s new president, Marek Kreczmer.These stock options are exercisable at a price of $0.75 per share, andexpire after five years.

At December  31,  2005, theCompany had working capital of $1,603,476, up from $964,035 atDecember  31,  2004. This increase resulted from the netproceeds raised through equity financings in 2005 less operating andmineral property costs incurred during the same period.

OnMay  5,  2006 the Company completed a private placementfinancing of 21,144,027 units of for gross proceeds of $17,972,423.Each unit (priced at $0.85 per unit) consists of one common share andone half of one common share purchase warrant. Each whole warrantentitles the holder to purchase one additional common share of theCompany at a price of $1.15 until either (i) the second anniversary ofthe closing date; or (ii) if the common shares of Northwestern commencetrading on either Tier 1 of the TSX Venture Exchange or the TorontoStock Exchange prior to the second anniversary of the closing date, thefifth anniversary of the closingdate.

B.   Liquidity and CapitalResources

At March  31,  2006, the Company hadworking capital (including cash of $1,307,483) of approximately$1,190,066. The current working capital is the balance left from theproceeds of its equity fundings, after deducting the costs of raisingthat funding, payment of outstanding accounts payable, payment of theCompany’s general and administrative costs, and the monies whichhave been spent acquiring and exploring its properties to thatdate.

On May  5,  2006 the Company completed aprivate placement financing of 21,144,027 units of for gross proceedsof $17,972,423. Each unit (priced at $0.85 per unit) consists of onecommon share and one half of one common share purchase warrant. Eachwhole warrant entitles the holder to purchase one additional commonshare of the Company at a price of $1.15 until either (i) the secondanniversary of the closing date; or (ii) if the common shares ofNorthwestern commence trading on either Tier 1 of the TSX VentureExchange or the Toronto Stock Exchange prior to the second anniversaryof the closing date, the fifth anniversary of the closingdate.

On April  28,  2006 the Company issued 100,000common shares to Azimut Exploration Inc. as partial payment for theNorth Rae Project.

At June  13,  2006, there wereoutstanding 13,570,528 share purchase warrants, 63,636 broker warrantsand 3,980,000 stock options, which entitle the holders to purchasecommon shares of the Company.

The Company does not have anymaterial commitments for capital expenditures. The Company does nothave any debt instruments outstanding. Other than its explorationcommitments and purchase/option payment commitments described in F.Tabular Disclosure of Contractual Obligations, the Company does notanticipate having to commit to undertake any significant capitalexpenditures in the foreseeable future.

The Company’sexpenditures to date have satisfied the various conditions necessary tomaintain the Company’s option agreements on the Company’sPichachos copper-gold and the Irhazer and In Gall, Waterbury and NorthRae Uranium Projects. For the next twelve months, the Companyanticipates that it will require approximately $5,000,000 in funds tosatisfy its share of the exploration costs on these projects. TheCompany will need $3,275,000 to satisfy its exploration and purchasepayment obligations for its various property interests. In addition,the Company believes it will need a minimum of $500,000 for expensesrelating to administration, salaries, and shareholder and publicrelations activities. The Company has sufficient capital on hand toundertake is exploration plans and fund its general and administrativeexpenses. However, there can be no assurance the Company will be ableto raise the necessary funds to fulfill its obligations.

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Since the Picachos Project, Irhazer and InGall, Waterbury and North Rae Projects are only at the explorationstage, the Company has no sources of revenue other than interest earnedon its cash. The primary source of funding for the Company is the issueof equity capital. The Company’s capital requirements in thefuture will be largely dependant upon the success of its variousexploration programs. Until such time as a feasibility study iscompleted and a production decision is made with regard to one of theCompany’s properties, it is expected that the only availablesource of future capital will be through the issuance of additionalequity shares. The availability of equity capital, and the price atwhich additional equity could be issued, is dependent upon the successof the Company’s exploration activities, and upon the state ofthe capital markets generally. See ‘‘Item 3. KeyInformation. D. RiskFactors.’’

C.   Research anddevelopment, patents and licenses, etc.

Since itsincorporation on September  26,  2003 the Company has notengaged in any research and developmentactivities.

D.  Trend Information.

NotApplicable.

E.   Off-Balance SheetArrangements.

The Company is not engaged in any off-balancesheet arrangements.

F.   Tabular Disclosure of ContractualObligations.

The Company’s contractual obligationsare in connection with its following mining interests: (i) an option toacquire a 100% interest in properties in Mexico's Durangoprovinces (the ‘‘Picachos Project’’), (ii)the acquisition in March  2006 of the right to explore twouranium properties in the Republic of Niger, Africa, (iii) an option toacquire up to a 65% interest in the North Rae Uranium Project,Northern Quebec, Canada, (iv), an option to acquire a 75%interest in the Waterbury Project, which consists of nine uraniumclaims in the Athabasca Basin, Saskatchewan, Canada, and (v) a Letterof Intent dated June  9,  2006 granting it the right toconduct due diligence and to potentially enter into an option agreementto acquire the Sequaney Uranium Property, located in Charlevoix County,Quebec. The payments described in the following tableare optional by the Company, are not contractual obligations of theCompany, and, if the Company does not make any payment, the Companywill only lose its interest in that particular property.Reference is made to ‘‘Item 4. Information on theCompany. D. Property, Plants and Equipment’’for a description of the Company’s obligations regarding itsvarious property interests.

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|                                                      |  |  |        |   |            |                      |  |  |           |   |           |           |  |  |                    |   |            |   |  |  |  |   |           |   |  |  |  |   |           |   |
|------------------------------------------------------|--|--|--------|---|------------|----------------------|--|--|-----------|---|-----------|-----------|--|--|--------------------|---|------------|---|--|--|--|---|-----------|---|--|--|--|---|-----------|---|
|                                                 |  |  |   |   |            | Paymentsdue byPeriod |
|                                                 |  |  | TOTAL  |   |            | LESSTHAN ONE YEAR    |  |  | 1-3 YEARS |   |           | 3-5 YEARS |  |  | MORETHAN FIVEYEARS |
| Option PaymentsNecessary to Retain PropertyInterests |  |  |        |   |       |                      |  |  |           |   |      |           |  |  |                    |   |       |   |  |  |  |   |      |   |  |  |  |   |      |   |
| Paymentsrelating to PicachosProject                  |  |  |        | $ | 22,000,000 |                      |  |  |           | $ | 1,000,000 |           |  |  |                    | $ | 4,000,000  |   |  |  |  | $ | 9,000,000 |   |  |  |  | $ | 8,000,000 |   |
| Paymentsrelating to NigerConcessions                 |  |  |        | $ | 4,400,000  |                      |  |  |           | $ | 400,000   |           |  |  |                    | $ | 4,000,000  |   |  |  |  |   | 0         |   |  |  |  |   | 0         |   |
| Paymentsrelating to WaterburyProject                 |  |  |        | $ | 2,150,000  |                      |  |  |           | $ | 1,350,000 |           |  |  |                    | $ | 800,000    |   |  |  |  |   | 0         |   |  |  |  |   | 0         |   |
| Paymentsrelating to North Rae UraniumProject         |  |  |        | $ | 3,110,000  |                      |  |  |           | $ | 480,000   |           |  |  |                    | $ | 1,870,000  |   |  |  |  | $ | 760,000   |   |  |  |  |   | 0         |   |
| Paymentsrelating to Sequaney UraniumProperty         |  |  |        | $ | 545,000    | *                    |  |  |           | $ | 45,000    |           |  |  |                    |   |            | * |  |  |  |   |           | * |  |  |  |   |           | * |
| TOTALFOR ALL PROPERTYINTERESTS                       |  |  |        | $ | 32,205,000 |                      |  |  |           | $ | 3,275,000 |           |  |  |                    | $ | 10,670,000 |   |  |  |  | $ | 9,760,000 |   |  |  |  | $ | 8,000,000 |   |
|                                                      |

|   |                                                                                 |
|---|---------------------------------------------------------------------------------|
| * | Thetiming of the additional $500,000 payments cannot be determined at thistime. |

Item 6.    Directors, Senior Management andEmployees.

A. Directors and SeniorManagement.

Directors and Officers.    Thenames, municipalities of residence and principal occupations of thedirectors and officers of the Company are asfollows:

|                                             |  |  |                                             |  |  |                                                                              |  |  |           |  |    |  |
|---------------------------------------------|--|--|---------------------------------------------|--|--|------------------------------------------------------------------------------|--|--|-----------|--|----|--|
| NAME& MUNICIPALITY OFRESIDENCE     |  |  | POSITIONWITH COMPANY                   |  |  | PRINCIPALOCCUPATION                                                     |  |  | AGE  |
| Kabir AhmedToronto, OntarioCanada           |  |  | Chairmanof the Board ofDirectors            |  |  | Chairmanof the Board of Directors – Northwestern Mineral VenturesInc.  |  |  |           |  | 38 |  |
| Marek KreczmerBritish Columbia, Canada      |  |  | Chief Executive Officer, President,Director |  |  | Chief Executive Officer, President –Northwestern Mineral Ventures Inc. |  |  |           |  | 55 |  |
| AntonEsterhuizen SouthAfrica                |  |  | Director                                    |  |  | Geologist, Managing Director –Pangea Exploration (Pty)                 |  |  |           |  | 55 |  |
| SimonLawrence Toronto, OntarioCanada        |  |  | Director                                    |  |  | MiningEngineer                                                               |  |  |           |  | 43 |  |
| Joseph D.Horne Kirkland Lake, OntarioCanada |  |  | Director                                    |  |  | President & CEO – VaultMinerals Inc.                               |  |  |           |  | 42 |  |
| ErrolFarr Bradford, Ontario Canada          |  |  | ChiefFinancial Officer                      |  |  | Certified ManagementAccountant                                               |  |  |           |  | 43 |  |
|                                             |

Kabir Ahmed, a securities lawyer, currently serves as theCompany’s Chairman of the Board. Mr.  Ahmed has announcedits intention to resign from the Company’s Board of Directors onor about July  7,  2006. He was also the founding CEO and adirector of Southampton Ventures Inc., a junior mineral explorationcompany he took public onto the TSX Venture Exchange. Mr.  Ahmedis also the President of Richmond Capital Partners Inc., a fullylicensed Limited Market Dealer in Ontario. Prior to that, he served asthe Ontario Regional Manager for the Toronto Stock Exchange. Mr.Ahmed holds a B.Sc. from the University of Toronto, an LL.B. fromOsgoode Hall Law School, and a Masters of Business Administration inCorporate Finance from the Schulich School of Business. He has been

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admitted to the Bars of New York and Ontario.Mr.  Ahmed has not entered into any non-competition ornon-disclosure agreement with the Company.

MarekKreczmer has been a geologist and mining executive for more than30 years. He has worked for major and emerging mining industrycompanies focused on uranium, base and precious metals. Mr.Kreczmer also has extensive experience in corporate governance andadministration as a current and former director of several publiclylisted mining companies in Canada. In 1991, Mr.  Kreczmer foundedTan Range Exploration Corporation (now Tanzanian Royalty ExplorationCorporation), a company active in the Tanzania region of Africa, whichhe served as the President through to 2003. His background includeswork with the uranium giant Cameco Corporation, AGIP Canada Ltd.,Granges Exploration Ltd., Golden Patriot Mining Inc., Soho ResourcesCorp. and Northern Canadian Minerals Inc. Mr.  Kreczmer obtaineda B.Sc. Honours (Mineral Deposits Major) from the University of Ottawaand a Master of Science specializing in mineral deposits from theUniversity of Toronto. He is a member of the Association ofProfessional Engineers of Saskatchewan and the Prospectors andDevelopers Association of Canada (PDAC). Mr.  Kreczmerdedicatesapproximately 70% of his time to the Company and has not enteredinto any non-competition or non-disclosure agreement with theCompany.

Errol Farr was appointed the Company’sChief Financial Officer in January  2005. A Certified ManagementAccountant, Mr.  Farr has 15 years of experience as a CertifiedManagement Accountant (CMA) including the supervision of finance,accounting and operations departments. His background also consists of10 years with numerous publicly listed junior mining companies, as wellas consulting assignments. Mr.  Farr studied at Queen'sUniversity and received his CMA accreditation in 1990.

AntonEsterhuizen, M.Sc., B.Sc. (Hons), is an experienced geologist withextensive experience in Africa. Among his career highlights, he iscredited with the discovery and evaluation of the Xstrata Group'sworld-class, high-grade Rhovan vanadium deposit in South Africa, there-evaluation of the sizeable Burnstone gold deposit, also in SouthAfrica, and a number of Tanzanian gold deposits. At present, Mr.Esterhuizen is Managing Director of Pangea Exploration (Pty) Limited inJohannesburg and a director of Tanzanian Royalty ExplorationCorporation. His background also includes work with African preciousmetals producer Gold Fields Ltd. Mr.  Esterhuizen is a fellow ofthe Geological Society of South Africa and the first recipient of theDes Pretorius Memorial Award for outstanding work in economic geologyin Africa. He also received the Dreyer Award from the Society forMining Metallurgy and Exploration Inc. (USA) for outstandingachievements in applied economic geology, one the world's mostprestigious awards for exploration.

Simon LawrenceMr.  Lawrence,  B.Eng (Mining Engineering) ACSM, MBA(International Finance), is a seasoned professional in the resourcessector. Earlier in his career, Mr.  Lawrence worked in miningproduction on the underground platinum and gold mines of South Africa.Following this Mr.  Lawrence worked for HSBC James Capel and ABNAMRO Bank in London, England, where he was involved in financing anddeveloping mining exploration companies in numerous countriesthroughout the world. More recently, Mr Lawrence was VP CorporateDevelopment of Gabriel Resources Ltd, where he was a key team member inthe discovery, development and financing of the multi-million ounceRosia Montana gold project in Romania, Eastern Europe. Mr.Lawrence was also a founder and director of Canadian-listed AfricanGold Group and European Goldfields Limited.

Joseph D.Horne studied at the Haileybury School of Mines, and has worked inthe mining industry for more than 20 years, with his experiencespanning exploration and project development in both underground andopen-pit production environments. Currently the President and ChiefExecutive Officer of Vault Minerals Inc., Mr.  Horne also hasextensive exploration and corporate experience through his work withmore than a dozen mining contractors, producers, junior explorers andconsulting/contracting firms.

On May  25,  2006 Mr.Wayne Beach, Jon North, and J. Scott Waldie resigned from theCompany’s Board of Directors and were replaced by Messrs.Esterhuizen, Lawrence, and Horne.

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B. Compensation.

Thefollowing table sets forth all annual and long-term compensation forservices rendered in all capacities to the Company for the fiscal yearended December  31,  2005 in respect of the individuals whowere, at December  31,  2005, the President and ChiefExecutive Officer and the Chief Financial Officer (collectively, the‘‘Named Executives’’) of theCompany.

Summary CompensationTable

|                                              |           |  |             |          |  |                    |                              |        |                        |                                     |  |                          |                                            |     |  |                |  |  |  |     |  |  |  |  |  |     |  |  |  |  |  |     |  |  |  |  |  |     |  |  |  |  |  |     |  |
|----------------------------------------------|-----------|--|-------------|----------|--|--------------------|------------------------------|--------|------------------------|-------------------------------------|--|--------------------------|--------------------------------------------|-----|--|----------------|--|--|--|-----|--|--|--|--|--|-----|--|--|--|--|--|-----|--|--|--|--|--|-----|--|--|--|--|--|-----|--|
| NameandTitle                                 |           |  | PeriodEnded |          |  | AnnualCompensation |                              |        | Long Term Compensation |                                     |  | AllOtherCompen-sation($) |
|                                              | Salary($) |  |             | Bonus($) |  |                    | Other AnnualCompen-sation($) |        |                        | SecuritiesUnderOptionsGranted(1)(#) |  |                          | RestrictedSharesorRestrictedShare Units($) |     |  | LTIPPayouts($) |
| Kabir AhmedChief ExecutiveOfficer            |           |  | Dec31, 2005 |          |  |                    | $                            | 90,000 |                        |                                     |  |                          |                                            | Nil |  |                |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |
| ErrolFarr, Chief FinancialOfficer            |           |  | Dec 31,2005 |          |  |                    | $                            | 21,000 | (1)                    |                                     |  |                          |                                            | Nil |  |                |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |
| RoderickChisholm Past Chief FinancialOfficer |           |  | Dec 31,2005 |          |  |                    | $                            | 3,000  | (2)                    |                                     |  |                          |                                            | Nil |  |                |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |
| MarekKreczmer President                      |           |  | Dec 31,2005 |          |  |                    | $                            | 21,000 | (3)                    |                                     |  |                          |                                            | Nil |  |                |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |  |  |  |  | Nil |  |
|                                              |

|  |
|--|
|  |  |
|  |

|    |                                                                                                                                                                                                                                                                                       |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1. | Mr.Farr receives a salary of $24,000 per annum, which salary commenced onFebruary  10,  2005. Accordingly, the total amount paid toMr.  Farr for the fiscal year ended December  31,2005 was based upon an annualized salary of $24,000 pro rated for hisperiod of employment in2005. |

|    |                                                                                                                                                                                                                                                                                                                                                                    |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | Mr.  Chisholm received asalary of $3,000 for 2005, which salary ceased on February10,  2005 when Mr.  Chisholm ceased to act as ChiefFinancial Officer of the Company. Accordingly, the total amount paid toMr.  Chisholm for the fiscal year ended December31,  2005 was based upon an annualized salary of $24,000 prorated for his period of employment in2005. |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3. | Mr.  Kreczmer receives asalary of $100,000 per annum, which salary commenced on October14,  2005 when Mr.  Kreczmer was appointed theCompany’s President. Accordingly, the total amount paid toMr.  Kreczmer for the fiscal year ended December31,  2005 was based upon an annualized salary of $100,000 prorated for his period of employment in 2005. On May  11,2006 Mr.  Kreczmer was appointed Chief ExecutiveOfficer. |

On May  25,  2006 the Company, throughits Compensation Committee consisting of Wayne Beach, Jon North, and J.Scott Waldie, established the following compensation plan for itsdirectors, which is retroactive to the Company’s incorporationon September  26,  2003:

1.    $10,000 per annumretainer for all directors;

2.    An additional $1,000 for eachboard of directors meeting attended during the year;

3.    Anadditional $2,500 to be paid to the Chair of the Audit Committee andthe Chair of the Compensation Committee;

4.    An additional$2,000 per annum to be paid to the Chair of the Corporate Governanceand Nomination Committee and Chair of the Environmental, Health &Safety Committee.

Director’s fees were calculated asfollows: (i) $10,000 per annum + (ii) seven board of directors meetingsper year ($7,000).

All persons who had served as a director ofthe Company since its incorporation on September  26,  2003received the following retroactivecompensation:

|  |          |                                                                                                                   |
|--|----------|-------------------------------------------------------------------------------------------------------------------|
|  | 1.  | Kabir Ahmed, Jon North and J.Scott Waldie – 2.5 years of service – payments of $42,500to each person. |

|  |          |                                                             |
|--|----------|-------------------------------------------------------------|
|  | 2.  | Wayne Beach – 14 monthsof service – $19,833.33. |

|  |          |                                                            |
|--|----------|------------------------------------------------------------|
|  | 3.  | Marek Kreczmer– 9 months of service – $12,750. |

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In addition, the Compensation Committeeawarded the following bonus payments on May  25,2006:

|  |          |                            |
|--|----------|----------------------------|
|  | 1.  | Jon North –$100,000; |

|  |          |                             |
|--|----------|-----------------------------|
|  | 2.  | Kabir Ahmed –$25,000. |

Kabir Ahmed serves as Chair of the Audit Committee.

Directors are also entitled to participate in the stock option planof the Company (the ‘‘Plan’’). As atJune  13,  2006, the Company had outstanding options topurchase 3,980,000 Shares, of which 3,250,000 may be exercised bydirectors. See ‘‘Summary of Stock OptionPlan.’’

Termination Agreements for ExecutiveOfficers and Directors. 

On May  25,  2006 theCompany agreed, in the event of a change in control of the Company, tomake the following payments to Kabir Ahmed, the Company’sChairman of the Board, and Marek Kreczmer, the Company’s ChiefExecutive Officer and President. Mr.  Ahmed and Mr.Kreczmer would each be entitled to a severance payment equal to twoyears salary in the event their consulting agreements were terminatedin connection with any acquisition of the Company’s Sharesresulting in a change of control of the Company, provided the Companyhas a project which has achieved commercial feasibility at that time.In the event none of the Company’s projects had achievedcommercial feasibility by such time, Mr.  Ahmed and Mr.Kreczmer would each receive one year’s salary.

StockOption Plan.

The Company’s shareholders approved thePlan on June  23,  2004. An aggregate of 4,730,000 Sharesare currently reserved for issue upon the exercise of options grantedpursuant to the Plan. An aggregate of 3,980,000 options have beengranted under the Plan to date, leaving an aggregate of 750,000 optionsavailable for grant under the Plan as of June  13,2006.

The purpose of the Plan is to attract, retain and motivatedirectors, officers, employees and other service providers by providingthem with the opportunity, through share options, to acquire aproprietary interest in the Corporation and benefit from its growth.The options are non-assignable and may be granted for a term notexceeding five years.

Options may be granted under the Plan onlyto directors, officers, employees and other service providers subjectto the rules and regulations of applicable regulatory authorities andany Canadian stock exchange upon which the Common Shares may be listedor may trade from time to time. The number of Common Shares reservedfor issue to any one person pursuant to the Plan may not exceed5% of the issued and outstanding Common Shares at the date ofsuch grant. The exercise price of options issued may not be less thanthe fair market value of the Common Shares at the time the option isgranted, subject to any discounts permitted by applicable legislativeand regulatory requirements.

Options/SARs Granted duringFiscal Year Ended December  31,2005

The following table provides details onstock options granted to the Named Executives and Directors during theyear ended December  31,2005:

|               |  |  |                                        |  |           |                                                             |  |  |                                  |  |     |                                                                               |  |  |                |   |      |  |  |  |  |   |      |  |  |  |                 |
|---------------|--|--|----------------------------------------|--|-----------|-------------------------------------------------------------|--|--|----------------------------------|--|-----|-------------------------------------------------------------------------------|--|--|----------------|---|------|--|--|--|--|---|------|--|--|--|-----------------|
| Name          |  |  | SecuritiesUnderOptions/SARs Granted(#) |  |           | % ofTotalOptions/SARsGranted toEmployees inFinancialYear(1) |  |  | Exercise orBasePrice($/Security) |  |     | Market ValueofSecuritiesUnderlyingOptions/SARs on theDate ofGrant($/Security) |  |  | ExpirationDate |
| MarekKreczmer |  |  |                                        |  | 1,900,000 |                                                             |  |  |                                  |  | 100 | %                                                                             |  |  |                | $ | 0.75 |  |  |  |  | $ | 0.75 |  |  |  | October14, 2010 |
|               |

Notes

An aggregate of1,900,000 options were granted by the Company during the financial yearended December  31,  2005.

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Upon exercise in accordance with theterms thereof, each of these options entitles the holder thereof toacquire one Share.

No amount has been set aside or accrued by theCompany and its subsidiaries during the last fiscal year of the Companyto provide pension, retirement or similar benefits for directors andofficers of the Company pursuant to any existing plan provided orcontributed to by the Company and its subsidiaries, or otherwise.

Roderick Chisholm, who resigned as the Company’s chieffinancial officer in 2005, exercised his options in January andFebruary  2005. Mr.  Chisholm exercised his entire optionof 100,000 Shares, resulting in proceeds to the Company of$57,000.

C.  BoardPractices.

The directors of the Company are asfollows:

|                  |  |  |                      |  |  |                             |
|------------------|--|--|----------------------|--|--|-----------------------------|
| NAME        |  |  | POSITION        |  |  | DATEAPPOINTEDDIRECTOR  |
| KabirAhmed*      |  |  | Chairmanof the Board |  |  | September  27,2003          |
| MarekKreczmer    |  |  | Director             |  |  | October  14,2005            |
| AntonEsterhuizen |  |  | Director             |  |  | May  25,2006                |
| SimonLawrence    |  |  | Director             |  |  | May  25,2006                |
| Joseph D. Horne  |  |  | Director             |  |  | May  25,2006                |
|                  |

|  |
|--|
|  |  |
|  |

|   |                                                                                                                        |
|---|------------------------------------------------------------------------------------------------------------------------|
| * | Mr.  Ahmed hasannounced his intention to resign from the Company’s Board ofDirectors on or about July  7,  2006. |

Composition of the Audit Committee

TheCompany’s audit committee is comprised of the Chairman and theindependent, non-management directors of the Board of Directors.

Pre-Approval Policies and Procedures

Inthe event that the Company wishes to retain the services of itsexternal auditors for tax compliance, tax advice or tax planning, theChief Financial Officer of the Company shall consult with the chair ofthe audit committee, who shall have the authority to approve ordisapprove on behalf of the audit committee, such non-audit services.All other non-audit services shall be approved or disapproved by theaudit Committee as a whole.

CompensationCommittee

The members of the Company’s compensationcommittee are the independent, non-management directors of the Board ofDirectors. The Compensation Committee may from time to time determinethe compensation of the Company’s officers and directors bytaking into consideration, among other factors, corporate performance,industry standards for compensation, and the state of theCompany’s treasury.

D.    Employees.

TheCompany has three consultants acting in a managementcapacity:    Kabir Ahmed, its Chairman of the Board, MarekKreczmer, its Chief Executive Officer and President, and Errol Farr,its Chief Financial Officer. Mr.  Ahmed has announced hisintention to resign from the Company’s Board of Directors on orabout July  7,  2006.

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E.    ShareOwnership.

The following table sets forth the shareholdingsof the Company’s directors and senior management as atJune  23,2006.

|                                    |  |  |                         |  |  |                            |  |           |                                      |  |  |  |  |      |   |
|------------------------------------|--|--|-------------------------|--|--|----------------------------|--|-----------|--------------------------------------|--|--|--|--|------|---|
| NAME                          |  |  | POSITION           |  |  | NUMBEROF SHARESOWNED  |  |           | PERCENTAGEOFOUTSTANDINGSHARES*  |
| KabirAhmed**                       |  |  | Chairmanof theBoard     |  |  |                            |  | 3,900,000 | ***                                  |  |  |  |  | 3.86 | % |
| MarekKreczmer                      |  |  | CEO, President,Director |  |  |                            |  | 0         |                                      |  |  |  |  | 0    |   |
| AntonEsterhuizen                   |  |  | Director                |  |  |                            |  | 0         |                                      |  |  |  |  | 0    |   |
| SimonLawrence                      |  |  | Director                |  |  |                            |  | 0         |                                      |  |  |  |  | 0    | % |
| JosephD. Horne                     |  |  | Director                |  |  |                            |  | 0         |                                      |  |  |  |  | 0    |   |
| ErrolFarr                          |  |  | Chief FinancialOfficer  |  |  |                            |  | 0         |                                      |  |  |  |  | 0    |   |
| Officers &Directors, as agroup |  |  |                    |  |  |                            |  | 3,900,000 | ***                                  |  |  |  |  | 3.86 | % |
|                                    |

|  |
|--|
|  |  |
|  |

|   |                                                                  |
|---|------------------------------------------------------------------|
| * | AtJune  23,  2006 the Company had 101,126,117 Sharesoutstanding. |

|    |                                                                                                                           |
|----|---------------------------------------------------------------------------------------------------------------------------|
| ** | Mr. Kabir Ahmedhas announced his intention to resign from the Company’s Boardof Directors on or about July  7,2006. |

|     |                                                                                                                                                                           |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *** | These amounts do notreflect the Shares the Company’s officers and directors can eachacquire pursuant to the exercise of options, as set forth in thefollowingtable. |

|                  |  |  |                |  |           |               |  |  |           |  |        |                 |  |  |                |  |  |                  |
|------------------|--|--|----------------|--|-----------|---------------|--|--|-----------|--|--------|-----------------|--|--|----------------|--|--|------------------|
| Name             |  |  | NumberofShares |  |           | ExercisePrice |  |  | GrantDate |  |        | Expiration Date |
| KabirAhmed       |  |  |                |  | 400,000   |               |  |  |           |  | 0.2875 |                 |  |  | March26,2004   |  |  | March26,  2009   |
| MarekKreczmer    |  |  |                |  | 1,900,000 |               |  |  |           |  | 0.75   |                 |  |  | Oct.  14,2005  |  |  | Oct.  14,2010    |
|             |  |  |                |  | 250,000   |               |  |  |           |  | 0.68   |                 |  |  | May25,  2006   |  |  | May  25,2011     |
| AntonEsterhuizen |  |  |                |  | 200,000   |               |  |  |           |  | 0.68   |                 |  |  | May  25,2006   |  |  | May  25,  2011   |
| SimonLawrence    |  |  |                |  | 200,000   |               |  |  |           |  | 0.68   |                 |  |  | May  25,2006   |  |  | May  25,  2011   |
| Joseph D.Horne   |  |  |                |  | 200,000   |               |  |  |           |  | 0.68   |                 |  |  | May  25,2006   |  |  | May  25,  2011   |
| ErrolFarr        |  |  |                |  | 100,000   |               |  |  |           |  | 1.10   |                 |  |  | March  27,2006 |  |  | March  27,  2011 |
|                  |

WayneBeach, formerly Chairman of the Board of Directors until hisresignation on May  25,  2006, owns 4,399,319 Shares. JonNorth and J. Scott Waldie, directors who resigned on May25,  2006, each own options to acquire 400,000 Shares at anexercise price of $0.2875 per Share. These options expire 90 days fromtheir resignation.

Pursuant to an Escrow Agreement datedJanuary  9,  2004 among Northwestern Mineral Ventures Inc.,Equity Transfer Services Inc. (the ‘‘EscrowAgent’’), and Kabir Ahmed(‘‘Ahmed’’), in connection with theCompany’s initial public offering of up to 15,000,000 Shares(pre-splits) in February  2004, Ahmed agreed to place 4,000,000Shares (post two 2-1 stock-splits) in escrow with the Escrow Agent, tobe released from escrow asfollows:

|                                                                                                        |  |  |                                       |
|--------------------------------------------------------------------------------------------------------|--|--|---------------------------------------|
| DATE                                                                                                   |  |  | NUMBEROF SHARES RELEASED FROMESCROW   |
| DateCompany’s Shares are listed on TSX Venture Exchange(‘‘ListingDate’’) |  |  | 1/10of Shares in Escrow               |
| 6 Months After ListingDate                                                                             |  |  | 1/6 of Shares Remaining in Escrow     |
| 12Months After Listing Date                                                                            |  |  | 1/5 of Shares Remaining inEscrow      |
| 18 Months After Listing Date                                                                           |  |  | 1/4 ofShares Remaining in Escrow      |
| 24 Months After ListingDate                                                                            |  |  | 1/3 of Shares Remaining in Escrow     |
| 30Months After Listing Date                                                                            |  |  | 1⁄2 of SharesRemaining in Escrow |
| 36 Months After ListingDate                                                                            |  |  | any Shares Remaining inEscrow         |
|                                                                                                        |

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Item 7.    Major Shareholders andRelated Party Transactions.

A.    MajorShareholders.

At June  23,  2006 Management isunaware of any person beneficially owning 5% or more of theCompany’s outstanding Shares.

At June  23,2006, the Company had 19 U.S. shareholders of record, holding18,790,848 Shares, which represented 26.76% of theCompany’s outstanding Shares. At such date, there were noarrangements, the operation of which could result in a change ofcontrol. All shareholders have the same voting rights with respect tothe Shares.

B.    Related PartyTransactions.

Kabir Ahmed, currently the Chairman of theBoard of Directors, and previously the Company’s President andChief Executive officer, and owner of 3.86% of theCompany’s outstanding Shares, was a director of RNC Gold Inc.‘‘(RNC’’) at the time the Company enteredinto its option agreement to acquire a 50% interest in thePicachos Project in Mexico. Mr.  Ahmed resigned his position asdirector of RNC in early 2005, prior to the time the Company negotiatedand entered into its Letter of Intent in May  2005 with RNC toacquire a 100% interest in the Picachos Project. Reference ismade to  ‘‘Item 4. Information on theCompany’’ for a description of thesetransactions.

‘‘No other executive officer, personowning at least 5% of the Company’s outstanding Shares,or affiliate thereof, has or has had any material interest, directly orindirectly, in any transaction involving the Company since itsincorporation, or in any proposed transaction involving theCompany.

Item 8.    FinancialInformation.

A.    Consolidated Statements andOther Financial Information.

Reference is made to‘‘Item 18. Financial Statements’’for the financial statements included in this AnnualReport.

There are no legal proceedings of a materialnature pending against the Company, or its sole U.S. subsidiary. TheCompany is unaware of any legal proceedings known to be contemplated byany governmental authorities.

The Company has never paida dividend and it is unlikely that the Company will declare or pay adividend until warranted based upon the factors outlined below. Thedeclaration, amount and date of distribution of any dividends in thefuture will be decided by the Board of Directors from time-to-time,based upon, and subject to, the Company’s earnings, financialrequirements and other conditions prevailing at thetime.

B.    Significant Changes.

InMay  2006, the Company completed a private placement of21,144,027 units, resulting in gross proceeds of $17,972,423. Otherthan the May  2006 financing, there have been no significantchanges since the Company’s unaudited financial statements atMarch  31,  2006.

Item 9.    TheOffer and Listing.

A.    Offer and ListingDetails.

The Company’s Shares commencedtrading (i) on the TSX Venture Exchange in Canada on March19,  2004 under the symbol ‘‘NWT,’’(ii) on the Berlin Stock Exchange on March  30,  2004(‘‘NMV’’), (iii) the Frankfurt StockExchange on April  5,  2004(‘‘NMV’’), and (iv) on the NASD OTCBulletin Board on August  25,  2004(‘‘NWTMF’’).

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Following is information on thetrading history of the Company’s Shares:

The lowand high market prices for the Shares, on a quarterly basis, on the TSXVenture Exchange are as follows:

TSX VentureExchange

|                             |  |  |     |  |       |            |  |  |  |  |      |   |
|-----------------------------|--|--|-----|--|-------|------------|--|--|--|--|------|---|
| MONTHANDYEAR           |  |  | LOW |  |       | HIGH  |
| March2004                   |  |  |     |  | .57   |            |  |  |  |  | 1.39 |   |
| April –June  2004     |  |  |     |  | 1.20  |            |  |  |  |  | 1.55 |   |
| July– September  2004 |  |  |     |  | 0.56  | *          |  |  |  |  | 0.79 | * |
| October –December2004 |  |  |     |  | 0.64  | *          |  |  |  |  | 0.79 | * |
| January –March  2005  |  |  |     |  | 0.70  | *          |  |  |  |  | 1.01 | * |
| April– June2005       |  |  |     |  | 0.65  | *          |  |  |  |  | 1.12 | * |
| July –September2005   |  |  |     |  | 0.445 |            |  |  |  |  | 0.97 |   |
| October –December2005 |  |  |     |  | 0.46  |            |  |  |  |  | 0.87 |   |
|                             |

|  |
|--|
|  |  |
|  |

|   |                   |
|---|-------------------|
| * | post-splitpricing |

The low and high market prices for the Shares on theTSX Venture Exchange for the period January  1,  2006 toJune  30,  2006 are as follows:

TSX VENTUREEXCHANGE 

|              |  |  |           |  |      |            |  |  |  |  |      |    |
|--------------|--|--|-----------|--|------|------------|--|--|--|--|------|----|
| DATE         |  |  | LOW  |  |      | HIGH  |
| January2006  |  |  |           |  | 0.63 |            |  |  |  |  | 0.92 |    |
| February2006 |  |  |           |  | 0.74 |            |  |  |  |  | 0.87 |    |
| March2006    |  |  |           |  | 0.75 |            |  |  |  |  | 1.35 |    |
| April2006    |  |  |           |  | 0.87 |            |  |  |  |  | 1.16 |    |
| May2006      |  |  |           |  | 0.61 |            |  |  |  |  | 1.06 |    |
| June2006     |  |  |           |  | 0.40 | **         |  |  |  |  | 0.63 | ** |
|              |

|  |
|--|
|  |  |
|  |

|   |                   |
|---|-------------------|
| * | post-splitpricing |

|    |                      |
|----|----------------------|
| ** | As of June  23,2006. |

The closing price of the Shares on the TSX VentureExchange on June  23,  2006 was $0.55.

The low andhigh market prices for the Shares, on a quarterly basis, on the BerlinStock Exchanges and Frankfurt Stock Exchanges are asfollows:

BERLIN STOCK EXCHANGE(EUROS)

|                             |  |  |     |  |      |            |  |  |  |  |      |  |
|-----------------------------|--|--|-----|--|------|------------|--|--|--|--|------|--|
| MONTHANDYEAR           |  |  | LOW |  |      | HIGH  |
| April– June2004       |  |  |     |  | 0.74 |            |  |  |  |  | 0.94 |  |
| July –September  2004 |  |  |     |  | 0.35 |            |  |  |  |  | 0.78 |  |
| October –December2004 |  |  |     |  | 0.39 |            |  |  |  |  | 0.52 |  |
| January –March  2005  |  |  |     |  | 0.40 |            |  |  |  |  | 0.63 |  |
| April– June2005       |  |  |     |  | 0.39 |            |  |  |  |  | 0.74 |  |
| July –September2005   |  |  |     |  | 0.26 |            |  |  |  |  | 0.71 |  |
| October –December2005 |  |  |     |  | 0.33 |            |  |  |  |  | 0.63 |  |
|                             |

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BERLIN STOCK EXCHANGE(EUROS)

|                    |  |  |           |  |      |            |  |  |  |  |      |   |
|--------------------|--|--|-----------|--|------|------------|--|--|--|--|------|---|
| MONTHANDYEAR  |  |  | LOW  |  |      | HIGH  |
| January2006        |  |  |           |  | 0.41 |            |  |  |  |  | 0.68 |   |
| February2006       |  |  |           |  | 0.50 |            |  |  |  |  | 0.65 |   |
| March2006          |  |  |           |  | 0.54 |            |  |  |  |  | 0.90 |   |
| April2006          |  |  |           |  | 0.62 |            |  |  |  |  | 0.88 |   |
| May2006            |  |  |           |  | 0.42 |            |  |  |  |  | 0.77 |   |
| June2006           |  |  |           |  | 0.27 | *          |  |  |  |  | 0.46 | * |
|                    |

|  |
|--|
|  |  |
|  |

|   |                       |
|---|-----------------------|
| * | Asof June  23,  2006. |

FRANKFURT STOCKEXCHANGE(EUROS)

|                             |  |  |     |  |      |            |  |  |  |  |      |  |
|-----------------------------|--|--|-----|--|------|------------|--|--|--|--|------|--|
| MONTHANDYEAR           |  |  | LOW |  |      | HIGH  |
| April– June2004       |  |  |     |  | 0.70 |            |  |  |  |  | 0.87 |  |
| July –September  2004 |  |  |     |  | 0.35 |            |  |  |  |  | 0.72 |  |
| October –December2004 |  |  |     |  | 0.40 |            |  |  |  |  | 0.53 |  |
| January –March  2005  |  |  |     |  | 0.43 |            |  |  |  |  | 0.66 |  |
| April– June2005       |  |  |     |  | 0.37 |            |  |  |  |  | 0.74 |  |
| July –September2005   |  |  |     |  | 0.27 |            |  |  |  |  | 0.71 |  |
| October –December2005 |  |  |     |  | 0.35 |            |  |  |  |  | 0.63 |  |
|                             |

FRANKFURT STOCKEXCHANGE(Euros)

|                    |  |  |           |  |      |            |  |  |  |  |      |   |
|--------------------|--|--|-----------|--|------|------------|--|--|--|--|------|---|
| MONTHANDYEAR  |  |  | LOW  |  |      | HIGH  |
| January2006        |  |  |           |  | 0.43 |            |  |  |  |  | 0.67 |   |
| February2006       |  |  |           |  | 0.54 |            |  |  |  |  | 0.63 |   |
| March2006          |  |  |           |  | 0.57 |            |  |  |  |  | 0.94 |   |
| April2006          |  |  |           |  | 0.61 |            |  |  |  |  | 0.88 |   |
| May2006            |  |  |           |  | 0.40 |            |  |  |  |  | 0.76 |   |
| June2006           |  |  |           |  | 0.29 | *          |  |  |  |  | 0.45 | * |
|                    |

|  |
|--|
|  |  |
|  |

|   |                       |
|---|-----------------------|
| * | Asof June  23,  2006. |

At June  27,2006, one Euro, as quoted by Reuters and other sources at 4 P.M.Eastern Time for New York foreign exchange selling rates (for banktransactions of at least $1,000,000), equaled $1.2581 in U.S. dollars.(Source: The Wall Street Journal)

The low and high market pricesfor the Shares, on a quarterly basis, on the OTC Bulletin Board are asfollows:

OTC BULLETIN BOARD (US$)

|                             |  |  |           |  |      |            |  |  |  |  |      |  |
|-----------------------------|--|--|-----------|--|------|------------|--|--|--|--|------|--|
| MONTHANDYEAR           |  |  | LOW  |  |      | HIGH  |
| July– September2004   |  |  |           |  | 0.46 |            |  |  |  |  | 0.60 |  |
| October –December2004 |  |  |           |  | 0.53 |            |  |  |  |  | 0.63 |  |
| January –March  2005  |  |  |           |  | 0.59 |            |  |  |  |  | 0.82 |  |
| April– June2005       |  |  |           |  | 0.51 |            |  |  |  |  | 0.90 |  |
| July –September2005   |  |  |           |  | 0.32 |            |  |  |  |  | 0.90 |  |
| October –December2005 |  |  |           |  | 0.40 |            |  |  |  |  | 0.73 |  |
|                             |

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OTC BULLETIN BOARD (US$)

|                    |  |  |           |  |      |            |  |  |  |  |      |   |
|--------------------|--|--|-----------|--|------|------------|--|--|--|--|------|---|
| MONTHANDYEAR  |  |  | LOW  |  |      | HIGH  |
| January2006        |  |  |           |  | 0.55 |            |  |  |  |  | 0.84 |   |
| February2006       |  |  |           |  | 0.62 |            |  |  |  |  | 0.82 |   |
| March2006          |  |  |           |  | 0.66 |            |  |  |  |  | 1.20 |   |
| April2006          |  |  |           |  | 0.74 |            |  |  |  |  | 1.04 |   |
| May2006            |  |  |           |  | 0.50 |            |  |  |  |  | 0.96 |   |
| June2006           |  |  |           |  | 0.35 | *          |  |  |  |  | 0.58 | * |
|                    |

|  |
|--|
|  |  |
|  |

|   |                       |
|---|-----------------------|
| * | Asof June  23,  2006. |

The closing prices of theShares on the Berlin Stock Exchange and Frankfurt Stock Exchange onJune  27,  2006 were 0.40 Euros and $0.41 Euros,respectively. The closing price of the Shares on the OTC Bulletin Boardon June  27,  2006 was $0.505.

B.    Plan ofDistribution.

Notapplicable.

C.    Markets

(see A.above)

D.    SellingShareholders.

Notapplicable.

E.    Dilution.

Notapplicable.

F.    Expenses of theIssue.

Not applicable.

|               |                         |
|---------------|-------------------------|
| Item10.  | Additional Information. |

A.    ShareCapital.

NotApplicable.

B.    Certificate and Articles ofIncorporation

Common Shares

The Company isauthorized to issue an unlimited number of Common Shares(‘‘Shares’’), with no par value.

Theholders of Shares are entitled to such dividends as and when declaredby our board of directors, to one vote per share at meetings ofshareholders and upon liquidation, to receive such of our assets as aredistributable to holders of Shares, subject to the rights of holders,if any, of the Preferred Shares. All Shares presently outstanding areduly authorized, validly issued, fully paid and non-assessable. Shareshave no preference, conversion, exchange, preemptive or cumulativevoting rights.

All Shares are entitled to one vote per share atall meetings of shareholders, rank equally as to dividends and as tothe distribution of the Company’s assets available fordistribution in the event of a liquidation, dissolution or winding upof the Company. There are no preemptive or conversion rights and noprovision for redemption, purchase for cancellation, surrender orsinking or purchase funds.

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Provisions as to the modification,amendment or variation of such rights and provisions are contained inthe Business Companies Act (Ontario) (the‘‘Act’’) and the regulations promulgatedthereunder. Certain fundamental changes to the articles of the Companywill require the approval of two-thirds of the votes cast on aresolution submitted to a special meeting of the Company’sshareholders called for the purpose of considering the resolution.These items include (i) an amendment to the provisions relating to theoutstanding capital of the Company, (ii) a sale of all or substantiallyall of the assets of the Company, (iii) an amalgamation of the Companywith another company, other than a subsidiary, (iv) a winding-up of theCompany, (v) a continuance of the Company into another jurisdiction,(vi) a statutory court approved arrangement under the Act (essentiallya corporate reorganization such as an amalgamation, sale of assets,winding-up, etc.), and (vii) a change of name.

Although the Actdoes not specifically impose any restrictions on the repurchase orredemption of shares, under the Act a corporation cannot repurchase itsshares or declare dividends if there are reasonable grounds forbelieving that (a) the corporation is, or after payment would be,unable to pay its liabilities as they become due, or (b) after thepayment, the realizable value of the corporation’s assets wouldbe less than the aggregate of (i) its liabilities and (ii) its statedcapital of all classes of its securities. Generally, stated capital isthe amount paid on the issuance of ashare.

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ARTICLESAND BY-LAWS

The following presents a description of certainterms and provisions of the Company’s articles andby-laws.

General

The Company was incorporated in theProvince of Ontario on September  26,  2003. Its OntarioCorporation Number is 1589236.

The Company’s corporateobjectives and purpose areunrestricted.

Directors

Pursuant to Section 132 of theBusiness Corporation Act (Ontario)(‘‘OBCA’’), a director who is a party to,or who is a director or officer of or has a material interest in anyperson who is a party to, a material contract or transaction orproposed material contract or transaction with us shall disclose to usthe nature and extent of that interest and shall not vote on anyresolution to approve such contract or transaction.

If a quorumof independent directors is present, the directors are entitled to votecompensation to themselves.

Section 137 of the OBCA providesthat the directors shall be paid such remuneration for their servicesas the board of directors may from time to timedetermine.

Section 184 of the OBCA provides that the board mayfrom time to time on our behalf, without authorization ofshareholders:

|  |              |                                  |
|--|--------------|----------------------------------|
|  | •  | borrow money upon Companycredit; |

|  |              |                                                                |
|--|--------------|----------------------------------------------------------------|
|  | •  | issue, reissue, sell or pledgedebt obligations of the Company; |

|  |              |                                                                                  |
|--|--------------|----------------------------------------------------------------------------------|
|  | •  | guarantee on our behalf to secureperformance of any obligation of any person;and |

|  |              |                                                                                                                                                                                                     |
|--|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | mortgage, hypothecate, pledge orotherwise create a security interest in all or any of our currentlyowned or subsequently acquired property of the Company, to secure anyobligations of the Company. |

There are no provisions in theCompany’s by-laws relating to retirement or non-retirement ofdirectors under an age limit requirement. A director need not be ashareholder. A majority of directors must be resident Canadians and atleast one-third of the directors must not be officers or employees ofthe Company or of any of the Company’s affiliates.

Annualand special meetings

The annual meeting and special meetings ofshareholders are held at such time and place as the board of directors,the chairman of the board, the managing director or the president shalldetermine. Notice of meetings are sent out to shareholders not lessthan 21 nor more than 50 days before the date of such meeting. Allshareholders at the record date are entitled to notice of the meetingand have the right to attend the meeting. The directors do not standfor reelection at staggered intervals.

There are no provisions ineither the Company’s Articles of Incorporation or By-laws thatwould have the effect of delaying, deferring or preventing a change incontrol of the Company and that would operate only with respect to amerger, acquisition or corporate restructuring involving the Company orits subsidiary.

There are no by-law provisions governing theownership threshold above which shareholder ownership must bedisclosed.

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|  |          |                    |
|--|----------|--------------------|
|  | C.  | Material Contracts |

|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 1.  | Escrow Agreement dated January9,  2004 among Northwestern Mineral Ventures Inc., EquityTransfer Services Inc. (the ‘‘EscrowAgent’’), and Kabir Ahmed(’’Ahmed’’). Pursuant to this agreement, inconnection with the Company’s initial public offering of up to15,000,000 Shares, Ahmed agreed to place 1,000,000 Shares (4,000,000Shares post two 2-1 stock splits) in escrow with the Escrow Agent, tobe released from escrow asfollows: |

|                                                                                                        |  |  |                                       |
|--------------------------------------------------------------------------------------------------------|--|--|---------------------------------------|
| DATE                                                                                                   |  |  | NUMBEROF SHARESRELEASED FROMESCROW    |
| DateCompany’s Shares are listed on TSX Venture Exchange(‘‘ListingDate’’) |  |  | 1/10 of Shares inEscrow               |
| 6 Months After ListingDate                                                                             |  |  | 1/6 of Shares Remaining inEscrow      |
| 12 Months After ListingDate                                                                            |  |  | 1/5 of Shares Remaining inEscrow      |
| 18 Months After ListingDate                                                                            |  |  | 1⁄4 of Shares Remaining inEscrow |
| 24 Months After ListingDate                                                                            |  |  | 1/3 of Shares Remaining inEscrow      |
| 30 Months After ListingDate                                                                            |  |  | 1⁄2 of Shares Remaining inEscrow |
| 36 Months After Listing Date                                                                           |  |  | anyShares Remaining inEscrow          |
|                                                                                                        |

|  |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 2.  | Consulting Agreementwith Primoris Group Inc. (‘‘PrimorisGroup’’), dated April  23,  2004. Under theterms of this agreement, Primoris Group is to provide investorrelations services to the Company for one year. Primoris Group isreceiving $13,500 per month and has been granted stock options toacquire 300,000 Shares (post-stock split) at an exercise price of$0.675 per Share, with an expiration date of April  23,2007. |

|  |          |                                                                                                                                                                                                                                                                                           |
|--|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 3.  | Option Agreement dated July14,  2004 between RNC Gold Inc. and Northwestern Mineral VenturesInc. concerning the Picachos Project.Reference is made to‘‘Item 4. Information on the Company. D. Property,Plants and Equipment.’’ for a description of theagreement. |

|  |          |                                                                                                                                                                                                                                                                                                                              |
|--|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 4.  | Letter of Intent dated May19,  2005 with RNC Gold Inc. pursuant to which the Company wasgranted the right to acquire a 100% interest in the PicachosProject. Reference is made to ’’Item 4. Informationon the Company. D. Property, Plants and Equipment.’’for a description of the Letter ofIntent. |

|  |          |                                                                                                                                                                                                                                                                |
|--|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 5.  | Amending Agreement datedOctober  14,  2005 between Northwestern Mineral VenturesInc. and RNC Gold Inc.Reference is made to ‘‘Item 4.Information on the Company. D. Property, Plants andEquipment.’’ for a description of theagreement. |

|  |          |                                                                                                                                                                                                                                                                         |
|--|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 6.  | Mining Agreement between theRepublic of Niger and Northwestern Mineral Ventures Inc. for theIrhazer Concession.Reference is made to ‘‘Item 4.Information on the Company. D. Property, Plants andEquipment.’’ for a description of theagreement. |

|  |          |                                                                                                                                                                                                                                                                         |
|--|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 7.  | Mining Agreement between theRepublic of Niger and Northwestern Mineral Ventures Inc. for the InGall Concession.Reference is made to ‘‘Item 4.Information on the Company. D. Property, Plants andEquipment.’’ for a description of theagreement. |

|  |          |                                                                                                                                                                                                                                                                                                                |
|--|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 8.  | Option Agreement between CanalaskaVentures Ltd. and Northwestern Mineral Ventures Inc. concerning theWaterbury Project, dated as of November  9, 2005.Reference ismade to ‘‘Item 4. Information on the Company. D.Property, Plants and Equipment.’’ for a descriptionof the agreement. |

|  |          |                                                                                                                                                                                                                                                                            |
|--|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 9.  | Letter of Intent datedMarch  2,  2006 between Northwestern Mineral Ventures Inc.and Azimut Exploration Inc. Reference is made to ‘‘Item4.Information on the Company. D. Property, Plants andEquipment.’’ for a description of the Letter ofIntent. |

|  |           |                                                                                                                                                                                                                                                                    |
|--|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 10.  | Consulting Agreement datedNovember  1,  2003 between Northwestern Mineral VenturesInc. and Kabir Ahmed. Reference is made to ‘‘Item6.Directors, Senior Management and Employees’’for a description of the material terms of thisagreement. |

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|  |           |                                                                                                                                                                                                                                                                        |
|--|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 11.  | Consulting Agreementdated October  14,  2005 between Northwestern MineralVentures Inc. and Marek Kreczmer. Reference is made to‘‘Item 6. Directors, Senior Management andEmployees’’ for a description of the material termsof this agreement. |

The above descriptions of the Company’sagreements are summaries only. The full agreements are set forth at‘‘Item 19.Exhibits.’’

|  |          |                   |
|--|----------|-------------------|
|  | D.  | ExchangeControls. |

There are no laws, governmental decrees orregulations in Canada that restrict the export or import of capital orwhich affect the remittance of dividends, interest or other payments tonon-resident holders of our shares, other than withholding taxrequirements. Reference is made to ‘‘Item E.Taxation.’’

There are no limitationsunder the laws of Canada or the Province of Ontario, or in ourconstituting documents, with respect to the right of non-resident orforeign owners to hold or vote Shares other than those imposed by theInvestment Canada Act.

The Investment Canada Actis a federal Canadian statute which regulates the acquisition ofcontrol of existing Canadian businesses and the establishment of newCanadian businesses by an individual, a government or entity that is a‘‘non-Canadian’’ as that term is defined inthe Investment Canada Act.

Management of the Companybelieves that it is not currently a‘‘non-Canadian’’ for purposes of theInvestment Canada Act. If the Company were to become a‘‘non-Canadian’’ in the future,acquisitions of control of Canadian businesses by the Company wouldbecome subject to the Investment Canada Act. Generally, thedirect acquisition by a ‘‘non-Canadian’’ ofan existing Canadian business with gross assets of $5,000,000 or moreis reviewable under the Investment Canada Act, with a thresholdsof $223  million and $237  million for transactions closingin 2003 and 2004, respectively, for ‘‘WTOinvestors’’ as defined under the Investment CanadaAct. If the Company were to become a‘‘non-Canadian’’ in the future, Managementbelieves the Company would likely become a‘‘non-Canadian’’ which is a‘‘WTO investor.’’ Generally, indirectacquisitions of existing Canadian businesses (with gross assets overcertain threshold levels) are reviewable under the Investment CanadaAct, except in situations involving ‘‘WTOinvestors’’ where indirect acquisitions are generally notreviewable. In transactions involving Canadian businesses engaged inthe production of uranium, providing financial services, providingtransportation services or which are cultural businesses, the benefitof the higher ‘‘WTO investor’’ thresholdsdo not apply.

Acquisitions of businesses related toCanada's cultural heritage or national identity (regardless ofthe value of assets involved) may also be reviewable under theInvestment Canada Act. In addition, investments to establishnew, unrelated businesses are not generally reviewable. An investmentto establish a new business that is related to the non-Canadian'sexisting business in Canada is not notifiable under the InvestmentCanada Act unless such investment relates to Canada's culturalheritage or national identity.

Investments which are reviewableunder the Investment Canada Act are reviewed by the Minister,designated as being responsible for the administration of theInvestment Canada Act. Reviewable investments, generally, maynot be implemented prior to the Minister’s determining that theinvestment is likely to be of ’’net benefit toCanada’’ based on the criteria set out in theInvestment Canada Act. Generally investments by non-Canadiansconsisting of the acquisition of control of Canadian businesses whichacquisitions are otherwise non-reviewable or the establishment of newCanadian businesses require that a notice be given under theInvestment Canada Act in the prescribed form and manner.

Any proposed take-over of the Company by a‘‘non-Canadian’’ would likely be subjectonly to the simple ‘‘notification’’requirements of the Investment Canada Act as in all likelihoodthat non-Canadian would be a ‘‘WTOinvestor’’ for purposes of the Investment CanadaAct. Generally, a ‘‘WTO investor’’ isan individual, other than a Canadian, who is a national of a countrywhich is a member of the World Trade Organization. In the case of aperson which is not an individual, a WTO 

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investor is a person which, generally, isultimately controlled by individuals, other than Canadians, who arenationals of a WTO member. Currently there are 134 countries which aremembers of the WTO, including virtually all countries of the Westernworld. The Company would have to have an asset base of at least beforethe ‘‘reviewable’’ transaction provisionsof the Investment Canada Act became relevant for considerationby a third party non-Canadian acquirer, which is not a WTOinvestor.

|  |          |           |
|--|----------|-----------|
|  | E.  | Taxation. |

CertainCanadian Federal Income Tax Consequences

The following is ageneral summary of the principal Canadian federal income taxconsiderations generally applicable to a person who holds Shares andwho, at all relevant times, for the purposes of the Income Tax Act(Canada) (the ‘‘Act’’) and any applicablebi-lateral tax convention, is not and has never been resident or deemedto be resident in Canada, deals at arm's length and is notaffiliated with the Company, holds his/her Shares as capital property,does not use or hold (and will not use or hold) and is not deemed touse or hold his/her Shares in, or in the course of, carrying on abusiness in Canada and does not carry on an insurance business inCanada and elsewhere (a ‘‘Non-ResidentHolder’’).

The summary is based on the currentprovisions of the Act and the regulations thereunder and theCompany's understanding of the current published administrativepractices, and assessing policies of the Canada Revenue Agency (the‘‘CRA’’). This summary takes into accountall specific proposals to amend the Act and the regulations publiclyannounced by the Minister of Finance (Canada) prior to the date hereof(the ‘‘Proposed Amendments’’) although noassurances can be given that such Proposed Amendments will be enactedin the form proposed or at all. This summary does not otherwise takeinto account or anticipate any other changes in law, whether byjudicial, governmental or legislative action or decision or otherchanges in administrative practices or assessing policies of the CRAnor does it take into account any provincial, territorial, local orforeign tax considerations. The provisions of provincial income taxlegislation may vary from province to province in Canada and, in somecases, differ from federal tax legislation.

This summary is of ageneral nature only and is not intended to be, nor should it beconstrued to be, legal or tax advice to any particular holder.Accordingly, holders and prospective holders of Shares should consulttheir own tax advisors with respect to their particular circumstances,including the application and effect of the income and other tax lawsof any country, province, state or local tax authority. AnyNon-Resident Holder who acquires Shares other than from the Company maybe required to obtain from the vendor a certificate pursuant to section116 of the Act (described below) unless the Shares are listed on aprescribed stock exchange or, after reasonable inquiry, the purchaserhad no reason to believe the vendor was a non-resident of Canada withinthe meaning of the Act.

Dividends on Shares

Dividends paid or credited or deemed under the Act to be paid orcredited on the Shares held by a Non-Resident Holder will be subject toCanadian non-resident withholding tax at a general rate of 25%.This rate may be reduced pursuant to the terms of an applicable taxtreaty between Canada and the country of residence of the Non-ResidentHolder. Dividends paid or credited or deemed under the Act to be paidor credited on the Shares held by a Non-Resident Holder who is residentin the United States for purposes of the Canada− United StatesIncome Tax Convention will generally be subject to Canadiannon-resident withholding tax at a rate of 15% and may, in thecase of a corporation, be further reduced in certain circumstances.

Disposition of Shares

A Non-Resident Holder will not besubject to tax under the Act in respect of any capital gain realized ona disposition of Shares unless at the time of such a disposition suchshares constitute taxable Canadian property of the Non-Resident Holderfor purposes of the Act and such Non-Resident Holder is not entitled torelief under an applicable tax treaty between Canada and the country ofresidence of the Non-Resident Holder.

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Shares will generally not constitutetaxable Canadian property of a Non-Resident Holder at a particular timeprovided that such Shares are listed on a prescribed stock exchange(which includes Tiers 1 and 2 of the TSX Venture Exchange) at that timeunless at any time during the sixty month period immediately precedingthe disposition of such Shares, the Non-Resident Holder, persons withwhom the Non-Resident Holder did not deal at arm’s length, orthe Non-Resident Holder together will all such persons, owned or had aninterest in or right to acquire 25% or more of the Shares of anyclass or series of the capital stock of the Company. Under certaincircumstances, Shares of the Company may be deemed to be taxableCanadian property. In the event that Shares constitute taxable Canadianproperty to a particular Non-Resident Holder, capital gains realized onthe disposition of the Shares held by a Non-Resident Holder who isresident in the United States for purposes of the Canada-United StatesIncome Tax Convention will generally not be subject to Canadian taxunless the value of the Shares at that time is derived principally fromreal property situated in Canada.

A purchase of Shares by theCompany (other than a purchase of Shares in the open market in themanner in which Shares would normally be purchased by any member of thepublic in the open market) will give rise to a deemed dividend underthe Act equal to the amount, if any, by which the amount paid by theCompany on the purchase exceeds the paid-up capital of such Sharesdetermined in accordance with the Act. The paid-up capital may be lessthan the Non-Resident Holder’s adjusted cost base of suchShares. Any such dividend deemed to have been received by aNon-Resident Holder will be subject to non-resident withholding tax asdescribed above. The amount of such deemed dividend will reduce theproceeds of disposition of the Shares to the Non-Resident Holder forpurposes of computing the Non-Resident Holder’s capital gain orloss under the Act.

Holders of Shares are entitled to receivedividends in cash, property or Shares when and if dividends aredeclared by the Board of Directors out of funds legally availabletherefore. There are no limitations on the payment of dividends. Todate, the Company has never paid any dividends to its shareholders.

|  |          |                        |
|--|----------|------------------------|
|  | G.  | Statements by Experts. |

Notapplicable.

|  |          |                      |
|--|----------|----------------------|
|  | H.  | Documents onDisplay. |

Copies of the documents referred to in thisdocument may be inspected during normal business hours, at 36 TorontoStreet, Suite 1000, Toronto, Ontario M5C 2C5Canada.

|  |          |                        |
|--|----------|------------------------|
|  | I.  | SubsidiaryInformation. |

Not applicable.

Item11.    Quantitative and Qualitative Disclosures About MarketRisk.

Not applicable.

Item 12.    Descriptionof Securities Other than Equity Securities.

Notapplicable.

Item 13.    Defaults, Dividend Arrearages, andDelinquencies.

None.

Item 14.    MaterialModifications to the Rights of Security Holders and Use ofProceeds.

None.

Item. 15.    Controls andProcedures.

The Company maintains disclosure controls andprocedures designed to ensure that information required to be disclosedin the Company’s reports filed under the Securities Exchange Actof 1934, as 

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amended, is recorded, processed, summarizedand reported within the time periods specified in the Securities andExchange Commission rules and forms, and that such information isaccumulated and communicated to our management, including our ChiefExecutive Officer and Chief Financial Officer, as appropriate, to allowfor timely decisions regarding required disclosure. In designing andevaluating the disclosure controls and procedures, managementrecognized that any controls and procedures, no matter how welldesigned and operated, can provide only reasonable assurance ofachieving the desired control objectives, and management necessarilywas required to apply its judgment in evaluating the cost benefitrelationship of possible controls and procedures.

As required bySecurities and Exchange Commission Rules 13a-15(a) and 13a-15(e), theCompany reviewed, under the supervision and with the participation ofour management, including our Chief Executive Officer and ChiefFinancial Officer, the effectiveness of the design and operation of theCompany’s disclosure controls and procedures as of the end yearcovered by this report. Because of the Company’s small size ithas not conducted a formal evaluation of its disclosure controls andprocedures, but it is constantly reviewing such controls and proceduresto ensure that they are effective. Based on the foregoing, our ChiefExecutive Officer and Chief Financial Officer concluded that ourdisclosure controls and procedures were effective at the reasonableassurance level.

Item 16A.    Audit Committee FinancialExpert.

The Company’s Chairman and independent,non-management directors serve as the Audit Committee. However, afinancial expert does not serve on the Company’s AuditCommittee. The Company believes that its Audit Committee is wellequipped to address all financial matters of the Company since theCompany’s Chief Financial Officer, a Chartered ManagementAccountant, serves as Secretary and active financial advisor to theAudit Committee.

Item 16B.    Code ofEthics.

The Company’s Board of Directors hascurrently requested the formulation of a Draft Proposal for a Code ofBusiness Conduct and Ethics, the specifics of which will be reviewedand considered for possible adoption by the Company’s Board ofDirectors in due course.

Item 16C.    Principal AccountantFees and Services.

The following chart summarizes theaggregate fees billed by the Company’s external auditors forprofessional services rendered to the Company during the fiscal yearsended December  31,  2005 and 2004 and the fiscal periodcommencing on September  26,  2003 (the date ofincorporation of the Company) and ending December  31,2003, for audit and non-audit relatedservices:

|                     |  |  |                        |   |        |                         |  |  |                                          |   |        |  |  |  |  |   |        |  |
|---------------------|--|--|------------------------|---|--------|-------------------------|--|--|------------------------------------------|---|--------|--|--|--|--|---|--------|--|
| Typeof Work         |  |  | Year EndedDec. 31,2005 |   |        | Year EndedDec. 31, 2004 |  |  | PeriodSeptember26, 2003 to Dec. 31, 2003 |
| Auditfees*          |  |  |                        | $ | 27,000 |                         |  |  |                                          | $ | 16,000 |  |  |  |  | $ | 13,000 |  |
| Audit-relatedfees** |  |  |                        | $ | 0      |                         |  |  |                                          | $ | 10,000 |  |  |  |  | $ | 6,500  |  |
| Taxadvisoryfees     |  |  |                        | $ | 3,000  |                         |  |  |                                          | $ | 0      |  |  |  |  | $ | 0      |  |
| All otherfees       |  |  |                        | $ | 0      |                         |  |  |                                          | $ | 0      |  |  |  |  | $ | 0      |  |
| Total               |  |  |                        | $ | 30,000 |                         |  |  |                                          | $ | 26,000 |  |  |  |  | $ | 19,500 |  |
|                     |

|  |
|--|
|  |  |
|  |

|   |                                                                                                                                                                                              |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| * | Aggregatefees billed for the Company’s annual financial statements andservices normally provided by the auditor in connection with theCompany’s statutory and regulatoryfilings. |

|    |                                                                                                                                                                                                                                                                                                                                                                                                                         |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** | Aggregate fees billed for assuranceand related services that are reasonably related to the performance ofthe audit or review of the Company’s financial statements andare not reported as ‘‘Audit fees’’,including: assistance with aspects of tax accounting, attest servicesnot required by state or regulation and consultation regardingfinancial accounting and reporting standards. |

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Item. 16D.    Exemptions from theListing Standards for Audit Committees.

NotApplicable.

Item 16E.    Purchases of Equity Services bythe Issuer and Affiliated Purchasers.

NotApplicable.

Item 17.    FinancialStatements.

See ‘‘Item 18. FinancialStatements.’’

Item 18.    FinancialStatements.

(1)   Consolidated Balance Sheets of theCompany as at December  31,  2005 and 2004, andConsolidated Statements of Operations and Deficit, Shareholders Equity,and Cash Flows, for each of the years in the two-year period endedDecember  31,  2005, the period from inception (September26, 2003) to December  31,  2003, and the cumulative periodfrom inception to December  31,  2005. These statementswere prepared in accordance with Canadian generally accepted accountingprinciples, which differ in certain respects from United Statesgenerally accepted accounting principles. See Note 15 to theconsolidated financial statements for a description of the differencesbetween Canadian Generally Accepted Accounting Principles and UnitedStates Generally Accepted Accounting Principles.

(2) UnauditedConsolidated Balance Sheet of the Company as at March  31,2006, Consolidated Statements of Operations and Deficit for the threemonths ended March  31,  2006, Statements of Cash Flows forthe three months ended March  31,  2006, and Statements ofShareholders’ Equity from Commencement of Operations,September  26,  2003 to March  31,  2006.

Item 19.    Exhibits.

Exhibits.    (Referenceis made to Registration Statement on Form 20-F, dated March9,  2004, submitted to the Securities and Exchange Commission onMarch  15,  2004, for exhibits 1, 2, 3.A-3.B. Reference ismade to Annual Report on Form 20-F, for the year ended December31,  2004, dated July  19,  2005, submitted to theSecurities and Exchange Commission on July  20,  2005, forexhibits 3.C and 3.D Reference is made to Annual Reporton Form 20-F, for the year ended December  31,  2005,submitted to the Securities and Exchange on June  30,2006, for exhibits 3.E-3.L, exhibits 4.A-4.E, and exhibits 13.1 and13.2).

|  |          |                                           |
|--|----------|-------------------------------------------|
|  | 1.  | Certificate and Articles ofIncorporation. |

|  |          |          |
|--|----------|----------|
|  | 2.  | By-Laws. |

|  |          |                     |
|--|----------|---------------------|
|  | 3.  | List of Agreements. |

|  |          |                                                                                                                                 |
|--|----------|---------------------------------------------------------------------------------------------------------------------------------|
|  | A.  | Escrow Agreement dated January  9,2004 among Northwestern Mineral Ventures Inc., Equity Transfer ServicesInc., and Kabir Ahmed. |

|  |          |                                                                     |
|--|----------|---------------------------------------------------------------------|
|  | B.  | Consulting Agreementdated April  22,  2004 with Primoris Group Inc. |

|  |          |                                                                                                                                   |
|--|----------|-----------------------------------------------------------------------------------------------------------------------------------|
|  | C.  | Option Agreement dated July  14,2004 between RNC Gold Inc. and Northwestern Mineral Ventures Inc.concerning the Picachos Project. |

|  |          |                                                                                                                             |
|--|----------|-----------------------------------------------------------------------------------------------------------------------------|
|  | D.  | Letter ofIntent dated May  19,  2005 between Northwestern MineralVentures Inc. and RNC Gold Inc. regarding PicachosProject. |

|  |          |                                                                                                        |
|--|----------|--------------------------------------------------------------------------------------------------------|
|  | E.  | Amending Agreement datedOctober  14,  2005 between Northwestern Mineral VenturesInc. and RNC Gold Inc. |

|  |          |                                                                                                                 |
|--|----------|-----------------------------------------------------------------------------------------------------------------|
|  | F.  | Mining Agreementbetween the Republic of Niger and Northwestern Mineral Ventures Inc.for the Irhazer Concession. |

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|  |          |                                                                                                                 |
|--|----------|-----------------------------------------------------------------------------------------------------------------|
|  | G.  | Mining Agreementbetween the Republic of Niger and Northwestern Mineral Ventures Inc.for the In Gall Concession. |

|  |          |                                                                                                                                                       |
|--|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | H.  | Option Agreementbetween Canalaska Ventures Ltd. And Northwestern Mineral Ventures Inc.concerning the Waterbury Project, dated as of November  9,2005. |

|  |          |                                                                                                            |
|--|----------|------------------------------------------------------------------------------------------------------------|
|  | I.  | Letter of Intent dated March2,  2006 between Northwestern Mineral Ventures inc. and AzimutExploration Inc. |

|  |          |                                                                                                         |
|--|----------|---------------------------------------------------------------------------------------------------------|
|  | J.  | Consulting Agreement datedNovember  1,  2003 between Northwestern Mineral VenturesInc. and Kabir Ahmed. |

|  |          |                                                                                                            |
|--|----------|------------------------------------------------------------------------------------------------------------|
|  | K.  | Consulting Agreementdated October  14,  2005 between Northwestern MineralVentures Inc. and Marek Kreczmer. |

|  |          |                                                                                                                                           |
|--|----------|-------------------------------------------------------------------------------------------------------------------------------------------|
|  | L.  | Letter ofIntent dated June  9,  2006 between Northwestern MineralVentures Inc. and Edward Bawolak regarding the Sequaney UraniumProperty. |

|  |          |          |
|--|----------|----------|
|  | 4.  | Consents |

|  |          |                                                                    |
|--|----------|--------------------------------------------------------------------|
|  | A.  | Consentof McGovern, Hurley, Cunningham, LLP, CharteredAccountants. |

|  |          |                                                                                   |
|--|----------|-----------------------------------------------------------------------------------|
|  | B.  | Consent of Watts, Griffis andMcOuat Limited, Consulting Geologists and Engineers. |

|  |          |                                      |
|--|----------|--------------------------------------|
|  | C.  | Consent of Claude Jobin, P.Eng.,M.Sc |

|  |          |                                   |
|--|----------|-----------------------------------|
|  | D.  | Consent of Azimut-ExplorationInc. |

|  |          |                                   |
|--|----------|-----------------------------------|
|  | E.  | Consent of Canalaska VenturesLtd. |

|  |           |                |
|--|-----------|----------------|
|  | 12.  | Certifications |

|  |            |                                          |
|--|------------|------------------------------------------|
|  | 12.1  | Certification of Chief ExecutiveOfficer. |

|  |            |                                        |
|--|------------|----------------------------------------|
|  | 12.2  | Certification of ChiefFinancialOfficer |

|  |           |                |
|--|-----------|----------------|
|  | 13.  | Certifications |

|  |            |                                        |
|--|------------|----------------------------------------|
|  | 13.1  | Certificationof Chief ExecutiveOfficer |

|  |            |                                         |
|--|------------|-----------------------------------------|
|  | 13.2  | Certification of ChiefFinancial Officer |

The Registrant hereby certifies that it meetsall of the requirements for filing on Form 20-F and that is has dulycaused and authorized the undersigned to sign this annual reporton its behalf.

|  | NORTHWESTERN MINERAL VENTURESINC. |
|--|-----------------------------------|

|  | By:    /s/ MarekKreczmer |
|--|----------------------------------------------|

|  | By:    MarekKreczmer |
|--|------------------------------------------|

|  | Title: President and Chief ExecutiveOfficer |
|--|---------------------------------------------|

Date: October27,  2006

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NORTHWESTERNMINERAL VENTURES INC.(AN EXPLORATION STAGECOMPANY)

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31,2005 AND 2004

(Expressed in CanadianDollars)

----

NORTHWESTERN MINERAL VENTURES INC.(ANEXPLORATION STAGE COMPANY)

CONSOLIDATED FINANCIALSTATEMENTS

DECEMBER 31, 2005 AND 2004

(Expressed inCanadianDollars)

|                                                     |  |  |                |
|-----------------------------------------------------|--|--|----------------|
| INDEX                                               |  |  | PAGE           |
| Auditors’Report                               |  |  | F-1            |
| ConsolidatedBalanceSheets                           |  |  | F-2            |
| ConsolidatedStatements of Operations andDeficit     |  |  | F-3            |
| ConsolidatedStatements of Shareholders’Equity |  |  | F-4            |
| ConsolidatedStatements of CashFlows                 |  |  | F-5            |
| Notes tothe Consolidated FinancialStatements        |  |  | F-6–F-24 |
|                                                     |

----

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AUDITORS’ REPORT

To theShareholders ofNORTHWESTERN MINERAL VENTURESINC.(An Exploration StageCompany)

We have audited theconsolidated balance sheets of Northwestern Mineral Ventures Inc. (AnExploration Stage Company) as at December  31,  2005 and2004 and the consolidated statements of operations and deficit,shareholders’ equity and cash flows for each of the years in thetwo-year period ended December  31,  2005, the period frominception (September 26, 2003) to December  31,  2003, andthe cumulative period from inception to December  31,2005. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express anopinion on these financial statements based on ouraudits.

We conducted our audits inaccordance with Canadian generally accepted auditing standards and thestandards of the Public Company Accounting Oversight Board (UnitedStates). These standards require that we plan and perform an audit toobtain reasonable assurance whether the financial statements are freeof material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for ouropinion.

In our opinion, these consolidatedfinancial statements present fairly, in all material respects, thefinancial position of the Company as at December  31,  2005and 2004 and the results of its operations and its cash flows for eachof the years in the two-year period ended December  31,2005, the period from inception (September 26, 2003) to December31,  2003, and the cumulative period from inception toDecember  31,  2005 in accordance with Canadian generallyaccepted accounting principles.

McGOVERN,HURLEY, CUNNINGHAM,LLP

CharteredAccountants

TORONTO, CanadaMarch3,  2006

COMMENTS BY AUDITOR FOR US READERS ONCANADA – US REPORTINGDIFFERENCE

In the United States,reporting standards for auditors require the addition of an explanatoryparagraph (following the opinion paragraph) when the financialstatements are affected by conditions and events that cast substantialdoubt on the Company’s ability to continue as a going concern,such as those described in Note 1 to the consolidated financialstatements. Although we conducted our audits in accordance with bothCanadian generally accepted auditing standards and the standards of thePublic Company Accounting Oversight Board (United States), our reportto the shareholders dated March  3,  2006 is expressed inaccordance with Canadian reporting standards which do not permit areference to such events and conditions in the auditors’ reportwhen these are adequately disclosed in the financialstatements.

McGOVERN, HURLEY, CUNNINGHAM,LLP

CharteredAccountants

TORONTO, CanadaMarch3,2006

F-1

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NORTHWESTERNMINERAL VENTURES INC.

(AN EXPLORATION STAGECOMPANY)

Consolidated BalanceSheets

AS AT DECEMBER31

(Expressed in CanadianDollars)

|                                                                                 |  |  |      |   |            |      |  |  |  |   |            |   |
|---------------------------------------------------------------------------------|--|--|------|---|------------|------|--|--|--|---|------------|---|
|                                                                            |  |  | 2005 |   |            | 2004 |
| ASSETS                                                                          |  |  |      |   |       |      |  |  |  |   |       |   |
| Current                                                                         |  |  |      |   |       |      |  |  |  |   |       |   |
| Cashand equivalents (Note3)                                                     |  |  |      | $ | 1,681,524  |      |  |  |  | $ | 1,083,675  |   |
| Amountsreceivable and prepaidexpenses                                           |  |  |      |   | 92,769     |      |  |  |  |   | 77,985     |   |
|                                                                            |  |  |      |   | 1,774,293  |      |  |  |  |   | 1,161,660  |   |
| Equipment(Note 4)                                                               |  |  |      |   | 6,706      |      |  |  |  |   | 3,575      |   |
| Interest inexploration properties and deferred exploration expenditures (Note5) |  |  |      |   | 1,075,701  |      |  |  |  |   | 730,800    |   |
|                                                                            |  |  |      | $ | 2,856,700  |      |  |  |  | $ | 1,896,035  |   |
| LIABILITIES                                                                     |  |  |      |   |       |      |  |  |  |   |       |   |
| Current                                                                         |  |  |      |   |       |      |  |  |  |   |       |   |
| Accountspayable and accruedliabilities                                          |  |  |      | $ | 170,817    |      |  |  |  | $ | 197,625    |   |
| SHAREHOLDERS'EQUITY                                                             |  |  |      |   |       |      |  |  |  |   |       |   |
| Sharecapital                                                                    |  |  |      |   |       |      |  |  |  |   |       |   |
| Common shares (Note6)                                                           |  |  |      |   | 4,329,779  |      |  |  |  |   | 2,171,849  |   |
| Warrants(Note7)                                                                 |  |  |      |   | 417,084    |      |  |  |  |   | 256,935    |   |
| Contributedsurplus (Note8)                                                      |  |  |      |   | 873,651    |      |  |  |  |   | 424,183    |   |
| Accumulateddeficit                                                              |  |  |      |   | (2,934,631 | )    |  |  |  |   | (1,154,557 | ) |
|                                                                            |  |  |      |   | 2,685,883  |      |  |  |  |   | 1,698,410  |   |
|                                                                            |  |  |      | $ | 2,856,700  |      |  |  |  | $ | 1,896,035  |   |
|                                                                                 |

CONTINUATIONOF BUSINESS (Note 1)

COMMITMENT (Note10)

APPROVED ON BEHALF OF THE BOARD:

Signed‘‘Wayne Beach’’,Director

Signed ‘‘KabirAhmed’’, Director

The accompanying notes arean integral part of these consolidated financialstatements.

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Table of Contents

NORTHWESTERN MINERAL VENTURESINC.

(AN EXPLORATION STAGECOMPANY)

Consolidated Statements of Operations andDeficit

(Expressed in CanadianDollars)

|                                                                                 |  |  |                                       |   |            |                        |  |  |                                   |   |            |      |  |  |  |   |            |   |  |  |  |   |           |   |
|---------------------------------------------------------------------------------|--|--|---------------------------------------|---|------------|------------------------|--|--|-----------------------------------|---|------------|------|--|--|--|---|------------|---|--|--|--|---|-----------|---|
|                                                                            |  |  | Cumulativefrominception toDecember31, |   |            | Years endedDecember31, |  |  | Period frominceptiontoDecember31, |
|                                                                            |  |  | 2005                                  |   |            | 2005                   |  |  | 2004                              |   |            | 2003 |
| Expenses                                                                        |  |  |                                       |   |       |                        |  |  |                                   |   |       |      |  |  |  |   |       |   |  |  |  |   |      |   |
| Stock-basedcompensation expense (Note8)                                         |  |  |                                       | $ | 917,651    |                        |  |  |                                   | $ | 493,468    |      |  |  |  | $ | 424,183    |   |  |  |  | $ | —   |   |
| Investorrelations, and businessdevelopment                                      |  |  |                                       |   | 716,276    |                        |  |  |                                   |   | 349,076    |      |  |  |  |   | 367,200    |   |  |  |  |   | —   |   |
| Managementand administrativeservices                                            |  |  |                                       |   | 264,183    |                        |  |  |                                   |   | 129,183    |      |  |  |  |   | 135,000    |   |  |  |  |   | —   |   |
| Professionalfees                                                                |  |  |                                       |   | 142,337    |                        |  |  |                                   |   | 58,730     |      |  |  |  |   | 83,607     |   |  |  |  |   | —   |   |
| Filingand listingfees                                                           |  |  |                                       |   | 148,491    |                        |  |  |                                   |   | 83,351     |      |  |  |  |   | 65,140     |   |  |  |  |   | —   |   |
| Officeandadministration                                                         |  |  |                                       |   | 186,254    |                        |  |  |                                   |   | 107,458    |      |  |  |  |   | 45,699     |   |  |  |  |   | 33,097    |   |
| Amortization                                                                    |  |  |                                       |   | 2,446      |                        |  |  |                                   |   | 1,815      |      |  |  |  |   | 631        |   |  |  |  |   | —   |   |
| Lossbefore thefollowing                                                         |  |  |                                       |   | (2,377,638 | )                      |  |  |                                   |   | (1,223,081 | )    |  |  |  |   | (1,121,460 | ) |  |  |  |   | (33,097   | ) |
| Explorationproperties and deferred exploration expenditures written-off (Note5) |  |  |                                       |   | (602,193   | )                      |  |  |                                   |   | (602,193   | )    |  |  |  |   | —    |   |  |  |  |   | —   |   |
| Lossbeforetaxes                                                                 |  |  |                                       |   | (2,979,831 | )                      |  |  |                                   |   | (1,825,274 | )    |  |  |  |   | (1,121,460 | ) |  |  |  |   | (33,097   | ) |
| Futureincome tax recovery (Note11)                                              |  |  |                                       |   | 45,200     |                        |  |  |                                   |   | 45,200     |      |  |  |  |   | —    |   |  |  |  |   | —   |   |
| NETLOSS FOR THEYEAR                                                             |  |  |                                       |   | (2,934,631 | )                      |  |  |                                   |   | (1,780,074 | )    |  |  |  |   | (1,121,460 | ) |  |  |  |   | (33,097   | ) |
| ACCUMULATEDDEFICIT, beginning ofyear                                            |  |  |                                       |   | —    |                        |  |  |                                   |   | (1,154,557 | )    |  |  |  |   | (33,097    | ) |  |  |  |   | —   |   |
| ACCUMULATEDDEFICIT, end ofyear                                                  |  |  |                                       | $ | (2,934,631 | )                      |  |  |                                   | $ | (2,934,631 | )    |  |  |  | $ | (1,154,557 | ) |  |  |  | $ | (33,097   | ) |
| LOSSPER SHARE – basic anddiluted                                          |  |  |                                       |   |       |                        |  |  |                                   |   | (0.02      | )    |  |  |  |   | (0.02      | ) |  |  |  |   | (0.00     | ) |
| WEIGHTEDAVERAGE NUMBER OF SHARESOUTSTANDING                                     |  |  |                                       |   |       |                        |  |  |                                   |   | 76,916,314 |      |  |  |  |   | 63,312,328 |   |  |  |  |   | 9,333,333 |   |
|                                                                                 |

Theaccompanying notes are an integral part of these consolidated financialstatements.

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NORTHWESTERN MINERAL VENTURESINC.

(AN EXPLORATION STAGECOMPANY)

Consolidated Statements of Shareholders'Equity

FROM COMMENCEMENT OF OPERATIONS(SEPTEMBER 26, 2003) TO DECEMBER 31,2005

(Expressed in CanadianDollars)

|                                                                                          |  |  |              |  |            |                 |  |  |          |  |           |                    |  |  |                    |  |          |       |  |  |   |  |         |   |  |  |  |  |         |   |  |  |  |  |            |   |  |  |  |  |            |   |
|------------------------------------------------------------------------------------------|--|--|--------------|--|------------|-----------------|--|--|----------|--|-----------|--------------------|--|--|--------------------|--|----------|-------|--|--|---|--|---------|---|--|--|--|--|---------|---|--|--|--|--|------------|---|--|--|--|--|------------|---|
|                                                                                     |  |  | Commonshares |  |            | SpecialWarrants |  |  | Warrants |  |           | ContributedSurplus |  |  | AccumulatedDeficit |  |          | Total |
|                                                                                     |  |  | #            |  |            | $               |  |  | $        |  |           | $                  |  |  | $                  |  |          | $     |  |  | $ |
| Issueof shares forcash                                                                   |  |  |              |  | 4,000,000  |                 |  |  |          |  | 101       |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | 101        |   |
| Issueof special warrants forcash                                                         |  |  |              |  | —    |                 |  |  |          |  | —   |                    |  |  |                    |  | 195,409  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | 195,409    |   |
| Lossfor theyear                                                                          |  |  |              |  | —    |                 |  |  |          |  | —   |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | (33,097    | ) |  |  |  |  | (33,097    | ) |
| Balance,December 31,2003                                                                 |  |  |              |  | 4,000,000  |                 |  |  |          |  | 101       |                    |  |  |                    |  | 195,409  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | (33,097    | ) |  |  |  |  | 162,413    |   |
| Publicoffering, net of issuecosts                                                        |  |  |              |  | 60,000,000 |                 |  |  |          |  | 1,321,537 |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | 1,321,537  |   |
| Conversionof specialwarrants                                                             |  |  |              |  | 8,000,000  |                 |  |  |          |  | 195,409   |                    |  |  |                    |  | (195,409 | )     |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | —    |   |
| Flowthrough private placement, net of issuecosts                                         |  |  |              |  | 412,000    |                 |  |  |          |  | 114,891   |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | 114,891    |   |
| Stock-basedcompensation                                                                  |  |  |              |  | —    |                 |  |  |          |  | —   |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | 424,183 |   |  |  |  |  | —    |   |  |  |  |  | 424,183    |   |
| Privateplacement, net of issuecosts                                                      |  |  |              |  | 2,909,000  |                 |  |  |          |  | 539,911   |                    |  |  |                    |  | —  |       |  |  |   |  | 256,935 |   |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | 796,846    |   |
| Lossfor theyear                                                                          |  |  |              |  | —    |                 |  |  |          |  | —   |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | (1,121,460 | ) |  |  |  |  | (1,121,460 | ) |
| Balance,December 31,2004                                                                 |  |  |              |  | 75,321,000 |                 |  |  |          |  | 2,171,849 |                    |  |  |                    |  | —  |       |  |  |   |  | 256,935 |   |  |  |  |  | 424,183 |   |  |  |  |  | (1,154,557 | ) |  |  |  |  | 1,698,410  |   |
| Privateplacements, net of issuecosts                                                     |  |  |              |  | 3,950,090  |                 |  |  |          |  | 1,636,155 |                    |  |  |                    |  | —  |       |  |  |   |  | 222,749 |   |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | 1,858,904  |   |
| Exerciseof stockoptions                                                                  |  |  |              |  | 200,000    |                 |  |  |          |  | 101,500   |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | (44,000 | ) |  |  |  |  | —    |   |  |  |  |  | 57,500     |   |
| Flowthrough tax effect on date ofrenunciation                                            |  |  |              |  | —    |                 |  |  |          |  | (45,200   | )                  |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | (45,200    | ) |
| Stock-basedcompensation                                                                  |  |  |              |  | —    |                 |  |  |          |  | —   |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | 493,468 |   |  |  |  |  | —    |   |  |  |  |  | 493,468    |   |
| Exerciseofwarrants                                                                       |  |  |              |  | 455,000    |                 |  |  |          |  | 283,475   |                    |  |  |                    |  | —  |       |  |  |   |  | (62,600 | ) |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | 220,875    |   |
| Sharesissued for interest in exploration properties and deferred explorationexpenditures |  |  |              |  | 300,000    |                 |  |  |          |  | 182,000   |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | —    |   |  |  |  |  | 182,000    |   |
| Lossfor theyear                                                                          |  |  |              |  | —    |                 |  |  |          |  | —   |                    |  |  |                    |  | —  |       |  |  |   |  | — |   |  |  |  |  | — |   |  |  |  |  | (1,780,074 | ) |  |  |  |  | (1,780,074 | ) |
| Balance,December 31,2005                                                                 |  |  |              |  | 80,226,090 |                 |  |  |          |  | 4,329,779 |                    |  |  |                    |  | —  |       |  |  |   |  | 417,084 |   |  |  |  |  | 873,651 |   |  |  |  |  | (2,934,631 | ) |  |  |  |  | 2,685,883  |   |
|                                                                                          |

Theaccompanying notes are an integral part of these consolidated financialstatements.

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NORTHWESTERN MINERAL VENTURESINC.

(AN EXPLORATION STAGECOMPANY)

Consolidated Statements of CashFlows

(Expressed in CanadianDollars)

|                                                                        |  |  |                                          |   |            |                        |  |  |                                   |   |            |      |  |  |  |   |            |   |  |  |  |   |         |   |
|------------------------------------------------------------------------|--|--|------------------------------------------|---|------------|------------------------|--|--|-----------------------------------|---|------------|------|--|--|--|---|------------|---|--|--|--|---|---------|---|
|                                                                   |  |  | Cumulativefrom inception to December 31, |   |            | Years endedDecember31, |  |  | Period frominceptiontoDecember31, |
|                                                                   |  |  | 2005                                     |   |            | 2005                   |  |  | 2004                              |   |            | 2003 |
| Cashprovided by (usedin)                                               |  |  |                                          |   |       |                        |  |  |                                   |   |       |      |  |  |  |   |       |   |  |  |  |   |    |   |
| OPERATINGACTIVITIES                                                    |  |  |                                          |   |       |                        |  |  |                                   |   |       |      |  |  |  |   |       |   |  |  |  |   |    |   |
| Netloss                                                                |  |  |                                          | $ | (2,934,631 | )                      |  |  |                                   | $ | (1,780,074 | )    |  |  |  | $ | (1,121,460 | ) |  |  |  | $ | (33,097 | ) |
| Futureincome taxrecovery                                               |  |  |                                          |   | (45,200    | )                      |  |  |                                   |   | (45,200    | )    |  |  |  |   | —    |   |  |  |  |   | — |   |
| Stock-basedcompensationexpense                                         |  |  |                                          |   | 917,651    |                        |  |  |                                   |   | 493,468    |      |  |  |  |   | 424,183    |   |  |  |  |   | — |   |
| Amortization                                                           |  |  |                                          |   | 2,446      |                        |  |  |                                   |   | 1,815      |      |  |  |  |   | 631        |   |  |  |  |   | — |   |
| Explorationproperties and deferred exploration expenditureswritten-off |  |  |                                          |   | 602,193    |                        |  |  |                                   |   | 602,193    |      |  |  |  |   | —    |   |  |  |  |   | — |   |
| Changesin non-cash working capitalitems                                |  |  |                                          |   |       |                        |  |  |                                   |   |       |      |  |  |  |   |       |   |  |  |  |   |    |   |
| Amountsreceivable and prepaidexpenses                                  |  |  |                                          |   | (92,769    | )                      |  |  |                                   |   | (14,784    | )    |  |  |  |   | (77,985    | ) |  |  |  |   | — |   |
| Accountspayable and accruedliabilities                                 |  |  |                                          |   | 88,210     |                        |  |  |                                   |   | (109,415   | )    |  |  |  |   | 187,625    |   |  |  |  |   | 10,000  |   |
|                                                                   |  |  |                                          |   | (1,462,100 | )                      |  |  |                                   |   | (851,997   | )    |  |  |  |   | (587,006   | ) |  |  |  |   | (23,097 | ) |
| FINANCINGACTIVITIES                                                    |  |  |                                          |   |       |                        |  |  |                                   |   |       |      |  |  |  |   |       |   |  |  |  |   |    |   |
| Issueof common shares, net ofcosts                                     |  |  |                                          |   | 3,659,014  |                        |  |  |                                   |   | 1,672,179  |      |  |  |  |   | 1,986,734  |   |  |  |  |   | 101     |   |
| Issueofwarrants                                                        |  |  |                                          |   | 453,162    |                        |  |  |                                   |   | 206,622    |      |  |  |  |   | 246,540    |   |  |  |  |   | — |   |
| Issueof special warrants, net ofcosts                                  |  |  |                                          |   | 195,409    |                        |  |  |                                   |   | —    |      |  |  |  |   | —    |   |  |  |  |   | 195,409 |   |
| Exerciseofwarrants                                                     |  |  |                                          |   | 220,875    |                        |  |  |                                   |   | 220,875    |      |  |  |  |   | —    |   |  |  |  |   | — |   |
| Exerciseofoptions                                                      |  |  |                                          |   | 57,500     |                        |  |  |                                   |   | 57,500     |      |  |  |  |   | —    |   |  |  |  |   | — |   |
|                                                                   |  |  |                                          |   | 4,585,960  |                        |  |  |                                   |   | 2,157,176  |      |  |  |  |   | 2,233,274  |   |  |  |  |   | 195,510 |   |
| INVESTINGACTIVITIES                                                    |  |  |                                          |   |       |                        |  |  |                                   |   |       |      |  |  |  |   |       |   |  |  |  |   |    |   |
| Interestin exploration properties and deferred explorationexpenditures |  |  |                                          |   | (1,433,184 | )                      |  |  |                                   |   | (702,384   | )    |  |  |  |   | (730,800   | ) |  |  |  |   | — |   |
| Purchaseofequipment                                                    |  |  |                                          |   | (9,152     | )                      |  |  |                                   |   | (4,946     | )    |  |  |  |   | (4,206     | ) |  |  |  |   | — |   |
|                                                                   |  |  |                                          |   | (1,442,336 | )                      |  |  |                                   |   | (707,330   | )    |  |  |  |   | (735,006   | ) |  |  |  |   | — |   |
| Increasein cash andequivalents                                         |  |  |                                          |   | 1,681,524  |                        |  |  |                                   |   | 597,849    |      |  |  |  |   | 911,262    |   |  |  |  |   | 172,413 |   |
| Cashand equivalents, beginning ofyear                                  |  |  |                                          |   | —    |                        |  |  |                                   |   | 1,083,675  |      |  |  |  |   | 172,413    |   |  |  |  |   | — |   |
| Cashand equivalents, end ofyear                                        |  |  |                                          | $ | 1,681,524  |                        |  |  |                                   | $ | 1,681,524  |      |  |  |  | $ | 1,083,675  |   |  |  |  | $ | 172,413 |   |
| SUPPLEMENTALINFORMATION                                                |  |  |                                          |   |       |                        |  |  |                                   |   |       |      |  |  |  |   |       |   |  |  |  |   |    |   |
| Interestpaid                                                           |  |  |                                          |   | 2,979      |                        |  |  |                                   |   | —    |      |  |  |  |   | 2,979      |   |  |  |  |   | — |   |
| Warrantsissued for servicesprovided                                    |  |  |                                          |   | 26,522     |                        |  |  |                                   |   | 16,127     |      |  |  |  |   | 10,395     |   |  |  |  |   | — |   |
| Accruedexplorationexpenditures                                         |  |  |                                          |   | 62,710     |                        |  |  |                                   |   | 62,710     |      |  |  |  |   | —    |   |  |  |  |   | — |   |
| Accruedshare issuecosts                                                |  |  |                                          |   | 19,897     |                        |  |  |                                   |   | 19,897     |      |  |  |  |   | —    |   |  |  |  |   | — |   |
| Conversionof special warrants into commonshares                        |  |  |                                          |   | 195,409    |                        |  |  |                                   |   | —    |      |  |  |  |   | 195,409    |   |  |  |  |   | — |   |
| Valueof shares issued to acquireproperty                               |  |  |                                          |   | 182,000    |                        |  |  |                                   |   | 182,000    |      |  |  |  |   | —    |   |  |  |  |   | — |   |
|                                                                        |

Theaccompanying notes are an integral part of these consolidated financialstatements.

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NORTHWESTERNMINERAL VENTURES INC.(AN EXPLORATION STAGECOMPANY)Notes to Consolidated FinancialStatementsDECEMBER 31, 2005, 2004, AND2003(Expressed in CanadianDollars)

|          |                                       |
|----------|---------------------------------------|
| 1.  | NATURE OF OPERATIONS AND GOINGCONCERN |

Northwestern Mineral Ventures Inc. (the‘‘Company’’) was incorporated under the laws ofthe Province of Ontario, Canada by Articles of Incorporation datedSeptember  26,  2003. The Company, which is in theexploration stage, is engaged in the acquisition, exploration anddevelopment of properties for the mining of precious and base metals.The Company is in the process of exploring its exploration propertiesfor mineral resources and has not determined whether the propertiescontain economically recoverable reserves. The recovery of the amountsshown for the exploration properties and the related deferredexpenditures is dependent upon the existence of economicallyrecoverable reserves, confirmation of the Company's interest inthe underlying mineral claims, the ability of the Company to obtainnecessary financing to complete the exploration, and upon futureprofitable production.

The business of mining andexploring for minerals involves a high degree of risk and there can beno assurance that current exploration programs will result inprofitable mining operations. The recoverability of the carrying valueof exploration properties and the Company’s continued existenceis dependent upon the preservation of its interest in the underlyingproperties, the discovery of economically recoverable reserves, theachievement of profitable operations, or the ability of the Company toraise alternative financing, if necessary, or alternatively upon theCompany’s ability to dispose of its interests on an advantageousbasis. Changes in future conditions could require material write downsof the carrying values. Some of the Company’s mining assets arelocated outside of Canada and are subject to the risk of foreigninvestment, including increases in taxes and royalties, renegotiationof contracts, currency exchange fluctuations and politicaluncertainty.

Although the Company has taken steps toverify title to the properties on which it is conducting explorationand in which it has an interest, in accordance with industry standardsfor the current stage of exploration of such properties, theseprocedures do not guarantee the Company’s title. Property titlemay be subject to unregistered prior agreements and non-compliance withregulatory requirements.

As at December31,  2005, the Company had cash and equivalents of $1,681,524 andworking capital of $1,603,476. Management of the Company believes thatit has sufficient funds to pay its ongoing administrative expenses andto meet its liabilities for the ensuing year as they fall due. However,the Company does not have sufficient resources to meet its explorationproperty expenditures as described in Notes 5 and 14. TheCompany's ability to continue operations and fund its explorationproperty expenditures is dependent on management's ability tosecure additional financing. Management is actively pursuing suchadditional sources of financing, and while it has been successful indoing so in the past, there can be no assurance it will be able to doso in the future. Because of this uncertainty there is some doubt aboutthe ability of the Company to continue as a going concern. Thesefinancial statements do not include the adjustments that would benecessary should the Company be unable to continue as a going concern.Such adjustments could bematerial.

2.    SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES

The accountingpolicies of the Company are in accordance with Canadian generallyaccepted accounting principles and their basis of application isconsistent with that of the previous year. These policies conform, inall material respects, with United States generally accepted accountingprinciples (‘‘US GAAP’’), except asdiscussed in Note 15. Outlined below are those policies consideredparticularly significant.

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2.    SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis ofConsolidation

The consolidated financial statementsinclude the accounts of the Company and its wholly-owned subsidiaryNorthwestern Mineral Ventures (USA) Inc. All material inter-companybalances and transactions have been eliminated. All references to theCompany should be treated as references to the Company and itssubsidiary.

Cash andEquivalents

Cash and equivalents include cash onhand, balances with banks and short-term investments with originalmaturities of 90 days orless.

Equipment

Equipment isrecorded at cost. Amortization is recorded on the declining balancebasis at an annual rate of 30%.

Interest inExploration Properties and Deferred ExplorationExpenditures

The Company accounts for explorationproperty costs in accordance with the Canadian Institute of CharteredAccountants (‘‘CICA’’) Handbook Section3061, ‘‘Property, plant and equipment’’(‘‘CICA 3061’’), and abstract EIC 126,‘‘Accounting by Mining Enterprises for ExplorationCosts’’ (‘‘EIC 126’’) of theEmerging Issues Committee. CICA 3061 provides for the capitalization ofacquisition and exploration costs of an exploration property where suchcosts are considered to have the characteristics of property, plant andequipment. EIC 126 provides that a mining enterprise is not precludedfrom considering exploration costs to have the characteristics ofproperty, plant and equipment, when it has not established mineralreserves objectively and therefore does not have a basis for preparinga projection of the estimated future net cash flows from theproperty.

Interest in exploration properties anddeferred exploration expenditures are carried at cost until they arebrought into production, at which time they are depleted on a unit-ofproduction method based on proven and probable reserves. If a propertyis subsequently determined not to be economic, the property and relateddeferred costs are written down to net realizable value. Other generalexploration expenses are charged to operations as incurred. The cost ofexploration properties abandoned or sold and their related deferredexploration costs are charged to operations in the currentyear.

Costs include the cash consideration and the fairmarket value of the shares issued for the acquisition of explorationproperties. The carrying value is reduced by option proceeds receiveduntil such time as the property cost and deferred expenditures arereduced to nominal amounts. Properties acquired under option agreementsor by joint ventures, whereby payments are made at the sole discretionof the Company, are recorded in the accounts at the time ofpayment.

EIC 126 provides that an exploration stageenterprise with initially capitalized exploration costs but that hasnot objectively established mineral reserves and therefore does nothave a basis for preparing a projection of the estimated future cashflow from a property, is not obliged to conclude that the capitalizedcosts have been impaired. However, EIC 126 references certainconditions that should be considered in determining subsequent writedowns, such as changes or abandonment of a work program or poorexploration results, and management reviews such conditions todetermine whether a write down of capitalized costs is required. Whenthe carrying value of a property exceeds its net recoverable amount,provision is made for the impairment in value.

AssetRetirement Obligations

Effective January1,  2004, the Company adopted the new recommendations of theCanadian Institute of Chartered Accountants(‘‘CICA’’) Handbook Section 3110,‘‘Asset Retirement Obligations’’. Under the newstandard, the fair values of asset retirement obligations are recordedas liabilities on a discounted basis when they are incurred. Amountsrecorded for the related assets are increased by 

F-7

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Table of Contents

2.    SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES (Continued)

the amount of these obligations. Over time,the liabilities will be accreted for the change in their present valueand the initial capitalized costs will be depleted and amortized overthe useful lives of the related assets. The impact of adopting the newaccounting for asset retirement obligations standard has no effect onthese statements as of December  31,2005.

Flow-Through Financing

TheCompany has financed a portion of its exploration activities throughthe issue of flow-through shares, which transfer the tax deductibilityof exploration expenditures to the investor. Proceeds received on theissue of such shares have been credited to capital stock and therelated exploration costs have been charged to exploration and resourceproperties.

Resource expenditure deductions for incometax purposes related to exploration and development activities fundedby flow-through share arrangements are renounced to investors inaccordance with income tax legislation. When these expenditures arerenounced, temporary taxable differences created by the renunciationwill reduce share capital.

Stock-based CompensationPlan

The Company has adopted the recognition ofstock compensation expense for grants of options to officers, directorsand employees in the financial statements based on the estimated fairvalue at the grant date for options granted after September26,  2003. The Company, as permitted by CICA Handbook Section3870, has adopted this section prospectively. The Company's stockoption plan is described in Note 8.

IncomeTaxes

The Company uses the future income tax asset andliability method of accounting for income taxes. Under the method oftax allocation, future income taxes are determined based on thedifferences between the financial reporting and tax bases of assets andliabilities. These income tax assets and liabilities are measured usingthe substantively enacted tax rates in which the income tax assets orliabilities are expected to be settled or realized. A valuationallowance is provided to the extent that it is more likely than notthat future income tax assets will not berealized.

Loss Per Common Share(LPS)

Basic loss per share is computed by dividingthe loss for the year by the weighted average number of common sharesoutstanding during the year, including contingently issuable shareswhich are included when the conditions necessary for issuance have beenmet. Diluted loss per share is calculated in a similar manner, exceptthat the weighted average number of common shares outstanding isincreased to include potentially issuable common shares from theassumed exercise of common share purchase options and warrants, ifdilutive. The number of additional shares included in the calculationis based on the treasury stock method for options and warrants. As theCompany had a loss in each of the periods presented, basic and dilutedloss per share are the same as the exercise of all options and warrantswould be anti-dilutive. At December  31,  2005, 3,900,000stock options and 3,364,015 warrants and broker warrants couldpotentially be dilutive in the future.

ForeignCurrency Translation

The Company’s functionaland reporting currency is the Canadian dollar. Foreign currencymonetary assets and liabilities are translated at the period endexchange rate. Non-monetary assets and liabilities, as well as revenueand expense transactions denominated in foreign currencies aretranslated at the rate prevailing at the time of the transaction.Translation gains or losses are recognized in the period in which theyoccur. Unless otherwise stated, all amounts are in Canadiandollars.

MeasurementUncertainty

The preparation of consolidatedfinancial statements in conformity with Canadian generally acceptedaccounting principles requires management to make estimates andassumptions that affect the 

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2.    SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES (Continued)

reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of thefinancial statements and the related reported amounts of revenue andexpense during the report period. The most significant estimates arerelated to the recoverability of exploration expenditures, stock-basedcompensation, and future tax assets and liabilities. Actual resultscould differ from those estimates. Management believes that theestimates are reasonable.

|          |                     |
|----------|---------------------|
| 3.  | CASH ANDEQUIVALENTS |

|                                              |  |  |      |   |           |      |  |  |  |   |           |  |
|----------------------------------------------|--|--|------|---|-----------|------|--|--|--|---|-----------|--|
|                                         |  |  | 2005 |   |           | 2004 |
| Cash and equivalents consist of thefollowing |  |  |      |   |      |      |  |  |  |   |      |  |
| Cash                                         |  |  |      | $ | 1,681,524 |      |  |  |  | $ | 583,675   |  |
| Short-term money marketinvestments           |  |  |      |   | —   |      |  |  |  |   | 500,000   |  |
|                                         |  |  |      | $ | 1,681,524 |      |  |  |  | $ | 1,083,675 |  |
|                                              |

Asat December  31,  2004, the carrying value of theshort-term money market investments approximated their marketvalue.

|          |           |
|----------|-----------|
| 4.  | EQUIPMENT |

|                   |
|-------------------|
|                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|              |  |  | Cost |  |  | AccumulatedDepreciation |  |  | NetCarryingValue2005 |  |  | NetCarryingValue2004 |
| Computerequipment |  |  |  | $ | 9,152 |  |  |  |  | $ | 2,446 |  |  |  |  | $ | 6,706 |  |  |  |  | $ | 3,575 |  |
|                   |

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|                            |                                                                        |
|----------------------------|------------------------------------------------------------------------|
|    5.  | INTERESTIN EXPLORATION PROPERTIES AND DEFERRED EXPLORATIONEXPENDITURES |

At December  31,  2005,accumulated costs with respect to the Company's interest inexploration properties owned, leased or under option, consisted of thefollowing:

|                            |  |  |      |   |         |      |  |  |  |   |         |   |
|----------------------------|--|--|------|---|---------|------|--|--|--|---|---------|---|
| PicachosProject,Mexico     |  |  | 2005 |   |         | 2004 |
| Acquisitioncosts           |  |  |      |   |    |      |  |  |  |   |    |   |
| Optionpayments             |  |  |      | $ | 114,000 |      |  |  |  | $ | — |   |
| Staking                    |  |  |      |   | 15,926  |      |  |  |  |   | — |   |
|                       |  |  |      |   | 129,926 |      |  |  |  |   | — |   |
| Explorationcosts           |  |  |      |   |    |      |  |  |  |   |    |   |
| Explorationadvance         |  |  |      |   | 297,739 |      |  |  |  |   | — |   |
| Analysis andassays         |  |  |      |   | 127,346 |      |  |  |  |   | 36,338  |   |
| Geological,reports andmaps |  |  |      |   | 71,071  |      |  |  |  |   | 65,613  |   |
| Surveys                    |  |  |      |   | 64,480  |      |  |  |  |   | — |   |
| General                    |  |  |      |   | 28,521  |      |  |  |  |   | 17,348  |   |
| Projectmanagementfees      |  |  |      |   | 8,965   |      |  |  |  |   | 8,965   |   |
| Labour                     |  |  |      |   | 8,830   |      |  |  |  |   | 8,830   |   |
| Professionalfees           |  |  |      |   | 8,535   |      |  |  |  |   | 8,535   |   |
| Campcosts                  |  |  |      |   | 5,940   |      |  |  |  |   | 5,940   |   |
| Transportation             |  |  |      |   | 5,364   |      |  |  |  |   | 3,836   |   |
| Drilling                   |  |  |      |   | 3,405   |      |  |  |  |   | 3,405   |   |
|                       |  |  |      |   | 630,196 |      |  |  |  |   | 158,810 |   |
| Interestincome             |  |  |      |   | (9,216  | )    |  |  |  |   | (4,046  | ) |
|                       |  |  |      |   | 620,980 |      |  |  |  |   | 154,764 |   |
|                       |  |  |      | $ | 750,906 |      |  |  |  | $ | 154,764 |   |
|                            |

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|                            |                                                                                         |
|----------------------------|-----------------------------------------------------------------------------------------|
|    5.  | INTERESTIN EXPLORATION PROPERTIES AND DEFERRED EXPLORATIONEXPENDITURES (Continued) |

|                                                                       |  |  |      |   |          |      |  |  |  |   |         |   |
|-----------------------------------------------------------------------|--|--|------|---|----------|------|--|--|--|---|---------|---|
| WaterburyProject,Canada                                               |  |  | 2005 |   |          | 2004 |
| Acquisitioncosts                                                      |  |  |      |   |     |      |  |  |  |   |    |   |
| Optionpayments                                                        |  |  |      | $ | 93,050   |      |  |  |  | $ | — |   |
| Explorationcosts                                                      |  |  |      |   |     |      |  |  |  |   |    |   |
| Geological, reports andmaps                                           |  |  |      |   | 76,697   |      |  |  |  |   | — |   |
|                                                                  |  |  |      | $ | 169,747  |      |  |  |  | $ | — |   |
| FireflyProject,USA                                                    |  |  | 2005 |   |          | 2004 |
| Acquisitioncosts                                                      |  |  |      |   |     |      |  |  |  |   |    |   |
| Optionpayments                                                        |  |  |      | $ | 58,485   |      |  |  |  | $ | — |   |
| Claimpayments                                                         |  |  |      |   | 17,854   |      |  |  |  |   | — |   |
|                                                                  |  |  |      |   | 76,339   |      |  |  |  |   | — |   |
| Explorationcosts                                                      |  |  |      |   |     |      |  |  |  |   |    |   |
| Geological, reports andmaps                                           |  |  |      |   | 18,466   |      |  |  |  |   | — |   |
| Professionalfees                                                      |  |  |      |   | 8,173    |      |  |  |  |   | — |   |
| Explorationadvance                                                    |  |  |      |   | 7,500    |      |  |  |  |   | — |   |
| Consultingfees                                                        |  |  |      |   | 2,980    |      |  |  |  |   | — |   |
| Transportation                                                        |  |  |      |   | 1,154    |      |  |  |  |   | — |   |
| General                                                               |  |  |      |   | 85       |      |  |  |  |   | — |   |
|                                                                  |  |  |      |   | 38,358   |      |  |  |  |   | — |   |
|                                                                  |  |  |      | $ | 114,697  |      |  |  |  | $ | — |   |
| BearProject,Canada                                                    |  |  | 2005 |   |          | 2004 |
| Acquisitioncosts                                                      |  |  |      |   |     |      |  |  |  |   |    |   |
| Optionpayments                                                        |  |  |      | $ | 50,000   |      |  |  |  | $ | 50,000  |   |
| Claimpayments                                                         |  |  |      |   | 12,506   |      |  |  |  |   | 1,500   |   |
|                                                                  |  |  |      |   | 62,506   |      |  |  |  |   | 51,500  |   |
| Explorationcosts                                                      |  |  |      |   |     |      |  |  |  |   |    |   |
| Transportation                                                        |  |  |      |   | 222,287  |      |  |  |  |   | 210,997 |   |
| Drilling                                                              |  |  |      |   | 85,865   |      |  |  |  |   | 85,865  |   |
| General                                                               |  |  |      |   | 63,004   |      |  |  |  |   | 60,679  |   |
| Campcosts                                                             |  |  |      |   | 60,671   |      |  |  |  |   | 60,671  |   |
| Projectmanagementfees                                                 |  |  |      |   | 40,759   |      |  |  |  |   | 40,759  |   |
| Labour                                                                |  |  |      |   | 29,741   |      |  |  |  |   | 29,741  |   |
| Consultingfees                                                        |  |  |      |   | 23,613   |      |  |  |  |   | 13,594  |   |
| Analysis andassays                                                    |  |  |      |   | 12,466   |      |  |  |  |   | 11,008  |   |
| Geological,reports andmaps                                            |  |  |      |   | 9,223    |      |  |  |  |   | — |   |
|                                                                  |  |  |      |   | 547,629  |      |  |  |  |   | 513,314 |   |
| Interestincome                                                        |  |  |      |   | (7,942   | )    |  |  |  |   | (4,047  | ) |
|                                                                  |  |  |      |   | 539,687  |      |  |  |  |   | 509,267 |   |
|                                                                  |  |  |      |   | 602,193  |      |  |  |  |   | 560,767 |   |
| Explorationproperties and deferredexploration expenditureswritten-off |  |  |      |   | (602,193 | )    |  |  |  |   | — |   |
|                                                                  |  |  |      | $ | —  |      |  |  |  | $ | 560,767 |   |
|                                                                       |

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|                            |                                                                                         |
|----------------------------|-----------------------------------------------------------------------------------------|
|    5.  | INTERESTIN EXPLORATION PROPERTIES AND DEFERRED EXPLORATIONEXPENDITURES (Continued) |

|                                                                              |  |  |      |   |           |      |  |  |  |   |         |  |
|------------------------------------------------------------------------------|--|--|------|---|-----------|------|--|--|--|---|---------|--|
| Irhazerand In Gall Project, Niger(See Note14(a))                             |  |  | 2005 |   |           | 2004 |
| Acquisitioncosts                                                             |  |  |      |   |      |      |  |  |  |   |    |  |
| Staking                                                                      |  |  |      | $ | 4,500     |      |  |  |  |   | — |  |
| Explorationcosts                                                             |  |  |      |   |      |      |  |  |  |   |    |  |
| Transportation                                                               |  |  |      | $ | 19,111    |      |  |  |  | $ | 6,769   |  |
| Consultingfees                                                               |  |  |      |   | 10,245    |      |  |  |  |   | 8,500   |  |
| General                                                                      |  |  |      |   | 6,495     |      |  |  |  |   | — |  |
|                                                                         |  |  |      |   | 35,851    |      |  |  |  |   | 15,269  |  |
|                                                                         |  |  |      | $ | 40,351    |      |  |  |  | $ | 15,269  |  |
| TOTALINTEREST IN EXPLORATION PROPERTIES AND DEFERRED EXPLORATIONEXPENDITURES |  |  |      | $ | 1,075,701 |      |  |  |  | $ | 730,800 |  |
|                                                                              |

|  |           |                 |
|--|-----------|-----------------|
|  | (a)  | PicachosProject |

On July  14,  2004 the Companyentered into an option agreement with RNC Gold Inc.(‘‘RNC’’) to acquire a 50% undividedinterest in the 6,700 hectare silver-gold Picachos property in Durango,Mexico and the 3,500 hectare Tango gold concession in Sinaloa, Mexico.In order to earn its interest, the Company must expend $500,000 inexploration expenditures on or before December  31,  2005and $1  million on or before December  31,  2006.Also part of the agreement, the Company must generate a feasibilitystudy for the production of a minimum of 25,000 ounces of gold peryear. The Chairman and CEO of the Company was also a director of RNC atthe time the Option Agreement was signed. On January  12,2005, the Chairman resigned as director of RNC. During the year endedDecember  31,  2005, a director of the Company was also adirector of RNC. On February  28,  2006, this individualresigned as a director of RNC.

On October14,  2005 the Company completed another agreement with RNC, whichgrants the Company the right to acquire a 100% interest in theproperty portfolio. Under the terms of this agreement, the Company willbe granted the right at feasibility to acquire RNC’s remaining50% stake in the Picachos Project. The purchase price of$20  million is payable as: $3  million at the completionof a feasibility study, then $9  million at the commencement ofcommercial production, and then $2  million on each of the firstthrough fourth anniversaries of the commencement of commercialproduction. The Company issued 200,000 common shares valued at $114,000from its treasury to RNC as consideration for entering into thisagreement.

Given the Company’s exploration focuson the silver-gold property in Durango State, the Company elected todrop its interest in the Tango gold claims in Sinaloa State onNovember  17,  2005. All material expenditures toDecember  31,  2005 have been incurred on the Durango Stateproperty and no writedown was required.

|  |           |                   |
|--|-----------|-------------------|
|  | (b)  | Waterbury Project |

OnNovember  9,  2005, the Company completed a formal optionagreement with CanAlaska Ventures Ltd.(‘‘CanAlaska’’) to acquire up to 75%ownership of nine uranium claims, collectively called the‘‘Waterbury Project’’, in the easternAthabasca Basin, Saskatchewan, Canada.

Under the termsof the formal option agreement, the Company will pay, in instalments, atotal of $150,000 ($25,000 paid) to acquire an initial 50%interest in the Waterbury Project from CanAlaska. In addition,CanAlaska will receive a 3% net smelter royalty (NSR) and300,000 shares (100,000 issued, valued at $68,000) from theCompany's treasury to be released in stages beginningNovember  15,  2005. These shares will be subject to anyregulatory hold periods. The Company has agreed to spend a minimum of$2  million on the Waterbury Project prior to April1,  2008.

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|                            |                                                                                         |
|----------------------------|-----------------------------------------------------------------------------------------|
|    5.  | INTERESTIN EXPLORATION PROPERTIES AND DEFERRED EXPLORATIONEXPENDITURES (Continued) |

The Company can increase itsownership to 60% by spending an additional $2  million onthe property within two years of vesting its 50% interest.Thereafter, the Company can increase its stake to 75% bycompleting a Bankable Feasibility Study within two years from the dateit vests its 60% interest. During this development stage, theCompany would spend an annual minimum of $500,000 at Waterbury.CanAlaska would also receive an additional 200,000 shares from theCompany’s treasury.

CanAlaska will act asoperator of the property until the Company has a vested 60%interest, at which time the Company may become theoperator.

|  |           |                |
|--|-----------|----------------|
|  | (c)  | FireflyProject |

On December  9,  2005, theCompany completed an option agreement to acquire 100% ownershipof two uranium-vanadium mines, collectively called the‘‘Firefly Project’’, in the La Sal uraniumdistrict in southeastern Utah from GeoXplor Corp.(‘‘GeoXplor’’).

Under the termsof the option agreement, the Company will pay US$5,100,000 to acquirethe Firefly Project from GeoXplor, which included an initial payment ofUS$50,000 (paid) and payment of US$50,000 upon receipt of board andregulatory approval. The Company will make an additional payment ofUS$5,000,000 to GeoXplor once a decision is made to commence productionon the Firefly Project or on July  31,  2011, whichever isearlier. In addition, and subject to board and regulatory approval,GeoXplor will receive 300,000 common shares from the Company’streasury to be released, 100,000 upon completion of NI 43-101 TechnicalReport, and 100,000 each on or prior to the first and secondanniversaries of the execution date of the formal agreement. Theseshares will be subject to any applicable regulatory hold periods.GeoXplor is also entitled to a 2% net smelter royalty on theproduction of uranium and vanadium from the FireflyProject.

The Company has agreed to spend a minimum ofUS$700,000 on the Firefly Project on or prior to the third anniversaryof the option agreement date. Ashworth Explorations Ltd. will act asoperator of the Firefly Project until the second anniversary of theoption agreement date, at which time the Company becomes theoperator.

|  |           |             |
|--|-----------|-------------|
|  | (d)  | BearProject |

The Company and FronteerDevelopment Group Inc. (‘‘Fronteer’’) executeda definitive formal agreement (the‘‘Agreement’’) along with several amendingagreements covering the Conjuror, Achook, McPhoo, and Longtom claims inthe Northwest Territories (collectively, the‘‘Bear Project’’). Pursuant tothe Agreement, the Company may acquire the right to earn up to50% interest in the Bear Project for the followingconsideration:

|  |           |                                                      |
|--|-----------|------------------------------------------------------|
|  | (i)  | an initial paymentto Fronteer of $20,000 cash(paid); |

|  |            |                                                                                                                                    |
|--|------------|------------------------------------------------------------------------------------------------------------------------------------|
|  | (ii)  | completion ofexploration expenditures by the Company in the amount of $5,000,000over a five-year period ending September  26,2008. |

|  |             |                                                                                                                                                                                                |
|--|-------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (iii)  | annual cash payments toFronteer, commencing on the first year anniversary of the OptionAgreement of $30,000 (paid), $40,000, $50,000, $60,000 and $70,000respectively over a five-year period. |

During the yearended December  31,  2004, the McPhoo, Achook and Conjurorclaims were allowed to lapse; however, the Agreement terms remain inplace for the Longtom property. All expenditures incurred on the BearProject related to the Longtom property. During the year endedDecember  31,  2005, management decided to terminate theBear Project and focus on other projects. There were no financialpenalties associated with the termination of the Bear Project. As aresult, capitalized costs of $602,193 were written-off during theyear.

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|                            |              |
|----------------------------|--------------|
|    6.  | SHARECAPITAL |

a)    Authorized

Unlimitednumber of common shares

b)    Issued andoutstanding

|                                                                                                              |  |  |        |  |            |        |  |  |  |   |           |   |
|--------------------------------------------------------------------------------------------------------------|--|--|--------|--|------------|--------|--|--|--|---|-----------|---|
|                                                                                                         |  |  | Shares |  |            | Amount |
| Balance,December  31,  2003                                                                                  |  |  |        |  | 4,000,000  |        |  |  |  | $ | 101       |   |
| Special warrantsexercised(1)                                                                                 |  |  |        |  | 8,000,000  |        |  |  |  |   | 195,409   |   |
| Publicoffering(2)                                                                                            |  |  |        |  | 60,000,000 |        |  |  |  |   | 1,500,000 |   |
| Flow-throughprivateplacement(4)                                                                              |  |  |        |  | 412,000    |        |  |  |  |   | 125,660   |   |
| Commonshares issued on privateplacements(5)(6)                                                               |  |  |        |  | 2,909,000  |        |  |  |  |   | 967,925   |   |
| Warrantvaluation(5)(6)                                                                                       |  |  |        |  | —    |        |  |  |  |   | (246,540  | ) |
| Costofissue                                                                                                  |  |  |        |  | —    |        |  |  |  |   | (370,706  | ) |
| Balance,December  31,2004                                                                                    |  |  |        |  | 75,321,000 |        |  |  |  |   | 2,171,849 |   |
| Flow-throughprivateplacement(9)                                                                              |  |  |        |  | 1,707,665  |        |  |  |  |   | 1,024,599 |   |
| Commonshares issued on private placements(7)(9)                                                              |  |  |        |  | 2,242,425  |        |  |  |  |   | 1,000,000 |   |
| Warrantvaluation(7)(9)                                                                                       |  |  |        |  | —    |        |  |  |  |   | (206,622  | ) |
| Exerciseof stockoptions                                                                                      |  |  |        |  | 200,000    |        |  |  |  |   | 57,500    |   |
| Exercise ofstock options –valuation                                                                    |  |  |        |  | —    |        |  |  |  |   | 44,000    |   |
| Exerciseof warrants                                                                                          |  |  |        |  | 455,000    |        |  |  |  |   | 220,875   |   |
| Exerciseof warrants-valuation                                                                                |  |  |        |  | —    |        |  |  |  |   | 62,600    |   |
| Sharesissued for interest in exploration properties and deferred explorationexpenditures (Notes 5(a) and(b)) |  |  |        |  | 300,000    |        |  |  |  |   | 182,000   |   |
| Cost ofissue                                                                                                 |  |  |        |  | —    |        |  |  |  |   | (181,822  | ) |
| Flow-throughtaxliability(4)                                                                                  |  |  |        |  | —    |        |  |  |  |   | (45,200   | ) |
| Balance,December  31,  2005 as per Statementof                                                               |  |  |        |  |       |        |  |  |  |   |      |   |
| Shareholders' Equity                                                                                         |  |  |        |  | 80,226,090 |        |  |  |  | $ | 4,329,779 |   |
|                                                                                                              |

|  |
|--|
|  |  |
|  |

|  |     |                                                                                                                                                                                                                                                                                                                                                                                                             |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (1) | Specialwarrants to purchase 8,000,000 common shares of the Company for noadditional consideration, were issued and outstanding as ofDecember  31,  2003. The net proceeds from the sale of thespecial warrants after deducting the issue costs of the special warrantoffering were $195,409. On January  19,  2004, the specialwarrants were exercised, at no additional cost, into 8,000,000 commonshares. |

|  |     |                                                                                                                                                                                                                                                                                                                                      |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (2) | On February26,  2004, the Company completed an offering for the sale of60,000,000 common shares at $0.025 per share, for gross proceeds of$1,500,000. Pursuant to this offering, the agent received a commissionequal to 7% of the gross proceeds of the Offering ($0.00175 percommon share) for an aggregate commission of$105,000. |

|  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (3) | In 2004, the Companycompleted a stock split pursuant to which each issued common share ofthe Company was subdivided into two common shares. The stock split wasapproved at the annual and special meeting of the shareholders of theCompany held on June  23,  2004. Each registered holder ofcommon shares of the Company of record on July  27,  2004received one additional common share for every common share held.Shares and per share amounts presented in these consolidated financialstatements have been retroactively adjusted to reflect this stocksplit. |

|  |     |                                                                                                                                                                                                                                                                            |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (4) | On July  30,2004, the Company issued 412,000 flow-through common shares forproceeds of $125,660. This amount was renounced subsequent toDecember  31,  2004. The renunciation created a futureincome tax liability of $45,200, which was allocated as a cost ofissuing the |

F-14

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Table of Contents

|                            |                               |
|----------------------------|-------------------------------|
|    6.  | SHARECAPITAL (Continued) |

|  |  |                                                                                                                                                                                                                |
|--|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | flow-through shares. Pursuant to thisoffering, the agent received a commission equal to 8.5% of thegross proceeds of the offering ($0.026 per flow-through common share)for an aggregate commission of$10,681. |

|  |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (5)  | On October  15,2004, the Company completed a private placement financing of 900,000units at a price of $0.35 per unit for gross proceeds of $315,000. Eachunit consisted of one common share and one common share purchasewarrant exercisable at a price of $0.475 until April  15,2006. Toll Cross Securities Inc. acted as the agent in the offering andwas paid a commission of $22,050, along with broker warrants to acquire63,000 units at an exercise price of $0.35 until April15,  2006. The broker warrants were valued using theBlack-Scholes option pricing model and charged to cost ofissue. |

|  |           |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (6)  | On December  3,  2004, theCompany completed a private placement financing of 2,009,000 units at aprice of $0.325 per unit for gross proceeds of $652,925. Each unitconsisted of one common share and one-half of one common share purchasewarrant. Each whole warrant is exercisable at a price of $0.475 untilJune  4,  2006. Canaccord Capital Corporation acted as theagent in the offering and was paid a commission of$65,292. |

The warrants and broker warrants issued in (5)and (6) above were valued using the Black-Scholes option-pricing model.The assumptions used for the valuationwere:

|  |           |                                         |
|--|-----------|-----------------------------------------|
|  | (a)  | Warrants issued on private placement(5) |

Dividend yield 0%, expected volatility100%, risk- free interest rate 4% and an expected life of18 months. Value assigned to 900,000 warrants is$126,000

|  |           |                                                |
|--|-----------|------------------------------------------------|
|  | (b)  | Broker warrants issued on privateplacement (5) |

Dividend yield 0%, expectedvolatility 100%, risk-free interest rate 4% and anexpected life of 18 months. Value assigned to 63,000 broker warrants is$10,395

|  |           |                                         |
|--|-----------|-----------------------------------------|
|  | (c)  | Warrants issued on private placement(6) |

Dividend yield 0%, expected volatility100%, risk-free interest rate 4% and an expected life of18 months. Value assigned to 1,004,500 warrants is$120,540

|  |           |                                                                                                                                                                                                                                                                                              |
|--|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (7)  | On January  27,  2005,the Company issued 1,333,334 units in a non-brokered private placementat a price of $0.375 per unit for gross proceeds of $500,000. Each unitconsists of one common share and one common share purchase warrantexercisable at a price of $0.465 until July  27,  2006. |

|  |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (8)  | Effective September  6,  2005,the Company completed another stock-split, where-by each issued commonshare of the Company was sub-divided into two common shares. Eachregistered shareholder of the Company received one additional new sharefor every common share held. No action was required by theshareholders. The outstanding warrants and stock-options were alsosub-divided at the same ratio as the common shares. The exercise pricesof the warrants and stock options were adjusted to reflect thestock-split. |

|  |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (9)  | On December  21,2005, the Company completed a private placement of 1,707,665flow-through common shares at a price of $0.60 per share, and 909,091units (the ‘‘Units’’) at a price of $0.55per Unit. Each Unit consisted of one common share and one-half of onecommon share purchase warrant exercisable at a price of $0.70 untilDecember  21,  2006. The proceeds of $1,024,599 from theflow through shares will be renounced subsequent to December31,  2005. The renunciation will create a future income taxliability of approximately $368,856, which will be allocated as a costof issuing the flow-through shares. |

In connection withthe private placement, the Company paid Toll Cross Securities Inc.(‘‘Toll Cross’’) a commission of approximately$106,700 and issued to Toll Cross broker warrants entitling it toacquire 63,636 Units at an exercise price of $0.55 perUnit.

F-15

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Table of Contents

|                            |                               |
|----------------------------|-------------------------------|
|    6.  | SHARECAPITAL (Continued) |

The warrants and broker warrantsissued in (7) and (9) above were valued using the Black-Scholesoption-pricing model. The assumptions used for the valuationwere:

|  |           |                                         |
|--|-----------|-----------------------------------------|
|  | (a)  | Warrants issued on private placement(7) |

expected dividend yield 0%, expectedvolatility 100%, risk- free interest rate 4% and anexpected life of 18 months. Value assigned to 1,333,334 warrants is$158,340.

|  |           |                                         |
|--|-----------|-----------------------------------------|
|  | (c)  | Warrants issued on privateplacement (9) |

expected dividend yield 0%,expected volatility 100%, risk-free interest rate 4% andan expected life of 12 months. Value assigned to 454,545 warrants is$48,282.

|  |           |                                                |
|--|-----------|------------------------------------------------|
|  | (b)  | Broker warrants issued on privateplacement (9) |

expected dividend yield 0%,expected volatility 100%, risk-free interest rate 4% andan expected life of 12 months. Value assigned to 63,636 broker warrantsis $16,127.

7.    COMMON SHARE PURCHASE WARRANTS AND BROKERWARRANTS

The following table represents a continuity ofwarrants for the year ended December  31,  2005. Allnumbers shown in the chart below have been adjusted to account for the2:1 stock splits that occurred on June  23,  2004 andSeptember  6,  2005:

|                 |
|-----------------|
|                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| ExpiryDate      |  |  | ExercisePrice |  |  | 2004OpeningBalance |  |  | Issued |  |  | Exercised |  |  | 2005ClosingBalance |  |  | 2005ClosingBlack-ScholesValue |
| Warrants        |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |
| April15,2006    |  |  |  | $ | 0.475 |  |  |  |  |  | 900,000 |  |  |  |  |  | — |  |  |  |  |  | (400,000 | ) |  |  |  |  | 500,000 |  |  |  |  | $ | 70,000 |  |
| April15,2006    |  |  |  | $ | 0.35 |  |  |  |  |  | 63,000 |  |  |  |  |  | — |  |  |  |  |  | — |  |  |  |  |  | 63,000 |  |  |  |  |  | 10,395 |  |
| June3,2006      |  |  |  | $ | 0.475 |  |  |  |  |  | 1,004,500 |  |  |  |  |  | — |  |  |  |  |  | (55,000 | ) |  |  |  |  | 949,500 |  |  |  |  |  | 113,940 |  |
| July27,2006     |  |  |  | $ | 0.465 |  |  |  |  |  | — |  |  |  |  |  | 1,333,334 |  |  |  |  |  | — |  |  |  |  |  | 1,333,334 |  |  |  |  |  | 158,340 |  |
| December21,2006 |  |  |  | $ | 0.70 |  |  |  |  |  | — |  |  |  |  |  | 454,545 |  |  |  |  |  | — |  |  |  |  |  | 454,545 |  |  |  |  |  | 48,282 |  |
|            |  |  |  |  |   |  |  |  |  |  | 1,967,500 |  |  |  |  |  | 1,787,879 |  |  |  |  |  | (455,000 | ) |  |  |  |  | 3,300,379 |  |  |  |  | $ | 400,957 |  |
| BrokerWarrants  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |
| December21,2006 |  |  |  | $ | 0.55 |  |  |  |  |  | — |  |  |  |  |  | 63,636 |  |  |  |  |  | — |  |  |  |  |  | 63,636 |  |  |  |  |  | 16,127 |  |
|            |  |  |  |  |   |  |  |  |  |  | 1,967,500 |  |  |  |  |  | 1,851,515 |  |  |  |  |  | (455,000 | ) |  |  |  |  | 3,364,015 |  |  |  |  | $ | 417,084 |  |
|                 |

|              |
|--------------|
|              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| ExpiryDate   |  |  | ExercisePrice |  |  | 2003OpeningBalance |  |  | Issued |  |  | Exercised |  |  | 2004ClosingBalance |  |  | 2004ClosingBlack-ScholesValue |
| Warrants     |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  |  |   |  |
| April15,2006 |  |  |  | $ | 0.475 |  |  |  |  |  | — |  |  |  |  |  | 900,000 |  |  |  |  |  | — |  |  |  |  |  | 900,000 |  |  |  |  | $ | 126,000 |  |
| April15,2006 |  |  |  | $ | 0.35 |  |  |  |  |  | — |  |  |  |  |  | 63,000 |  |  |  |  |  | — |  |  |  |  |  | 63,000 |  |  |  |  |  | 10,395 |  |
| June3,2006   |  |  |  | $ | 0.475 |  |  |  |  |  | — |  |  |  |  |  | 1,004,500 |  |  |  |  |  | — |  |  |  |  |  | 1,004,500 |  |  |  |  |  | 120,540 |  |
|         |  |  |  |  |   |  |  |  |  |  |             — |  |  |  |  |  | 1,967,500 |  |  |  |  |  | — |  |  |  |  |  | 1,967,500 |  |  |  |  | $ | 256,935 |  |
|              |

8.    STOCKOPTIONS AND CONTRIBUTED SURPLUS

|  |          |              |
|--|----------|--------------|
|  | a)  | StockOptions |

The Company has a stock option plan for thepurchase of common shares for its directors, officers, employees andother service providers. The aggregate number of common shares reservedfor issuance under the stock option plan is the lesser of 7,200,000common shares and 10% of the issued and outstanding commonshares of the Company. The options are non-assignable andnon-transferable and may be granted for a term not exceeding fiveyears. The exercise price of the options is fixed by the board ofdirectors of the Company at the time of grant, subject to allapplicable regulatory requirements.

F-16

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Table of Contents

8.    STOCKOPTIONS AND CONTRIBUTED SURPLUS (Continued)

The following table represents acontinuity of stock options for the year ended December31,  2005. All numbers shown in the chart below have beenadjusted to account for the 2:1 stock split that occurred onJune  23,  2004 and September  6,  2005:

|                  |
|------------------|
|                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|             |  |  | Numberof Stock Options |  |  | Weighted Average ExercisePrice |
|             |  |  | 2005 |  |  | 2004 |  |  | 2005 |  |  | 2004 |
|             |  |  |  |  |   |  |  |  |  |  |   |  |  |  |  | $ |          |  |  |  |  | $ |          |  |
| OpeningBalance   |  |  |  |  | 2,120,000 |  |  |  |  |  | — |  |  |  |  |  | 0.305 |  |  |  |  |  | — |  |
| Optionsgranted   |  |  |  |  | 1,980,000 |  |  |  |  |  | 2,120,000 |  |  |  |  |  | 0.739 |  |  |  |  |  | 0.305 |  |
| Optionsexercised |  |  |  |  | (200,000 | ) |  |  |  |  | — |  |  |  |  |  | 0.288 |  |  |  |  |  | — |  |
| EndingBalance    |  |  |  |  | 3,900,000 |  |  |  |  |  | 2,120,000 |  |  |  |  |  | 0.526 |  |  |  |  |  | 0.305 |  |
|                  |

OnMarch  26,  2004, 1,400,000 stock options exercisable at$0.2875 per share were granted to directors and officers of theCompany. For purposes of estimating the fair market value under theBlack-Scholes option pricing model, the following assumptions wereused: expected dividend yield – 0%; expected volatility– 100%; risk-free interest rate – 4.0%; andan expected average life of 5 years. The options were valued at$308,000 and charged to stock based compensationexpense.

On April  23,  2004, 600,000 stockoptions exercisable at $0.3375 per share were issued to a firm thatprovides investor relations to the Company. The following assumptionswere used under the Black-Scholes option-pricing model: expecteddividend yield of 0%; expected volatility of 100%;risk-free interest rate of 4% and an expected life of 3 years.These options were valued at $128,850 and will be expensed over the oneyear vesting term. As of December  31,  2004, $116,183 wascharged to stock-based compensation expense. The remaining $12,667vested in 2005 and was charged to stock based compensationexpense.

On October  22,  2004, 120,000stock options exercisable at $0.36 per share were granted to aconsultant of the Company. The following assumptions were used underthe Black-Scholes option-pricing model: expected dividend yield of0%; expected volatility of 100%; risk-free interest rateof 4% and an expected life of 3 years. These options were valuedat $27,600 and will be charged to exploration property expenditureswhen certain vesting conditions have been met (See Note14(a)).

On August  2,  2005, 80,000 stockoptions exercisable at $0.47 per share were granted to a consultant ofthe Company. The following assumptions were used under theBlack-Scholes option-pricing model: expected dividend yield of0%; expected volatility of 100%; risk-free interest rateof 4% and an expected life of 3 years. These options were valuedat $23,920 and will be charged to exploration property expenditureswhen certain vesting conditions have been met (See Note 14(a)).

On October  14,  2005, 1,900,000 stock optionsexercisable at $0.75 per share were granted to a director who is alsothe President of the Company. The following assumptions were used underthe Black-Scholes option-pricing model: expected dividend yield of0%; expected volatility of 100%; risk-free interest rateof 4% and an expected life of 5 years. These options were valuedat $1,083,000. As at December  31,  2005, $480,801 wascharged to stock-based compensation expense. The remaining $602,199will be charged to stock-based compensation when they vest in2006.

Unexercised stock options at September6,  2005 were adjusted to account for the 2:1 one stocksplit.

F-17

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Table of Contents

8.    STOCKOPTIONS AND CONTRIBUTED SURPLUS (Continued)

As at December  31,2005, the Company had the following stock optionsoutstanding:

|                 |  |  |                    |  |           |                  |  |  |            |  |        |  |  |  |                |
|-----------------|--|--|--------------------|--|-----------|------------------|--|--|------------|--|--------|--|--|--|----------------|
| NumberofOptions |  |  | ExercisableOptions |  |           | ExercisePrice($) |  |  | ExpiryDate |
| 600,000         |  |  |                    |  | 600,000   |                  |  |  |            |  | 0.3375 |  |  |  | April23,2007   |
| 120,000         |  |  |                    |  | —   |                  |  |  |            |  | 0.36   |  |  |  | October22,2007 |
| 80,000          |  |  |                    |  | —   |                  |  |  |            |  | 0.47   |  |  |  | August2,2008   |
| 1,200,000       |  |  |                    |  | 1,200,000 |                  |  |  |            |  | 0.2875 |  |  |  | March26,2009   |
| 1,900,000       |  |  |                    |  | —   |                  |  |  |            |  | 0.75   |  |  |  | October14,2010 |
| 3,900,000       |  |  |                    |  | 1,800,000 |                  |  |  |            |  |   |  |  |  |           |
|                 |

b)    ContributedSurplus

The following table reflects the continuity ofcontributed surplus relating to stockoptions:

|                                 |  |  |        |   |         |   |
|---------------------------------|--|--|--------|---|---------|---|
|                            |  |  | Amount |
| Balance,December  31,2003       |  |  |        | $ | — |   |
| Stock-based compensationexpense |  |  |        |   | 424,183 |   |
| Balance,December  31,2004       |  |  |        |   | 424,183 |   |
| Stock-based compensationexpense |  |  |        |   | 493,468 |   |
| Stock optionsexercised          |  |  |        |   | (44,000 | ) |
| Balance,December  31,2005       |  |  |        |   | 873,651 |   |
|                                 |

|          |                           |
|----------|---------------------------|
| 9.  | RELATEDPARTY TRANSACTIONS |

The Company was charged $129,183 infiscal 2005 (2004 – $144,000; 2003 – $Nil) for consultingand other services rendered by directors and/or officers of theCompany. The entire amount has been expensed in the statement ofoperations and deficit. Included in accounts payable and accruedliabilities at December  31,  2005 is $14,301 (2004 –$6,769) owing to these related parties.

See also Note5(a) with respect to certain officers and directors of the Companybeing directors of RNC.

These transactions are in thenormal course of operations and are measured at the exchange amountwhich is the consideration established and agreed to by the relatedparties.

|           |            |
|-----------|------------|
| 10.  | COMMITMENT |

As atDecember  31,  2005, the Company is committed to incurprior to December  31,  2006, on a best efforts basis,approximately $1,024,599 in qualifying Canadian explorationexpenditures pursuant to a private placement for which flow-throughproceeds have been or will be renounced to thesubscribers.

F-18

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Table of Contents

8.    STOCKOPTIONS AND CONTRIBUTED SURPLUS (Continued)

|           |             |
|-----------|-------------|
| 11.  | INCOMETAXES |

The following table reconciles the expectedincome tax recovery at the statutory income tax rate of 36%(2004 – 36%; 2003 – 37%) to the amountsrecognized in the statements ofoperations:

|                                                                        |  |  |      |   |           |      |  |  |      |   |           |   |  |  |  |   |         |   |
|------------------------------------------------------------------------|--|--|------|---|-----------|------|--|--|------|---|-----------|---|--|--|--|---|---------|---|
|                                                                   |  |  | 2005 |   |           | 2004 |  |  | 2003 |
| Lossbeforetaxes                                                        |  |  |      | $ | 1,825,274 |      |  |  |      | $ | 1,121,460 |   |  |  |  | $ | 33,097  |   |
| Expectedincome tax recovery at statutoryrate                           |  |  |      |   | 657,100   |      |  |  |      |   | 403,700   |   |  |  |  |   | 10,900  |   |
| Shareissuecosts                                                        |  |  |      |   | 37,800    |      |  |  |      |   | 25,900    |   |  |  |  |   | — |   |
| Explorationproperties and deferred exploration expenditureswritten-off |  |  |      |   | (216,800  | )    |  |  |      |   | —   |   |  |  |  |   | — |   |
| Stockbasedcompensation                                                 |  |  |      |   | (177,600  | )    |  |  |      |   | (152,700  | ) |  |  |  |   | — |   |
| Explorationoverhead                                                    |  |  |      |   | (75,000   | )    |  |  |      |   | (187,100  | ) |  |  |  |   | — |   |
| Other                                                                  |  |  |      |   | (4,300    | )    |  |  |      |   | —   |   |  |  |  |   | — |   |
| Valuationallowance                                                     |  |  |      |   | (176,000  | )    |  |  |      |   | (89,800   | ) |  |  |  |   | (10,900 | ) |
| Incometaxrecovery                                                      |  |  |      | $ | 45,200    |      |  |  |      | $ | —   |   |  |  |  | $ | — |   |
|                                                                        |

Thefollowing table reflects the future income tax assets and liabilitiesat December  31,  2005 and2004:

|                                       |  |  |      |   |          |      |  |  |  |   |          |   |
|---------------------------------------|--|--|------|---|----------|------|--|--|--|---|----------|---|
|                                  |  |  | 2005 |   |          | 2004 |
| Futureincome tax assets(liabilities): |  |  |      |   |     |      |  |  |  |   |     |   |
| Non-capitallosses                     |  |  |      | $ | 330,800  |      |  |  |  | $ | 104,000  |   |
| Explorationproperties                 |  |  |      |   | 437,700  |      |  |  |  |   | 187,100  |   |
| Shareissuecosts                       |  |  |      |   | 125,500  |      |  |  |  |   | 103,800  |   |
|                                  |  |  |      |   | 894,000  |      |  |  |  |   | 394,900  |   |
| Lessunrecognizedamount                |  |  |      |   | (894,000 | )    |  |  |  |   | (394,900 | ) |
|                                  |  |  |      | $ | —  |      |  |  |  | $ | —  |   |
|                                       |

TheCompany has unclaimed share issue costs of $348,700 and non-capitallosses of $893,900 available to reduce future taxable income in Canada.Of these losses, $33,100 expires in 2010, $246,200 in 2014, and$614,600 expires in 2015. The Company also has Canadian explorationexpenditures totaling approximately $1,220,700, Canadian developmentexpenses of $155,500, and foreign exploration and developmentexpenditures of $915,200, which under certain circumstances, may beutilized to reduce taxable income in future years. Management believesthat it is not considered more likely than not that it will createsufficient taxable income to realize its future tax assets. As aresult, a full valuation allowance has beenrecognized.

|           |                       |
|-----------|-----------------------|
| 12.  | SEGMENTED INFORMATION |

TheCompany has one operating segment which is the exploration anddevelopment of exploration properties. Geographic segmentation of theCompany’s assets are asfollows:

|                        |  |  |      |   |           |      |  |  |  |   |           |  |
|------------------------|--|--|------|---|-----------|------|--|--|--|---|-----------|--|
|                   |  |  | 2005 |   |           | 2004 |
| Canada                 |  |  |      | $ | 1,950,746 |      |  |  |  | $ | 1,726,002 |  |
| Mexico                 |  |  |      |   | 750,906   |      |  |  |  |   | 154,764   |  |
| UnitedStates ofAmerica |  |  |      |   | 114,697   |      |  |  |  |   | —   |  |
| Niger                  |  |  |      |   | 40,351    |      |  |  |  |   | 15,269    |  |
|                   |  |  |      | $ | 2,856,700 |      |  |  |  | $ | 1,896,035 |  |
|                        |

Substantiallyall of the Company's operating expenses are incurred in Canada.Substantially all of the Company’s cash and equivalents are witha Canadian chartered bank.

F-19

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Table of Contents

8.    STOCKOPTIONS AND CONTRIBUTED SURPLUS (Continued)

|           |                      |
|-----------|----------------------|
| 13.  | FINANCIALINSTRUMENTS |

Fair Value

Canadiangenerally accepted accounting principles require that the Companydisclose information about the fair value of its financial assets andliabilities. Fair value estimates are made at the balance sheet date,based on relevant market information and information about thefinancial instrument. These estimates are subjective in nature andinvolve uncertainties in significant matters of judgment and thereforecannot be determined with precision. Changes in assumptions couldsignificantly affect these estimates.

At December31,  2005, the Company's financial instruments consisted ofcash and equivalents, amounts receivable and prepaid expenses, andaccounts payable and accrued liabilities. Unless otherwise noted, it ismanagement's opinion that the Company is not exposed tosignificant interest, currency or credit risks arising from thesefinancial instruments. The Company estimates that the fair value ofthese financial instruments approximate the carryingvalues.

Foreign ExchangeRisk

The Company’s financings are inCanadian dollars. Certain of the Company's expenses are incurredin U.S., Mexican, and West African (Niger) currencies and are thereforesubject to gains or losses due to fluctuations in exchangerates.

Commodity Price Risk

Thefuture profitability of the Company is directly related to the marketprices of gold, silver, copper, uranium and otherminerals.

|           |                  |
|-----------|------------------|
| 14.  | SUBSEQUENTEVENTS |

|  |          |                                  |
|--|----------|----------------------------------|
|  | a)  | Acquisition of UraniumProperties |

Subsequent to December  31,2005, the Company acquired prospecting permits for two uraniumproperties, Irhazer and In Gall, located in the West African country ofNiger. The Government of Niger has entered into a mining conventionwith the Company for the two uranium properties for a term of thirty(30) years. Each property consists of 2,000 square kilometers (500,000acres) of mineral rights. The Company has the obligation to expend anaggregate of US$4.4 million in exploration expenditures on the twoproperties over a period of three years. The Government of Niger isentitled to a 10% retained interest and a 10%participating interest on production.

The 120,000 stockoptions exercisable at $0.36 per share and the 80,000 stock optionsexercisable at $0.47 per share described in Note 8(a) vested upon thesuccessful application of the above two prospectingpermits.

|  |          |                 |
|--|----------|-----------------|
|  | b)  | Letter ofIntent |

Subsequent to December  31,2005, the Company signed a letter of intent to acquire a controllinginterest in an uranium project located in the Ungava Bay region ofnorthern Quebec, Canada from Azimut Exploration Inc.(‘‘Azimut’’). The ‘‘North RaeUranium Project’’ consists of three blocks representing668 claims with a total area of 298.9 square kilometres or 73,835 acres(29,880 hectares). Under the terms of the letter of intent, the Companywill pay $210,000 in cash instalments over four years, and will issue150,000 common shares. The Company will also spend a total of$2.9  million in exploration expenditures over five years to earnan initial 50% interest in the project from Azimut, at whichstage Azimut would retain a 2% ‘‘yellowcake’’ royalty. The Company can increase its ownership to65% by issuing an additional 100,000 shares and paying anadditional $100,000 in cash over five years from the date the Companyearned its 50% interest. To earn its 65% interest, theCompany must also incur a minimum of $1  million in explorationexpenditures over five years from 

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|           |                                   |
|-----------|-----------------------------------|
| 14.  | SUBSEQUENTEVENTS (Continued) |

the date the Company earned its 50%interest, and produce a bankable feasibility study. The Company willact as operator of the project. The letter of intent is subject toregulatory approval, due diligence and environmentalassessment.

|  |          |                     |
|--|----------|---------------------|
|  | c)  | Exercise ofWarrants |

Subsequent to December  31,2005, a total of 996,000 warrants were exercised for total proceeds of$473,100.

|           |                                                                             |
|-----------|-----------------------------------------------------------------------------|
| 15.  | DIFFERENCESBETWEEN CANADIAN AND U.S. GENERALLYACCEPTED ACCOUNTINGPRINCIPLES |

These consolidated financial statementshave been prepared in accordance with generally accepted accountingprinciples in Canada (‘‘Canadian GAAP’’).The following represents the material adjustments to the consolidatedfinancial statements as at December  31,  2005 and 2004 andfor the periods ended December  31,  2005, 2004, and 2003in order to conform to accounting principles generally accepted in theUnited States (‘‘USGAAP’’).

|                                                                         |  |  |             |  |            |      |  |  |  |  |            |   |
|-------------------------------------------------------------------------|--|--|-------------|--|------------|------|--|--|--|--|------------|---|
|                                                                    |  |  | December31, |
|                                                                    |  |  | 2005        |  |            | 2004 |
|                                                                    |  |  | $           |  |            | $    |
| Assets                                                                  |  |  |             |  |       |      |  |  |  |  |       |   |
| CanadianGAAP                                                            |  |  |             |  | 2,856,700  |      |  |  |  |  | 1,896,035  |   |
| Explorationproperties and deferred exploration expenditures(a)          |  |  |             |  | (1,075,701 | )    |  |  |  |  | (730,800   | ) |
| USGAAP                                                                  |  |  |             |  | 1,780,999  |      |  |  |  |  | 1,165,235  |   |
| AccountsPayable and AccruedLiabilities                                  |  |  |             |  |       |      |  |  |  |  |       |   |
| CanadianGAAP                                                            |  |  |             |  | 170,817    |      |  |  |  |  | 197,625    |   |
| Flow throughshares(b)                                                   |  |  |             |  | 166,667    |      |  |  |  |  | —    |   |
| USGAAP                                                                  |  |  |             |  | 337,484    |      |  |  |  |  | 197,625    |   |
| FutureIncome Taxes                                                      |  |  |             |  |       |      |  |  |  |  |       |   |
| CanadianGAAP                                                            |  |  |             |  | —    |      |  |  |  |  | —    |   |
| Explorationproperties and deferred exploration expenditures expensed(a) |  |  |             |  | 387,000    |      |  |  |  |  | 263,000    |   |
| Increase invaluationallowance                                           |  |  |             |  | (387,000   | )    |  |  |  |  | (263,000   | ) |
| USGAAP                                                                  |  |  |             |  | —    |      |  |  |  |  | —    |   |
| CapitalStock                                                            |  |  |             |  |       |      |  |  |  |  |       |   |
| CanadianGAAP                                                            |  |  |             |  | 4,329,779  |      |  |  |  |  | 2,171,849  |   |
| Flowthrough shares(b)                                                   |  |  |             |  | (121,467   | )    |  |  |  |  | —    |   |
| USGAAP                                                                  |  |  |             |  | 4,208,312  |      |  |  |  |  | 2,171,849  |   |
| Deficit                                                                 |  |  |             |  |       |      |  |  |  |  |       |   |
| CanadianGAAP                                                            |  |  |             |  | (2,934,631 | )    |  |  |  |  | (1,154,557 | ) |
| Cumulativeexploration properties adjustment(a)                          |  |  |             |  | (1,075,701 | )    |  |  |  |  | (730,800   | ) |
| Flow-throughshares(b)                                                   |  |  |             |  | (45,200    | )    |  |  |  |  | —    |   |
| USGAAP                                                                  |  |  |             |  | (4,055,532 | )    |  |  |  |  | (1,885,357 | ) |
|                                                                         |

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|           |                                                                                              |
|-----------|----------------------------------------------------------------------------------------------|
| 15.  | DIFFERENCESBETWEEN CANADIAN AND U.S. GENERALLYACCEPTED ACCOUNTINGPRINCIPLES (Continued) |

|                                                                |  |  |                       |  |            |                       |  |  |      |  |            |   |  |  |  |  |         |   |
|----------------------------------------------------------------|--|--|-----------------------|--|------------|-----------------------|--|--|------|--|------------|---|--|--|--|--|---------|---|
|                                                           |  |  | YearendedDecember 31, |  |            | PeriodendedDecember31 |
|                                                           |  |  | 2005                  |  |            | 2004                  |  |  | 2003 |
|                                                           |  |  | $                     |  |            | $                     |  |  | $    |
| Statementof Operations                                         |  |  |                       |  |       |                       |  |  |      |  |       |   |  |  |  |  |    |   |
| Netloss under CanadianGAAP                                     |  |  |                       |  | (1,780,074 | )                     |  |  |      |  | (1,121,460 | ) |  |  |  |  | (33,097 | ) |
| Explorationproperties and deferred exploration expenditures(a) |  |  |                       |  | (344,901   | )                     |  |  |      |  | (730,800   | ) |  |  |  |  | — |   |
| Flow-throughshares(b)                                          |  |  |                       |  | (45,200    | )                     |  |  |      |  | —    |   |  |  |  |  | — |   |
| Netloss and comprehensive loss under USGAAP                    |  |  |                       |  | (2,170,175 | )                     |  |  |      |  | (1,852,260 | ) |  |  |  |  | (33,097 | ) |
| Basicand diluted loss per share – USGAAP                 |  |  |                       |  | (0.03      | )                     |  |  |      |  | (0.03      | ) |  |  |  |  | (0.00   | ) |
| Statementof Cash Flows                                         |  |  |                       |  |       |                       |  |  |      |  |       |   |  |  |  |  |    |   |
| Cashflows from operating activities under CanadianGAAP         |  |  |                       |  | (851,997   | )                     |  |  |      |  | (587,006   | ) |  |  |  |  | (23,097 | ) |
| Explorationproperties and deferred exploration expenditures(a) |  |  |                       |  | (702,384   | )                     |  |  |      |  | (730,800   | ) |  |  |  |  | — |   |
| Cashflows from operating activities under USGAAP               |  |  |                       |  | (1,554,381 | )                     |  |  |      |  | (1,317,806 | ) |  |  |  |  | (23,097 | ) |
| Cashflows from investing activities under CanadianGAAP         |  |  |                       |  | (707,330   | )                     |  |  |      |  | (735,006   | ) |  |  |  |  | — |   |
| Explorationproperties and deferred exploration expenditures(a) |  |  |                       |  | 702,384    |                       |  |  |      |  | 730,800    |   |  |  |  |  | — |   |
| Cashflows from investing activities under USGAAP               |  |  |                       |  | (4,946     | )                     |  |  |      |  | (4,206     | ) |  |  |  |  | — |   |
|                                                                |

|  |           |                                                            |
|--|-----------|------------------------------------------------------------|
|  | (a)  | ExplorationProperties and Deferred ExplorationExpenditures |

Canadian GAAP allows exploration coststo be capitalized during the search for a commercially mineable body ofore. Furthermore, pursuant to EIC 126, deferred exploration costs wouldnot automatically be subject to regular assessment of recoverability,unless certain conditions exist. Under US GAAP, expenditures onexploration properties can only be deferred subsequent to thedetermination that proven or probable mineral reserves exist. For USGAAP purposes, the Company has expensed exploration expenditures in theperiodincurred.

|  |           |                    |
|--|-----------|--------------------|
|  | (b)  | Flow-throughShares |

Under Canadian GAAP, flow-through shares arerecorded at their face value, net of related issuance costs. Wheneligible expenditures are made, the carrying value of theseexpenditures may exceed their tax value due to the renunciation of thetax benefit by the Company. The tax effect of this temporary differenceis recorded as a cost of issuing the shares.

TheFinancial Accounting Standards Board(‘‘FASB’’) staff has taken the view thatunder SFAS No. 109, Accounting for Income Taxes, the proceedsfrom issuance should be allocated between the offering of shares andthe sale of tax benefits. The allocation is made based on thedifference between the quoted price of the existing shares and theamount the investor pays for the shares. A liability is recognized forthis difference. The liability is reversed, when tax benefits arerenounced and a deferred tax liability is recognized at that time.Income tax expense is the difference between the amount of deferred taxliability and the liability recognized on issuance. Up toDecember  31,  2004, all issuances of flow-through sharesby the Company were based on the market price of the shares

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|           |                                                                                              |
|-----------|----------------------------------------------------------------------------------------------|
| 15.  | DIFFERENCESBETWEEN CANADIAN AND U.S. GENERALLYACCEPTED ACCOUNTINGPRINCIPLES (Continued) |

as they last traded on the TSX VentureExchange on the date that each agreement to issue shares was made.Accordingly, the absence of a discount or premium to market value onissuance resulted in no impact on consolidated financial statements forthe periods up to December  31,  2004, from the applicationof U.S. GAAP in respect of flow-through shares. Under US GAAP, theamounts received from the issuance of flow-through shares and not yetexpended on the related exploration costs are separately classified asrestricted cash. At December  31,  2005 there was$1,024,599 in restricted cash (2004 –$Nil).

|  |           |              |
|--|-----------|--------------|
|  | (c)  | Income Taxes |

UnderCanadian GAAP, future income taxes are calculated based on enacted orsubstantively enacted tax rates applicable to future years. Under USGAAP, only enacted rates are used in the calculation of future incometaxes. This difference in GAAP did not result in a difference in thefinancial position, results of operations or cash flows of the Companyfor the periods ended December  31,  2005, 2004, and2003.

|  |           |                                  |
|--|-----------|----------------------------------|
|  | (d)  | Stock-Based EmployeeCompensation |

On September  26,  2003(date of incorporation), the Company prospectively adopted the fairvalue based method for its employee options (see Notes 2 and 15(f)).Consequently, there were no differences between Canadian and US GAAPwith respect to options granted sinceinception.

|  |           |                     |
|--|-----------|---------------------|
|  | (e)  | ComprehensiveIncome |

Effective for fiscal years beginning afterDecember  15,  1997, Statement of Financial AccountingStandards No. 130 Reporting Comprehensive Income(‘‘FAS 130’’), is applicable for U.S. GAAPpurposes. FAS 130 establishes standards for the reporting and displayof comprehensive income and its components in a full set of generalpurpose financial statements. FAS 130 requires that all items that arerequired to be recognized under accounting standards as components ofcomprehensive income be reported in a financial statement. No materialdifference arises from the application of FAS130.

|  |           |                                 |
|--|-----------|---------------------------------|
|  | (f)  | Recent AccountingPronouncements |

Stock-based EmployeeCompensation

In December  2004, the FASBrevised Statement 123 (‘‘SFAS 123(R)’’)Accounting for Stock-Based Compensation, to require that allshare-based payments to employees, including grants of employee stockoptions, be recognized in the income statement based on their fairvalues. Pro forma disclosure is no longer an alternative. SFAS 123(R)must be adopted as of the beginning of the first interim or annualreporting period that begins after December  15,  2005. TheCompany adopted the fair value based method of accounting forshare-based payments effective September  26,  2003 (dateof inception) using the ‘‘prospectivemethod’’ described in FASB Statement No. 148Accounting for Stock-Based Compensation – Transition andDisclosure. Currently, the Company uses the Black-Scholes model toestimate the value of stock options granted to employees and expects tocontinue to use this acceptable option valuation model upon therequired adoption of SFAS 123(R).

The Company does notanticipate that adoption of SFAS 123(R) will have a material impact onits results of operations or its financialposition.

Accounting for Non-Monetary Transactions

In December  2004, the FASB issued Statementof Financial Accounting Standards No. 153 (‘‘SFAS153’’) Exchanges of Non-monetary Assets – anamendment of APB Opinion No. 29. SFAS 153 requires non-monetaryexchanges to be accounted for at fair value, recognizing any gains orlosses, if the transactions meet a commercial substance criterion andfair value is determinable. The amendment will be effective fornon-monetary transactions occurring in fiscal periods beginning after

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|           |                                                                                              |
|-----------|----------------------------------------------------------------------------------------------|
| 15.  | DIFFERENCESBETWEEN CANADIAN AND U.S. GENERALLYACCEPTED ACCOUNTINGPRINCIPLES (Continued) |

June  15,  2005. Similarly, theCICA issued Handbook Section 3831 Non-Monetary Transactions,which applies to all non-monetary transactions initiated in periodsbeginning on or after January  1,  2006. Under this newstandard, a commercial substance test replaces the culmination ofearnings test as the criteria for fair value measurement. In addition,fair value measurement is clarified.

The Company iscurrently evaluating the impact of adopting these recommendations, onits consolidated financial statements.

ComprehensiveIncome

In April  2005, the CICA issuedHandbook Section 1530 Comprehensive Income, which exposesreporting and disclosure recommendations with respect to comprehensiveincome and its components. Comprehensive income is the change inshareholders’ equity, which results from transactions and eventsfrom sources other than the Company’s shareholders. Thesetransactions and events include unrealized gains and losses resultingfrom changes in the fair value of certain financial instruments. Thissection applies to fiscal years commencing on or after October1,  2006.

FinancialInstruments

In April  2005, the CICA issuedHandbook Section 3855 Financial Instruments – Recognition andMeasurement. It exposes the standards for recognizing and measuringfinancial instrument on the balance sheet and the standards forreporting gains and losses in the financial statements. Financialassets available for sale, assets and liabilities held for trading, andderivative instruments, whether part of hedging relationship or not,have to be measured at fair value. This section applies to fiscal yearscommencing on or after October  1,2006.

The Company is currently evaluating the impact ofadopting these recommendations, on its consolidated financialstatements.

Hedge Accounting

InApril  2005, the CICA issued Handbook Section 3865 Hedges,which describes when and how hedge accounting can be applied as well asthe disclosure requirements. Hedge accounting enables the recording ofgains, losses, revenues and expenses from the derivative financialinstruments in the same period as for those related to the hedged item.This section applies to fiscal years commencing on or afterOctober  1,  2006.

The Company does notcurrently have any hedging relationships.

AccountingChanges and Error Corrections

In May  2005,the FASB issued SFAS 154 Accounting Changes and ErrorCorrections, effective for accounting changes and error correctionsmade in fiscal years beginning after December  15,  2005,has been introduced and requires, unless impracticable, retroactiveapplication as the required method for reporting changes in accountingprinciples in the absence of transitional provisions specific to thenewly adopted accounting principle. The Company will apply thisstandard for US GAAP purposes commencing in fiscal2006.

Accounting Standards inCanada

For the next five years, CICA will adopt itsnew strategic plan for the direction of accounting standards in Canada,which was ratified in January  2006. As part of that plan,accounting standards in Canada for public companies will converge withInternational Financial Reporting Standards(‘‘IFRS’’) over the next five years. TheCompany continues to monitor and assess the impact of convergence ofCanadian GAAP andIFRS.

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