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					No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim
otherwise. This prospectus constitutes a public offering of securities only in those jurisdictions where they may be
lawfully offered for sale and therein only by persons permitted to sell such securities. The securities offered hereby
have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S.
Securities Act”) or any state securities laws and, unless registered under the U.S. Securities Act or pursuant to an
applicable exemption from registration under the U.S. Securities Act, may not be offered, sold, reoffered, resold or
delivered, directly or indirectly, in the United States or to “U.S. persons” (as defined in Regulation S under the U.S.
Securities Act). This prospectus does not constitute an offer to sell or solicitation of an offer to buy any of the
securities offered hereby within the United States or to U.S. persons. See “Plan of Distribution”.
                                                  PROSPECTUS




Initial Public Offering                                                                            March 24, 2008
                          AFRICAN AURA RESOURCES LIMITED
                                     $7,922,917 (14,405,304 Units)
 (Each Unit consisting of one common share and one-half of one common share purchase warrant)

                                                         and

              21,121,062 Common Shares and 10,560,531 Common Share purchase warrants
                 issuable upon exercise of 21,121,062 previously issued Special Warrants

Offering
This prospectus (the “Prospectus”) qualifies the distribution by African Aura Resources Limited (the
“Company”) of 14,405,304 units of the Company (“Units”) at a price of $0.55 per Unit. Each Unit is
comprised of one common share in the capital of the Company (a “Common Share”) and one-half of one
Common Share purchase warrant (each whole Common Share purchase warrant, a “Warrant”). Each Warrant
entitles the holder to purchase one Common Share (a “Warrant Share”) for a period of 24 months from the date
of closing of the Offering (as described herein) at a price of $0.80 per Warrant Share. The Units are
immediately severable into their constituent Common Shares and Warrants. The Company is hereby offering
to sell to investors resident in the provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia,
and elsewhere permitted by law, the Units at a price of $0.55 (the “Offering Price”) per Unit (the “Offering”).
The Common Shares and Warrants comprising the Units which are to be sold pursuant to the Offering will be
issued pursuant to an agency agreement (the “Agency Agreement”) dated as of March 24, 2008, between the
Company and Thomas Weisel Partners Canada Inc. (formerly Westwind Partners Inc.) and Haywood
Securities Inc. (together, the “Agents”). The Offering Price of the Units was determined through arm’s length
negotiation between the Company and the Agents.



                                    Offering Price: $0.55 per Unit
                                                                   Price to       Agents’           Net Proceeds to
                                                                   Public      Commission (1)       the Company(2)
         Per Unit .............................................     $0.55        $0.03575              $0.51425

         Total Offering (2) (3)(4) .........................      $7,922,917     $514,990              $7,407,927


Notes:
(1)      Pursuant to the terms of the Agency Agreement, the Company has agreed to pay to the Agents a cash commission equal
         to 6.5% of the aggregate gross proceeds of the Offering (the “Agents’ Commission”). In addition, a cash commission of
         6.5% of the gross proceeds shall be paid to the Agents in connection with any Units sold pursuant to the exercise of the
         Over-Allotment Option (as defined herein). The Agents will also be granted non-assignable Warrants (the
         “Compensation Warrants”) to purchase at an exercise price of $0.55 for a period of 18 months from the Closing Date
         (as defined herein) that number of Units equal to 6.5% of the total number of Units issued pursuant to the Offering
         including those sold upon exercise of the Over-Allotment Option. This Prospectus qualifies the issuance of the
         Compensation Warrants. See “Plan of Distribution”.
(2)      Before deducting the expenses of the Offering, estimated to be $450,000, which the Company will pay from the
         proceeds of the Offering.
(3)      The Company has granted the Agents an option (the “Over-Allotment Option”), which is exercisable in whole or in
         part at the sole discretion of the Agents at any time up to 30 days following the Closing Date, to purchase up to
         2,160,796 additional Units (equal to 15% of the Units sold pursuant to the Offering), on the same terms as set out above
         or up to 2,160,796 Common Shares and 1,080,398 Warrants at prices of $0.54 per Common Shares and $0.01 per one-
         half Warrant, respectively, to cover over-allotments, if any, and for market stabilization purposes. Unless the context
         otherwise requires, references herein to “Offering” or “Units” assumes the exercise of the Over-Allotment Option in
         full. If the Over-Allotment Option is exercised in full, the total number of Units sold in the Offering will be 16,566,100.
         This Prospectus qualifies the distribution of the Over-Allotment Option and the distribution of the Common Shares and
         Warrants comprising the Units issuable upon exercise of the Over-Allotment Option. See “Plan of Distribution”.
(4)      If the Over-Allotment Option is exercised in full, the total price to the public, Agents’ Commission and net proceeds to
         the Company will be $9,111,355, $592,238 and $8,519,117, respectively.

There is currently no market through which any of the securities offered hereby may be sold and
purchasers may not be able to resell such securities purchased under this Prospectus.

The Company has applied to list the Common Shares distributed under this Prospectus on the TSX
Venture Exchange. Listing will be subject to the Company fulfilling all the listing requirements of the
TSX Venture Exchange.

The Agents, as exclusive agents of the Company for the purposes of this Offering, conditionally offer the
Units on a commercially reasonable best efforts basis, subject to prior sale, if, as and when issued and
delivered by the Company and accepted by the Agents in accordance with the Agency Agreement
referred to under Plan of Distribution, and subject to the approval of certain legal matters on behalf of the
Company by Neil J. F. Steenberg, Barrister & Solicitor and on behalf of the Agents by Lang Michener
LLP.

Subscriptions for the Units offered pursuant to the Offering will be received subject to rejection or
allotment in whole or in part and the right is reserved to close the subscription books at any time without
notice. It is expected that the closing of the Offering (the “Closing”) will take place on or about March 31,
2008, or such later date as the Agents and the Company may agree, but in any event not later than April
30, 2008 (the “Closing Date”), and that certificates representing the Common Shares and Warrants
comprising the Units will be issued on the Closing Date.

Certificates in definitive form representing the securities acquired hereunder will be issued in registered
form to the Canadian Depository for Securities (“CDS”) and deposited with CDS on the Closing Date.
Special Warrant Offering

This Prospectus also qualifies the distribution of 21,121,062 Common Shares and 10,560,531 Common
Share purchase warrants (each, a “Series 2007 Warrant”) issuable upon the exercise or deemed exercise
of 21,121,062 previously issued special warrants (each, a “Special Warrant”) of the Company issued on
several dates during June 2007 and July 2007 (collectively the “Special Warrant Offering”). The
21,121,062 Special Warrants were issued at $0.45 each by way of private placement pursuant to private
agreements between the Company and the purchasers thereof. Each Special Warrant entitles the holder,
upon exercise or deemed exercise thereof and without payment of any additional consideration, to acquire
one unit (a “Special Warrant Unit”) consisting of one Common Share and one-half of one Series 2007
Warrant. In the event the Company does not complete a Liquidity Event (as defined below) prior to
March 31, 2008, (the “Deadline Date”) each Special Warrant shall entitle the holder to receive 1.1 Special
Warrant Units in lieu of one Special Warrant Unit upon the exercise or deemed exercise of such Special
Warrant. Each Series 2007 Warrant will entitle the holder to purchase one Common Share at a price of
$0.60 per share until the date which is 18 months following the date of a Liquidity Event.

The Special Warrants are exercisable at any time up to 5:00 p.m. (Toronto time) on the date which is the
fifth business day after the date (the “Special Warrant Expiry Date”) on which the Common Shares are
cleared for trading on a recognized stock exchange by Canadian securities regulators (the “Liquidity
Event”). Any Special Warrants not exercised prior to the Special Warrant Expiry Date will be deemed to
be exercised immediately prior thereto.

The Company is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction
or resides outside of Canada. Although the Company has appointed Neil J. F. Steenberg, Barrister &
Solicitor, Suite 1002, 111 Richmond Street West, Toronto, Ontario, M5H 2G4, as its agent(s) for service
of process in Ontario, it may not be possible for investors to collect from the Company judgments
obtained in courts in Ontario predicated on the civil liability provisions of securities legislation.

An investment in the securities offered hereby is highly speculative and involves a significant degree
of risk. Investors should carefully review and consider the risk factors outlined in this Prospectus
before purchasing the securities offered hereby. See “Risk Factors”.
                                                      TABLE OF CONTENTS

                                                            Page                                                                         Page


SUMMARY OF PROSPECTUS .......................2                        EXECUTIVE COMPENSATION................... 94
ELIGIBILITY FOR INVESTMENT.................9                          COMPENSATION OF DIRECTORS............. 96
CAUTIONARY STATEMENT REGARDING                                        INDEBTEDNESS OF OFFICERS AND
FORWARD-LOOKING STATEMENTS .........9                                 DIRECTORS ................................................... 96
AFRICAN AURA RESOURCES LIMITED ..11                                   PROMOTER ................................................... 96
THE BUSINESS OF THE COMPANY ..........12                              ESCROWED SECURITIES............................ 97
THE PROPERTIES .........................................14            RISK FACTORS ............................................. 98
SELECTED CONSOLIDATED FINANCIAL                                       LEGAL PROCEEDINGS.............................. 104
INFORMATION..............................................67           INTEREST OF MANAGEMENT AND
MANAGEMENT’S DISCUSSION AND                                           OTHERS IN MATERIAL TRANSACTIONS
ANALYSIS......................................................67      ....................................................................... 104
USE OF PROCEEDS ......................................77              EXPERTS...................................................... 104
PLAN OF DISTRIBUTION ............................79                   AUDITORS, TRANSFER AGENT AND
DESCRIPTION OF DISTRIBUTED                                            REGISTRAR ................................................. 105
SECURITIES...................................................81       MATERIAL CONTRACTS.......................... 105
CERTAIN CANADIAN FEDERAL INCOME                                       PURCHASERS’ STATUTORY RIGHTS .... 105
TAX MATTERS..............................................83           GLOSSARY OF TECHNICAL TERMS ...... 107
DIVIDEND RECORD AND POLICY............86                              CONVERSION TABLE................................ 112
CONSOLIDATED CAPITALIZATION.........86                                FINANCIAL STATEMENTS....................... F-1
OPTIONS TO PURCHASE SECURITIES.....87                                 CERTIFICATE OF THE COMPANY .......... C-1
PRIOR SALES.................................................88        CERTIFICATE OF THE PROMOTER ........ C-2
PRINCIPAL HOLDERS OF COMMON                                           CERTIFICATE OF THE AGENTS .............. C-3
SHARES ..........................................................89
DIRECTORS AND OFFICERS ......................89
                                                          2


                                       SUMMARY OF PROSPECTUS

The following is a summary of the principal features of this Offering and should be read together
with the more detailed information and financial data and statements contained elsewhere in this
Prospectus. All dollar amounts referenced, unless otherwise indicated, are expressed in Canadian
dollars except for the financial statements. United States dollars are referred to herein as “US$”.
As at March 20, 2008 the noon buying rate certified by the Federal Reserve Bank of New York for
customs purposes was CDN$1.0265 for US$1.00.
Issuer:         African Aura Resources Limited (the “Company”)

Business of     The Company’s management (the “Management”) has adopted a strategy of being a
the             “first mover” in the pursuit of economic gold, iron ore, diamond and uranium
Company:        deposits within highly prospective but under-explored regions of sub-Saharan Africa.
                The Company commenced exploration in 2004 and has established a portfolio of ten
                exploration licences (eight in Cameroon and two in Liberia) totalling approximately
                7,838km2 through its local operating subsidiaries. The portfolio includes one project
                successfully drilled, a pipeline of significant prospects for drill testing and numerous
                gold, uranium and iron ore targets requiring early stage exploration.
                The Company’s primary focus is based on its land position in Cameroon where it
                holds exploration licences totalling approximately 7,438km2. The country is
                approximately twice the size of Ghana and, in spite of prospective geology and three
                decades of political stability, Cameroon has seen little exploration using modern
                technology. Based on their operating experience and the exploration results to date
                Management considers it has a significant opportunity to make numerous potentially
                economic discoveries in both Cameroon and Liberia.
Management:     The Company has assembled a strong management team and board with a proven
                track record of success in the mining sector and particularly in Africa which
                includes: David Netherway (Chairman), the former President and CEO of Afcan
                Mining Corporation and currently a director of Orezone Resources, GMA Resources,
                Equigold NL, Kazakh Gold, and the CEO of Shield Mining; and John Gray (Chief
                Executive Officer), a senior geologist who formerly held positions at Homestake
                Mining Co., Noranda Inc., and AXMIN Inc. The Company has two senior country
                managers, Hamish Maclaren and Dr. Velizar Strumberger, who each have over 20
                years of exploration experience, the former having 14 years with Gold Fields Ltd.
Properties:     The following table summarises the status of the Company’s projects:

                                                                  Soil
                      Country     Licence      Reconnaissance               Trenching   Geophysics   Drilling
                                                                  Grid

                  Cameroon      Batouri          Completed      Ongoing       None      Completed    Q1 2008
                                                                                              (1)
                  Cameroon      Rey Bouba        Completed      Underway    Q2 2008       TBC        Q4 2008
                                                                                              (1)
                  Cameroon      Tchollire II     Completed      Q1 2008     Q2 2008       TBC        Q4 2008

                  Cameroon      Akonolinga       Completed      Underway     TBC(1)       TBC(1)      2009

                  Cameroon      Djoum III        Completed      Underway     TBC(1)       TBC(1)      2009

                  Cameroon      Ntem             Completed        2008      Q2 2008       TBC(1)      2009
                                                                                              (1)
                  Cameroon      Essong           Underway       Q1 2008     Q2 2008       TBC        TBC(1)

                  Cameroon      Bantadje         Underway       Q1 2008     Q2 2008       TBC(1)     TBC(1)

                  Liberia       North Bea        Completed      Completed   Underway    Completed    Q3 2008
                                                                                              (1)
                  Liberia       East Kpo          Completed     Completed   Underway      TBC         2009
                (1)
                  To be considered depending on results.
                                 3


Cameroon:

The Company holds six mineral exploration licences across Cameroon for gold,
related minerals, uranium and diamonds. These comprise the “Batouri” (1,000km2)
licence first granted on April 6, 2006 and modified (enlarged) on April 3, 2007;
“Djoum III” (998km2) and “Akonolinga” (996km2) licences granted on August 1,
2006; “Rey Bouba” (992km2) licence granted on May 29, 2007, “Tchollire II”
(992km2) licence granted on April 24, 2007; and “Ntem” (987km2) licence granted
on June 1, 2007.

The Company, through its 70% owned Seychelles registered subsidiary, Ridgeway
Energy Limited (“Ridgeway”), is also undertaking uranium exploration with a focus
on Cameroon. Ridgeway holds two exploration permits in Cameroon for uranium,
gold, diamonds and iron ore. These comprise the “Essong” (991km2) licence granted
on June 1, 2007 and “Bantadje” (482km2) licence granted on June 1, 2007 and
amended September 6, 2007 to reduce the surface area.

The Company has conducted systematic gold exploration across its Batouri,
Akonolinga and Djoum III properties, and reconnaissance scale “grass-roots”
prospecting on its Ntem, Rey Bouba and Tchollire II properties.

On the Batouri licence, artisanal gold workings have been mapped along a 16km
long trend and exploration by the Company to date has identified two priority
prospects at Kambele and Mongonam. Both prospects have experienced significant
hard rock artisanal gold mining at surface. At Kambele, soil sampling by the
Company has defined a 3km long anomaly with three significant zones grading
above 0.5 g/t at surface. Sampling of the artisanal workings, which in places extend
to depths of 27m, returned maximum grades of 65.4 g/t Au over 5 vertical metres
and 24.77 g/t Au over 4m. SRK Consulting (UK) Limited (“SRK”) has
recommended a minimum first phase 2,500m diamond drilling program on the
Kambele prospect, and a minimum first phase 1,000m diamond drilling program on
the Mongonam prospect. Results from a geophysical survey that has been completed
across the Kambele and Mongonam prospects will be used to guide the drilling
programs. A verification rock sample collected by SRK in October 2007 from the
Mongonam prospect returned 32 g/t Au.

Elsewhere in Cameroon the Company has defined numerous gold anomalies from
early stage exploration of its licences. In addition to advancing its gold and, through
Ridgeway, uranium exploration programs, the Company intends to conduct follow-
up exploration on reported historic occurrences of uranium and iron ore. The
Company’s global exploration budget for the next 18 months in Cameroon, as
recommended by SRK and described in detail below, is US$6.03 million.

Liberia:

The Company holds two mineral exploration licences in northwest Liberia for gold
and related minerals. These consist of the “North Bea” (200km2) licence and “East
Kpo” (200km2) licence, both of which were granted on February 27, 2004, and
became operational on February 1, 2005.

The Company has conducted systematic gold exploration across these two licences
including stream sediment sampling, soil sampling, trenching and diamond core
drilling. On the North Bea licence hard rock and alluvial artisanal gold workings
have been mapped intermittently along a 5km trend and exploration by the Company
to date has identified gold deposits known as Fula Camp and Soso Camp.
                                4


Management considers that Fula Camp has similar characteristics to the New Liberty
gold project (located 45km to the southwest), which is currently being developed by
Mano River Resources Inc. (“Mano River”). Mano River has reported a measured
and indicated gold resource totalling 1,383,000 ounces of gold at the New Liberty
project based on a 1 g/t Au cut off.

The Company has completed two phases of diamond core drilling at Fula Camp with
results including: 3.1 g/t Au over 12.5m, 5.4g/t Au over 9.9m, 2.4g/t Au over 21.4m,
and 4.3g/t Au over 6.3m. Elsewhere in Liberia, the Company has defined a number
of other targets through systematic stream sediment and follow-up soil sampling.
The most advanced is at the Tenkeh Hill project on the East Kpo licence where the
Company has completed a series of trenches that have returned anomalous gold,
hosted within a quartz vein system that persists along 700m of strike.

The Company has a Heads of Agreement for kimberlite diamond exploration with
Stellar Diamonds Ltd. centered on the diamond mining community of Camp Israel
on the North Bea licence. The Company’s global exploration budget for the next 18
months in Liberia, as recommended by SRK and as described in detail below, is
US$1.85 million.

See “The Business of the Company - Technical Report”.
         5

Property Location Map
                                             6
                                            THE OFFERING

Offering:   The Company is hereby offering 14,405,304 Units for aggregate gross proceeds of
            $7,922,917. In addition, the Agents have been granted the Over-Allotment Option,
            exercisable at any time up to 30 days from the Closing Date, to offer for sale up to an
            additional 2,160,796 Units (equal to 15% of the Units sold pursuant to the Offering)
            at a price equal to the Offering Price, or up to 2,160,796 Common Shares and
            1,080,398 Warrants at prices of $0.54 per Common Share and $0.01 per one-half
            Warrant respectively to cover over-allotments, if any, and for market stabilization
            purposes. See “Plan of Distribution”.

Offering    $0.55 per Unit.
Price:

Units:      Each Unit is comprised of one Common Share and one-half of one Warrant. Each
            whole Warrant entitles the holder to purchase one Common Share in the capital of
            the Company (a “Warrant Share”) for a period of 24 months from the Closing Date at
            a price of $0.80 per Common Share.

Special     This Prospectus also qualifies the distribution of 21,121,062 Common Shares and
Warrants:   10,560,531 Series 2007 Warrants issuable upon the exercise or deemed exercise of
            21,121,062 previously issued Special Warrants of the Company issued on several
            dates during June 2007 and July 2007. The 21,121,062 Special Warrants were issued
            at $0.45 each by way of private placement pursuant to private agreements between
            the Company and the purchasers thereof. Each Special Warrant entitles the holder,
            upon exercise or deemed exercise thereof and without payment of any additional
            consideration, to acquire one Special Warrant Unit consisting of one Common Share
            and one-half of one Series 2007 Warrant. In the event the Company does not
            complete a Liquidity Event prior to the Deadline Date each Special Warrant shall
            entitle the holder to receive 1.1 Special Warrant Units in lieu of one Special Warrant
            Unit upon the exercise or deemed exercise of such Special Warrant. Each Series
            2007 Warrant will entitle the holder to purchase one Common Share at a price of
            $0.60 per share until the date which is 18 months following the date of a Liquidity
            Event. See “Plan of Distribution”.

Use of      The net proceeds from the Offering are estimated to be $6,957,927 ($8,069,117 if the
Proceeds:   Over-Allotment Option is exercised in full), after deducting the Agents’ Commission
            and expenses of the Offering.
                                  7
Such proceeds and other available cash currently on hand amounting to $6,154,200
for a total of $13,112,127 will be used to fund further exploration and development
of the Company’s projects in Liberia and Cameroon and for general working capital.
Actual use of these proceeds may vary, depending on the Company’s operational and
capital needs from time to time.
The Company expects to use the net proceeds of the Offering and other available
funds, estimated to be $6,154,200, as follows:

                 Intended Use of Available Funds                             US$
                 Exploration in Cameroon:
                         Batouri licence(1)                                    2,310,000
                         Rey Bouba & Tchollire II
                                                                               1,040,000
                         licences(2)
                         Other Gold licences(1)                                1,595,000
                                                          (3)
                         Ridgeway Uranium licences                             1,085,000
                 Exploration in Liberia:
                         North Bea licence(4)                                    850,000
                                             (5)
                         East Kpo licence                                      1,000,000
                 Overheads (UK, Cameroon ,Liberia):

                        In-country management and
                                                                               1,077,275
                        office costs
                        UK head office costs                                   1,631,250
                 Unallocated Working Capital                                   2,523,602
                 TOTAL                                                        13,112,127

        Notes:
            1.   See “The Properties – Cameroonian Properties – Batouri Licence – Conclusions
                 and Recommendations”, “The Properties – Cameroonian Properties – Akonolinga
                 and Djoum III Licences – Conclusions and Recommendations, and “The Properties
                 – Cameroonian Properties – Ntem Licence – Conclusions and Recommendations;
            2.   See “The Properties – Cameroonian Properties – Rey Bouba & Tchollire II
                 Licences – Conclusions and Recommendations”;
            3.   See “The Properties – Cameroonian Properties – Bantadje Licence – Conclusions
                 and Recommendation;
            4.   See “The Properties – Liberian Properties – North Bea Licence – Conclusions and
                 Recommendations”; and
            5.   See “The Properties – Liberian Properties – East Kpo Licence – Conclusions and
                 Recommendations”

See “Use of Proceeds”.

The Company intends to spend the funds available to it as stated in this Prospectus.
There may be circumstances, however, where, for sound business reasons, a
reallocation of funds may be necessary.
                                                8
Summary of The following provides a summary of certain financial information of the Company
Financial    for the six month period ended December 31, 2007, the financial period ended June
Information: 30, 2007, and the financial years ended December 31, 2006, December 31, 2005 and
             December 31, 2004, and should be read in conjunction with the sections of this
             Prospectus entitled “Selected Financial Information” and “Management’s Discussion
             and Analysis”, the financial statements of the Company and the notes thereto
             included elsewhere in this Prospectus.

                                                              Six             Financial          Financial            Financial             Financial
                                                          Months                 period               year                 year                  year
                                                           ended                 ended               ended                ended                 ended
                                                     December 31,              June 30,       December 31,         December 31,          December 31,
                                                            2007                 2007(1)              2006                 2005                  2004
                                                      (unaudited)             (audited)           (audited)            (audited)             (audited)
                                                             US$                   US$                 US$                  US$                   US$
                Revenue(2)                                    134,000            33,000               39,000                4,000                       Nil
                Net loss                                    (313,000)         (988,000)            (216,000)            (459,000)                  (31,000)
                Net loss per share (basic)                     0.0098            0.0321               0.0110               0.0395                      0.62
                Net loss per share (diluted)                   0.0098            0.0321               0.0110               0.0395                      0.62
                Total assets                               12,764,000        11,114,000            4,329,000            1,466,000                    99,000
                Total long-term debt                              Nil                Nil                 Nil                  Nil                       Nil
                Shareholders’ equity                       12,712,000        11,051,000            4,210,000            1,454,000                    22,000
                (deficiency)
                Notes
                (1)
                     During 2007, the Company changed its financial year to June 30th.
                 (2)
                     Consists entirely of interest income.

                See Note 18 to the audited consolidated financial statements for a reconciliation to generally accepted accounting principles in
                Canada.

Risk           There are risk factors that should be considered by persons proposing to make an investment
Factors:       in securities of the Company, which should be considered highly speculative, and investors
               may incur a loss on their investment. These include:
                       The Company is currently at the exploration and development stage and has not yet
                       defined any commercial quantities of mineral reserves on its properties;
                       There is no assurance any resources developed on the properties may prove to be
                       economically mineable;
                       The Company may not be able to secure additional financing when required;
                       While the Company has followed standard, industry-accepted due diligence
                       procedures to ensure that it has valid contractual interests or title to its properties,
                       there is no guarantee that the Company’s ownership interest is 100% certain or that it
                       cannot be challenged by third parties claiming an interest in its properties;
                       The Company’s activities require permits or licences which may not be granted;
                       The Company competes with other companies with greater financial resources and
                       technical facilities;
                       The Company has no history of earnings;
                       The Company may be affected by political, economic, environmental and regulatory
                       risks beyond its control;
                       The Company’s operations, assets, experts, officers and directors are located
                       primarily outside of North America;
                       The Company has been incorporated under foreign corporate laws which may not
                       provide the same rights and protections to shareholders;
                       The Company and its assets may become subject to uninsurable risks;
                       The Company is currently largely dependent on the performance of its directors and
                       officers and there is no assurance the Company can retain their services;
                       In recent years, both metal prices and publicly traded securities prices have fluctuated
                       widely; and
                       Exchange rate fluctuations may affect the costs that the Company incurs in its
                       operations.

               See “Risk Factors” for details of these and other risks relating to the Company’s business.
                                                   9


                                ELIGIBILITY FOR INVESTMENT

In the opinion of Neil J. F. Steenberg, Barrister & Solicitor, counsel to the Company, and Lang
Michener LLP, counsel to the Agents, the Common Shares and Warrants comprising the Units will be
qualified investments under the Income Tax Act (Canada) and the regulations thereunder for trusts
governed by registered retirement savings plans, registered retirement income funds, registered
education savings plans, deferred profit sharing plans and registered disability savings plans, provided
(i) in the case of the Common Shares, that they are listed on a prescribed stock exchange (which
currently includes the TSX Venture Exchange (“TSXV”) and (ii) in the case of the Warrants, that they
are either listed on a prescribed stock exchange or the Company deals at arm’s length with each person
who is an annuitant, a beneficiary, an employer or a subscriber under such plan.

    CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains “forward-looking information” (also referred to as “forward-looking
statements”) which may include, but is not limited to:

        statements with respect to the future financial or operating performance of the Company, its
        subsidiaries and projects;
        the future price of gold and other minerals;
        the operating and exploration expenditures;
        costs and timing of future exploration and production;
        requirements for additional capital;
        government regulation of mining operations;
        environmental risks including reclamation and rehabilitation expenses;
        title disputes or claims;
        limitations of insurance coverage; and
        the timing and possible outcome of pending litigation and regulatory matters.

Often, but not always, forward-looking statements can be identified by the use of words and phrases
such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”,
“projects”, “predicts”, “continues”, “anticipates”, or “believes” or variations (including negative
variations) of such words and phrases, or state that certain actions, events or results “may”, “could”,
“would”, “might” or “will” be taken, occur or be achieved. This information reflects Management’s
current beliefs and is based on information currently available to Management. Forward-looking
statements involve known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company and/or its subsidiaries to be materially
different from any future results, performance or achievements expressed or implied by the forward-
looking statements. Such factors include, among others:

        general business, economic, competitive, political and social uncertainties;
        the actual results of current exploration activities and feasibility studies;
        economic evaluations which prove to be inaccurate;
        changes in project parameters as plans continue to be refined;
        the future assumptions in the price of gold and other minerals;
        possible variations of ore grade or recovery rates;
        failure of equipment or processes to operate as anticipated;
        accidents, labour disputes or slowdowns and other risks of the mining industry;
        climate conditions;
        unfavourable decisions by governmental authorities; and
        delays in obtaining governmental approvals or financing or in the completion of development
        or construction activities;


as well as those factors discussed in the section entitled “Risk Factors” in this Prospectus. Although
the Company has attempted to identify important factors that could cause actual actions, events or
                                                      10
results to differ materially from those described in forward-looking statements, there may be other
factors that cause actions, events or results to differ from those anticipated, estimated or intended.


Forward-looking statements contained herein are made as of the date of this Prospectus and the
Company disclaims any obligation to update any forward-looking statements, whether as a result of
new information, future events or results or otherwise. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future events could differ materially from
those anticipated in such statements. The Company undertakes no obligation to update forward-
looking statements or the foregoing list of factors whether as a result of new information or future
events or otherwise, except as may be required in connection with a material change in the information
disclosed in the Prospectus or as otherwise required by law. Accordingly, the reader is cautioned not to
place undue reliance on forward-looking statements.
                                                 11


                           AFRICAN AURA RESOURCES LIMITED

The Company was incorporated in the British Virgin Islands on August 10, 1998 as Cogefi Finance
Inc. under the International Business Companies Ordinance of the laws of the British Virgin Islands.
The Company changed its name to African Aura Resources Limited on January 16, 2004.

The principal executive offices of the Company are at Orchard Centre, 14 Station Road, Didcot, OX11
7LL, United Kingdom.

The Company has two direct, wholly-owned active subsidiaries incorporated under the laws of the
Republic of the Seychelles and one wholly-owned subsidiary incorporated under the laws of England
and Wales:

    1.      African Aura Resources (CAM) Limited incorporated on February 10, 2006, which was
            incorporated as a holding company to own and operate the Company’s Properties and
            projects in Cameroon through the following subsidiaries:

            a. a 90% owned subsidiary African Aura Resources (Cameroun) SARL, the remaining
               10% being held in trust on behalf of the Company, 5% by John Anthony Gray, and
               5% by Compagnie Financiere Internationale (CFI), which was incorporated under the
               laws of the Republic of Cameroon on May 22, 2006;

            b. a 90% owned subsidiary Caminur SARL, the remaining 10% being held in trust on
               behalf of the Company, 5% by John Anthony Gray, and 5% by Compagnie Financiere
               Internationale (CFI), which was incorporated under the laws of the Republic of
               Cameroon on May 18, 2006; and

            c. a 90% owned subsidiary Caminex SARL, the remaining 10% being held in trust on
               behalf of the Company, 5% by John Anthony Gray, and 5% by Compagnie Financiere
               Internationale (CFI), which was incorporated under the laws of the Republic of
               Cameroon on May 16, 2006; and

    2.      African Aura Resources (LIB) Limited incorporated on February 10, 2006, which was
            incorporated as a holding company to own and operate the Company’s Properties and
            projects in Liberia through its 100% owned subsidiary African Aura Resources (Liberia)
            Limited which was incorporated under the laws of the Republic of Liberia on January 18,
            2005.

    3.      African Aura Resources (UK) Limited incorporated on September 22, 2006 under the
            laws of England and Wales to operate the Company’s executive offices.

The Company also has two additional, currently inactive subsidiaries: African Aura Resources (CAR)
Limited (Central African Republic, incorporated on February 10, 2006) and African Aura Resources
(ZIM) SARL (Zimbabwe, incorporated on September 28, 2006).

The Company also holds a 70% interest in Ridgeway Energy Limited (“Ridgeway”) incorporated in
the Seychelles on May 14, 2007 which was incorporated as a holding company to own and operate
uranium exploration Properties and projects in Cameroon through its subsidiary, Ridgeway Energy
Cameroon SARL which was incorporated under the laws of the Republic of Cameroon on May 14,
2007 all the shares of which are held in trust on behalf of Ridgeway, by Steven Poulton (50%), and by
Brunot Yegba (50%).
                                                  12
The African Aura Group Structure is shown below.



                              THE BUSINESS OF THE COMPANY




Business Objectives and Milestones

The Company was incorporated for the purpose of exploring, developing and commercially exploiting
gold and other precious metal, base metal, gemstone and energy mineral deposits in Africa.

Management of the Company (“Management”) has adopted a strategy of being a “first mover” and
anticipates that upon completion of the Offering, the Company will be the first publicly traded gold
exploration company operating in Cameroon and one of only a handful exploring in Liberia. During
the past four years, the Company has established local subsidiary companies to obtain mineral
exploration licences and undertake exploration in both the Republic of Liberia (2004) and the
Republic of Cameroon (2006). The local companies employ a combination of experienced expatriate
and locally trained geologists as well as the necessary operating and administrative staff. The
Company has now established a portfolio of ten exploration licences (eight in Cameroon and two in
Liberia) totalling approximately 7,838km2 through its local operating subsidiaries. The portfolio
includes one project successfully drilled, a pipeline of significant prospects for drill testing and
numerous gold, uranium and iron ore targets requiring early stage exploration. The Company’s
primary focus is based on its land position in Cameroon where it holds exploration licences totalling
some 7,438km2. In spite of prospective geology and three decades of political stability, Cameroon has
seen little exploration using modern technology. Due to previous instability, relatively low population
density and high forest cover, Management believes that, like Cameroon, Liberia remains significantly
under-explored when compared to other West African nations. Other countries in West Africa such as
Mali, Burkina Faso, Ghana and Guinea have witnessed a substantial increase in gold exploration,
discovery and production over the past ten years. Based on their operating experience and the
exploration results to date Management considers it has a significant opportunity to make numerous
potentially economic discoveries in both Cameroon and Liberia.

Country Overviews

Cameroon

Cameroon, sometimes referred to as the ‘hinge of Africa’, covers an area of 475,000km2
(approximately twice the size of Ghana) and lies just north of the Equator in the Atlantic Gulf of
Guinea. Cameroon has a 200km long seaboard and is bordered by Nigeria, Chad, Central African
Republic, Congo, Gabon and Equatorial Guinea. The current population is estimated to be 16.2 million
with English and French being the official languages. Its major commodity is oil, which provides 50%
of the country’s export revenues.
                                                   13
In spite of its prospective geology and political stability for several decades, Cameroon has seen little
modern day mining exploration. Publicly traded resource companies currently active in Cameroon are
listed hereunder:

           Company                                       Commodity                Exchange
           Exxon Mobil Corp.                              Oil & Gas                NYSE
           Royal Dutch Shell plc                          Oil & Gas                 LSE
           Total SA                                       Oil & Gas                NYSE
           Rio Tinto plc.                                 Aluminum                 NYSE
           Transocean Inc.                                Oil &Gas                 NYSE
           Mega Uranium Ltd.                               Uranium                  TSX
           Sundance Resources Ltd.                         Iron Ore                 ASX
           BowLeven Plc                                   Oil &Gas                  AIM
           Geovic Mining Corp.                          Cobalt & Nickel            TSXV

Liberia
The Republic of Liberia covers approximately 111,000km2 and lies just north of the Equator on the
Atlantic coast in West Africa. Liberia has a 560km long seaboard and is bordered by Sierra Leone,
Guinea and Côte d’Ivoire to the west, north and east, respectively. The current population is estimated
to be 3.5 million with English being the official language. Liberia has seen little modern day mineral
exploration. Publicly traded resource companies currently active in Liberia are listed hereunder:


          Company                                        Commodity                 Exchange
          BHP Billiton Limited.                           Diversified                ASX
          Arcelor Mittal                                   Iron Ore                 NYSE
          Trans Hex Group Ltd.                            Diamonds                   JSE
          Mano River Resources Inc.               Gold, Diamonds & Iron Ore         TSXV
          Diamond Fields International Ltd.          Diamonds and Gold               TSX

The political stability of Liberia deteriorated in 1980 when power was seized under a military coup.
The next 25 years saw periods of stability with sporadic conflict, which ultimately led to the country’s
economic and social decline. Peace talks in Accra, Ghana in August 2003 led to the signing of the
Comprehensive Peace Agreement in September 2003. A United Nations peacekeeping force has since
been established which has an annually renewable mandate. Now that relative peace has returned to
Liberia and reconstruction is underway with strong international support, Management believes that
there is a major opportunity to apply modern exploration techniques to highly prospective and under-
explored gold districts.
                                                  14


Mineral Exploration Licencing

Cameroon

Exploration licences in Cameroon (Permis de Recherche) are granted by the Ministry of Industry,
Mines, and Technological Development (“MIMTD”) as governed by the World Bank sponsored
Mining Law Number 01 (Code Minier Loi #01) of 2001. The Cameroonian mining code regulates
mineral substances and defines taxes and royalties.

Exploration licences grant the holder the right to explore the surface and subsurface for metals,
minerals and gem stones as specified within the individual licence agreement. The licences cannot
exceed 1,000km2 and are valid for three years with an option to renew four times for further periods of
two years each, subject to a reduction in surface area of 50% upon each renewal. The holder of an
exploration licence is required to submit a progress report every six months to the MIMTD and has the
automatic right to convert any part of the exploration licence to an exploitation licence. The holder of
an exploration licence is also required to work within an exploration budget as submitted at the time of
application.

The Company’s mineral exploration permits of the maximum size (1,000km2) in Cameroon are subject
to a minimum aggregate expenditure of approximately US$624,000 for each permit over the initial
three year tenure. Expenditure is on target to achieve this commitment on all licences held by the
Company.

None of the exploration licences held by the Company in Cameroon are subject to encumbrances.
However, under Cameroon mining law, the Government retains a 10% free carried interest in any
producing mine and receives a 3% royalty on any gold production. Corporate tax in Cameroon is set at
30%.

Liberia

Exploration licences in Liberia are granted by the Ministry of Lands, Mines and Energy (“MLME”) as
governed by Minerals and Mining law of 2000. The Liberian mining code regulates mineral
substances and defines taxes and royalties.

Exploration licences grant the holder the right to explore the surface and subsurface for metals,
minerals and gem stones as specified within the individual licence agreement. The licences cannot
exceed 1,000km2 and are valid for three years with an option to renew for a further period of two
years, subject to a reduction in surface area of 50% upon renewal. The holder of an exploration licence
is required to submit a progress report every 12 months to the MLME and has the automatic right to
convert any part of the exploration licence to an exploitation licence governed by a separate Mineral
Development Agreement (“MDA”). The holder of an exploration licence is also required to work
within an exploration budget as submitted at the time of application and to pay an annual permit fee of
US$5,000 plus a rental charge of US$0.18 per acre (approximately US$0.44 per hectare). A royalty
equal to 3% of the sale price of all gold produced from the licence area is payable to the Liberian
government.
Neither of the exploration licences held by the Company in Liberia are subject to encumbrances.
However, under Liberian mining law, the Government retains a 10% free carried interest in any
producing mine and receives a 3% royalty on any gold production. Corporate tax in Liberia is set at
30%.

                                        THE PROPERTIES

For an explanation of certain technical terms used in this Prospectus, see “Glossary Relating to
Technical Terms” beginning on page 96 of this Prospectus.
                                                              15


The Company is currently engaged in exploration in eight licences in Cameroon and two licences in
Liberia (collectively, the “Properties”).

Cameroon Properties

       Description and Location

Through its 100% owned Cameroonian subsidiaries the Company holds six gold exploration licences
(Permis de Recherche) in Cameroon allowing it to explore for gold, related minerals, uranium and
diamonds as set out in the following table:

                                                                                            Initial
                    Licence Name            Area (km2)             Date Granted            Tenure(1)

                       Batouri (2)              1000              April 6, 2006              3 years
                      Tchollire II               992             April 24, 2007              3 years
                      Rey Bouba                  992             May 29, 2007                3 years
                      Djoum III                  998             August 1, 2006              3 years
                      Akonolinga                 996             August 1, 2006              3 years
                         Ntem                    987              June 1, 2007               3 years
       (1)
             Subject to the holders rights to renew for up to four renewal terms of two years each with a required
             reduction in area.
       (2)
             The Batouri licence was extended from 300km2 to 1,000km2 on April 3, 2007.

Through the Company’s 70% owned Seychelles incorporated subsidiary Ridgeway, the Company is
undertaking uranium exploration in Cameroon. Ridgeway holds two exploration licences for uranium,
gold, iron ore, related minerals and diamonds in Cameroon through its 100% owned local operating
subsidiary as set out in the following table:



                Licence Name            Area (km2)              Date Granted              Initial Tenure(1)


                    Bantadje                 482                June 1, 2007(2)                 3 years
                    Essong                   991                 June 1, 2007                   3 years
       (1)
             Subject to the holders rights to renew for up to four renewal terms of two years each with a required
             reduction in area.
       (2)
             Originally granted on June 1, 2007 covering 981 km2 and reduced to 482 km2 effective September 6, 2007.

A previous exploration survey conducted by the French state geological survey, the Bureau de
Recherches Géologiques et Minières (“BRGM”) has identified uranium occurrences within the licence
areas.

All the licences held by the Company in Cameroon are in good standing and allow it to perform all
and any work necessary to advance projects within the licence boundaries with the aim of discovering
viable mineral deposits.

Liberian Properties

Description and Location

The Company has two exploration licences, Mineral Exploration Agreements (“MEAs”), in Liberia
for gold and related minerals located in Western Liberia as set out in the following table:
                                                    16



                                                                   Area under                 Tenure
  Licence       Initial Area                             Initial                  Date
                                 Date Granted                      renewal (Sq                 under
   Name            (km2)                                 Tenure                  Renewed
                                                                       km)                    renewal
                                February 1, 2005                                  February
 East Kpo           400                                  3 years      200                      2 years
                                 (effective date)                                  1, 2008
                                February 1, 2005                                  February
 North Bea          400                                  3 years      200                      2 years
                                 (effective date)                                  1, 2008

The Company holds the exclusive right to explore for gold and other minerals discovered incidentally
to its gold exploration activities pursuant to its MEA.
The location of the Properties and the individual deposits are shown in the following two figures.

                                           Location Maps
                                                   17




Mineral Processing and Metallurgical Testing

To date, no mineral processing or metallurgical testing has been completed on any of the Company’s
projects.

Mineral Resource and Mineral Reserve Estimates

There are no mineral resource or mineral reserve estimates on any of the Company’s projects at this
time.

Drilling

Two phases of drilling have been completed on the Company’s North Bea licence in Liberia totalling
1,228m. No drilling has been conducted on any of the Cameroon licences to date.

Technical Report

SRK Consulting (UK) Limited (“SRK”) was retained by the Company to prepare an independent
technical report within the meaning of NI 43-101 on the Company’s Properties and the results of the
Company’s exploration work. Information in this section of a scientific or technical nature in respect is
based upon the technical report entitled “Amended Independent Technical Report on the Mineral
Exploration Licences of African Aura Resources Ltd.” dated Original October 2007, Amended
February 2008 (the “Technical Report”) prepared by Martin Pittuck and Gareth O’Donovan of SRK
who are “Qualified Persons” as such term is defined in NI 43-101 and who are independent of the
Company. The Technical Report has been prepared in compliance with NI 43-101 and is based on
work performed to October 31, 2007.

The following has been prepared with the consent of SRK and, in some cases, is a direct extract
from the Technical Report.
                                                  18


The Technical Report has been filed with certain Canadian securities regulatory authorities pursuant to
NI 43-101 and is available for review on SEDAR at www.sedar.com. A copy of the Technical Report
may be inspected during distribution of the securities being offered under this Prospectus and for 30
days thereafter during normal business hours at the Company’s offices at Orchard Centre, 14 Station
Road, Didcot, OX11 7LL United Kingdom and at the offices of its legal counsel, Neil J.F. Steenberg,
Suite 1002, 111 Richmond Street West, Toronto, Ontario, Canada M5H 2G4.

Monetary units in the Technical Report are shown in United States dollars (US$). Abbreviations used
in the Technical Report are listed in the Glossary of Technical Terms.

CAMEROONIAN PROPERTIES

Regional Geology of Cameroon

Two regional geological domains and a significant regional structural regime exist within Cameroon
which had a direct bearing on the licences applied for and obtained by the Company.

The Archaean rocks in the south of the country are a northern extension of the Congo Craton which is
well exposed in Democratic Republic of Congo, Gabon and Congo Brazzaville where the unit is well
known for its mineral wealth. The Archaean in Cameroon comprises the Ntem and Nyong units that
are made up of granite-gneissic and metasedimentary suites of rocks hosting metadiorites, migmatites,
quartzites, banded iron formations and amphibolitic greenstone belts. These rocks are typically
affected by a dominant foliation that is cross-cut in places by complex, brittle-ductile structural
regimes that have provided loci for mineralising events.

Within this Archaean domain the Company acquired the contiguous Akonolinga and Djoum III
licences which covers a BRGM mapped, 150km long greenstone belt, and an area containing known
banded iron formations and nearby alluvial gold artisanal activity within its Ntem licence.

The Neoproterozoic Pan-African mobile belt is a branch of the Pan-Africano-Braziliano Belt (the
“Belt”) mapped as Eburnian in age (Birimian) and underlies the central and northern parts of
Cameroon. The Belt includes granites intruding metasediments with distinct aureoles, and sheared,
foliated and hydrothermally altered granitoids that bear quartz veins.

The Company centered its Batouri licence over an area of granite-hosted, gold bearing quartz veins
and stockworks that is intermittently exploited by artisanal mining activity.

Otherwise, the Pan-African rocks are transected by a series of deep strike-slip faults and splays
running from the southwest of Cameroon through the central and eastern parts of the country,
describing an en echelon arrangement that defines a major regional structure referred to as the Central
African Shear Zone (“CASZ”). The CASZ extends across the Atlantic into the Borborema province of
Brazil where numerous gold deposits have been discovered along the Patos and Pernambuco shear
zones.

The Company located its Tchollire II and Rey Bouba licences along the CASZ where suitable host
rocks for gold occur and where, in several locations, outcropping rocks that are being exploited by
artisanal miners display visible gold.
          19




Simplified Geology of Cameroon
                                                   20


Batouri Licence

Given exploration results to date, Management expects the Batouri licence to be a key area for the
Company in the future.

Licence History

Gold was reportedly discovered by a local farmer in Batouri during the 1970’s. Following this
discovery, several hundred artisanal miners migrated into the immediate area. Currently, there are
estimated to be up to 100 artisanal miners that support a community of a few hundred at the nearby
villages of Kambele III and Mongonam where entire families are involved in crushing and washing
ore derived from pits in both the Kambele-Dem and Mongonam-Dimako trends.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Batouri licence is located in the Eastern Province of Cameroon which lies on the south Cameroon
plateau, where elevation varies between 500 and 1,000m above sea level except for low lying plains of
200-500m. The majority of the licence is situated in an undulating plain at an elevation of
approximately 600-650m. The licence occupies a transition zone between degraded tropical rainforest
to the south and open tree savannah to the north along with mixed subsistence farmland. The main
drainage system in the region is controlled by the river Kadei.

Batouri town is located 420km east of the capital Yaoundé. It takes approximately eight hours to drive
to the project on tarmac and maintained laterite roads. Batouri is a divisional capital with shops,
hotels, local airfield and a hospital. Access within the licence area is good by 4x4 tracks and old
forestry roads.

The main prospects of potential economic interest are the Kambele-Dem and the Mongonam-Dimako
trends. The former is 7km and the latter less than 5km from Batouri.

The region is characterised by a long dry season from December to May, a light wet season from May
to June, and a heavy wet season from July to early November. Annual rainfall ranges from 1,500 to
2,200mm per year, with a mean daily average temperature of 28ºC.

Local surface tenure has not been thoroughly investigated at this early stage of exploration, however,
land is understood to be privately held or held in trust under local tribal law. There are no topographic
constraints that would preclude construction of mining areas and facilities.

Electrical power is available from the national grid to a population centre less than 10km from the
main Kambele-Dem trend. Running water is available in the local river networks. Good mobile
telephone communications are available in the locality from a transmitter at Batouri.

Geological Setting

Cameroonian

See “Properties – Regional Geology of Cameroon”

        Batouri Licence Area Geology

The prospects at Batouri are hosted by Palaeoproterozoic intrusives occurring as a window in
Neoproterozoic, Pan-African intrusives.

Gold-bearing rocks are considered to be controlled by a major granite hosted shear zone that has been
observed in pits and trenches with a northeast-southwest to northnortheast-southsouthwest trend,
within envelopes of extensive hydrothermal alteration. Several generations of quartz veining are
                                                   21


recognized with gold primarily associated with early stage, foliated quartz containing abundant
hematite and crude weathered cubic magnetite vugs.

The shearing has resulted in the development of a gentle to steeply dipping foliation, but auriferous
quartz veins within the granite are not necessarily concordant to this foliation. The average trend of the
shear zone is N30E while the quartz veins commonly have strikes of N50–N70E. These veins though
commonly thin, often have altered and mineralised granite wallrock around them.

        Deposit Types

The Company is focused on finding and defining primary deposits comprising hydrothermal gold-
quartz veins and stockworks hosted in sheared granitoid. Both the wall rock and stockworks are
mineralised as is the overlying saprolite.

Exploration Results

The Company’s exploration programs to date have included the following:

                GIS based remote mapping;
                Mapping and pit sampling of artisanal workings;
                Localised soil sampling (50m x 25m grid);
                Ongoing regional soil sampling (200m x 200m grid); and
                Combined IP, resistivity and radiometric geophysical surveys.

No trenching or diamond drilling has occurred.

Two major zones of potential economic mineralisation have so far been identified by these programs:

        (1)     Kambele–Mboscorro–Dem

        3.5km long, >100 ppb Au in soil anomaly between 100-1000m wide;

        Three zones grading >0.5g/t Au;

        Several tens of artisanal pits have been dug from a few metres to 27m deep;

        122 artisanal pits have been vertically sampled with assays ranging from trace to 84.48g/t Au;

        15.53% of pit samples yielded >0.5 g/t Au; and

        Drill targets delineated from soil and geophysical surveys.

        (2)     Mongonam–Dimako

        3.5km long shear zone in hydrothermally altered granite;

        Artisanal workings extending along 580m of strike by maximum 25m wide and 25m deep;

        Workings exploiting a 0.3m to 3.0m wide gold-bearing quartz vein;

        50 artisanal pits have been channel sampled; and

        Drill targets delineated from soil and geophysical surveys.
                                                   22


        Mapping and Sampling

SRK collected a check sample from quartz vein in an artisanal pit in Mongonam, Batouri which
yielded 31.5 g/t Au (32.48 g/t Au repeat).

In July 2006, the Company undertook mapping of artisanal workings across the Kambele-Dem
prospect with initial sampling undertaken across eight artisanal pits. A combination of channel and
grab samples were collected from the various weathering horizons within the pits. Gold grades were
found to be highly variable, however, gold was present in all horizons.

        Maximum grades of 65.4 g/t Au over 5 vertical metres were noted; and

        In the mottled zone 24.77 g/t Au over 4 metres was recorded.

In early 2007, a more detailed program of artisanal pit sampling was completed across all the Batouri
prospects. The majority of pits sampled were at Kambele-Dem where 122 existing pits were sampled
on an approximate 50m x 50m spaced grid where access was possible. Results from the sampling
program established that gold is predominantly present within the quartz veins with lower grade (<0.5
g/t Au) present in altered wall rocks. In total, 734 samples were taken from the vertical channel
samples in the pit walls.

Mapping of the Dimako and Mongonam areas has defined two main areas of artisanal workings. At
Dimako to the south, several large pits comprise a zone extending for 400m strike length. The pits are
up to 20m wide, 100m long and 20m deep. Some 3km north at Mongonam, artisanal pits extend over a
zone 180m in strike length and are typically up to 20m wide and a maximum of 25m deep.

The Company completed channel sampling of the pits at Mongonam and Dimako where access was
possible. In total, 50 channels were completed with a total of 259 samples collected from the pit
walls.

SRK considers the extent of artisanal activity in the area to be a clear indication of the existence of a
substantial mineralised system. The preliminary sampling by the Company has returned encouraging
results from a number of the workings.

        Soil Sampling

As of September 2007, the Company had collected and assayed 1,686 samples at Kambele–Dem and
728 samples from Mongonam–Dimako.

In July 2006, an initial area for soil sampling was selected to cover the extent of the known artisanal
workings. Thirty seven east–west striking lines spaced 100m apart were sampled at 25m intervals.

Results from the first phase soil sampling program showed high values associated with the location of
artisanal workings:

        35% of samples analysed above 200 ppb Au;

        18% of all samples analysed above 0.5 g/t Au with an overall average grade from all of the
        samples of 395 ppb Au; and

        Several areas of high grade gold above 2 g/t Au were recorded very close to existing workings
        and pits with values up to a maximum of 10.85 g/t Au.

This soil grid was subsequently extended to the south and west with the collection of a further 375
samples extending the anomalous gold zone at Kambele Village where samples exceed 250ppb.
                                                 23


In August 2006, the Company completed soil sampling over the Mongonam–Dimako trend. The
results identified:

        1.1km long anomalous zone over Dimako in the south; and

        A 500m long anomaly over Mongonam in the north, as defined by gold in soil values above
        25 ppb Au. In total, 330 samples on a 200m x 50m grid were collected over an area 3km long
        x 0.7km wide. Anomalous areas > 50 ppb Au and close to existing artisanal pits were followed
        up with infill soil sampling on a 100m x 50m grid in April 2007.

The soil sampling diagram below illustrates the results of the soil sampling programs. In addition to
clearly defining the artisanal areas, the soil programs have also revealed a parallel zone west of
Dimako and east of Mongonam. The entire Mongonam–Dimako trend extends over 3km but the
central zone has yet to be shown to be mineralised which may be a function of surface weathering or
ground conditions.

During 2007, the Company completed infill soil sampling on a 50m x 25m spaced grid over the
anomalous targets identified from the earlier soil sampling program. In total, the infill soil survey
covers an area of 4km2 at Kambele–Dem. Results of the assays from the Kambele–Dem detailed soil
sampling identify a 3.5km anomalous zone with a maximum width of 1,000m and three core zones
grading above 0.5 g/t Au.

SRK notes that surface contamination is likely to have affected soil sample results due to the density
of artisanal workings in the immediate area. However, the objective of identifying an area of interest
which warrants follow-up work is not considered to be affected by this and the presence of artisanal
workings is a positive indication in itself.

During 2007, the Company started a regional soil sampling program across the Batouri licence which
is ongoing at the time of the Technical Report. Samples are being collected at a depth of 60cm on a
200m x 200m spaced grid. To date, 1,062 samples have been collected across the licence covering an
area of some 15 by 3.5km. This program has already identified a northerly and westerly extension to
the existing Kambele soil anomaly which is currently being followed up by the Company by extension
and infill soil sampling.
                                24


Regional soil sampling over Batouri prospect and detailed soil sampling over
                Kambele-Dem and Mongonam–Dimako areas
                                                25


       Geophysics

During May and June 2007, a combined IP resistivity and radiometric survey was completed over
Kambele–Dem and Mongonam–Dimako. Terratec Geoservices of Germany (“Terratec”) undertook a
combined High Resolution Induced Polarisation (“HRIP”) and radiometric survey over the Kambele–
Dem and Mongonam–Dimako areas. A 200m line separation was used with each line extended to
1,000 m in length. In total, 32km of data were collected across the licence.

The survey area is dominated by very high resistivities (2,000–10,000 Ohm*m) interpreted to be
intrusive rocks. Lower resistivity zones (< 2,000 Ohm*m) are interpreted as fault zones with clay
minerals and typically increased saprolite thickness. The geophysical survey has identified a number
of potential targets, some of which are located within or on the boundaries of the core part of the
geochemical anomaly.

The main geophysical features in the Kambele area are shown in the “Geophysics and Anomalous
Gold Mineralisation–Kambele” diagram below and are summarised as follows:

       A low resistivity zone, which borders the main zone of mineralisation, is interpreted to be a
       potentially significant mineralising structure. The feature strikes at 70 degrees with lateral
       extents of 25m to 150m;

       An additional low resistivity zone with an azimuth of 130 degrees located in the east of
       Kambele and situated close to another zone of higher grade mineralisation; and

       A number of chargeability targets which may define the boundaries of a more conductive,
       fault bounded corridor also potentially significant for mineralisation.
                                                 26




         Geophysics & anomalous gold mineralisation, Kambele – Dem zone




The results of the survey completed over Mongonam–Dimako shown in the “Geophysics and
Anomalous Gold Mineralisation–Mongonam–Dimako” diagram below are less conclusive although a
lower resistivity zone has been interpreted proximal to the current known mineralisation that appears
to extend into the zone separating Mongonam and Dimako.
                               27



Geophysical targets & anomalous gold mineralisation, Mongonam – Dimako
zone
                                                     28


Conclusions and Recommendations

Results from the preliminary fieldwork undertaken to date on the Company’s Batouri licence indicate
a prospective geological terrain that is largely unexplored, and where the potential for the discovery of
economic gold deposits is considered reasonable.

From the data thus far generated, and as a result of SRK’s site visit, two mineralised trends have been
noted on the Batouri licence:

                  Gold Mineralisation in the Kambele–Dem area hosted by an eastnortheast-
                  westsouthwest striking, shallow dipping quartz veins and stockwork within or
                  associated with a potassically altered granite intrusion. Soil sampling and geophysics
                  indicate that the defined zone of gold mineralisation remains open in all directions;
                  and

                  Gold Mineralisation in the Mongonam–Dimako area hosted by discreet quartz veins,
                  stockworks and shear zone emplaced along a kilometre-scale, north-south striking
                  shear in potasically altered granite. Soil geochemistry results indicate that there may
                  be two or more broadly-spaced, en echelon quartz veins with a parallel strike.
Key areas for follow up by infill soil sampling along the Kambele–Dem trend are described as
follows:

               1. Mboscoro: 500m by 700m area, open to the north, south, and east;

               2. Bote: 400m by 700m area, open to the southwest; and

               3. Dem: 200m by 300m area, open to the north and south.

SRK considers that a diamond drill coring program is necessary to test the depth continuity of the
mineralisation exposed at surface. Management anticipates that trenching will likely be difficult with
so much spoil from the artisanal workings and that in situ mineralisation is located at depths which are
not practical for trenches.

It is anticipated that the drilling program will be guided by both the strong geochemical footprint
defined by the soil survey results, and the structural and lithological interpretation defined by the
geophysical surveys.

SRK’s suggested exploration program comprises of:

          1.      A minimum 2,500m diamond drilling program on the Kambele-Dem prospect, and a
                  minimum 1,000m diamond drilling program on the Mongonam-Dimako prospect with
                  geotechnical and geological logging and sampling of all core. At least two fences of
                  holes will initially be required in each of the two prospects to test the broad surface
                  anomaly, in addition to target specific drill collars to test geophysical, geochemical or
                  other target areas to depths of up to 150m;

          2.      Co-incident with the diamond drilling program, the Company should continue to
                  generate targets from:

                  a.    undertaking infill soil surveys on gold anomalies defined by the first phase of
                        the regional soil sampling program; and

                  b.    extending the regional soil sampling program and follow-up any anomalies
                        generated with in fill soil surveys;
                                                  29


          3.    Trenching and drill testing of any significant anomalies defined from geochemical soil
                sampling across the licence;

          4.    Possibly sourcing and usage of a Reverse Air Blast drilling rig to rapidly and
                systematically test geochemical anomalies identified outside the two main prospect
                areas, ahead of testing with diamond core drilling; and

          5.    A phase two drilling program to follow up any targets generated or drilled in the work
                outlined above with the intention to result in a preliminary mineral resource estimate.

      The Company anticipates that this exploration program will take 18 months to complete and has
      budgeted US$2,310,000 to complete the program including US$1,300,000 for a 10,000m follow
      up drilling program should the initial phase of work generate results of sufficient merit. SRK
      considers this timeline and budget allocation to be reasonable.

Sampling Methods and Approach

Refer to ‘Sampling Methods and Approach’, on page 43.

Data Verification

Refer to ‘Data Verification’ on page 44.

Rey Bouba & Tchollire II Licences, Northern Cameroon

Licence History

There are no known previous owners of exploration licences in the immediate area of the Rey Bouba
licence, however, the Tchollire II licence is contiguous with the western boundary of the Kitongo
licence held by Mega Uranium Ltd. (“Mega Uranium”), which is currently being actively explored for
uranium.

The BRGM mapped the area in the 1990s and recorded several alluvial gold anomalies. Small scale
artisanal mining operations are exploiting alluvial gold at several sites throughout the area. Colluvial
quartz rubble is being exploited in the south of the Rey Bouba licence. Quartz and schist hosted gold is
being exploited at east Guidjiba and Kadje in the Tchollire II licence. No resource or reserve estimates
exist.

Accessibility, Climate, Local Resources, Infrastructure, and Physiography

The Rey Bouba and Tchollire II licences (shown in the diagram below) cover a gently undulating plain
with an average elevation of 300-400m rising to 600-700m in elevation in the far west and south of the
Tchollire licence. The vegetation in the north is sahel, and in the south tree savannah type with
cultivation of cotton, arable crops and cattle farming. The climate is arid with an intermittent rainy
season in August-September when some parts of the licences become inaccessible even by foot.

The licences are accessed via a network of laterite roads and a main tar road bisects the Tchollire II
licence.

There is a regional airport at Garoua 150km to the north, and mobile phone telephony is possible from
some parts of the licence. Mains power is available in Tchollire and water is available from the river
Mayo Rey and its tributaries.

There are no exploration or exploitation licence holders (other than the Company) immediately
adjacent to Rey Bouba licence.
                                                   30


Geological Setting

        Rey Bouba and Tchollire II Licence Area Geology

The licences cover metavolcanics, schists and gneisses of mapped Birimian/Eburnian age and
synkinematic to late Pan-African granitoids. The most significant structural feature is the Tchollire
shear zone with a northeast-southwest orientation that constitutes a splay off the CASZ and can be
traced for at least 80km through the Rey Bouba licence.

Large scale folds associated with the shear zone are observed around Bouba Njida on the Tchollire II
licence, where complex deformation patterns may have favoured multistage hydrothermal fluid
circulation.

        Deposit Types

The main exploration target types are structurally controlled, multistage hydrothermal gold-quartz vein
deposits. As of the date of this Prospectus the mineralisation style that gives rise to the copper
anomalies recorded by the BRGM on the Tchollire II licence are unknown.

Mineralisation

On the Rey Bouba licence, visible gold with sulphides occurs in quartz veins observed at the
‘Millionaire’ prospect. The Company has completed two soil surveys over Taboun and Mayo Dje
following the identification of gold in stream anomalies with associated quartz and ferruginous schist
material. The BRGM also reported a single copper occurrence and a single uranium occurrence.

On the Tchollire II licence, visible gold with sulphides reportedly occurs in quartz veins observed at
one location (“Kadje”). In addition the BRGM recorded gold at two locations and copper at six
locations.

Exploration Results

        Reconnaissance Mapping and Sampling

On the Rey Bouba licence, the Company has employed reconnaissance soil, drainage, termite and rock
sampling to investigate gold anomalies reported by the BRGM and around areas of artisanal gold
working. These programs have confirmed at least nine prospect areas with anomalous gold: six
alluvial sites and three sites showing primary gold. The latter three prospects are Millionaire, Gentil
and Sakdje in the southern portion of the licence area. At Sakdje, a number of artisanal workings,
including a shaft, are focussed on a 5m wide quartz vein which returned a grade of 6.7 g/t Au when
sampled by the Company. One kilometre square soil sampling grids with 50m x 100m spaced samples
have been completed over two of the anomalies at Taboun and Mayo Dje. Results are pending as at
the date of this Prospectus.

On the Tchollire II licence, the Company has also conducted preliminary reconnaissance (prospecting
and pan concentrate sampling) across the licence and located several areas of artisanal gold workings
along with one outcropping, hard rock gold occurrence. Soil surveys are planned to commence shortly.
Results have indicated at least nine drainage-related, and one primary gold occurrence. At the primary
occurrence artisanal miners are recovering gold from quartz veins at a lithological boundary between
quartzite and schist.

Conclusions and Recommendations

The results from reconnaissance exploration at sites of artisanal mining have revealed both primary
(quartz vein hosted) and alluvial gold. Preliminary results from the first two soil surveys carried out on
the Rey Bouba licence at the Taboun and Douja/Mayo Dje soil grids were inconclusive and the
Company may undertake further work to determine whether these prospects are of potential
                                                  31


commercial interest. On Tchollire II, the BRGM recorded copper occurrences in an area of complex
folding which appear to be related to the CASZ.

In SRK’s opinion, preliminary results from grab samples from the licence and the juxtaposition of
gold and copper occurrences relative to splays of the CASZ give merit to further exploration
expenditure on both licences.

Both the Rey Bouba and Tchollire II licences are early stage gold exploration properties in arid
terrane. SRK concurs with the recommendations of the Company’s chief geologist that grass roots
exploration should continue. The proposed program will include prospecting known gold and copper
occurrences and licence-wide regional soil sampling designed to distinguish between deposits
containing coarse and fine (that is, sulphide associated) gold. Concurrent soil surveys across areas of
historic artisanal activity shown to contain anomalous gold, then mapping, trenching and rock
sampling are the most suitable exploration methods. Scout drilling of advanced targets that have been
soil sampled and trenched may be justified on successful exploration results.

The Company has budgeted US$1,040,000 in order to continue with exploration over an 18 month
period, which included approximately US$390,000 for 3,000m of drilling on both licences which SRK
considers to be reasonable.

Sampling Methods and Approach

Refer to ‘Sampling Methods and Approach’, on page 43.

Data Verification

Refer to ‘Data Verification’ on page 44.
                                    32


          Tchollire II and Rey Bouba Licences, Northern Cameroon




[CHART]
                                                  33


Akonolinga and Djoum III Licences

Licence Description and Location

The Akonolinga and Djoum III licences are located in the central southern region of the country and
are held by Caminex SARL. Both licences were granted to the Company on August 1, 2006 and cover
a combined surface area of 1,994km2.

The Caminex Akonolinga and Djoum gold exploration licences, and the Ridgeway Essong uranium
exploration licence are all contiguous as shown in the Exploration Summary diagram below, however,
there are no other exploration or exploitation licence holders immediately adjacent to any of these
licences.

Licence History

There are no known previous owners of the licences.

The BRGM mapped the area in the 1990s and commissioned an airborne magnetic survey which
revealed at least five kilometer scale magnetic highs in the northwest of the Akonolinga licence which
are interpreted as being underlain by fault fragmented, basic greenstone terranes possibly with
associated banded iron formations (“BIF”s).

There is a 10km long airborne magnetic domain change anomaly in the north of the Djoum III licence,
identified as a large, basic-ultrabasic intrusive possibly with associated BIFs.

There is no production from the area nor any known artisanal workings.

Accessibility, Climate, Local Resources, Infrastructure, and Physiography

The landscape is hilly with an average elevation of 200-300m and the licence is covered by tropical
rainforest with small scale agriculture close to main roads. The Akonolinga licence is accessed via
paved and laterite road and takes approximately two hours from Yaoundé. The southern part of the
Djoum III licence is accessed by the Akonolinga-Djoum road; the northern part of the Djoum III
licence is accessed by the Djoum-Mintom laterite road. The town of Sangmelima (approximate
population 42,000) lies 10km northwest of Akonolinga, and Djoum (approximate population 5,000) is
located in the northwest corner of the Company’s Djoum III licence.

Exploration is possible for at least ten months of the year with a rainy season between August and
September.

Geological setting

        Akonolinga and Djoum III Licence Area Geology

The Akonolinga licence is underlain by part of the Archaean Ntem complex, and early
Palaeoproterozoic Nyong series rocks located in this northernmost exposure of the reworked Congo
craton. The Akonolinga and Djoum III licences enclose a 150km long greenstone belt interpreted by
the BRGM from ground observations of airborne magnetic anomalies. Lithologies include ultramafic
rocks, schists, gneisses (greenschist to upper amphibolite facies), metagranitoids making up part of the
Congo craton, and banded iron formation at Nkout. All these lithologies are widely affected by
northnortheast-southsouthwest and east-west shear zones.
                                                   34


        Deposit types

The principal gold exploration target types are:

                 Hydrothermal BIF-hosted quartz-gold mineralisation;
                 Archaean greenstone-belt, shear-zone hosted gold mineralisation in mafic lithologies;
                 Intrusion related gold-bearing skarns are a further possible target as quartz-tourmaline
                 vein material was reported during the Company’s stream sediment sampling programs.

Mineralisation

No primary sources of gold have yet been discovered. The BRGM recorded two gold and seven
uranium occurrences across the licences as well as a number of base metal targets. Fine and coarse
gold has been seen in pan concentrate samples from 48 locations.

Exploration Results

        Stream Sediment Sampling

The entire Akonolinga licence and 60% of the Djoum III licence has been covered by regional stream
sediment sampling at a density of approximately one sample per 4km2. Laboratory analytical results
are pending as at the date of this Prospectus. However, gold was noted in the pan concentrate at over
48 locations across both licences (see diagram below). Significant coarse gold was found across a
20km zone at Anvam in the north of the Djoum III licence.

        Soil Sampling

On the Djoum III licence, an area of 3km x 1.5km has been soil sampled on a 50m x 100m grid close
to Anvam. A total of 950 samples were taken and laboratory analytical results are pending as at the
date of this Prospectus.
                               35


Exploration summary – Akonolinga, Djoum III and Essong Licences, Southern
                               Cameroon
                                                  36


Conclusions and Recommendations

The results from pan concentrate stream sediment sampling on the Akonolinga licence to date have
revealed a large area of gold bearing terrain in the northwest of the licence. On Djoum III the results
from pan concentrate stream sediment sampling to date have identified a significant, 20km long
drainage anomaly in the northern portion of the licence. This suggests that gold may be associated
with the structurally complex Archaean rocks mapped by the BRGM and supported by the airborne
geophysics in the 1990s. As only reconnaissance exploration on a regional scale has been completed to
date, it is not prudent to draw meaningful interpretations from the results so far, however, a
preliminary indication exists for the potential to discover a number of hard rock gold deposits.

Systematic pan concentrate sampling across the licence will be completed, then follow-up stream
sediment surveys will be conducted to define areas for soil survey. Follow-up mapping, geophysics,
rock sampling and trenching will be effected, and up to 3,000m of drilling will be conducted on targets
across both licences depending upon results of the initial phases of exploration.

SRK considers an 18 month budget of US$1,035,000 to be sufficient to fund such work at Akonolinga
and Djoum III.

Sampling Methods and Approach

Refer to ‘Sampling Methods and Approach’, on page 43.

Data Verification

Refer to ‘Data Verification’ on page 44.

Essong Licence

Licence Description and Location

The Ridgeway Essong uranium exploration licence and the Caminex Akonolinga and Djoum III gold
exploration licences are all contiguous, but there are no other exploration or exploitation licence
holders immediately adjacent to any of these licences.

Licence History
There is no history of licence ownership, modern exploration, mineral resource or mineral reserve
estimates, nor any uranium or other mineral production from the licence. The BRGM mapped the area
in the 1990’s and commissioned an airborne magnetic survey.

Accessibility, Climate, Local Resources, Infrastructure, and Physiography

The landscape is hilly with an average elevation of 200-300m, and the licence is covered by tropical
rainforest with small scale agriculture close to main roads. The Essong licence has not yet been
visited, but access will likely be via an extension of the road network south of Akonolinga and west of
Djoum.

Exploration is possible for at least ten months of the year with a rainy season between August and
September.

Geological Setting

        Essong Licence Area Geology

The Essong licence is underlain by part of the Archaean Ntem complex and early Palaeoproterozoic
Nyong series rocks located in this northernmost exposure of the reworked Congo craton. The geology
                                                   37


is illustrated in the diagram entitled: “Exploration Summary – Akonolinga, Djoum III and Essong
Licences, Southern Cameroon” in the “Akonolinga and Djoum III licences” section above.

        Deposit Types

The presence of late stage alkaline intrusive activity in Archaean greenstone terrain indicates the
possibility of polymetallic base-metal and uranium deposits resulting from epithermal mineralising
processes associated with the granites.

Mineralisation

No mineralisation has been identified on the licence to date.

Exploration Results

        Historical Radiometric Anomalies

The BRGM were active in Cameroon in the 1990s and identified six radiometric anomalies within the
licence (illustrated in the diagram “Exploration summary – Akonolinga, Djoum III and Essong
Licences, Southern Cameroon” in the “Akonolinga and Djoum III Licences” section) which will be
used to guide exploration.

A desktop study and reconnaissance by the Ridgeway chief geologist has indicated broad areas for
early stage exploration.

Conclusions and Recommendations

The Company has established a dedicated uranium exploration office in Cameroon led by a chief
geologist experienced in uranium exploration. The team includes a Cameroonian geological consultant
who also has uranium exploration experience. Training of local staff has started and fieldwork is set to
commence during the fourth quarter of 2007.

Essong is an early stage exploration licence that has not been explored by modern exploration
methods. The Company intends to spend approximately US$540,000 over the next 18 months using
appropriate exploration methods and includes a sum of approximately US$195,000 for follow up
drilling, if warranted; SRK considers this to be reasonable.

Sampling Methods and Approach

No assay results of samples taken by the company for uranium over the Essong licence have been
received at the time of this Prospectus.

Ntem Licence

Licence Description and Location

There are no exploration or exploitation properties adjacent to the Ntem licence.

Licence History

There are no known previous owners of exploration licences in the immediate area, however, the
BRGM mapped the area in the 1990s and commissioned an airborne magnetic survey which covers a
third of the licence to the southeast. There is significant gold production by artisanal miners, who
exploit alluvial gravels in Abiete and Assok whose locations are shown in the map below.
                                                   38


Accessibility, Climate, Local Resources, Infrastructure, and Physiography

The topography is hilly with an average elevation of 200m. The vegetation is tropical rainforest.
Access to the licence is via tarred road to Kribi on the coast in southwest Cameroon, then by laterite
roads into the interior. There are two villages in the licence: Bipindi in the north and Akom II in the
south. Transport within the licence is via 4x4 pick-up truck and footpath. The climate is tropical with a
rainy season from August to October.

The surface rights are government owned. There is no mains electricity.

Geological Setting

        Ntem Licence Area Geology

The Ntem region forms part of the northern segment of the Congo craton. It consists of two main
groups: the Ntem complex and the Nyong series. The Ntem complex is Archaean and was reworked
together with the Paleoproterozoic Nyong series during the Birimian. The Ntem unit is made up of
intrusive rocks (porphyritic leucocratic and charnockitic granites) hosted in a volcano-sedimentary
complex of a similar age which includes gneisses and BIF complexes (greenstone assemblage).
Metamorphosed ultramafic rocks as well as amphibolites and eclogites are also present. Structurally,
the region is dominated by north-south shear zones and faults.

        Deposit Types

The principal exploration targets are BIF-hosted hydrothermal gold, and shear zone hosted gold
deposits at contacts between the volcanic and sedimentary units.

Mineralisation

Utilising the occurrence of gold in drainages downstream from high ground interpreted as BIF, it is
thought by the Company that mineralisation is controlled by the emplacement of gold bearing quartz
veins along brittle structures within the BIFs.

Exploration Results

The Ntem exploration licence area was selected from a larger 10,000km2 Reconnaissance licence
which the Company explored and allowed to lapse on April 6, 2007. The BRGM reported a single
copper occurrence on the licence area.

        Stream Sediment Samples

Out of 17 locations sampled in the Ntem licence, gold was observed in the pan at 16 of them from
three areas. The geology of all three includes sheared amphibolites and at Abiete in the south of the
licence. The geology also includes BIF, with alteration at the geological contact between the
amphibolites and gneisses (metasediments).

Assay results have been received for these samples and confirm the presence of gold in many
concentrates.

Sampling Methods and Approach

Refer to ‘Sampling Methods and Approach’, on page 43.

Data Verification

Refer to ‘Data Verification’ on page 44.
       39


Map of Ntem Licence Area
                                                  40


Conclusions and Recommendations

The results from pan concentrate stream sediment sampling on the Ntem licence revealed
concentrations of gold in drainages that probably derive from a topographic high interpreted to
represent an Archaean-age banded iron formation.

The preliminary results from the stream sediment sampling programs indicate that the potential to find
economic gold and possibly iron deposits justifies further exploration expenditure.

This is an early stage exploration project and further reconnaissance and prospecting programs across
the licence are recommended with systematic pan concentrate sampling and follow up mapping and
soil surveying. Subject to generating positive results, approximately 2,200m of trenching and 1,500m
of drilling is planned. SRK considers the Company’s exploration strategy and 18 month exploration
budget of US$560,000 to be reasonable.

Bantadje Licence

Licence Description and Location

The Ridgeway Bantadje licence lies directly northwest of and adjacent to the Kitongo licence held by
Mega Uranium Ltd. through its recent acquisition of NU Energy Corporation Ltd. (“NU Energy”).

Licence History

There are no known previous owners of exploration licences in the immediate area.

The BRGM mapped the area in the 1990s and recorded two uranium occurrences.

Accessibility, Climate, Local Resources, Infrastructure, and Physiography

The Bantadje licence covers a plain in the north with sahel type vegetation, and hills in the south with
an average elevation of 300–400m covered by tree-savannah type vegetation. The climate is arid with
cultivation of cotton, arable crops and cattle farming, and an intermittent rainy season occurs in
August-September when some parts of the licences become inaccessible even by foot.

There is a regional airport 160km away at Garoua. Mains power is available some 100km away in
Tchollire and water is available from the river Mayo Rey and its tributaries.

Geological Setting

The neighbouring Kitongo licence (originally held by NU Energy Corporation which is now owned by
Mega Uranium Ltd) is underlain by the lower Precambrian intrusives that host the primary vein-hosted
uranium mineralisation. However, Bantadje is underlain by Precambrian Basement rocks, volcano-
sedimentary Precambrian (possibly of Birimian/Eburnian age) Poli Group rocks, Palaeozoic
sediments, and Pan-African granitoids. Bantadje contains two uranium occurrences recorded by the
BRGM.

The most significant structural feature is the Tchollire shear zone with a northeast-southwest
orientation that constitutes a splay off the CASZ. Large scale folds associated with the shear zone are
observed around Bouba Njida on the Tchollire II licence, where complex deformation patterns may
have favoured multistage hydrothermal fluid circulation.

        Deposit Types

Granite hosted uranium in which post intrusion faulting provided a conduit for mineralising,
metasomatic, sodic-rich, uranium-bearing fluids to form hard rock uranium deposits (similar to the
neighbouring Kitongo project).
                                                 41


A potentially more significant target deposit type which may exist in the district is sediment-hosted
“roll-front” uranium style mineralisation.

Mineralisation

No economically viable mineral deposits have yet been identified on the licence.

Exploration Results

        Historical Radiometric Anomalies

The BRGM were active in Cameroon in the 1990s and identified a number of radiometric anomalies
within the licence area which will be used to guide exploration by the Company as shown in the
diagram below. In addition, the BRGM reported a single copper occurrence.

First pass reconnaissance has been conducted and results are pending at time of presenting this
Prospectus.

Sampling Methods and Approach

No assay results of samples taken by the company for uranium over the Bantadje licence have been
received at the time of this Prospectus.
                 42


Bantadje Licence showing historical anomalies
                                                  43


Conclusions and Recommendations

A desktop study of data from the licence has revealed the presence of several historically reported
uranium occurrences. The combination of a favourable geological setting and immediate proximity to
the Kitongo licence affirms the potential for economic deposits of uranium to occur in the Bantadje
area and SRK considers that further exploration expenditure is warranted.

Bantadje is an early stage under-explored exploration licence for uranium. SRK concurs with the
recommendations of the chief geologist of Ridgeway that early stage uranium exploration should be
undertaken on the licence.

The Company’s exploration strategy for the next 18 months will commence with reconnaissance
radiometric work. Contingent on the results, subsequent exploration phases should involve sampling
of outcrops, soils and stream sediments.

In-field testing will be undertaken using a number of instruments including:

               A Rad 7 emanometer;
               GR135 scintillometres; and
               A KT-9 Digital Magnetic Susceptibility Meter.

Rock samples will be processed through a laboratory that will include a bench-mounted Xray
Defraction Spectrophotometer (“XRF”) that the Company expects to be established in Yaoundé during
the next six months. Further, a 1,500m drill program is anticipated should the results of the above be
of sufficient merit.

SRK considers the US$545,000 budget for this work to be reasonable.

Sampling Methods and Approach

The sample methods and approach and the data verification procedures described below are applied in
all of the Company’s projects in Cameroon.

        Field Procedures

Soil Sampling: A 30cm diameter pit is dug in the soil through the organic/humic layer and an
approximately 3kg sample of the primary soil is taken and put in a plastic bag. This sample is taken
from a depth of 30cm to 60cm. The bagged sample is identified by a sample number marked on the
outside of the bag and by a sample tag inside the bag. The bag is sealed using staples.

A sampling field sheet is completed for each sampling location, data observed and recorded includes
location coordinates Universal Transverse Mercator (“UTM”), sample number, soil colour, soil type,
depth from which the sample is taken, vegetation, relief, and presence of artisanal workings. The
bagged sample is then transported to the field camp.

Pit Wall Sampling: After cleaning the wall, 5cm deep vertical channel samples representing different
petrological horizons are taken from the pit wall. Quartz veins and stockworks are sampled separately.
Sample locations are sketched and each sample is split to provide a 1kg laboratory sample and a field
duplicate for storage.

Stream Sediment Sampling: Technicians dig a pit to the gravel/grit layer at the edge of the drainage.
From this an approximately 40–60 kg bulk sample is taken. The following sample types are produced
from this bulk sample:

               A 300g pan concentrate sample; visible gold and any heavy minerals are noted and the
               concentrate is submitted for 50g fire assay;
                                                   44


                A 300g, minus 80 mesh (180 m) fraction is submitted for 50g fire assay; and
                A 2kg sample of -1mm material is kept as a back-up.

All three sample types are bagged on site, the bagged sample is identified by a sample number marked
on the outside of the bag and by a sample tag inside the bag, then sealed using staples. Every 20th
sample is duplicated in the field. No further preparation is carried out. Samples are packed in fibre
sacks, closed with tape and sent to the laboratory.

        Sample Preparation, Analyses and Security

Company staff are responsible for sample preparation before dispatch to the analytical laboratory
including insertion of duplicates into the sample stream every 20th sample. No blanks or standards
have been inserted in the sample stream to date; however, the Company plans to do so in future
sampling which may be used to inform resource models.

Soil samples are bagged and sealed on-site identifying each sample by a number marked on the
outside of the bag and by a sample tag inside the bag. In all cases, a 2kg sample is stored as a back-up.

There is no on-site preparation of rock samples from artisanal workings. Samples are sent directly to
Abilabs laboratory in Bamako, Mali for jaw crushing, riffle splitting, horizontal disc milling and tena
milling before submission to 50g fire assay. Abilabs is part of the ALS Chemex certified laboratory
group.

Samples are transported by Company pick-up truck and staff to freight forwarders SDV in Douala in
Cameroon, then air-freighted to Abilabs assay laboratory in Bamako, Mali. Standard 50g fire assay
procedures are employed for all rock and soil samples.

In SRK’s opinion, the combined protocols employed by the Company in the field, and those employed
by Abilabs in Bamako with respect to the preparation, transport and analysis of samples are
acceptable.

Data Verification

Given that all samples to date are from early stage exploration projects the insertion of duplicate field
materials into the sample stream by the Company’s field teams is considered adequate.

The Qualified Person (as defined in NI 43-101) has examined the statistical analysis performed by the
Company on the duplicates, and the blanks and standards submitted by the laboratory and verifies that
the data is reliable. The only limitation on the whole data verification procedure is the absence of
blanks and standards introduced into the sample stream prior to submission to the laboratory. This is
not considered to be a serious issue for early stage exploration projects as no quantative decisions are
being made on the basis of the results. The quality control methods employed by Abilabs are to
industry standard.

SRK has noted the occurrence of standards and blanks in the assay results returned by the laboratory,
and noted the following:

              Statistics derived from assay results of the duplicate samples submitted by the Company
              in places show a high variance which is expected in a coarse gold environment caused
              by surface enrichment above a deposit comprising gold bearing quartz veins and
              stockworks; and

              Statistics derived from the assay results of blanks and standards inserted by Abilabs
              show a high degree of repeatability and accuracy indicating that the laboratory’s sample
              handling and analysis techniques are robust.
                                                  45


The laboratory’s own quality assurance and quality control (“QA/QC”) procedures have been a
suitable monitor of accuracy of assay results at this stage of the exploration cycle, and statistical
analysis comparing assay results of blanks and standards against published values for those blanks and
standards reveals an acceptable repeatability.

LIBERIAN PROPERTIES

North Bea Licence

Property Description and Location

The North Bea licence comprises 200km2 in Grand Cape Mount County in low relief forest with
occasional isolated hills. It is located in the west of Liberia some 150km from the capital Monrovia
close to the border with Sierra Leone.

The Fula Camp deposit has similar characteristics to those at the New Liberty gold deposit on the
adjacent Bea licence located 45km southwest of Fula Camp, held by Mano River. Here, drilling has
shown that gold mineralisation occurs as several isolated, high grade lodes situated along a structural
trend similar to that at Fula and Soso Camps.

A measured and indicated mineral resource has been estimated at New Liberty by Mano River and is
detailed in a report by Lower Quartile Solutions dated October 24, 2006 and filed by Mano River at
www.sedar.com. The estimates are based on a 1.0 g/t Au cut-off grade and consist of:

        Measured resource of 6,658,000 tonnes at 3.49 g/t Au for 746,409 ounces; and

        Indicated resource of 6,875,000 tonnes at 2.88 g/t Au for 636,570 ounces

The resource remains open at depth and Mano River is reportedly investigating various permitting
issues relating to the project and seeking financing. The presence of this mineral resource at the New
Liberty deposit is not necessarily indicative of mineralization on the North Bea licence.

Licence History

The North Bea licence was awarded to the Company by the MLME on behalf of the Government of
Liberia on February 27, 2004, however, due to a delay in accessing site and with ministerial approval
the operational date assigned to the licence was February 1, 2005.

The initial three year licence period expired on January 31, 2008. As provided for in the terms of the
licence an automatic two year extension until January 31, 2010 was agreed and signed on December
18, 2007, by the Liberian Ministry of Lands, Mines and Energy. As required by the terms of the
licence, the area under the licence was reduced from the original 400 km2 to 200 km2 without adversely
affecting the prospective areas identified by the Company or the Company’s planned operations on the
licence.

The licence was held until November 2001 by Mano River (“MNO” on TSXV and “MANA” on
AIM). Mano River completed seven trenches on the Fula Camp prospect but it is not known if these
were sampled. Local artisanal miners have reportedly worked gravels for alluvial gold in the area
around Fula Camp and for diamonds in the vicinity of Camp Israel for at least a decade.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The North Bea licence is approximately 170m above sea level. Liberia has a typical tropical climate
average annual rainfall exceeding 4,500 mm, most of which falls between mid-May and mid-October.
In the dry season, temperatures reach 27-32°C. Access from the capital Monrovia is by a combination
of 150km of tarmac, laterite roads and logging tracks. The journey by 4 X 4 takes less than six hours.
Bridges along the road may require seasonal repair.
                                                    46


The nearest population centre is Weaju (population estimated at 4,000) located 20km (one hour) to the
south. There are artisanal mining villages at Fula Camp and the Vaney Camp (populations estimated
700-1000 each vary according to season). There is ample space for any future tailing storage, waste
disposal, heap leach pads and processing plant areas.

The licence contains two known hard rock gold showings, 4km apart, at Fula Camp and Soso Camp.
Artisanal miners work small pits in these areas and nearby alluvial deposits. The Company
representatives do not believe any mercury contamination has arisen from this activity as all observed
processing results in clean gravity panned gold concentrates.

There are no mineral resource and mineral reserve estimates associated with any previous work.

Geological Setting

The rocks within the North Bea licence area are of Archaean age and form part of the Man Craton
proto-continent that accreted to Africa 2.1 billion years ago shown in the schematic below.

The rocks within the property are highly-deformed and largely comprised of granite-gneiss, mafic
metavolcanics, mafic to ultramafic meta-intrusives and a minor amount of metasediments. The
granite/granodiorite-gneiss basement encloses linear volcano-sedimentary belts that fill major
structural breaks. These are interpreted as highly metamorphosed greenstone belts which contain
quartzite, amphibolite, ultramafics and banded iron formation components. One of these northeast
trending volcano-sedimentary belts crosses the southern half of the North Bea licence bounded by
quartz-diorite gneiss and granite–gneiss.

Granodiorite gneiss covers the northern half of the Licence with a granitic intrusion on the northern
edge of the licence. These lithologies represent the granitoid basement and greenstone belts typical of
Archaean greenstone terrains such as those described in Australia, Canada and Zimbabwe. In
addition, there are some showings of itabirite, a layered coarse grained chert and haematite formation.

High temperature and heavy rainfall have resulted in an in-situ laterite-saprolite soil profile which is in
excess of 30m deep in some areas. The highest density of outcrop is found in stream and river courses
and on high ridges where the ferricrete or laterite covering is limited.
                     47


Schematic of West African Geology showing Man Shield
                                                    48

                   North Bea Geological Map (after USGS 1-772 Bopolu Quadrangle)




        Deposit Types

There are two types of gold deposits found on the licence: primary (hard rock) deposits and placer
(alluvial) deposits.

        Primary Deposits

Primary gold mineralisation within the licence is associated with hydrothermal alteration in an Archaean
greenstone belt setting. The gold is typically hosted by quartz veins and stockworks but also occurs in a
disseminated form throughout the country rock associated with sulphides. The Company believes that
mineralisation is structurally controlled, occurring along shear zones that have acted as conduits for the
hydrothermal fluids, especially in areas of dilation.

        Placer Deposits

Actively worked placer gold and diamond deposits are abundant within the drainage network on the
licence. Alluvial deposits are indicative of nearby in-situ source rocks. The Company is not undertaking
exploration of placer deposits but uses their presence to trace mineralisation back to primary deposits.

Mineralisation

Initial soil geochemical work conducted during January 2005 by the Company identified two gold in soil
anomalies 4km apart in the central portion of the North Bea licence area, namely, Fula Camp and Soso
Camp. The Company is presently awaiting results from a follow-up soil geochemical survey between the
two anomalies.
                                                      49
        Fula Camp Prospect

Channel sampling at Fula Quarry and in nearby trenches and float mapping undertaken by the Company
indicate the presence of a structurally complex, 16m wide contact zone between granite-gneiss basement
and Archaean greenstone belt amphibolites. Artisanal mining has exposed disseminated and stockwork
mineralisation to a depth of 5-8m on the face of Fula Quarry as shown in the Fula Artisanal Quarry
photograph below.

                                            Fula Artisanal Quarry




Drilling and channel sample results from trenches indicate that the mineralised contact zone has a strike
length of at least 450m, possibly offset by at least two faults. The Company has named the offset
mineralised zones as Fula Southwest, Fula Quarry and Fula Northeast. The mineralisation follows a
silicified, manganese-rich zone of northeast-southwest, left lateral-shearing along the contact between a
mafic, possibly volcanic unit, and a granite-gneiss host, with pinch and swell characteristics, illustrated in
the Soso and Fula Camp Soil Geochemistry diagram below.

        Soso Camp Prospect

This area is situated 4km northeast of Fula Camp, and 3km southwest of Camp Israel and reportedly has a
long history of artisanal alluvial gold mining. The Company has mapped two artisanal, hard rock quarries
at Soso where results of sampling indicate weak gold mineralisation. However, more recent detailed soil
geochemistry and follow-up trenching by the Company has confirmed the presence of a persistent 500m
gold in soil anomaly striking at 65 degrees and open at both ends as shown in the Soso Camp Soil
Geochemistry and Trench Locations diagram below.
                                                    50
Exploration Results

The following types of fieldwork have been undertaken by the Company during exploration on the North
Bea licence:

                GIS based remote mapping;
                Licence wide soil sampling;
                Geological and float mapping;
                Prospect scale grab, soil and trench channel sampling;
                Geophysics; and
                Two phases of diamond drilling.

        Soil Sampling

During May to July 2005, the Company collected a total of 984 soil samples on a 400 x 400m regional
grid. Assay results demonstrated both isolated anomalies and clusters of anomalous values. In total, 78 soil
samples returned assay values greater than 60ppb Au.
                                                     51
                                             Regional Soil Samples




Infill sampling on a 50m x 50m grid yielded 20 samples containing more than 400ppb Au and 64 soil
anomalies containing more than 100ppb Au within the immediate vicinity of the Fula Camp prospect and
4 samples containing more than 100ppb Au.

Infill soil samples within the immediate vicinity of the Soso Camp prospect yielded 23 samples containing
more than 100ppb Au, with eight containing more than 400ppb Au as seen in the Soso Camp Soil
Geochemistry diagram above.

In May 2007, the Company took infill soil samples at 25m spacing on 200m spaced lines in the area
between Fula and Soso Camps. Assay results were pending as at the date of the Technical Report.

SRK considers the soil geochemistry to be a reasonable tool for identifying trenching targets in this terrain
and recommends that the Fula and Soso Camp infill soil grids be expanded owing to some of the highest
grade samples being on the perimeter of these areas.
                                                    52
        Sampling Methodology, Sample Preparation, Analyses and Security

Please refer to the section below: “Liberian Properties - East Kpo-Sampling Methodology, Sample
Preparation, Analyses and Security”.

        Geophysics

The Company implemented a pilot, ground-based magnetic survey of the Fula Camp prospect, which
covered less than 1km2. The results have been used to interpret faults that show up as linear anomalies and
which coincide with the interpreted offsets of the Fula Camp mineralised trend.

        Trenching and Channel Sampling

In October 2004, the Company undertook a grab and channel sampling program on artisanal workings and
seven pre-existing trenches (TR1–TR7) dug across the projected north-easterly strike of mineralisation
seen in Fula Quarry:

        A channel sample across the face of the artisanal workings returned 8.75m containing 1.17g/t Au;
        and

        Grab samples mostly taken from the side walls of the quarry returned grades ranging from 5g/t to
        77g/t Au. The channel did not provide a full intersection but this was later achieved in trenches
        TR3 and TR8 close to the channel sample location. SRK took a short channel sample from part of
        the quarry which returned 1.9 g/t Au.

On the basis of these and subsequent soil sampling results, a series of trenches were dug and sampled.
Trench TR8 was dug across Fula Quarry floor and encountered 10m of recent fill between high grade
samples indicating that artisanal mining has targeted a central high grade zone within the mineralised
corridor.

Several additional trenches were dug, mapped and sampled to test extensions of the mineralised zone to
the northeast and southwest of Fula Quarry.

The trenching results show a northeast trending mineralised zone interpreted to be offset by faults, in
places. Results from the trenching at Fula Camp to date are given in the following table and the trenches
are illustrated in Schematic Vertical Longitudinal Projection and Plan of Mineralised Zones diagram
below.
                                                     53
                                      Results from Fula Camp Trenches
                     Trench     From       To         Interval(m) Grade (g/t Au)
                     TR1                      no > 0.5g/t intersections
                     TR1x       10         19         9              0.9
                     TR2        10         14         4              1.1
                     TR3        21         40         19             0.9
                         inc    29         33         4              2.6
                     TR4        14         34         20             0.8
                         inc    20         26         6              1.5
                     TR5                      sample results pending
                     TR6        10         36         26             0.9
                         inc    14         18         4              3.4
                     TR7        14         36         22             2.1
                         inc    18         22         4              6.7
                     TR8        0          7          7              1.4
                        and     17         27         10             1.5
                     TR29xx                   no > 0.5g/t intersections
                     TR36       16         31         15             1.4
                         inc    18         24         6              2.3
                     TR37       22         36         14             1.7
                         inc    29         33         4              3.2
                     TR38       7          15         8              1.7
                     TR39                     sample results pending
                     TR41                     no > 0.5g/t intersections
                     TR42       19         24         5              3.7
                     TR43 –
                     TR45                       no > 0.5g/t intersections

SRK considers the trenches at Fula Camp to have been dug in appropriate orientations and that the 1-2m
depth achieved means that the samples are mostly from saprolitised rock which appears to be in situ.

        Sampling Methodology, Sample Preparation, Analyses and Security

Please refer to the section below: “Liberian Properties-East Kpo-Sampling Methodology, Sample
Preparation, Analyses and Security”.

Trenching at Soso was based on gold in soil anomalies, grab samples and the presence of artisanal
workings. Fifteen, five metre long pilot trenches were dug across the strongest anomalies. Results from the
trenching at Soso Camp to date are given in the table below and the trenches are illustrated in the Soso
Camp Soil Geochemistry diagram above.

SRK considers the trenching at Soso Camp to be too limited, in most cases trenches are only 5m long and
these should be extended to at least 50m. SRK did not inspect the Soso trenches.
                                          54
              Assay From All Pilot Trenches Dug at Soso Camp
            Trench       From        To          Interval(m)     Grade
                                                                 (g/t Au)
            TR10-                    No intersections >0.5 g/t
            TR21X
            TR22X               20          31             11       0.795
                   inc          23          26              3        1.83
            TR23                     No intersections >0.5 g/t
            TR24X                2        25.3           23.3        0.82
                   inc          21        25.3              4        3.17
            NB grades have not been capped



Soso Camp Soil Geochemistry Results and Trench Locations
                             55
North Bea Licence Geochemical Soil Program Results, Fula – Soso Camp
                   Mineralisation Trends/Trenches
                                                     56


        Drilling

Two diamond drilling programs have been completed at the Fula Camp prospect. These were undertaken
by UK based diamond drilling contractor Eurasian Drilling Systems Ltd. (EDS). In total, 1,228m of drill
core was sampled during October 2006–June 2007. Core recovery was 90% for both drill programs with the
exception of BEDH03 and BEDH10 which encountered bad ground and were stopped. Most core loss
occurred within the laterite/saprolite layers.

The first phase of 562m of diamond drilling in eight holes started in November 2006 and was completed in
December 2006. A Hydracore-28 diamond drilling rig drilled BTW sized core (42mm diameter) to depths
of between 50 and 100m, angled at -50°. All holes were oriented at 130°N apart from BEDH08 which was
oriented at 310°N. The program was designed to test the presence of gold in the northeast striking
mineralised shear zone, as defined at surface by Fula Quarry and trenches.

In March 2007, the Company drilled a further 636m in eight holes at Fula Camp using an Onram 100
diamond drill rig producing 40-35mm diameter core. These were drilled with similar orientations. The
phase two drilling campaign was designed to infill drill the previous holes and test potential on-strike
extensions to the zone.

SRK viewed some of the core and noted good core quality in general.

The northern-most drillhole, BEDH16, intersected granite at a shallow level confirming results of the initial
float mapping, that potentially auriferous mafic rocks are replaced by barren granite, probably emplaced
along a NW striking structural.

The following table summarises the drilling results achieved at Fula Camp.

                                           Results of Drilling at Fula Camp
                               Drill
                               hole          From (m)        To (m)       Intersected(m)     Au g/t
     Fula Southwest Zone       BEDH09                        No intersections >0.5 g/t
                               BEDH10                        No intersections >0.5 g/t
                               BEDH11               31.6          32.5                 1.0            0.7
                               BEDH12                3.0          18.0               15.0             1.2
                                     and            19.8          20.5                 1.0            1.3
     Fula Quarry Zone          BEDH01               20.1          32.5               12.5             3.1
                                     and            38.5          51.6               13.1             1.3
                               BEDH02               20.5          30.3                 9.9            5.4
                                     and            37.2          43.3                 6.1            1.0
                                     and            48.4          57.4                 9.0            2.0
                               BEDH03                               Core loss
                               BEDH08               15.9          37.3               21.4             2.4
                                     and            75.8          82.1                 6.3            4.3
     Fula Northeast Zone       BEDH04               13.3          16.3                 3.0            4.4
                               BEDH05               14.4          21.9                 7.4            2.4
                               BEDH06                3.0            5.0                2.0            0.6
                                     and            28.5          31.4                 2.9            3.6
                               BEDH07               11.8          13.3                 1.5            3.8
                                     and            33.5          37.0                 3.5            0.9
                               BEDH13               28.8          29.8                 1.0            0.6
                                     and            32.7          33.7                 1.0            0.6
                                     and            52.0          52.4                 0.4            0.9
                                     and            54.9          55.7                 0.9            0.6
                                     and            57.4          57.9                 0.6            1.4
                                                         57


                                  Drill
                                  hole          From (m)          To (m)       Intersected(m)        Au g/t

                                BEDH14                37.1             37.6                 0.5               1.9
                                      and             40.9             41.4                 0.5               0.8
                                      and             44.7             45.3                 0.6               0.9
                                      and             47.4             48.1                 0.7               0.6
                                BEDH15                47.3             48.7                 1.4               1.1
                                BEDH16                  1.0              7.0                6.0               0.9
Note: Grades have not been capped. Intersections calculated are based on a cut off grade of 0.5g/t Au.
The drilling and trenching results at Fula Camp have been interpreted using the GEMS mining software.
Trench results over 0.5 g/t, incorporating occasional lower grade results >0.2 g/t can be connected together
to form three northeast striking zones over 5m wide, mostly over 15m wide. Each zone has a strike extent of
200 to 300m and they are offset some 70m by sinistral faults. The interpreted outcrop is shown in the
diagram below.

The horizontal thickness of similarly defined mineralisation encountered in the drilling are similar although
in places the structure is seen to pinch to <5m in width, particularly at depth.

Gold grade multiplied by horizontal thickness provides a horizontal gold accumulation value for each trench
and drillhole intersection and these are projected in long section in the schematic below. Gold accumulation
is highest near and beneath Fula Quarry.

                                       Fula Camp Drilling and Trenching Results




Although the mineralised structure is reasonably well defined at surface, the distribution and persistence of
higher grades are not considered sufficiently well understood to produce a resource estimate for Fula Camp
at this time. The mineralisation near the Fula Quarry is economically interesting and remains open at depth
and to the southwest, therefor further drilling here is warranted in particular.
                                                    58


        Sampling Methodology, Sample Preparation, Analyses and Security

Please refer to the section below: “Liberian Properties - East Kpo-Sampling Methodology, Sample
Preparation, Analyses and Security”.

Heads of Agreement with Stellar Diamonds Ltd.

On March 23, 2005, the Company signed a Heads of Agreement for a Joint Venture with Stellar
Diamonds Ltd. (“Stellar”) (previously Mano Diamonds Ltd.), a subsidiary of Mano River Resources Inc.
(the “Stellar Agreement”) to explore for diamondiferous kimberlites in the North Bea licence.
The Stellar Agreement entitles Stellar to earn up to a 78% interest in the diamond rights on the Property
through the completion of a four-year, four-phase exploration program comprising of:
        Phase 1:       Commitment by Stellar to a minimum 12-month expenditure of $112,500 and
        made a cash payment to AAR of $12,500 thereby earning the right to proceed to Phase 2.
        Phase 2:       Following completion of Phase 1, Stellar are committed to exploration
        expenditures of $500,000 and a cash payment to the Company of $25,000. Upon completion
        of phase 2, Stellar will have a 46% equity interest in the diamond rights on the North Bea
        licence and the right to proceed to Phase 3. As at the date hereof, Stellar has made the
        US$25,000 payment and expended $279,691. The Company has agreed to extend the period
        of the Phase 2 program until after Stellar becomes a publicly traded company by accepting a
        supplementary cash payment of US$25,000. It is anticipated that Stellar will restart its
        exploration program on the North Bea licence by June 2008.
        Phase 3:      Stellar may elect to increase its interest in the diamond rights of the Property
        to 64% through financing the completion of a bulk sampling program within a further period of
        12 months and making a cash payment to AAR of $25,000.

        Phase 4:       Stellar can further increase its interest in the diamond rights on the North
        Bea licence to 78% through sole funding of a feasibility study over one or more kimberlites
        considered to have economic potential, within a further period of 12 months and by making a
        cash payment to the Company of $25,000.

If Stellar completes all four phases of the Stellar Agreement, it will have earned a 78% interest in the
diamond rights on the North Bea licence and the Company’s interest will be reduced to 12%. At any time
during the term of the Stellar Agreement, the Company may grant Stellar the option to assume sole funding
of mine construction with the result that the Company’s interest will revert to a 2% production royalty. A
10% carried interest is reserved to the Government of Liberia. The most recent exploration program
completed in 2007 under the Stellar Agreement was a ground electromagnetic survey that followed
encouraging ilmenite grain counts from a previous loam sampling program. The loam and geophysical
results have yet to be published, but possible kimberlite pipes, dykes and blows have been interpreted which
may be explored by drilling in 2008. Stellar has expended a total of US$279,691 in exploration
expenditures to date under the Stellar Agreement.

Conclusions and Recommendations

The Company has covered the North Bea licence area with geochemical sampling methods and has covered
anomalous areas with closer spaced follow-up sampling which has resulted in a number of gold in soil
anomalies. Two of the anomalies at Fula Camp and Soso Camp coincide with areas of current artisanal
mining activity targeting alluvial and primary gold occurrences.

Trenching at Soso Camp has not yet identified substantial insitu mineralisation, however, SRK considers
the methods employed to have been too restricted and that longer trenches should be dug before making the
decision to drill or to suspend further work there.
                                                      59


Trenching at Fula Camp has defined a northeast striking mineralised shear structure over an 800m strike
length, offset 70m by each of two sinistral faults. Sixteen drillholes have tested the mineralisation at depth.
Although intersections in the vicinity of Fula Quarry and isolated intersections elsewhere along the trend
are of economically interesting widths and grades, the continuity of such strong mineralisation along strike
and down dip has yet to be properly understood; narrower widths and lower grades are found in many
intersections. Pinch and swell features require to be better defined by more drilling before a resource
estimate can be attempted. However, the strongly mineralised area at Fula Quarry is open at depth and to
the southwest. Further, infill trenching may help understand the distribution of the more strongly
mineralised parts of the structure.

The Fula Camp deposit has some similar characteristics to the New Liberty gold deposit some 45km away,
where drilling has shown that the resource comprises several isolated, high grade lodes situated along the
same structural trend; a positive feasibility study has been completed for commercial scale gold production
at New Liberty. SRK believes it may be possible to define a relatively small tonnage of high grade material
at Fula Camp which could be mined and processed at the New Liberty facility and therefore further drilling
is warranted.

The Company has an 18 month budget of some US$850,000 to advance exploration including infill soil
sampling and 5,000m of trenching. This budget also includes 2,500m of drilling which in SRK’s opinion is
partially warranted on testing extensions at Fula Quarry and the remainder may be warranted depending on
the outcome of ongoing mapping, soil sampling and trenching programs. Overall, SRK considers the
exploration strategy and budget to be reasonable.

East Kpo Licence

Property Description and Location

The East Kpo licence comprises 200km2 in Lofa County in the west of Liberia about 150km from the
capital Monrovia close to the border with Sierra Leone.

Licence History

The East Kpo licence was awarded by the MLME on February 27, 2004, however, due to a delay in
accessing site and with ministerial approval, the operational date assigned to the licence was February 1,
2005.

The initial three year licence period expired on January 31, 2008. As provided for in the terms of the
licence, an automatic two year extension until January 31, 2010 was agreed and signed on December 18,
2007 by the Liberian Ministry of Lands, Mines and Energy. As required by the terms of the licence, its area
was reduced from the original 400 km2 to 200 km2 without adversely affecting the prospective areas
identified by the Company or the Company’s planned operations on the licence.

The ground was previously held under MEA by Mano River. Mano River relinquished the area in
November 2001 as per the terms of its MEA. Local artisanal miners currently work gravels for alluvial gold
in the area around Bella Yelle.

Limited modern mineral exploration has been conducted in the area covered by the licence and there are no
historical mineral resource and mineral reserve estimates associated with any previous work. There has
been extensive alluvial gold production from the property especially in the areas around Belle Yela and
Gbankole, but there has never been any commercial scale production.
                                                     60


                                    East Kpo Licence Overlying Local Geology




As a result of exploration by the Company to date, a zone of mineralisation has been identified at Tenkeh
Hill which is at an early stage of exploration and has been trenched with inconclusive results. Employing a
pan concentrate sampling program, the Company has also identified four further prospective areas (Zormu,
Zelekai, Kpyakpanu and Glubai) which are being examined in more detail through follow-up stream
sediment and soil sampling programs. Otherwise, the only recorded gold occurrences are alluvials at
Gbankole and Belle Yela which represent the main reason that this licence was originally applied for which
are reputedly among the most productive placer gold camps in Liberia.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Access from the capital Monrovia to the East Kpo licence takes approximately five hours by a combination
of tarmac roads and laterite roads to the St. Paul river. Thereafter crossing the river is achieved by large,
locally constructed canoes, then a 17km footpath to the field office located at the largest local population
centre at Bella Yella. Previously cut logging tracks are currently being restored by the Company to improve
access on the licence.

Geological Setting

The rocks within the East Kpo licence area are of Archaean age and form part of the Man Craton as
described above under the heading “North Bea Licence – Geological Setting”.

Deposit Types

There are two types of gold deposits found on the licence: primary deposits and placer deposits as described
above under the heading “North Bea Licence – Geological Setting”.

Mineralisation

Initial geochemical work conducted during early 2006 by the Company identified a gold bearing deposit in
the eastern portion of the East Kpo Bea licence at the Tenkeh Hill prospect. This anomaly is seen as a
                                                     61


northeast striking gold in soil anomaly containing >50 ppb Au. The Company is presently assessing a
previous trenching program on the prospect.

Exploration Results

The following types of fieldwork have been undertaken by the Company during exploration on the East
Kpo licence:

                GIS based remote mapping;
                Licence wide stream sediment sampling;
                Geological and Float Mapping;
                Prospect scale grab, soil and trench channel sampling; and
                Follow-up trenching.

        Stream Sediment Surveys

In the first exploration phase conducted in June 2006, stream sediment samples were collected in first order
drainages and samples were panned and the concentrate was examined for gold and recorded as ‘dust’,
‘points’, ‘specks’ or ‘nuggets’. The gold concentrate was also quantified into a ‘small’, ‘medium’ or ‘large’
amount. The following diagram Regional Stream Sediment Survey shows the distribution of these quantities
of gold in pan concentrate.

                                    Regional Stream Sediment Survey
                                                   62


       Soil Sampling

The Tenkeh Hill area is the most advanced project where 743 samples have been collected on a 100m grid
and 1043 samples have been collected on a 25m grid. The resultant gold in soil anomaly at Tenkeh Hill has
a 950m strike as seen in diagram below.

At Glubai Hills, a 400m x 50m spaced soil survey has been completed (486 samples), the results define a
>50 ppb Au anomaly over 5km strike length with >200 ppb Au anomaly over 500m strike open along strike
to the west. The Company intends to undertake infill soil sampling in the Glubai Hills area.

At the Zelekai prospect, a 200m x 25m spaced soil survey has been completed (1,114 samples). Assay
results are pending as at the date of the Prospectus.

At the Zormu prospect, a 200m x 25m spaced soil survey has been completed (2,400 samples). The pan
concentrate anomaly coincides with a potential fold closure interpreted by the Company from satellite
imagery. Assay results are pending as at the date of the Prospectus.

                                Tenkeh Hill Prospect East Kpo Licence
            63


Gold in Soil Anomaly at Glubai Hills
                                                    64
        Trenching

The results of the 100m spaced soil survey revealed a broken, 500m long, northeast striking zone of
anomalous gold values at Tenkeh Hill. Subsequent trenching, summarised in the following table, has
located a network of quartz veins from which it has been possible to pan visible gold, but from which
assays have yielded only short intervals of low gold grades. The Company intends to continue
prospecting and soil sampling in the Tenkeh Hill area.

                                          Tenkeh Hill Trench Results
                         Trench         From       To        Interval    Grade
                                                             (m)         (g/t)
                         BYTR1          25.33     34.33      8.8         0.57
                         BYTR2          No > 0.5g/t Au intersections
                         BYTR3          10        11         1           0.69
                                        71        72         1           0.54
                                        82        84         2           0.53
                         BYTR4-5        No > 0.5g/t Au intersections
                         BYTR6          47.3      48.1       0.8         1.01
                         BYTR7          3.8       5.6        1.8         0.89
                         BYTR8          20.8      21.8       1           0.52
                         BYTR9-14       No > 0.5g/t Au intersections
                         BYTR15         4         5          1           1.93


        Drilling

No drilling has been carried out on the East Kpo licence to date.

Conclusions and Recommendations

Though trenching at Tenkeh Hill has not yet returned significant intersections, a recent re-interpretation
of geology has generated further trenching targets. Further mapping, soil sampling and trenching is
considered a reasonable exploration approach at this stage. Results have yet to provide a drilling target
although a drilling budget has been proposed in anticipation of positive results.

SRK agrees with the Company’s stated intention to follow up on gold in soil anomaly targets with infill
soil sampling programs and trenching, where warranted. In order to advance exploration at a reasonable
pace, there will need to be some investment in improving access to this licence area. The Company’s 18
month budget of approximately US$1,000,000 includes some US$500,000 for 2,500m of drilling which
in SRK’s opinion would only be warranted should the soil geochemistry and trenching programs produce
results of sufficient merit.

        Sampling Methodology, Sample Preparation, Analyses and Security

The Company employs high specification GPS units to locate and record the details of the sample
positions. The integrity of the samples is protected by ensuring that samples are kept in secure storage on
site and under Company supervision while in transit. Sample sites are marked with aluminium tags and
flagging to ensure that sample locations can be re-located.

        Soil Sampling

Samples are collected from a depth of between 30cm and 50cm and sealed before transport to camp, with
specific details logged at site. The chief geologist checks numbering and logging of samples at camp.
                                                    65
        Trench sampling

Trenching is oriented perpendicular to the interpreted mineralised trend with trenches dug to a depth of 1-
2m. Samples, typically 1-2.5m long composites, are taken every 1 to 2.5m from a 3cm-wide, horizontal
channel in the trench wall about 5-10cm above the trench floor. Each sample weighs 2 to 7kg.

The sample medium chosen was in-situ saprolite and related quartz veins and veinlets, but in some
instances laterite and lateritised eluvial material was sampled where saprolite could not be reached. The
exposed profile was weakly to strongly laterized grading downwards from red-brown, featureless, mottled
clay, to pale, whitish-grey clay with preserved geological features.

        Sampling statistics

The following table summarises the statistics of the samples collected on the North Bea licence by the
Company.

                          Statistics of all the Sampling Programs on North Bea Licence
  Sample Type              Number     Alluvial   Blank      Standard     Highest     Mean       Standard
                                                                           value                    Dev.
  Regional Soil                984         29       50             5     740 ppb        21          51.8

  Prospect Soil               1,130        19       13             1   6,804 ppb       47.3        242.5

  Trench                       244         n/a       2                   7.84 g/t     0.427        0.991

  Channel Sample                49         n/a                          76.56 g/t

  Grab sample                   46         n/a                     1     1.63 g/t      0.07        0.248

  Alluvial Sample               87         n/a       2                   155 ppb      12.31        19.59

  Alluvial Pan Conc.            85         n/a                     3   434.96 g/t    11.045           50

  Drilling                    1,263        n/a      26            23     40.8 g/t      0.28         2.94

  TOTAL                       3,888        48       93            33




Two main assay laboratories have been used during the Company’s exploration programs to date: SGS
(Guinea and Ghana) and Alex Stewart/OMAC (Liberia and Ireland).

Before October 2006, SGS were used to prepare and analyse soil and trench samples from early stage
exploration. On the North Bea property, all samples from trenches TR10 to TR31, all soil samples series
from FCS1246 to FCS1539 and BE1 to BE2456 were subjected to a 500g cyanide leach bottle roll. The
resulting gold solution was extracted into a solvent and gold concentration determined by Atomic
Absorption Spectrometry (“AAS” - SGS procedure code MT60). The lower detection limit for both
techniques AAS is 10ppb Au. All assay results less than 10ppb Au in assay reports were replaced by a
value of 1ppb Au. When a sample yielded more than one assay result (duplicates, splits etc.) the average
of all results from that sample was used for data processing.

Since October 2006, soil, trench and drill core samples have been pulped at the Alex Stewart (“AS”)
preparation laboratory in Monrovia. The pulps are then returned to the Company representative for
insertion of standards and blanks into the sample stream before being returned to AS for onward courier
                                                    66
shipment to the ISO 17025 accredited OMAC laboratory in Ireland for 50g Au fire assay (OMAC
procedure code Au4). Sample pulps are fused with lead oxide, producing a prill. The prill is then
dissolved in Aqua Regia and presented to an AAS.

        Quality control

OMAC runs batches of 50 samples, comprising 48 samples plus an in-house blank and standard. In
addition to their in-house QA/QC regime, OMAC repeats 10% of all assays. The laboratory participates
in the round robin for this analysis, conducted twice yearly by Geostats of Australia, and also participates
in the Proficiency Testing Program run by the Standards Council of Canada in which it has achieved the
top rating for this analysis in every round. Some 15% of samples assayed by OMAC on behalf of the
Company are for internal QA/QC. Pulp repeats are quite variable especially in the 3 to 10g/t Au range,
with pairs of results routinely differing by 20 to 50%. OMAC’s internal standards demonstrate good
precision and accuracy.

        Data Verification

SRK visited Fula Camp and inspected a number of drill cores, trenches and artisanal workings.
Independent samples were taken from the eastern end of trench TR3 which are compared against the
originals in the following table:

                                          SRK Check Samples Trench 3
                                                   Original Sample     Check Sample Assay
                  From               To            Assay (g/t Au)           (g/t Au)
                   20                25                   0.4                 0.24
                   25                30                  0.72                 0.69
                   30                35                  1.84                 1.62
                   35                40                  0.36                 0.40

SRK also took 1/8 core samples from selected mineralised intersections in three drillholes and the results
from these are detailed in the following table:

                                        SRK Check Samples from drill core
                                                            Original Sample Assay     Check Sample
            Hole ID              From             To               (g/t Au)           Assay (g/t Au)
            BEDH08               75.8            82.1                2.49                 0.62
            BEDH04               13.3            16.3                4.41                 5.12
            BEDH07               11.8            13.3                3.76                 2.78


Although the majority of SRK’s assay results are lower than those achieved by the Company, in general,
gold grade levels are confirmed. SRK considers the difference to be coarse gold observed in some of the
samples and the 50g fire assay method currently employed probably resulting in variable repeatability of
field and core duplicates. SRK has recommended using screen fire assays on a series of repeat pulp or
coarse reject submissions to assess whether this can be demonstrated.

The Company has routinely submitted blanks, standards and duplicates in its drilling and trenching
sample batch submissions to OMAC Laboratories. While blanks always return satisfactorily low results,
the standards show one or two instances of significant differences from the ‘expected value’. In SRK’s
opinion, this is more likely to be due to the project geologists recording the wrong standard than the
laboratory returning erratic results. Other than these, the majority of standard results show the laboratory
to be accurate and precise. OMAC is a well respected and internationally accredited laboratory whose
internal quality control results from the Company batches show good precision and accuracy.
                                                                     67
Results of field duplicate submissions do show a significant variability and reaffirm SRK’s view that the
Company should investigate means of reducing errors resulting from sample size reduction by using
screen fire assays when trenches and drillholes intersect zones of potential economic interest.

                             SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following table provides a summary of certain historical financial data of the Company and its
subsidiaries for the six month period ended December 31, 2007, the six month period ended June 30,
2007, and the financial years ended December 31, 2006 and December 31, 2005 and December 31, 2004.

                                                       Six              Six       Financial       Financial           Financial
                                                   Months           Months             year            year                 year
                                                    ended            ended            ended           ended               ended
                                              December 31,         June 30,    December 31,    December 31,    December 31, 2004
                                                     2007            2007(1)           2006            2005            (audited)
                                               (unaudited)        (audited)        (audited)       (audited)                US$
                                                      US$              US$              US$             US$
Revenue(2)                                     134,000                33,000          39,000           4,000                 Nil
Net loss                                     (313,000)             (988,000)       (216,000)       (459,000)            (31,000)
Net loss per share (basic)                      0.0098                0.0321          0.0110          0.0395               0.062
Net loss per share (diluted)                    0.0098                0.0321          0.0110          0.0395               0.062
Total assets                               12,764,000            11,114,000        4,329,000       1,466,000              99,000
Total long-term debt                                Nil                  Nil             Nil             Nil                 Nil
Shareholders’ equity                       12,712,000            11,051,000        4,210,000       1,454,000              22,000
(deficiency)
Notes
(1)
    During 2007, the Company changed its financial year to June 30th.
(2)
      Consists entirely of interest income.



See Note 18 to the audited consolidated financial statements for a reconciliation to generally accepted
accounting principles in Canada.

                                      MANAGEMENT’S DISCUSSION AND ANALYSIS

The following management discussion and analysis (“MD&A”) provides information that Management
believes is relevant to an assessment and understanding of the consolidated results of operations and the
financial condition of the Company and its subsidiaries. For a reconciliation of these numbers to
generally accepted accounting principles in Canada, see Note 18 to the financial statements.

This discussion should be read in conjunction with the consolidated financial statements of the Company
and the related notes thereto included elsewhere in this Prospectus. The financial information contained in
the discussion of results and operations was prepared in accordance with International Financial
Reporting Standards. All amounts in this discussion are expressed in US dollars, unless identified
otherwise.

The discussion contains forward-looking statements that involve numerous risks and uncertainties,
including those risks set forth in this Prospectus under “Cautionary Statements Regarding Forward
Looking Statements” and under “Risk Factors”. Actual results of the Company could differ materially
from those discussed in such forward-looking statements as a result of these risks and uncertainties.

Overview

The Company was incorporated in the British Virgin Islands on August 10, 1998 as Cogefi Finance Inc.
under the International Business Companies Ordinance of the laws of the British Virgin Islands. The
Company changed the name to African Aura Resources Limited on January 16, 2004. The financial
statements contained in this Prospectus and the activities described in the following management
discussion and analysis relate to the operations of the Company.
                                                    68
The Company is a junior exploration company within the natural resource industry with the primary
business objective of exploration and development of mineral deposits in sub-Saharan Africa.

On June 30, 2007 the Company changed its financial year end from December 31 to June 30.

During the period from January 2004 to December 31, 2007, the Company has expended US$5,201,000
in conducting exploration and development work in Cameroon and Liberia, Africa.

Cameroon, Central Africa
The Company holds six mineral exploration licences in Cameroon for gold exploration and associated
metals. The Company also holds two additional mineral exploration licences in Cameroon, for uranium,
iron and associated metals through its 70% owned subsidiary, Ridgeway Energy Limited.

All licences are valid for an initial term of three years whereupon a reduction in area of 50% is required.
The licence period is then extendable for a further four periods of two years each with a concomitant 50%
reduction in area required at each extension. The permits allow the Company to work up to the feasibility
stage at which time a mining licence can be automatically applied for.

Batouri

Description of the project:

The Batouri licence is 1,000km2 in size and targets gold in the Eastern Province of Cameroon. It
encompasses a 16km long trend of anomalous gold mineralization as defined by soil sampling and
discontinuous artisanal gold workings with two main areas of interest: the Dimako-Mongonam prospect
and the Kambele-Dem prospect.

Plans for the project:

The Company plans to execute a 3,500m preliminary diamond drilling programme, guided by ground-
based geophysics (IP and radiometric) to characterize the style, intensity and potential extent of gold
mineralization starting in Q1 2008. Pending results, a follow-on drilling programme of 10,000m to
prepare an initial independent resource estimate is scheduled to start in Q4 2008.

Status of the project:

Results of soil sampling and ground-based geophysics have identified strongly anomalous gold in soils
and clear subsurface geometry believed to control gold distribution across each prospect area. The
Company has bought two fully equipped diamond drill rigs and contracted a diamond drilling contractor
to effect the drilling campaign. Drill rigs have arrived in Cameroon at time of presenting this Prospectus.

Expenditure:

Total expenditure to date is US$1,661,212. The budget allocation for the next 18-month phase is
US$2,310,000.

Akonolinga

Description of the project:

The licence is 996km2 and targets gold in the Southern Province of Cameroon. It encompasses part of a
150km long Archaean greenstone belt identified through interpretation of aeromagnetic data.
                                                  69
Plans for the project:

The Company plans to identify areas of gold anomalism for subsequent soil survey, trenching, and
ultimately drilling guided by pan-concentrate stream sediment sampling across the licence.

Status of the project:

Results from pan-concentrate stream sediment sampling has identified an area 20km long by 10km wide
in which gold is concentrated in drainages.

Expenditure:

Total expenditure to date is US$144,948.

The next phases of exploration are stream sediment sampling, then soil sampling, trenching and
preliminary drilling in order to characterize deposit type.

The budget allocation for the next 18-month phase is US$480,000.

Djoum III

Description of the project:

The licence is 998km2 and targets gold in the Southern Province of Cameroon. It encompasses part of a
150km long Archaean greenstone belt identified through interpretation of aeromagnetic data.

Plans for the project:

The Company plans to identify areas of gold anomalism for subsequent soil survey, trenching, and
ultimately drilling guided by pan-concentrate stream sediment sampling across the licence.

Status of the project:

Results from pan-concentrate stream sediment sampling has identified two areas 10 to 20km long by 5 to
10km wide in which gold is concentrated in drainages.

Expenditure:

Total expenditure to date is US$175,796. The next phases of exploration are stream sediment sampling,
then soil sampling and trenching to delineate drill targets. The budget allocation for the next 18-month
phase is US$555,000.

Ntem

Description of the project:

The licence is 987km2 and targets gold in the Southern Province of Cameroon. It encompasses a block of
Archaean greenstone terrane in which there are areas of alluvial artisanal mining.

Plans for the project:

The Company plans to identify areas of gold anomalism for subsequent soil survey, trenching, and
ultimately drilling guided by pan-concentrate stream sediment sampling across the licence.
                                                     70


Status of the project:

Results from reconnaissance pan-concentrate stream sediment sampling have identified coarse gold in
two drainage basins which are being exploited by local artisanal miners.

Expenditure:

Total expenditure to date is US$141,657. The next phases of exploration are systematic stream sediment
sampling, then soil sampling and trenching in order to delineate drill targets. The budget allocation for the
next 18-month phase is US$560,000.

Rey Bouba

Description of the project:

The licence is 992km2 and targets gold in the Northern Province of Cameroon. It encompasses an 80km
long segment of the Central African Shear Zone that transects volcano-sedimentary rocks of
palaeoproterozoic age within which artisanal miners are exploiting gold.

Plans for the project:

The Company plans to identify areas of gold anomalism for subsequent soil survey, trenching, and
ultimately drilling guided by regional and detailed soil sampling across the licence.

Status of the project:

Reconnaissance within the licence has identified several areas of both active and abandoned artisanal
mining activity.

Expenditure:

Total expenditure to date is US$147,362. The next phases of exploration are systematic regional soil
sampling, prospect scale soil sampling trenching and preliminary drilling in order to characterize deposit
type(s). The budget allocation for the next 18-month phase is US$500,000.

Tchollire II

Description of the project:

The licence is 992km2 and targets gold in the Northern Province of Cameroon. It encompasses a
kilometric scale fold structure in volcano-sedimentary rocks of Palaeoproterozoic age within which
artisanal miners are exploiting gold.

Plans for the project:

The Company plans to identify areas of gold anomalism for subsequent soil survey, trenching, and
ultimately drilling guided by regional and detailed soil sampling across the licence.

Status of the project:

Reconnaissance within the licence has identified several areas of both active and abandoned artisanal
mining activity.
                                                    71
Expenditure:

Total expenditure to date is US$157,085. The next phases of exploration are systematic regional soil
sampling, prospect scale soil sampling, trenching and preliminary drilling in order to characterize deposit
type(s). The budget allocation for the next 18-month phase is US$540,000.

Essong

Description of the project:

The licence is 991km2 and targets uranium in the Southern Province of Cameroon. It encompasses several
uranium occurrences recorded by the Bureau de Recherches Geologique et Miniere (BRGM) in Archaean
age rocks.

Plans for the project:

The Company plans to identify areas of uranium anomalism for subsequent soil survey, trenching, and
ultimately drilling guided by radiometric survey across the licence.

Status of the project:

The reconnaissance stage of exploration is underway.

Expenditure:

Total expenditure to date is US$50,000. The next phases of exploration are radiometric survey, then soil
sampling and trenching in order to delineate drill targets. The budget allocation for the next 18-month
phase is US$540,000.

Bantadje

Description of the project:

The licence is 482km2 and targets uranium in the Northern Province of Cameroon. It encompasses two
uranium occurrences recorded by the BRGM in volcano-sedimentary rocks of Palaeoproterozoic age.

Plans for the project:

The Company plans to identify areas of uranium anomalism for subsequent soil survey, trenching, and
ultimately drilling guided by radiometric survey across the licence.

Status of the project:

The reconnaissance stage of exploration is underway.

Expenditure:

Total expenditure to date is US$19,000. The next phases of exploration are radiometric survey, then soil
sampling and trenching in order to delineate drill targets. The budget allocation for the next 18-month
phase is US$545,000.

Liberia, West Africa
                                                    72
The Company holds two MEA licences in Liberia for gold and related minerals and diamonds. These
MEAs are located in Western Liberia and consist of the North Bea (200km2) and East Kpo (200km2)
licences. Both licences were valid for an initial term of three years after which a reduction in area of 50%
was required. The reduced licences are now valid for a further two years.

Both these MEAs were granted on February 27, 2004 and became operational on February 1, 2005. The
two year renewals are valid from February 1, 2008. The MEAs will allow the Company to work up to the
feasibility stage at which time an MDA can be applied for automatically which will permit mining.

The Company signed a Heads of Agreement for a joint venture on the diamond rights of its North Bea
licence with Stellar Diamonds Limited, a subsidiary of Mano River Resources Inc. on March 23, 2005.

North Bea

Description of the project:

The licence was reduced to 200km2 on February 1, 2008 as per the terms of the Mineral Exploration
Agreement with the Liberian Government, and confirmed by letter to the Company from the Liberian
Ministry of Lands and Mines dated December 18, 2007.

The licence targets gold in the west of Liberia. It encompasses the 4.5km long, Fula Camp to Soso Camp
corridor along which there are numerous artisanal workings; the Fula Camp Quarry zone of Archaean,
shear zone hosted gold mineralization which was the subject of diamond drilling in 2006-7; and the Camp
Israel artisanal diamond mining area which is the subject of a joint venture with privately held Stellar
Diamonds Ltd.

Plans for the project:

It is intended to outline an initial resource estimate through trenching and diamond drilling in the next 12
months by extending the known strike length of the Fula Camp Quarry zone through soil sampling and
trenching, then drilling any extension found. It is also planned to drill deeper holes where previous
1,263m of diamond drilling has indicated potentially economic grades of gold mineralization at Fula
Camp Quarry.

Status of the project:

Trenching and mapping is now underway to extend the Fula camp Quarry zone along the Fula-Soso
corridor.

Expenditure:

Total expenditure to date is US$1,523,138. The next phases of exploration are trenching, mapping and
drilling in the next 18 months. The budget allocation for the next 18-month phase is US$850,000.

East Kpo

Description of the project:

The licence was reduced to 200km2 on February 1, 2008 as per the terms of the Mineral Exploration
Agreement with the Liberian Government, and confirmed by letter to the Company from the Liberian
Ministry of Lands and Mines dated December 18, 2007.
The licence targets gold in the west of Liberia. It encompasses 40km of Archaean greenstone geology.
                                                    73
Plans for the project:

Follow-up soil sampling, mapping, trenching then drilling as warranted by areas of interest delineated by
trenching.

Status of the project:

The pan concentrate survey has revealed five prospective areas: all of which have been subject to soil
sampling with final results still outstanding. One of these (Tenkeh Hill) has been the subject of trenching
that has not yielded firm drill targets.

Expenditure:

Total expenditure to date is US$984,684. The next phases of exploration are trenching, mapping and
drilling in the next 18 months. The budget allocation for the next 18-month phase is US$1,000,000.
Results of Operations
Review of Six Month Period Ended December 31, 2007
As the Company is in the exploration and development stage and had no operations or revenue other than
interest income of US$134,000 for the six month period ended December 31, 2007 (US$24,000 for the
six month period ended December 31, 2006).
For the six month period ended December 31, 2007, the Company reported a net loss of US$313,000
(December 31, 2006: US$148,000). The principal components of the increased loss in the six month
period ended December 31, 2007 were increased general and administrative expenses of US$189,000
(December 31, 2006 – US$53,000), travel and subsistence expenses of US$59,000 (December 31, 2006 –
US$7,000), both of which resulted from financing activities and preparation for an initial public offering
of the Company’s securities. General and administrative expenses are comprised of management costs,
office rental, legal and professional fees, and corporate administrative costs. There was an increase in
wages and salaries to US$121,000 (December 31, 2006 – US$-) due to additional staff being hired and an
increase in salary for the existing staff.

During the six month period ended December 31, 2007, the Company invested US$1,916,000 (December
31, 2006: US$1,252,000) in exploration and development activities on the Properties. The investment
was financed by private placement of shares and special warrants of the Company.

Review of Six Month Period Ended June 30 2007, and Financial Years Ended December 31, 2006
December 31, 2005 and December 31, 2004

The Company is in the exploration and development stage and had no operations or revenue other than
interest income for the six month period ended June 30, 2007, and the financial years ended December 31,
2006, December 31, 2005 and December 31, 2004.

For the period ended June 30, 2007, the Company reported a net loss of US$988,000; a net loss of
US$216,000 for the year ended December 31, 2006, a net loss of US$459,000 for the year ended
December 31, 2005 and a net loss of US$31,000 for the year ended December 31, 2004. The principal
components of the increased loss in the period ended June 30, 2007 and the year ended December 31,
2006 were increasing levels of general and administrative expenses, travel and subsistence expenses, in
the period ended June 30, 2007. General and administrative expenses are comprised of management
costs, office rental, legal and professional fees, and corporate administrative costs.

During the six month period ended June 30, 2007, the Company invested US$1,291,000 in exploration
and development activities on the Properties. Similarly the Company invested US$1,564,000 in the year
                                                              74
ended December 31, 2006, US$369,000 in the year ended December 31, 2005 and US$93,000 in the year
ended December 31, 2004. The investment was financed by private placement of shares of the Company.

Liquidity and Capital Resources

The Properties are in the exploration and development stage and, as a result, the Company has no source
of operating cash flow. The exploration and development of the Properties depends on the Company’s
ability to obtain financing.

As at December 31, 2007, the Company had cash or other current assets of US$7,563,000 (December 31,
2006: US$2,311,000) and total liabilities of US$52,000 (December 31, 2006: US$119,000).

As at June 30, 2007, December 31, 2006, 2005 and 2004, the Company had cash or other current assets of
US$7,830,000, US$2,311,000; US$1,004,000 and US$99,000, respectively, and current liabilities of
US$63,000, US$119,000, US$12,000 and US$77,000, respectively.
The Company is in the process of raising the necessary funding to carry out its exploration and
development programs through the Offering. The Company’s financing efforts may be affected by
general economic conditions and volatility in the capital markets.
Additional Disclosure for Venture Issuers without Significant Revenue
                               6 months ended     6 months       Year ended          Year ended              Year ended
 Analysis of General and        December 31,     ended June   December 31, 2006   December 31, 2005       December 31, 2004
 Administration expenses            2007          30, 2007

                               $ '000           $ '000        $ '000              $ '000              $ '000


 Stock-based compensation      Nil              709           Nil                 363                 10
 Wages and salaries            121              30            Nil                 Nil                 Nil
 Directors fees and salaries   130              166           168                 80                  11
 Administrative and office
 expenses                      189              57            65                  16                  5
 Travel & subsistence          59               23            15                  4                   5
 Foreign Exchange              (52)             36            7

 Total                         447              1,021         255                 463                 31
                                                         75
Transactions with Related Parties
The Company incurred the following expenses for directors or corporations controlled by directors or
officers of the Company or to corporations in which directors of the Company were also directors.

     Detail                   Dec 31, 2007     June 30, 2007   Dec 31, 2006   Dec 31, 2005   Dec 31, 2004

     Executive and Director
     Compensation             212,000          238,000         238,000        120,000        11,000
     Commission               -                 -              26,000          -              -
     TOTAL                    212,000          238,000         264,000        120,000        11,000



Related party transactions include:
              Wages paid to executive directors;
              Director’s fees paid to non-executive directors; and
              Finder’s fee paid to one non-executive director for arranging private placement.
“Executive and Director Compensation” represents payments to Steven Poulton, David Netherway, John
Gray, Matthew Grainger, Danesh Varma and Manuel Lamboley.

No director, executive officer or principal shareholder of the Company, and no associate or affiliate of the
foregoing, has had a material interest, direct or indirect, in any transaction that has materially affected or
will materially affect the Company.

All of the above named are directors of the Company and hold 7,968,041 shares or 25% of the issued
shares of the Company as at December 31, 2007.

These transactions with related parties were within the normal course of business and have been recorded
at the exchange amounts, being the amounts agreed to by the transacting parties.

For a reconciliation of these numbers to generally accepted accounting principles in Canada, see Note 18
to the financial statements.

Off Balance Sheet Transactions

There are no off balance sheet transactions.

Obligations and Contractual Commitments

The Company has no long term obligations or contractual commitments.

The Company’s mineral exploration permits of the maximum size (1,000km2) in Cameroon are subject to
a minimum aggregate expenditure of approximately US$624,000 for each permit over the initial three
year tenure. Expenditure is on target to achieve this commitment on all permits held by the Company.

The Company’s MEA’s in Liberia are subject to a minimum expenditure of US$2.00 per acre (US$494
per km2) per year, which expenditure has already been achieved across both licences.

Financial Instruments

The balance sheet carrying amounts for cash, accounts receivable, accounts payable and accrued
liabilities approximate fair value due to their short-term nature. Due to the use of subjective judgments
                                                     76
and uncertainties in the determination of fair values, these values should not be interpreted as being
realizable in an immediate settlement of the financial instruments.

Outstanding Share Capital

The Company’s authorised share capital is 500,000,000 common shares with a par value of $0.01 each, of
which 31,836,174 shares were issued and outstanding as at December 31, 2007 (31,816,549 as at
December 31, 2006).

Critical Accounting Estimates

The Company’s significant accounting policies are described in Note 3 to the financial statements
included in this Prospectus. Management considers the following to be the most critical in understanding
the judgments that are involved in preparing the Company’s financial statements and the uncertainties that
could impact its results of operations, financial conditions and future cash flows.

Use of Estimates

The preparation of financial statements in conformity with International Financial Reporting Standards
requires Management to make estimates and assumptions that affect the reported amount of assets and
liabilities and the disclosure of contingent liabilities at the date of the financial statements and the
reported amount of expenses during the reporting period. The most significant estimates are related to the
carrying value of resource interest in mineral properties and its recoverability. Actual results could differ
from those estimates.

Mineral Property Interests

The Company is an exploration and development company. The mineral properties of the Company are
currently being explored and the Company has not yet determined whether these properties contain
reserves that are economically recoverable. The recoverability of the amount shown for mineral properties
is dependent upon the existence of economically recoverable reserves (as established in accordance with
NI 43-101), the ability of the Company to obtain the necessary financing to complete exploration and
development, and upon future profitable production or proceeds from disposition of such properties.

Mineral Properties and Deferred Exploration Costs

The Company’s accounting policy is to defer the costs of exploration and capital assets on existing
projects and carry them as assets until production commences. Mineral properties and the deferred
exploration expenditures are recorded at cost and do not necessarily reflect present or future values. If a
project is successful, the related mineral properties and deferred exploration expenditures will be
amortized over the estimated economic life of the project. If a project is unsuccessful, or if exploration
has ceased because continuation is not economically feasible, the mineral properties and related
exploration expenditures will be written off.

Impairment of Long-Lived Assets

Management periodically reviews the carrying value of the mineral properties and deferred exploration
expenditures to consider whether there are any conditions that may indicate impairment. Where estimates
of future cash flows are available, a reduction in the carrying value is recorded to the extent the net book
value of the investment exceeds the estimated undiscounted future cash flows. Where estimates of the
future cash flows are not available and where other conditions suggest impairment, Management assesses
if the carrying value can be recovered and provides for impairment, if so indicated.
                                                    77
The Company will monitor the recoverability of long-lived assets in accordance with the
recommendations of the CICA Handbook Section 3063, Impairment of Long-Lived Assets. This is based
on such factors as current market value, future asset utilization, business climate and future undiscounted
cash flows expected to result from the use of the related assets. The Company’s accounting policy is to
record an impairment loss in the period when it is determined that the carrying value of the asset may not
be recoverable. Management’s estimate of future commodities prices, operating costs, capital costs and
the availability of resources required to develop existing properties are utilized in the evaluation of the
assets and involve subjective judgments.

Risks and Uncertainties

In conducting its business, the Company faces a number of risks and uncertainties. These are described
under the heading “Risk Factors”.

Outlook

The Company is currently in an exploration and development stage and has various exploration programs
that will continue into 2008.

Shareholder Meeting

The Company convened an annual and special meeting of its shareholders at the London offices of the
Company on November 23, 2007 for the following purposes:

            a. To receive the audited financial statements of the Company as contained in this
               Prospectus;
            b. To consider amendments to the Memorandum of Articles of the Association of the
               Company to more closely conform to North American practise;
            c. To elect directors;
            d. To appoint auditors; and
            e. To approve the Company’s stock option plan including the approval, by vote of a
               majority of disinterested shareholders, of the previous issuance of options temporarily in
               excess of 10% of the Company’s issued shares.

All items of business requiring approval by shareholders were duly approved at such meeting by the
requisite majority of votes.
                                       USE OF PROCEEDS

Offering

The net proceeds to the Company from the Offering are estimated to be $6,957,927 ($8,069,117 if the
Over-Allotment Option is exercised in full) after deducting the Agents’ Commission of $514,990
($592,238 if the Over-Allotment Option is exercised in full) and the expenses of the Offering which are
estimated to be $450,000.

Such proceeds and other available cash of $6,154,200 for a total of $13,112,127 will be used to fund
further phases of exploration and development of the Company’s projects in Liberia and Cameroon and
for general administrative working capital. Actual use of proceeds may vary depending on the Company’s
operational and capital needs from time to time.

Special Warrants

The net proceeds from the sale of the 21,121,062 special warrants qualified by this Prospectus were
US$8,916,679 after deduction of a finder’s fee of US$134,229 paid to a Canadian investment dealer for
                                                       78
services rendered in connection with such offering. As at February 29, 2008 the Company had expended
a total of US$3,230,382 of such proceeds as follows:

                           Exploration in Cameroon                       US$731,494
                           Exploration in Liberia                        US$897,204
                           Finders Fee Payment                           US$ 56,884
                           IPO Costs                                     US$167,921
                           General & Administrative                      US$658,680
                           Capital Expenditures                          US$718,199


Funds Available

Following the Offering, the Company will have funds available to it as follows:

                             Available Funds                       Offering
                             Estimated net proceeds from           $6,957,927
                             the Offering(1)

                             Estimated working capital as          $6,154,200
                             of February 29, 2008(2)
                             Total                                 $13,112,127

        Notes:
        (1)      Without giving effect to the exercise of the Over-Allotment Option but after deducting the Agents’
                 Commission and expenses of the Offering estimated to be $450,000.
        (2)      Unaudited.

Intended Use of Available Funds

The Company intends to use the net proceeds of the Offering and other available funds as follows:


                                                                             US$
                   Exploration in Cameroon:
                          Batouri licence(1)                                    2,310,000
                          Rey Bouba & Tchollire II
                          licences(2)                                           1,040,000
                          Other Gold licences(1)                                1,595,000
                          Ridgeway Uranium licences(3)                          1,085,000
                   Exploration in Liberia:
                          North Bea licence(4)                                    850,000
                          East Kpo licence(5)                                   1,000,000
                   Overheads (UK, Cameroon, Liberia):
                          In-country management and                             1,077,275
                          office costs
                          UK head office costs                                 1,631,250
                   Unallocated Working Capital                                 2,523,602
                   TOTAL                                                      13,112,127
                                                        79
        Notes:
            1.   See “The Properties – Cameroonian Properties – Batouri Licence – Conclusions and Recommendations”,
                 “The Properties – Cameroonian Properties – Akonolinga and Djoum III Licences – Conclusions and
                 Recommendations, and “The Properties – Cameroonian Properties – Ntem Licence – Conclusions and
                 Recommendations;
            2.   See “The Properties – Cameroonian Properties – Rey Bouba & Tchollire II Licences – Conclusions and
                 Recommendations”;
            3.   See “The Properties – Cameroonian Properties – Bantadje Licence – Conclusions and Recommendation;
            4.   See “The Properties – Liberian Properties – North Bea Licence – Conclusions and Recommendations”; and
            5.   See “The Properties – Liberian Properties – East Kpo Licence – Conclusions and Recommendations”

The Company intends to spend the funds available to it as stated in this Prospectus. There may be
circumstances, however, where, for sound business reasons, a reallocation of funds may be necessary.

                                         PLAN OF DISTRIBUTION

Pursuant to the Agency Agreement between the Company and Thomas Weisel Partners Canada Inc.
(formerly Westwind Partners Inc.) and Haywood Securities Inc. (together, the “Agents”), the Company
has appointed the Agents to offer for sale the Common Shares and Warrants comprising the Units offered
hereby on a commercially reasonable efforts basis at a price of $0.55 per Unit for gross proceeds of
$7,922,917, upon the terms and subject to the conditions contained in the Agency Agreement.

The Agents are not obligated to take up and pay for any Units for which they are unable, on a
“commercially reasonable best efforts” basis, to secure subscriptions prior to Closing. The Agency
Agreement provides that, upon the occurrence of certain stated events, the Agents may terminate the
Offering and withdraw all subscriptions for Units on behalf of subscribers.

The Closing Date is expected to be on or about March 31, 2008 or such other date as may be agreed upon
by the Company and the Agents but in any event no later than April 30, 2008. The Units are being offered
for sale to the public in the provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia,
and in the United States pursuant to exemptions from the registration requirements of the U.S. Securities
Act. The Agents may, in connection with the Offering, and in their sole discretion, retain one or more
registered dealers, brokers and investment dealers (referred to herein as the “Selling Firms”) as sub-
Agents and may receive subscriptions for the Units from such Selling Firms.

The Offering Price of the Units was determined through arm’s length negotiation between the Agents and
the Company. Pursuant to the Agency Agreement, the Agents will receive a fee of 6.5% of the aggregate
gross proceeds of the Offering including the gross proceeds from the issuance of securities upon exercise
of the Over-Allotment Option, if applicable. In addition, the Company will issue to the Agents
Compensation Warrants equal to 6.5% of the number of Units sold pursuant to the Offering including
those sold upon the exercise of the Over-Allotment Option. Each Compensation Warrant will entitle the
Agents to purchase one Unit at the Offering Price at any time prior to the date that is 18 months from
Closing Date. The Company will also reimburse the Agents for their reasonable expenses incurred in
connection with the Offering.

The Company has granted to the Agents the Over-Allotment Option, exercisable in whole or in part for a
period of 30 days following the Closing Date, to offer for sale up to an additional 2,160,796 Units (equal
to 15% of the Units sold pursuant to the Offering) at a price equal to the Offering Price, or up to
2,160,796 Common Shares and 1,080,398 Warrants at prices of $0.54 per Common Share and $0.01 per
one-half Warrant respectively to cover over-allotments, if any, and for market stabilization purposes. If
the Over-Allotment Option is exercised in full, the total price to the public, Agents’ Commission and net
proceeds to the Company will be $9,111,355, $592,238 and $8,519,117, respectively before deducting the
expenses of the Offering which are estimated at $450,000. This Prospectus qualifies the grant of the
Over-Allotment Option and the distribution of any Common Shares and Warrants comprising the Units
issued and sold upon the exercise of the Over-Allotment Option.
                                                     80
Subscriptions for the Units offered pursuant to the Offering will be received subject to rejection or
allotment in whole or in part and the right is reserved to close the subscription books at any time without
notice. Upon rejection of a subscription, the subscription price and the subscription will be returned to
the subscriber forthwith without interest or deduction.

There is currently no market through which the securities offered hereby may be sold and there
can be no assurance that a market will develop.

The Company has applied to list the Common Shares distributed under this Prospectus on the TSX
Venture Exchange. Listing will be subject to the Company fulfilling all the listing requirements of the
TSX Venture Exchange.

The Common Shares and Warrants will not be registered under the U.S. Securities Act or any applicable
state securities laws, and may not be offered or sold within the United States except in transactions
exempt from the registration requirements of the U.S. Securities Act. The Agency Agreement, however,
permits the Agents to offer and sell Units to certain institutional purchasers in the United States in certain
transactions that are exempt from registration under the U.S. Securities Act. The Common Shares and
Warrants sold for such offer and sales made in accordance with such exemptions under the U.S. Securities
Act will be restricted within the meaning of Rule 144(a)(3) under the U.S. Securities Act. In addition,
until 40 days after the commencement of the Offering, an offer or sale of the Common Shares and
Warrants within the United States by a dealer (whether or not participating in the Offering) may violate
the registration requirement of the U.S. Securities Act if that offer or sale is made otherwise than in
accordance with an applicable exemption from registration under the U.S. Securities Act.

Until such time as the same is no longer required under applicable requirements of the U.S. Securities
Act, certificates representing any securities which are sold in the United States or to, or for the account of
benefit of, a U.S. person will bear a legend to the effect that the securities represented thereby are not
registered under the U.S. Securities Act and may only be offered or sold pursuant to certain exemptions
from the registration requirements under the U.S. Securities Act.

Pursuant to rules and policy statements of certain Canadian provincial securities commissions, the Agents
may not, throughout the period of distribution, bid for or purchase Common Shares and Warrants
comprising the Units for their own account or for accounts over which they exercise control or direction.
The foregoing restriction is subject to exemptions, on the condition that the bid or purchase is not engaged
in for the purpose of creating actual or apparent active trading in, or raising the price of, the Common
Shares and Warrants comprising the Units. These exceptions include bids or purchases permitted under
the Universal Market Integrity Rules for Canadian Marketplaces administered by Market Regulation
Services Inc., relating to market stabilization and passive market making activities and a bid or purchase
made for and on behalf of a customer where the order was not solicited during the period of distribution.
Subject to the foregoing, the Agents may over-allot or effect transactions in Canada that stabilize or
maintain the market price of the Common Shares and Warrants comprising the Units at levels other than
those that might otherwise prevail on the open market. Such transactions, if commenced, may be
discontinued at any time.

The Company has agreed to indemnify the Agents and their affiliates and their respective directors,
officers, employees and agents against certain liabilities and expenses or will contribute to payments that
the Agents may be required to make in respect thereof.

Special Warrant Offering

A total of 21,121,062 Special Warrants were issued on several dates during June and July 2007, at an
issue price of $0.45 each by way of private placement pursuant to private agreements between the
Company and the purchasers thereof.
                                                    81
Each Special Warrant entitles the holder, upon exercise or deemed exercise thereof and without payment
of any additional consideration, to acquire one unit (a “Special Warrant Unit”) consisting of one Common
Share and one-half of one Series 2007 Warrant. In the event the Company does not complete a Liquidity
Event (as defined below) prior to March 31, 2008, (the “Deadline Date”) each Special Warrant shall
entitle the holder to receive 1.1 Special Warrant Units in lieu of one Special Warrant Unit upon the
exercise or deemed exercise of such Special Warrant. Each Series 2007 Warrant will entitle the holder to
purchase one Common Share at a price of $0.60 per share until the date which is 18 months following the
date of a Liquidity Event. Each Series 2007 Warrant will entitle the holder to purchase one Common
Share at a price of $0.60 per share until the date which is 18 months following completion of a Liquidity
Event.

The Special Warrants are exercisable at any time up to 5:00 p.m. (Toronto time) on the Special Warrant
Expiry Date which is the fifth business day after the date on which the Common Shares are cleared for
trading on a recognized stock exchange by Canadian securities regulators (the “Liquidity Event”). Any
Special Warrants not exercised prior to such expiry date will be deemed to be exercised immediately prior
thereto.

Certificates in definitive form representing the securities acquired hereunder will be issued in registered
form to the Canadian Depository for Securities (“CDS”) and deposited with CDS on the Closing Date.

This Prospectus also qualifies the distribution of the Common Shares and Series 2007 Warrants issuable
upon exercise of the Special Warrants.

                         DESCRIPTION OF DISTRIBUTED SECURITIES

The Offering consists of 14,405,304 Units, each Unit consisting of one Common Share and one-half of
one Warrant, for a total of 14,405,304 Common Shares and 7,202,652 Warrants. In addition, up to
2,160,796 Units (2,160,796 Common Shares and 1,080,398 Warrants may be issued under the Over-
Allotment Option.

Common Shares

The Company is authorized to issue 500,000,000 Common Shares at a par value of $0.01 each, of which
31,836,174 Common Shares are issued and outstanding as at the date of this Prospectus. Holders of
Common Shares are entitled to dividends if, as and when declared by the directors, to one vote per
Common Share at meetings of shareholders and to receive the remaining property of the Company upon
the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary.

Warrants

Each whole Warrant entitles the holder to purchase one Warrant Share for a period of 24 months from the
Closing Date at a price of $0.80 per Warrant Share after which time the Warrants become null and void.
The Warrants will be issued under an indenture (the ‘‘Warrant Indenture’’) to be entered into between the
Company and Computershare Trust Company of Canada (the ‘‘Trustee’’) on or before the Closing Date.
The Company will appoint the principal transfer office of the Trustee in Toronto (or such other location
as the Company may designate from time to time) as the location at which the Warrants may be
surrendered for exercise, transfer or exchange. Under the Warrant Indenture, the Company may, subject
to applicable law, purchase in the market, by private contract or otherwise, any of the Warrants then
outstanding, and any Warrants so purchased will be cancelled.

The Warrant Indenture will provide for adjustment in the number of Common Shares issuable upon the
exercise of the Warrants and/or the exercise price per Common Share upon the occurrence of certain
events, including:
                                                   82
        (i)    the issuance of Common Shares or securities exchangeable for or convertible into
               Common Shares to all or substantially all of the holders of the Common Shares by way of
               a stock dividend or other distribution (other than a ‘‘dividend paid in the ordinary
               course’’, as defined in the Warrant Indenture, or a distribution of Common Shares upon
               the exercise of the Warrants or pursuant to the exercise of stock options granted to
               directors, officers, employees or consultants under the Company’s stock option plan);

       (ii)    the subdivision, redivision or change of the Common Shares into a greater number of
               shares;

       (iii)   the consolidation, reduction or combination of the Common Shares into a lesser number
               of shares;

       (iv)    the issuance to all or substantially all of the holders of the Common Shares of rights,
               options or warrants under which such holders are entitled, during a period expiring not
               more than 45 days after the record date for such issuance, to subscribe for or purchase
               Common Shares, or securities exchangeable for or convertible into Common Shares, at a
               price per share to the holder (or in the case of securities exchangeable for or convertible
               into Common Shares at an exchange or conversion price per share at the date of issue of
               such securities) of less than 95% of the ‘‘current market price’’, as defined in the Warrant
               Indenture, for the Common Shares on such record date; and

       (v)     the issuance or distribution to all or substantially all of the holders of the Common Shares
               of: (a) shares of the Company of any class other than Common Shares; (b) rights, options
               or warrants to acquire Common Shares or securities exchangeable for or convertible into
               Common Shares (other than rights, options or warrants pursuant to which holders of
               Common Shares are entitled, during a period expiring not more than 45 days after the
               record date for such issue, to subscribe for or purchase Common Shares at a price per
               share (or in the case of securities exchangeable for or convertible into Common Shares at
               an exchange or conversion price per share at the date of issue of such securities) of at
               least 95% of the “current market price”, as defined in the Warrant Indenture, of the
               Common Shares on such record date); (c) evidences of indebtedness of the Company; or
               (d) any property or assets of the Company.

The Warrant Indenture will also provide for adjustment in the class and/or number of securities issuable
upon the exercise of the Warrants and/or exercise price per security in the event of the following
additional events:

        (i)    reclassifications and redesignations or certain capital reorganizations involving the
               Common Shares;

       (ii)    consolidations, amalgamations, arrangements or mergers of the Company with or into
               any other corporation or other entity (other than consolidations, amalgamations,
               arrangements or mergers which do not result in any reclassification of the Common
               Shares or a change of the Common Shares into other shares or securities); or

       (iii)   the transfer of the undertaking or assets of the Company as an entirety or substantially as
               an entirety to another corporation or other entity.

No adjustment in the exercise price will be required to be made unless the effect of such adjustment or
adjustments would result in a change of at least 1% in the prevailing exercise price and no adjustment
shall be made in the number of Common Shares purchasable upon exercise of the Warrants unless it
would result in a change of at least one one-hundredth of a Common Share.
                                                    83
The Company will also covenant in the Warrant Indenture that, during the period in which the Warrants
are exercisable, it will give notice to Warrantholders of certain stated events, including events that would
result in an adjustment to the exercise price for the Warrants or the number of Common Shares issuable
upon exercise of the Warrants, at least 10 Business Days prior to the record date or effective date, as the
case may be, of such event. No fractional Warrants will be issued or otherwise provided for, and no
person who purchases or holds a fraction of a Warrant shall be entitled to any cash or other consideration
in lieu of any interest in or claim to any fraction of a Warrant. No fractional Common Shares will be
issuable upon the exercise of any Warrants, but cash will be paid in lieu of any fractional share
entitlement based on the ‘‘current market value’’, as defined in the Warrant Indenture, of the Common
Shares. Warrantholders will not have any voting or pre-emptive rights or any other rights which a holder
of Common Shares would have. From time to time, the Company and the Warrant Trustee, without the
consent of the Warrantholders, may amend or supplement the Warrant Indenture for certain purposes,
including rectifying any ambiguity or detective provisions or making any change that does not prejudice
the rights of any Warrantholder. Any amendment or supplement to the Warrant Indenture that would
prejudice the interests of the Warrantholders may only be made by ‘‘extraordinary resolution’’, which is
defined in the Warrant Indenture as a resolution either (1) passed at a meeting of the Warrantholders at
which there are Warrantholders present in person or represented by proxy representing at least 25% of the
and passed by the affirmative vote of Warrantholders representing not less than 75% of the aggregate
number of all the then outstanding Warrants represented at the meeting and voted on the poll upon such
resolution, or (2) adopted by an instrument in writing signed by the Warrantholders representing not less
than 75% of the outstanding Warrants.

The foregoing summary of certain provisions of the Warrant Indenture does not purport to be complete
and is qualified in its entirety by reference to the provisions of the Warrant Indenture.

Special Warrants

The Special Warrants have the attributes described under the heading “Plan of Distribution – Special
Warrant Offering” above.

Each Series 2007 Warrant issuable upon the exercise of the Special Warrants entitles the holder to
purchase one Common Share (a “Series 2007 Warrant Share”) for a period of 18 months from completion
of a Liquidity Event at a price of $0.60 per Series 2007 Warrant Share after which time the Warrants
become null and void. The Series 2007 Warrants will be issued under an indenture (the ‘‘Series 2007
Warrant Indenture’’) to be entered into between the Company and Computershare Trust Company of
Canada (the ‘‘Series 2007 Trustee’’) on or before the Closing Date. The Company will appoint the
principal transfer office of the Series 2007 Trustee in Toronto (or such other location as the Company
may designate from time to time) as the location at which the Series 2007 Warrants may be surrendered
for exercise, transfer or exchange. Under the Series 2007 Warrant Indenture, the Company may, subject
to applicable law, purchase in the market, by private contract or otherwise, any of the Warrants then
outstanding, and any Series 2007 Warrants so purchased will be cancelled. The Series 2007 Warrant
Indenture will contain the same terms and conditions as are contained in the Warrant Indenture except as
to exercise price and term of the Series 2007 Warrants.

                   CERTAIN CANADIAN FEDERAL INCOME TAX MATTERS

In the opinion of Neil J.F. Steenberg, counsel to the Company, and Lang Michener LLP, counsel to the
Agents, the following is a summary of the principal Canadian federal income tax considerations generally
applicable to prospective purchasers of the Units offered by this Prospectus who, within the meaning of
the Tax Act and at all relevant times, are or are deemed to be residents of Canada, deal with the Company
at arm’s length and are not affiliated with the Company, and hold or will hold Common Shares and
Warrants as capital property. The Common Shares and Warrants will generally be considered capital
property to a purchaser unless either the purchaser holds such Common Shares or Warrants in the course
                                                    84
of carrying on a business of buying and selling securities or the purchaser has acquired the Common
Shares or Warrants in a transaction or transactions considered to be an adventure in the nature of trade.
Certain purchasers who might not otherwise be considered to hold their Common Shares as capital
property may, in certain circumstances, make an irrevocable election under subsection 39(4) of the Tax
Act to have their Common Shares (and all other “Canadian securities” as defined in the Tax Act owned
by such purchaser in the taxation year of the election and in all subsequent taxation years) treated as
capital property. As the Warrants are not “Canadian securities”, the election under subsection 39(4) will
not apply to them.

This summary is not applicable to a “financial institution” within the meaning of section 142.2 of the Tax
Act, a “specified financial institution” as defined in the Tax Act, or to a holder in which an interest is a
“tax shelter investment” as defined in the Tax Act. Such purchasers should consult their own advisors.

This summary is based upon the current provisions of the Tax Act and regulations thereunder in force as
at the date hereof, specific proposals to amend the Tax Act and regulations thereunder that have been
publicly announced by the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”)
and counsel’s understanding of the administrative policies and assessing practices of the Canada Revenue
Agency (“CRA”) publicly available prior to the date hereof. This summary assumes that the Tax
Proposals will be enacted as currently proposed although no assurance can be given in that regard. Except
as otherwise indicated, this summary does not take into account or anticipate any changes in the
applicable law, whether made by judicial, governmental or legislative decision or action nor does it take
into account provincial, territorial or foreign tax laws or considerations, which might differ significantly
from those discussed herein.

This summary is not exhaustive of all possible Canadian federal income tax considerations applicable to
an investment in Common Shares and Warrants, and does not describe the income tax considerations
relating to the deductibility of interest on money borrowed by a purchaser to acquire Units. On October
31, 2003, the Minister of Finance (Canada) released draft proposals regarding the deductibility of interest
and other expenses (the “October 31, 2003 Tax Proposals”) for public comment. In the federal budget of
February 23, 2005, the Minister of Finance announced that an alternative proposal to replace the October
31, 2003 Tax Proposals would be released for comment at an early opportunity. No such alternative
proposal has been released to date. The October 31, 2003 Tax Proposals or the alternative proposal could,
among other things, adversely affect a purchaser who has borrowed money to acquire Common Shares
and Warrants pursuant to this Offering.

The income and other tax consequences of acquiring, holding and disposing of Common Shares and
Warrants will vary according to the status of the purchaser, the province or territory in which the
purchaser resides or carries on business and, generally, the purchaser's own particular circumstances.
Accordingly, the following summary is of a general nature only and is not intended to constitute tax
or legal advice to any particular purchaser. Prospective purchasers should consult their own tax
advisors with respect to the tax consequences of investing in Common Shares and Warrants, based
on their own particular circumstances.

Allocation of Purchase Price

A purchaser of a Unit offered by this Prospectus will be required to allocate the price paid for a Unit on a
reasonable basis between the Common Share and the one-half Warrant in order to determine their
respective costs to the purchaser for purposes of the Tax Act. The Company will allocate $0.54 of the
issue price of each Unit as consideration for the issue of each Common Share and $0.01 for the issue of
each one-half Warrant. Although the Company believes this allocation to be reasonable, it is not binding
upon the CRA or a holder, and counsel expresses no opinion as to such allocation. A successful challenge
by the CRA of this allocation will affect the adjusted cost base calculations accordingly.

Exercise of Warrants
                                                    85
No gain or loss will be realized by a holder upon exercise of a Warrant. When a Warrant is exercised, the
cost to the holder of the Common Share so acquired will be the aggregate of the adjusted cost base, for
that holder, of the Warrant and the price paid for the Common Share upon exercise of the Warrant. The
cost to a holder of a Common Share acquired upon the exercise of a Warrant must be averaged with the
adjusted cost base (determined immediately before the acquisition of the Common Share) of all other
Common Shares held by the holder as capital property at the time of the exercise of the Warrant to
determine the adjusted cost base of such Common Share.

Disposition or Expiry of Warrants

The disposition of a Warrant (other than a disposition arising on the exercise or expiry of a Warrant), will
generally result in a capital gain (or capital loss) to the holder to the extent that the proceeds of
disposition, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of
the Warrant to the holder. The expiry of an unexercised Warrant will generally result in a capital loss
equal to the holder’s adjusted cost base of the Warrant. See the discussion of capital gains and losses
generally under “Capital Gains and Capital Losses” below.

Disposition of Common Shares

In general, a disposition, or a deemed disposition, of a Common Share (other than to the Company) will
give rise to a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of
the Common Share, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost
base to the holder of the Common Share. See the discussion of capital gains and capital losses under
“Capital Gains and Capital Losses” below.

In the case of a holder that is a corporation, the amount of any capital loss otherwise determined arising
from a disposition or deemed disposition of Common Shares may be reduced by the amount of dividends
previously received or deemed to be received thereon to the extent and under circumstances prescribed in
the Tax Act. Analogous rules apply where a corporation is, directly or through a trust or partnership, a
member of a partnership or a beneficiary of a trust that owns Common Shares.

Dividends on Common Shares

Dividends received or deemed to be received on the Common Shares by an individual will be included in
computing the individual’s income for tax purposes and will be subject to the gross-up and dividend tax
credit rules applicable to dividends received from taxable Canadian corporations. A dividend will be
eligible for the enhanced gross-up and dividend tax credit if designated as an eligible dividend by the
Company. There may be limitations on the ability of the Company to designate dividends as eligible
dividends. A holder that is a corporation will include dividends received or deemed to be received on the
Common Shares in computing its income for tax purposes and generally will be entitled to deduct the
amount of such dividends in computing its taxable income, with the result that no tax will be payable by it
in respect of such dividends.

Certain corporations, including private corporations and subject corporations (as such terms are defined in
the Tax Act), may be liable to pay a refundable tax under Part IV of the Tax Act at the rate of 33 % of
the dividends received or deemed to be received on the Common Shares to the extent that such dividends
are deductible in computing taxable income.

Capital Gains and Capital Losses

A holder will be required to include one-half of the amount of any capital gain (a “taxable capital gain”)
in income, and will be required to deduct one-half of the amount of any capital loss (an “allowable capital
loss”) against taxable capital gains realized by the holder in the year of disposition. Allowable capital
losses not deducted in the taxation year in which they are realized may be carried back and deducted in
                                                             86
any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year
against taxable capital gains realized in such years, to the extent and under the circumstances specified in
the Tax Act.

A holder that is a Canadian-controlled private corporation for purposes of the Tax Act may be liable to
pay an additional refundable tax of 6 % on certain investment income, including amounts in respect of
taxable capital gains.

Alternative Minimum Tax

In general terms, a holder that is an individual or a trust, other than certain specified trusts, that receives
or is deemed to receive taxable dividends on the Common Shares or realizes a capital gain on the
disposition or deemed disposition of Common Shares or Warrants may realize an increase in the holder’s
liability for alternative minimum tax.

                                      DIVIDEND RECORD AND POLICY

The Company has not paid any dividends on its Common Shares since incorporation and does not
anticipate paying any dividends on its Common Shares in the foreseeable future. The Company has a
limited operating history and there can be no assurance of its ability to operate its projects profitably.
Payment of any future dividends will be at the discretion of the Company’s Board of Directors after
taking into account many factors, including the Company’s operating results, financial condition and
current and anticipated cash needs.

                                    CONSOLIDATED CAPITALIZATION

The following table sets forth the consolidated capitalization of the Company as at the dates indicated
before and after giving effect to the Offering. This table should be read in conjunction with the
consolidated financial statements of the Company contained elsewhere in this Prospectus.

                                                                                                Outstanding as of the
         Designation of               Outstanding as at           Outstanding as at the
                                                                                               date hereof after giving
           Security                    June 30, 2007                  date hereof
                                                                                                effect to the Offering
                                         (audited)                    (unaudited)
                                                                                                    (unaudited) (1)

 Long-term Debt                              $Nil                         $Nil                           $Nil
 Shareholders’ Equity                   US$11,051,000                US$12,712,000                 US$28,609,927
 Common Shares                          US$4,289,000                 US$4,307,000                 US$20,204,927(2)
 (Authorized – unlimited)            31,920,428 Common            31,836,174 Common              67,362,540 Common
                                            Shares                       Shares                         Shares
 Special Warrants(3)                    US$7,018,854                 US$8,940,000                         Nil
                                         16,605,388                   21,121,062
                                       Special Warrants             Special Warrants
 Warrants                                    Nil                           Nil                         7,202,652
 (Authorized – 8,283,050)
 Series 2007 Warrants                          Nil                          Nil                        10,560,531
 (Authorized – 10,560,531)
 Retained Earnings (Deficit)            US($1,694,000)               US($2,007,000)                 US($2,007,000)

Notes:
(1)      This assumes the Over-Allotment Option is not exercised and the Special Warrants are exercised.
(2)      After deducting expenses of the Offering estimated to be $450,000 and the Agents’ Commission of $514,990.
(3)      These Special Warrants are automatically exercised following completion of the Offering. See “Plan of Distribution”.
                                                    87
                              OPTIONS TO PURCHASE SECURITIES

Incentive Stock Option Plan

The Company has established a stock option plan to provide incentive compensation to the Company’s
directors, officers, employees and consultants (the “Stock Option Plan”).

The Stock Option Plan is administered by the board of directors of the Company (the “Board of
Directors”). Stock options may be granted at any time to any director, senior officer, employee or other
person providing services to the Company, taking into consideration his or her contribution to the success
of the Company and any other factor which the board of directors of the Company may deem proper and
relevant. The aggregate number of Common Shares which may be reserved for issuance pursuant to the
Stock Option Plan and any other share compensation arrangements of the Company cannot exceed 10%
of the total number of issued and outstanding Common Shares (calculated on a non-diluted basis).

The outstanding options described below were granted prior to the adoption of the Stock Option Plan and
the number of such options is in excess of 10% of the issued shares of the Company. As a result, at a
special meeting of shareholders of the Company, shareholders were asked to and did pass two resolutions,
namely (i) approving the Stock Option Plan and (ii) approving the prior grant of options in excess of the
10% limit stipulated in such Plan by the vote of a majority of disinterested shareholders. The temporary
excess of granted options over the 10% limit stipulated in the Plan will disappear upon completion of this
Offering due to the automatic exercise of the 21,121,062 Special Warrants. See “Management’s
Discussion and Analysis – Shareholder Meeting”.

Stock options granted under the Stock Option Plan are exercisable over a period not exceeding ten years
from the date of issuance, subject to earlier cancellation upon the termination of the optionee’s
employment with the Company, upon the optionee ceasing to be an employee, senior officer, director or
consultant of the Company, as applicable, or upon the optionee retiring, becoming permanently disabled
or dying. Under the Stock Option Plan, the Board of Directors, in its discretion but upon the advice of its
Human Resources and Corporate Governance Committee, is authorized to impose deferred vesting
restrictions on any options granted and to fix the exercise price provided that such price may not be lower
than the market price of the Company’s shares determined in accordance with the rules of any stock
exchange or other trading market upon which the shares of the Company are then listed or quoted or, if
the shares of the Company do not trade on any such exchange or market, by the Board of Directors in
their discretion. The stock options are non-assignable and non-transferable. The Stock Option Plan
contains provisions for adjustment in the number of shares issuable in the event of a subdivision,
consolidation, reclassification or change of the Common Shares, or a merger or other relevant changes in
the Company’s capitalization. The Stock Option Plan does not contain any provision for financial
assistance by the Company in respect of stock options granted thereunder.

Outstanding Options

As at the date of this Prospectus, 5,801,316 options to purchase securities of the Company have been
issued pursuant to the Stock Option Plan of which 776,316 have been exercised and 5,025,000 stock
options remain outstanding.

The following table provides details on stock options granted under the Stock Option Plan, as at the date
of this Prospectus:
                                                       88
                             Common           % of Total                      Market Value of
                           Shares Under        Options        Exercise or       Securities
                             Options        Granted Since      Base Price       Underlying
                             Granted           Date of        ($/Security)    Options on the
        Grantees                (#)         Incorporation         US$         Date of Grant (1)   Expiration Date
                                                                              (US$/Security)
David Netherway               350,000          6.03%             0.090             0.090            01/06/2015
Chairman and Director         350,000          6.03%             0.170             0.170            01/12/2015
                              350,000          6.03%             0.260             0.170            01/12/2015
                              250,000          4.31%             0.420             0.420            28/06/2017
John Gray(2)                  131,579          2.26%             0.036             0.036            01/10/2014
Chief Executive Officer       131,579          2.26%             0.045             0.036            01/10/2014
and Director                  131,579          2.26%             0.054             0.036            01/10/2014
                              131,579          2.26%             0.063             0.036            01/10/2014
                              175,000          3.01%             0.090             0.090            01/06/2015
                              350,000          6.03%             0.170             0.170            01/12/2015
                              100,000          1.72%             0.333             0.333            01/01/2017
                              280,000          4.83%             0.420             0.420            28/06/2017
                              100,000          1.72%             0.090             0.090            01/06/2015
Matthew Grainger (3)          100,000          1.72%             0.170             0.170            01/12/2015
Chief Operating Officer       150,000          2.59%             0.260             0.170            01/12/2015
and Director                  150,000          2.59%             0.345             0.170            01/12/2015
                              220,000          3.79%             0.420             0.420            28/06/2017
Danesh Varma                  150,000          2.59%             0.260             0.170            01/12/2015
Director                      150,000          2.59%             0.345             0.170            01/12/2015
                              100,000          1.72%             0.420             0.420            28/06/2017
Steven Poulton                200,000          3.45%             0.090             0.090            01/06/2015
Director                      250,000          4.31%             0.170             0.170            01/12/2015
                              100,000          1.72%             0.420             0.420            28/06/2017
Manuel Lamboley(4)            100,000          1.72%             0.010             0.010            01/06/2015
Director                       50,000          0.86%             0.170             0.170            01/12/2015
                              100,000          1.72%             0.420             0.420            28/06/2017
Employees/Consultants         200,000          3.45%             0.090             0.090            01/06/2015
                              200,000          3.45%             0.170             0.170            01/12/2015
                              300,000          5.17%             0.333             0.333            01/01/2017
                              450,000          7.76%             0.420             0.420            28/06/2017
Total                        5,801,316         100%

Notes:
    1. The Market Value of Securities Underlying Options on the Date of Grant was determined by the Board of
       Directors on the basis of its assessment of the value of the underlying assets and operation of the Company
       and taking into account previous arms length equity financings.
    2. Options to purchase 526,316 Common Shares were exercised by Mr. Gray in August 2006 for an aggregate
       exercise price of £14,474 (US$29,005).
    3. Options to purchase 100,000 Common Shares were exercised by Mr. Grainger in September 2007 for an
       aggregate exercise price of £5,000 (US$10,020). The option exercise price was £0.05 per share or US$0.09
       at the date of granting the option. On the date of exercise the exercise price was £0.05 per share or
       US$0.10 due to a change in the rate of exchange in the intervening period.
    4. Options to purchase 150,000 Common Shares were exercised by Mr. Lamboley in October 2006 for an
       aggregate exercise price of £10,000 (US$20,040).

                                                PRIOR SALES

The number of securities of the Company sold during the 12-month period prior to the date of this
Prospectus and the consideration paid therefore is set out in the following table:
                                                              89
Date                     # of Shares          Consideration (1)                        Value of               Price per
                                                                                     Consideration          Common Share
                                                                                         US$
 December 2006                   3,975,304    Private Placement for cash                     1,323,984                US$0.33
         April 2007                 84,554    Compensation for services                         26,393                US$0.27
         April 2007                125,001    Compensation for services                         42,463                US$0.33
       August 2007                 130,600    Compensation for services                         53,727                US$0.45
 September 2007                    100,000    Exercise of Option                                10,238               US$0.10
          TOTAL                  4,415,459                                                   1,456,805

           Notes:
           1. The Consideration was converted from Sterling to USD at the prevailing market exchange rate at the date of grant.
           2.     The option exercise price was £0.05 per share or US$0.09 at the date of granting the option. On the
                  date of exercise the exercise price was £0.05 per share or US$0.10 due to a change in the rate of
                  exchange in the intervening period.


In addition, during June 2007 a total of 21,121,062 Special Warrants were sold for total proceeds of
$9,504,478 or $0.45 per Special Warrant. The Special Warrants have the attributes described under the
heading “Plan of Distribution – Special Warrant Offering” and are convertible, upon the exercise or
deemed exercise thereof and without payment of any further consideration, for a total of 21,121,062
Common Shares and 10,560,531 Series 2007 Warrants.

                                 PRINCIPAL HOLDERS OF COMMON SHARES

As at the date of this Prospectus, to the knowledge of the directors and officers of the Company, no
person beneficially owns, directly or indirectly, or exercises control or direction over, Common Shares
carrying more than 10% of the voting rights attaching to all outstanding Common Shares, except as
follows:

                                                                                 Number and                Number and
                                                                                Percentage of              Percentage of
                                                                               Common Shares             Common Shares
                                       Designation of         Type of          owned before the         owned after giving
                 Name                      Class             Ownership            Offering            effect to the Offering(1)

Steven Poulton                            Common                Direct              5,800,000                5,800,000
                                           Shares                                    18.22%                    8.60%

Firebird Global Master Fund II            Common                Direct              3,458,870                3,458,870
Limited                                    Shares                                    10.86%                    5.13%

                Notes:
    1.           Also gives effect to the exercise of the 21,121,062 Special Warrants.

                                             DIRECTORS AND OFFICERS

The following table sets out, for each of the Company’s directors and executive officers, the individual’s
name, municipality of residence, positions with the Company, principal occupation, and, if a director, the
month and year in which such individual became a director. Directors hold office for a term of one (1)
year until the close of the next annual meeting of shareholders of the Company or until their successors
are duly elected or appointed.
                                                        90
                                                                                           Shares held
                                                                                           Directly or
                                                                                           Indirectly or over
Name and                                                                                   which control or
Municipality of          Offices with the    Principal                Director/Officer     direction is
Residence                Company             Occupation               Since                exercised
David Netherway (1,2)    Chairman and        Mining Engineer          December 1,          265,450
London, UK               Director            Chief Executive          2005                 (0.83%, 0.50%
                                             Officer of Shield                             upon exercise of
                                             Mining Limited                                the Special
                                                                                           Warrants)

John Gray                Chief Executive     Geologist, Chief         May 10, 2005         808,622
Oxfordshire, UK          Officer and         Executive Officer of                          (2.54%, 1.53%
                         Director            the Company                                   upon exercise of
                                                                                           the Special
                                                                                           Warrants)

Matthew Grainger         Chief Operating     Geologist, Chief         September 11,        218,519
Oxfordshire, UK          Officer and         Operating Officer of     2006                 (0.69%,    0.41%
                         Director            the Company                                   upon exercise of
                                                                                           the       Special
                                                                                           Warrants)

Maz Mannan               Chief Financial     Chartered                October 1, 2007      Nil
Hampshire, UK            Officer             Accountant, Chief
                                             Financial Officer of
                                             the Company

Danesh Varma (1,2)       Director            Chief Financial          May 5, 2006          143,982
London, UK                                   Officer of Minco plc,                         (0.45%,    0.27%
                                             Conquest Resources                            upon exercise of
                                             Limited and Labrador                          the       Special
                                             Iron Mines Holdings                           Warrants)
                                             Limited

Steven Poulton(3)        Director            Chief Executive of       February 4, 2004     5,800,000
Oxfordshire, UK                              Altus Strategies Ltd                          (18.22%, 10.95%
                                                                                           upon exercise of
                                                                                           the Special
                                                                                           Warrants)

Manuel Lamboley (1)      Director            Investment Banker        July 20, 2005        731,468
Paris, France                                                                              (2.30%, 1.38%
                                                                                           upon exercise of
                                                                                           the Special
                                                                                           Warrants)


Notes:
(1)      Independent director and Member of the Company’s Audit Committee.
(2)      Independent director and Member of the Company’s Governance and Human Resources Committee.
(3)      Member of the Company’s Governance and Human Resources Committee

As of the date of this Prospectus, the directors and executive officers of the Company, as a group,
beneficially own, directly or indirectly 7,968,041 Common Shares, representing approximately 25.03% of
the issued and outstanding Common Shares.
                                                  91
The following relates to the directors and officers of the Company. Except as noted below, each of the
Company’s directors and executive officers has been engaged for more than five years in his or her
present principal occupation.

David Netherway, Age 54, Chairman and Director. Mr. Netherway is a mining engineer with over 30
years of experience in the mining industry. He is currently the Chief Executive Officer of Shield Mining
Limited, an Australian listed company exploring for gold and base metals in Mauritania. From April
2002 until the completion of its takeover by Eldorado Gold Corporation in 2005, Mr. Netherway served
as the President and Chief Executive Officer of Afcan Mining Corporation, a company previously listed
in Toronto and with a focus on China’s gold mining. Mr. Netherway is a mine developer and operator
who was involved in the construction and development of the Iduapriem, Siguiri, Kiniero and Samira Hill
gold mines in West Africa and has mining experience which includes Australia, Canada, India, Nepal,
Oman and Malaysia. Prior to joining Afcan, Mr. Netherway held senior management positions in a
number of mining companies, including Golden Shamrock Mines, Ashanti Goldfields and Semafo Inc.
Mr. Netherway has received a B.E. in Mining Engineering from the University of Melbourne in 1975 and
a Certified Diploma in Accounting and Finance from the Chartered Association of Certified Accountants
in the United Kingdom in 1985.

Mr. Netherway is a Non-Executive Director of Equigold NL (from April 28, 2006), GMA Resources plc
(from December 1, 2005), KazakhGold Group Limited (from September 1, 2005) Orezone Resources Inc.
(from July 18, 2002) and Altus Strategies Ltd (from August 1, 2007).

John Gray, Age 49, Chief Executive Officer and Director. Mr. Gray joined the board on May 19, 2005
and has over 18 years experience in mineral exploration having worked as a project and senior geologist
primarily in gold, copper and platinum group metals exploration with both major international mining and
junior exploration companies, including Homestake, Noranda and Axmin. His experience includes
exploration and project management within Archaean greenstone through Tertiary epithermal terranes in
Canada, South America, the Balkans, northern Europe and sub Saharan Africa. Mr Gray is a Fellow of
The Geological Society of London and a member of the Association of Mining Analysts.

Matthew Grainger, Age 34, Chief Operating Officer and Director. Mr. Grainger joined the board on
September 11, 2006. His background includes project management and early stage exploration as well as
corporate transactions and company financings. Most recently, Mr. Grainger co-founded Altus Strategies
Ltd., a UK-based junior exploration incubator. In 2004, he co-founded and was integral to the successful
development of AIM listed Ariana Resources plc and was the Operations Director until September 2006.
Mr. Grainger was a director of KSPM Associates Ltd. until January 2005. He graduated with Honours in
Earth Science in 1997 and subsequently completed a Master's degree in Mining Geology at Camborne
School of Mines. Mr. Grainger is a Fellow of The Geological Society of London and a member of the
Association of Mining Analysts.

Maz Mannan, Age 46, Chief Financial Officer. Mr. Mannan joined the Company on October 1, 2007
and is a graduate of the University of Manchester and a qualified accountant with nearly 15 years
experience, ten of which have been in the natural resource sector. He is a Fellow of the Chartered
Association of Certified Accountants of the United Kingdom and of the Institute of Professional Finance
Managers. Mr. Mannan has significant African experience; having lived and worked in Nigeria,
Botswana, South Africa, Zambia, Zimbabwe, Kenya, Ghana and Tanzania. He has been integral to the
successful development of a number of publicly traded gold exploration and mining companies including
Cluff Resources Limited, Samax Resources Limited, Graphtan Limited and European Minerals
Corporation. Both Cluff and Samax were eventually acquired by AngloGold Ashanti Limited.

Danesh Varma, Age 57, Director. Mr. Varma joined the board on May 5, 2006 and is a chartered
accountant in Canada and in England and Wales, with over 20 years of experience in financial
management. He is currently a director of Anglesey Mining plc and of Minco plc. In addition, Mr.
                                                   92
Varma serves as the Chief Financial Officer of Minco plc, Conquest Resources Limited and Labrador
Iron Mines Holdings Limited. Previously, he was Chief Financial Officer of Canadian Zinc Corporation
and President of Westfield Minerals Limited and a director of Northgate Exploration Limited and
Brookfield Infrastructure Partners L.P. (NYSE).

Steven Poulton, Age 32, Director. Mr. Poulton founded the Company in February 2004 and holds an
honours degree in Geology from the University of Southampton (1997) and a Master’s degree in Mining
Geology from the Camborne School of Mines (1998). Most recently, Mr. Poulton co-founded Altus
Strategies Ltd. a UK-based junior exploration incubator where he is the CEO. Mr. Poulton is a non-
executive director of Stellar Diamonds Ltd (a subsidiary of Mano Rover Resources Inc.), having
previously worked for Mano River from 1998 to 2005. He is a director of the Company’s subsidiary
Ridgeway. Mr Poulton is the former CEO of AIM listed Ariana Resources plc, a company he co-founded
in 2002 and a director and co-founder of KSPM Associates Ltd. until January 2005. He was a non-
executive director of AIM and TSXV listed Mano River Resources Inc. until December 21, 2007. He is a
fellow of the Geological Society of London, a member of the Institute of Materials, Minerals and Mining
and a member of the Association of Mining Analysts.

Manuel Lamboley, Age 43, Director. Mr. Lamboley joined the board on July 20, 2005. During 20 years
of experience with investment banking firms in the US and Europe, Mr. Lamboley was a director of UBS
AG, head of the Geneva office of Williams de Bröe, as well as holding senior positions at Bank Julius
Bär, Kidder Peabody, Paine Webber International, and Prudential-Bache Securities. He was a founder of
Eastern Capital Fund and Ocean Finance. He is a licenced stockbroker under Swiss law (series 3 and 7)
and holds Swiss citizenship.

Audit Committee

The Audit Committee assists the board of directors in fulfilling its responsibilities for oversight of
financial and accounting matters. The committee recommends the auditors to be nominated and reviews
the compensation of the auditors. The committee is directly responsible for overseeing the work of the
auditors, must pre-approve non-audit services, be satisfied that adequate procedures are in place for the
review of the Company’s public disclosure of financial information extracted or derived from the
Company’s financial statements and must establish procedures for the receipt, retention and treatment of
complaints regarding accounting, internal accounting controls or auditing matters. The current members
of the Audit Committee are Messrs. Netherway, Varma and Lamboley, each of whom are independent
and financially literate in accordance with Multinational Instrument 52-110 – Audit Committees.

Audit and all Other Fees

The Company has not paid the auditors, Kajaine Limited, any amounts during the period ended June 30,
2007.

Governance and Human Resources Committee

The Governance and Human Resources Committee (the “Committee”) is composed of three directors,
namely Messrs. Netherway, Varma and Poulton, all of whom are independent of Management. The
purpose of the Committee is to develop and monitor the process and structure used to supervise the
business and affairs of the Company.

The Committee's activities shall include:

    (a) reviewing, monitoring and making recommendations regarding the effectiveness of the Board and
        ensuring that the Board functions independently of Management;
                                                    93
    (b) establishing and administering a process for the selection of new directors and the ongoing
        evaluation of existing directors;
    (c) periodically reviewing and making recommendations to the Board with respect to the
        compensation of directors and senior officers;
    (d) providing oversight in ensuring a high quality of leadership and an employee relations strategy
        that provides for ongoing flexibility and productivity throughout the Company and its
        subsidiaries; and
    (e) performing such other tasks as may be delegated to the Committee by the Board.

Penalties or Sanctions

No director, officer, promoter or other member of Management of the Company has, during the ten years
prior to the date hereof, been subject to any penalties or sanctions imposed by a court or securities
regulatory authority relating to trading in securities, promotion, formation or management of a publicly
traded company, or involving fraud or theft.

Corporate Cease Trade Orders or Bankruptcies

No director, officer, promoter or other member of Management is, or within the ten years prior to the date
hereof has been, a director, officer, promoter or other member of management of any other issuer that,
while that person was acting in the capacity of a director, officer, promoter or other member of
management of that issuer, was the subject of a cease trade order or similar order or an order that denied
the issuer access to any statutory exemptions for a period of more than 30 consecutive days or was
declared bankrupt or made a voluntary assignment in bankruptcy, made a proposal under any legislation
relating to bankruptcy or insolvency or has been subject to or instituted any proceedings, arrangement or
compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets
except as follows:

              Mr. Varma was President and Managing Director of American Resource Corporation
              Limited in respect of which a cease trade order was issued in June 2004 for failure to file its
              financial statements. The cease trade order is still currently in effect.

Personal Bankruptcies

No director, officer, promoter or other member of management of the Company is, or within the ten years
prior to the date hereof has been bankrupt or made a proposal under any legislation relating to bankruptcy
or insolvency or been subject to or instituted any proceedings, arrangement or compromise with creditors
or had a receiver, receiver manager or trustee appointed to hold its assets.

Conflicts of Interest

The transactions in which directors, senior officers, promoters or principal holders of the Company’s
securities have had an interest in are described under the headings “Interest of Management and Others in
Material Transactions”, “Options to Purchase Securities” and “Executive Compensation”. Other than as
described under these headings, there are no material transactions with or involving the directors, senior
officers, promoters or principal holders of securities of the Company that have occurred since
incorporation. Certain of the Company’s directors and officers also serve as directors and/or officers of
companies which may enter into contracts with the Company in the future. In the event that this occurs, a
conflict of interest will exist. Directors in a conflict of interest position are required to disclose such
conflicts to the Company.

The directors of the Company are required by law to act honestly and in good faith with a view to the best
interests of the Company and to disclose any interests that they may have in any material contract or
                                                              94
material transaction. If a conflict of interest arises at a meeting of the Board of Directors, any director in a
conflict is required to disclose his interest and abstain from voting on such matter.

The directors and officers of the Company are aware of the existence of laws governing accountability of
directors and officers for corporate opportunity and requiring disclosures by directors of conflicts of
interest in respect of the Company and are required to comply with such laws in respect of any directors’
and officers’ conflicts of interest or in respect of any breaches of duty by any of its directors or officers.

                                             EXECUTIVE COMPENSATION

Compensation

Set out below are particulars of the compensation paid to the “Named Executive Officers” of the
Company, which include:

          (a)           the Company’s Chief Executive Officer and Chief Financial Officer, despite the amount
                        of compensation paid to such individuals by the Company;

          (b)           each of the Company’s four most highly compensated executive officers, other than the
                        Chief Executive Officer, who were serving as executive officers at the end of the most
                        recently completed financial year and whose total salary and bonus exceeds $150,000 per
                        year; and

          (c)           any additional individuals for whom disclosure would have been provided under (b) but
                        for the fact that the individual was not serving as an executive officer of the Company at
                        the end of the most recently completed financial year.

Summary of Compensation

The following table is a summary of compensation paid to the Named Executive Officer for each of the
Company’s most recently completed financial years.

                                                                            Long-Term Compensation Awards
                                        Annual Compensation (3)                        Payouts
                                                                                        Restricted
                                                                           Options      Shares or
                                                                            SARs        Restricted    LTIP     Other Annual
Name and Principal          Year    Salary      Bonus         Other        Granted     Share Units   Payouts   Compensation
Position                   Ended    (US$)       (US$)         (US$)                                   (US$)       (US$)
John Gray,                2007      56,990      20,040           0         380,000          0           0            0
Chief Executive           2006      96,025         0          10,020          0             0           0            0
Officer                   2005      88,675         0          13,944       525,000          0           0            0
Danesh Varma              2007      15,030         0             0         100,000          0           0            0
Former Chief              2006      20,040         0             0            0             0           0            0
Financial Officer         2005         0           0             0         300,000          0           0            0
Maz Mannan                2007         0           0             0            0             0           0            0
Current Chief             2006         0           0             0            0             0           0            0
Financial Officer (1)     2005         0           0             0            0             0           0            0
Matthew Grainger,         2007      45,090         0             0         220,000          0           0            0
Chief Operating           2006      20,040         0             0            0             0           0            0
Officer (2)               2005         0           0             0         500,000          0           0            0

Notes:
    (1)         Mr. Mannan did not take office until October 2007.
    (2)         Mr Grainger did not take office until September 2006.
    (3)         Compensation in 2007 is for the six month period ended June 30, 2007.
                                                               95
Long-Term Incentive Plans, Options and SARs – Awards in most recently completed Fiscal Year

During the most recently completed fiscal year, the following incentive stock options and stock
appreciation rights (“SARs”) were granted to the Named Executive Officers. The Company does not have
any long term incentive plans in place and, therefore, no awards made under any long-term incentive plan
to the Named Executive Officers during the Company’s most recently completed fiscal year. A “Long-
Term Incentive Plan” is a plan under which awards are made based on performance over a period longer
than one fiscal year, other than a plan for options, SARs or restricted share compensation. The Company
does not have a pension plan.

        Name          Securities             % of Total              Exercise or           Market Value of           Expiration Date
                        Under              Options/SARs              Base Price          Securities Underlying
                     Options/SARs       Granted to Employees       (US$/Security)        Options/SARs on the
                       Granted             in Fiscal Year                                    Date of Grant
                          (#)                                                               (US$/Security)
John Gray,             100,000                 1.72%                   0.33                   0.33/share             January 1, 2017
Chief Executive        280,000                 4.83%                   0.42                   0.42/share              June 28, 2017
Officer
Danesh Varma            100,000                1.72%                   0.42                   0.42/share              June 28, 2017
Former Chief
Financial Officer
Maz Mannan                 0                     0                      N/A                      N/A                        N/A
Current Chief
Financial Officer
(1)

Matthew                 220,000                3.79%                   0.42                   0.42/share              June 28, 2017
Grainger,
Chief Operating
Officer

Aggregated Option/SAR Exercises During the Most Recently Completed Financial Year and
Financial Year-End Option/SAR Values

During the most recently completed fiscal year, the following incentive stock options or SARs were
exercised by the Named Executive Officers.

                                                                                                         Value of Unexercised
                                                                                                             In-the-Money
                        Securities                                     Unexercised Options                 Options at Fiscal
                        Acquired               Aggregate                at Fiscal Year End                  Year End ($)(2)
                      On Exercise (#)      Value Realized (#)(1)           Exercisable /               Exercisable/Unexercisable
       Name               US$                     US$                   Unexercisable (#)                         US$
John Gray,               526,316                 63,421                      905,000/0                          31,500/0
Chief Executive
Officer
Danesh Varma                   Nil                   Nil                      400,000/0                          39,000/0
Former CFO
Maz Mannan                     Nil                   Nil                       Nil/Nil                           Nil/Nil
Current CFO
Matthew Grainger,              Nil                   Nil                      620,000/0                          39,00/0
Chief Operating
Officer

Note:
(1)       Based on the difference between the option exercise price and the closing market price of the Company’s Common
          Shares on the date of exercise.
(2)       In-the-Money Options are those where the market value of the underlying securities as at the most recent fiscal year
          end exceeds the option market price.
                                                     96
Termination of Employment, Change in Responsibilities and Employment Contracts

The employment of each of the Chief Executive Officer and the Chief Operating Officer is subject to
employment contracts dated May 1, 2005 and September 1, 2006, respectively, which contracts provide
for the payment of salaries as detailed in the table set out under the heading “Summary of Compensation”
above. The employment of the Chief Financial Officer is subject to an employment contract dated
October 1, 2007, which provides for an annual salary of US$105,210 which increases to US$110,220
following six months of service, to US$120,240 following one year of employment and thereafter subject
to annual review by the Board of Directors. All contracts provide for:

    a. annual payments equal to 10% of annual salary to any pension or retirement plan nominated by
       the employee;
    b. the possibility of the payment of bonuses at the sole discretion of the Board of Directors;
    c. termination of employment at any time without notice for cause;
    d. termination of employment for any reason upon three months’ notice of payment of three months
       salary and benefits in lieu of notice; and
    e. mandatory retirement at age 65.

None of these employment contracts provide for any additional payment or other compensation in the
event of a change of control of the Company or a change in the executive officer’s responsibilities
following a change of control.

                                 COMPENSATION OF DIRECTORS

Except for the Chairman, directors who are not officers of the Company currently receive an annual
retainer of between £15,000 - £30,000 (£25,000 for the Chairman), payable in arrears, with a fee of £200
per board meeting (minimum 4) attended (or committee meeting attended on a separate date). Directors
are also reimbursed for travel expenses incurred in connection with attendance at such meetings.
Directors are eligible to participate in the Stock Option Plan. The Company has granted to each director
incentive stock options to collectively purchase up to 4,651,316 Common Shares of the Company at
various exercise prices. See “Options to Purchase Securities – Outstanding Options”.

                        INDEBTEDNESS OF OFFICERS AND DIRECTORS

There is no indebtedness of any officer or director, or any associate of any such director or officer, to the
Company. The Company is indebted to Steven Poulton in the amount of £8,000 in respect of director fees
for the 12 month period April 1, 2005 to March 31, 2006.

                                              PROMOTER

Mr. Steven Poulton, having taken the initiative in founding and organizing the Company and in the
acquisition of its exploration projects and properties, is considered a promoter of the Company within the
meaning of applicable securities laws. Mr. Poulton presently owns 5,800,000 Common Shares being
18.22% of the issued Common Shares of the Company. Upon the exercise of the Special Warrants Mr.
Poulton will hold 10.95% and upon completion of the Offering he will hold 8.60% (8.33% if the Over-
Allotment Option is exercised in full). See “Principal Holders of Common Shares”.

Other than director’s compensation described under “Compensation of Directors” and the stock options
described under “Options to Purchase Securities - Outstanding Options”, both of which are in
consideration for his services as a director, Mr. Poulton has not received anything of value from the
Company. All of the Company’s African properties were acquired by direct licence applications or
through agreements with arm’s length third parties and Mr. Poulton has not transferred any properties or
other assets to the Company.
                                                             97
Within the ten years prior to the date hereof, Mr. Poulton has not been a director, officer, promoter or
other member of management of any other issuer that, while he was acting in the capacity of a director,
officer, promoter or other member of management of that issuer, was the subject of a cease trade order or
similar order or an order that denied the issuer access to any statutory exemptions for a period of more
than 30 consecutive days or was declared bankrupt or made a voluntary assignment in bankruptcy, made a
proposal under any legislation relating to bankruptcy or insolvency or been subject to or instituted any
proceedings, arrangement or compromise with its creditors or had a receiver, receiver manager or trustee
appointed to hold its assets.

Within the ten years prior to the date hereof, Mr. Poulton has not at any time been bankrupt or made a
proposal under any legislation relating to bankruptcy or insolvency or been subject to or instituted any
proceedings, arrangement or compromise with his creditors or had a receiver, receiver manager or trustee
appointed to hold his assets.”


                                             ESCROWED SECURITIES

There are currently no securities of the Company subject to escrow. In accordance with National Policy
46-201 – Escrow for Initial Public Offerings (the “Escrow Policy”) and pursuant to an escrow agreement
to be entered into prior to Closing (the “Escrow Agreement”) among the principals of the Company (the
“Escrowed Shareholders”), the Company and Computershare Investor Services Inc. (the “Escrow
Agent”), the Escrowed Shareholders will agree to deposit their Common Shares, when issued, into escrow
with the Escrow Agent on or before closing of the Offering. The issue and placement of these securities
with the Escrow Agent in accordance with the terms of the Escrow Agreement is a condition precedent to
the closing of the Offering. The names of the Escrowed Shareholders and the number of securities subject
to escrow held by each Escrowed Shareholder (the “Escrowed Securities”) are as follows:

                                                                              Percentage of
                                                                          outstanding Common
                                                                            Shares on a fully-
                                                     Number of Common       diluted basis after
                       Name of Escrowed               Shares subject to    giving effect to the
                          Shareholder                     Escrow                 Offering
                   David Netherway                        265,450                 0.39%
                   John Gray                              808,622                 1.20%
                   Matthew Grainger                       218,519                 0.32%
                   Danesh Varma                           143,982                 0.21%
                   Steven Poulton                        5,800,000                8.61%
                   Manuel Lamboley                        731,468                 1.08%


Under the Escrow Policy, the Company will qualify as an “established issuer” provided that the Common
Shares are listed on the TSXV. As such, the Escrowed Securities will be released on the following basis:

Release Date                                                                                Number of
                                                                                         Shares Released
On the date the Company’s securities are listed on a Canadian exchange       ¼ of the Escrowed Securities
(the “Listing Date”)
Six months after the Listing Date                                              of the remaining Escrowed Securities
Twelve months after the Listing Date                                         ½ of the remaining Escrowed Securities
Eighteen Months after the Listing Date                                       The remaining Escrowed Securities

Pursuant to the policies of the TSX Venture Exchange, an additional 5,100,000 previously issued
Common Shares will also be placed in escrow upon the same terms as outlined above. In addition, a total
of 66,177 Common Shares previously issued to certain employees and consultants of the Company will
be subject to a hold period of up to one year following the date of listing subject to release on the basis of
                                                      98
20% immediately and 20% following each of three, six, nine and twelve months following the date of
listing.


Lock-up Agreement

Pursuant to the Agency Agreement, John Gray, Steven Poulton, Matthew Grainger, David Netherway,
Manuel Lamboley and Danesh Varma will enter into a lock-up agreement with the Company and
Management to be dated prior to the Closing under which each has agreed that they will not, directly or
indirectly, without the prior consent of Thomas Weisel Partners Canada Inc. and Haywood Securities Inc.
(i) offer, sell, contract to sell, secure, pledge, grant or sell any option, right or warrants to purchase, or
otherwise lend, transfer or dispose of, or announce any intention to do so, any of their securities of the
Company, or (ii) make any short sale, engage in any hedging transaction, or enter into any swap or other
arrangement that transfers to another any of the economic consequences of ownership of Common
Shares, for a period of up to six months following the closing of the Offering.

                                              RISK FACTORS

Apart from the risk factors noted below, Management is not aware of any other trends, commitments,
events or uncertainties that would have a material effect on the Corporation’s business, financial
condition or operating results.

The Company, and thus the securities of the Company, should be considered a highly speculative
investment and involve a high degree of financial and other risks over a significant period of time which
even a combination of careful evaluation, experience and knowledge may not eliminate. The Properties,
in which the Company has an interest, or the option to acquire an interest, are in the early exploration
stage and are without either resources or reserves. While discovery of an orebody may result in
significant rewards, few properties which are explored are ultimately developed into producing mines.
Investors should carefully consider all of the information disclosed in this Prospectus prior to making an
investment in the Company. In addition to the other information presented in this Prospectus, the
following risk factors should be given special consideration when evaluating an investment in any of the
Company’s securities.

Limited Operating History

The Company has no history of earnings. The Properties are in the exploration stage and there are no
known commercial quantities of mineral reserves on the Properties. There is no assurance that any of the
Company’s Properties will generate earnings, operate profitably or provide a return on investment in the
future. The purpose of this Offering is to raise funds to carry out exploration and development with the
objective of establishing economic quantities of mineral reserves.

Title Risks

Although the Company has exercised the usual due diligence with respect to determining title to and
interests in the Properties, there is no guarantee that such title to or interests in the Properties will not be
challenged or impugned and title insurance is generally not available. The Company’s mineral Property
interests may be subject to prior unregistered agreements or transfers or land claims and title may be
affected by, among other things, undetected defects. Surveys have not been carried out on any of the
Properties in accordance with the laws of the jurisdiction in which they are located; therefore, their
existence and area could be in doubt. Until competing interests in the mineral lands have been
determined, the Company can give no assurance as to the validity of title of the Company to those lands
or the size of such mineral lands.
                                                       99
Political and Country Risks

The political risk in sub-Saharan Africa is significant due to prolonged periods of economic and political
instability. Although since 2006 Liberia has made considerable progress in rebuilding its government
institutions and economy, it will need to continue to rely on international support for security and
economic assistance to ensure that these efforts are successful in creating a stable and more prosperous
future for its citizens. In result, there are still considerable risks, (as well as opportunities) in carrying on
business in Liberia for foreign corporations, such as the Company.

Exploration, Development and Operating Risk

Resource exploration and development is a speculative business, characterized by a number of significant
risks including, among other things, unprofitable efforts resulting not only from the failure to discover
mineral deposits but also from finding mineral deposits that, though present, are insufficient in quantity
and quality to return a profit from production. The marketability of minerals acquired or discovered by
the Company may be affected by numerous factors that are beyond the control of the Company and that
cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling
facilities, mineral markets and processing equipment, and such other factors as government regulations,
including regulations relating to royalties, allowable production, importing and exporting minerals and
environmental protection, the combination of which factors may result in the Company not receiving an
adequate return of investment capital. All of the claims to which the Company has a right to acquire an
interest are in the exploration stage only and are without a known body of commercial ore. Development
of the subject mineral Properties would follow only if favourable exploration results are obtained and a
positive feasibility study is completed.

The business of exploration for minerals and mining involves a high degree of risk. Few Properties that
are explored are ultimately developed into producing mines. There is no assurance that the Company’s
mineral exploration and development activities will result in any discoveries of commercial bodies of ore.
The long-term profitability of the Company’s operations will in part be directly related to the costs and
success of its exploration and development programs, which may be affected by a number of factors.

Substantial expenditures are required to establish reserves through drilling and to develop the mining and
processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be
derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will
be discovered in sufficient quantities to justify commercial operations or that funds required for
development can be obtained on a timely basis.

No Assurance of Production

Mineral exploration is highly speculative in nature, involves many risks, and frequently does not lead to
the discovery of commercial reserves of minerals. While the rewards can be substantial if commercial
reserves of minerals are found, there can be no assurance that the Company’s past or future exploration
efforts will be successful, that any production therefrom will be obtained or continued, or that any such
production which is attempted will be profitable.

Company at Exploration Stage Only - Limited Experience with Development-Stage Mining
Operations

The Company has limited experience in placing resource Properties into production, and its ability to do
so will be dependent upon using the services of appropriately experienced personnel or entering into
agreements with other major resource companies that can provide such expertise. There can be no
assurance that the Company will have available to it the necessary expertise when, and if, the Company
places its resource Properties into production and whether it will produce revenue, operate profitably or
provide a return on investment in the future.
                                                     100
Factors Beyond Company’s Control

The exploration and development of mineral Properties and the marketability of any minerals contained in
such Properties will be affected by numerous factors beyond the control of the Company. These factors
include government regulation, high levels of volatility in market prices, availability of markets,
availability of adequate transportation and refining facilities and the imposition of new or amendments to
existing taxes and royalties. The effect of these factors cannot be accurately predicted.

Failure to Obtain Additional Financing

While the Company has the financial resources necessary to undertake its currently planned activities,
there can be no assurance that the Company will be successful in obtaining any additional required
funding necessary to conduct additional exploration, if warranted, on the Company’s exploration
Properties or to develop mineral resources on such Properties, if commercially mineable quantities of
such resources are located thereon. Failure to obtain additional financing on a timely basis could cause the
Company to delay or indefinitely postpone exploration, development or production on the Properties or to
forfeit its interest in such Properties. There can be no assurance that additional capital or other types of
financing will be available if needed or that, if available, the terms of such financing will be favourable to
the Company. If additional financing is raised through the issuance of equity or convertible debt
securities of the Company, the interests of shareholders in the net assets of the Company may be diluted.

Risk of International Operations

The Company is incorporated under and governed by the laws of the British Virgin Islands. All of the
Corporation's assets are located outside Canada, and all of the Corporation’s directors and officers and
most of the experts named in this Prospectus are residents of countries other than Canada. As a result, it
may be difficult for investors to effect service of process within Canada upon the Company and those
directors, officers and experts, or to realize in the Canada upon judgments of courts of Canada predicated
upon civil liability of the Company and such directors, officers or experts under Canadian provincial
securities laws.

Many of the mineral rights and interests of the Company are subject to government approvals, licences
and permits. Such approvals, licences and permits are, as a practical matter, subject to the discretion of
the applicable governments or governmental officials. No assurance can be given that the Company will
be successful in maintaining any or all of the various approvals, licences and permits in full force and
effect without modification or revocation.

In certain countries in which the Company has assets and operations, such assets and operations are
subject to various political, economic and other uncertainties, including, among other things, the risks of
war and civil unrest, expropriation, nationalization, renegotiation or nullification of existing concessions,
licences, permits, approvals and contracts, taxation policies, foreign exchange and repatriation of earnings
restrictions, changing political conditions, international monetary fluctuations, currency controls and
foreign governmental regulations that favour or require the awarding of contracts to local contractors or
require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. In
addition, in the event of a dispute arising from foreign operations, the Company may be subject to the
exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the
jurisdiction of courts in Canada or the United States. The Company also may be hindered or prevented
from enforcing its rights with respect to a governmental instrumentality because of the doctrine of
sovereign immunity. It is not possible for the Company to accurately predict such developments or
changes in laws or policy or to what extent any such developments or changes may have a material
adverse effect on the Company’s operations.
                                                   101
Risks due to Foreign Incorporation

The Company is incorporated under and governed by the laws of the British Virgin Islands and
consequently shareholders may not have the same rights and protections as they would have under
provincial or federal corporate law in Canada. There can be no assurance that shareholder rights and
remedies available under the corporate law of the British Virgin Islands will be enforceable in Canada
through Canadian courts or that any orders of the courts of the British Virgin Islands made under such
corporate law will be enforceable in Canada.

Insurance and Uninsured Risks

The Company’s business is subject to a number of risks and hazards generally, including adverse
environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological
conditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural
phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result
in damage to mineral Properties or production facilities, personal injury or death, environmental damage
to the Company’s Properties or the properties of others, delays in development or mining, monetary
losses and possible legal liability.

Although the Company will purchase insurance to protect against certain risks in such amounts as it
considers reasonable, such insurance may not cover all the potential risks associated with a mining
company’s operations. The Company may also be unable to maintain insurance to cover these risks at
economically feasible premiums. Insurance coverage may not continue to be available or may not be
adequate to cover any resulting liability. Moreover, insurance against risks such as environmental
pollution or other hazards as a result of exploration and production is not generally available to the
Company or to other companies in the mining industry on acceptable terms. The Company might also
become subject to liability for pollution or other hazards which may not be insured against or which the
Company may elect not to insure against because of premium costs or other reasons. Losses from these
events may cause the Company to incur significant costs that could have a material adverse effect upon its
financial performance and results of operations.

Environmental Risks and Hazards

The Company’s operations may be subject to environmental regulations in the various jurisdictions in
which it operates. Environmental legislation provides for restrictions and prohibitions on spills, releases
or emissions of various substances produced in association with certain mining industry operations, such
as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such
legislation may result in the imposition of fines and penalties. In addition, certain types of operations
require the submission and approval of environmental impact assessments. Environmental legislation is
evolving in a manner that means standards are stricter, and enforcement, fines and penalties for non-
compliance are more stringent. Environmental assessments of proposed projects carry a heightened
degree of responsibility for companies and directors, officers and employees. The cost of compliance with
changes in governmental regulations has a potential to reduce the profitability of operations. The
Company intends to comply fully with all applicable environmental regulations.

Government Regulation and Permitting

The current or future operations of the Company, including exploration and development activities and
the commencement of production on its Properties, require permits from various federal, provincial or
territorial and local governmental authorities, and such operations are and will be governed by laws and
regulations governing prospecting, development, mining, production, exports, taxes, labour standards,
occupational health, waste disposal, toxic substances, land use, water use, environmental protection, land
claims of local people, mine safety and other matters.
                                                    102
Such operations and exploration activities are also subject to substantial regulation under applicable laws
by governmental agencies that will require the Company to obtain permits, licences and approvals from
various governmental agencies. There can be no assurance, however, that all permits, licences and
approvals that the Company may require for its current or future operations and exploration activities will
be obtainable on reasonable terms or on a timely basis or that such laws and regulations will not have an
adverse effect on any mining project which the Company might undertake.

Failure to comply with applicable laws, regulations, and permitting requirements may result in
enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing
operations to cease or be curtailed, and may include corrective measures requiring capital expenditures,
installation of additional equipment or remedial actions. Parties engaged in mining operations may be
required to compensate those suffering loss or damage by reason of mining activities and may have civil
or criminal fines or penalties imposed for violations of applicable laws or regulations and, in particular,
environmental laws.

Amendments to current laws, regulations and permits governing operations and activities of mining
companies, or more stringent implementation thereof, could have a material adverse impact on the
Company and cause increases in exploration expenses, capital expenditures or production costs or
reduction in levels of production at producing Properties or require abandonment or delays in
development of new mining Properties.

To the best of the Company’s knowledge, it is operating in compliance with all applicable rules and
regulations.

Lags

The Company is unable to predict the amount of time which may elapse between the date when any new
mineral reserve may be discovered, the date upon which such discovery may be deemed to be economic
pursuant to a feasibility study and the date when production will commence from any such discovery.

Lack of Infrastructure

Completion of the planned exploration of the Company’s Properties is subject to various requirements,
including the availability and timing of acceptable arrangement for power, water and transportation
facilities. The lack of availability on acceptable terms or the delay in the availability of any one or more
of these items could prevent or delay completion of the Company’s planned exploration and development
of these Properties. If adequate infrastructure is not available in a timely manner, there can be no
assurance that the planned exploration of the Company’s Properties will be completed on a timely basis,
if at all.

Competition

The mining industry is intensely competitive in all its phases, and the Company competes with other
mining companies in connection with the acquisition of Properties producing or capable of producing,
precious and base metals, gemstones and energy minerals. Many of these companies have greater
financial resources, operational experience and technical facilities than the Company. Competition could
adversely affect the Company’s ability to acquire suitable Properties or prospects in the future.
Consequently, the Company’s revenue, operations and financial condition could be materially adversely
affected. If the Company’s costs increase due to its locations, the grade and nature of ore bodies, foreign
exchange rates, or its operating and management skills, its profitability may be affected.
                                                     103
Management

The success of the Company is currently largely dependent on the performance of its directors and
officers. There is no assurance the Company can maintain the services of its directors and officers or other
qualified personnel required to operate its business. The loss of the services of these persons could have a
material adverse affect on the Company and its prospects.

Ability to Attract and Retain Qualified Personnel

Recruiting and retaining qualified personnel is critical to the Company’s success. The number of persons
skilled in the acquisition, exploration and development of mining Properties is limited and competition
for such persons is intense. As the Company’s business activity grows, additional key financial,
administrative and mining personnel as well as additional operations staff will be required. Although the
Company believes it will be successful in attracting, training and retaining qualified personnel, there can
be no assurance of such success. If the Company is not successful in attracting, training and retaining
qualified personnel, the efficiency of operations could be affected.

Absence of Public Trading Market

Currently there is no public market for the Common Shares, and there can be no assurance that an active
market for the Common Shares will develop or be sustained after this Offering. If an active public market
for the Common Shares does not develop, the liquidity of an investor’s investment may be limited and the
share price may decline below the Offering Price.

The Offering Price of the Common Shares has been determined by negotiations among the Company and
the Agents based on numerous factors. This price may not be indicative of the market price or the fair
market value for the Common Shares after this initial public offering. See “Plan of Distribution”.

Securities of exploration companies have experienced substantial volatility in the past, often based on
factors unrelated to the financial performance or prospects of the companies involved. These factors
include macroeconomic developments in North America and globally, and market perceptions of the
relative attractiveness of particular industries. The Company’s share price is also likely to be significantly
effected by short-term changes in metal prices or in the Company’s financial condition or results of
operations as reflected in quarterly earnings reports. Other factors unrelated to the Company’s
performance that may have an effect on the price of the Common Shares include the following:

        the extent of analytical coverage available to investors concerning the Company’s business may
        be limited if investment banks with research capabilities do not follow its securities;

        the limited trading volume and general market interest in the Company’s securities may affect an
        investor’s ability to trade the Common Shares;

        the relatively small size of the publicly held shares will limit the ability of some institutions to
        invest in the Company’s securities; and

        a substantial decline in the Company’s share price that persists for a significant period of time
        could cause its securities to be de-listed from any stock exchange upon which they are listed,
        further reducing market liquidity.

As a result of any of these factors, the market price of the Common Shares at any given point in time may
decline below the Offering Price and not accurately reflect the Company’s long-term value.
                                                     104
Fluctuating Mineral Prices

Factors beyond the control of the Company may affect the marketability of metals discovered, if any.
Metal prices are subject to significant fluctuation and are affected by a number of factors which are
beyond the control of the Company. The effect of these factors on the Company’s operations cannot
accurately be predicted.

Foreign Currency Exchange

Exchange rate fluctuations may affect the costs that the Company incurs in its operations. The Company’s
financing activities have been denominated in Canadian dollars, while gold prices are generally quoted in
U.S. dollars. The appreciation of the U.S. dollar against the Canadian dollar, if it occurs, may have a
significant impact on the Company’s financial position and results of operations in the future.

Conflicts of Interest

Some of the directors and officers are engaged and will continue to be engaged in the search for
additional business opportunities on behalf of other corporations, and situations may arise where these
directors and officers will be in direct competition with the Company. Conflicts, if any, will be dealt with
in accordance with the relevant provisions of applicable corporate and securities laws.

                                        LEGAL PROCEEDINGS

Management is not aware of any material legal proceedings, actual, contemplated or threatened to which
the Company, or any of its subsidiaries is a party or to which any of their Properties or assets are subject.

       INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

No director, executive officer or principal shareholder of the Company, and no associate or affiliate of the
foregoing, has had a material interest, direct or indirect, in any transaction that has materially affected or
will materially affect the Company except Steven Poulton who is a director and is currently a director of
Stellar as described under “The Properties – Liberian Properties – North Bea Licence”.

                                                 EXPERTS

Information of an economic (including economic analysis), scientific or technical nature regarding the
Company’s Properties included in this Prospectus are based upon the Technical Report. The Technical
Report provides an independent review of the mineral resources, reserves and development of the
Properties. The Technical Report was prepared by Martin Pittuck and Gareth O’Donovan of SRK who are
“Qualified Persons” as such term is defined in NI 43-101. Each of the authors of the Technical Report is
independent of the Company within the meaning of NI 43-101 and do not have an interest in the
Prospectus. A copy of this report can be found on the Company’s disclosure page on www.sedar.com.
Messrs. Pittuck and O’Donovan do not have any interest in the Properties and do not own any securities
of the Company.

Certain legal matters relating to the Offering have been passed upon on behalf of the Company by Neil J.
F. Steenberg, Barrister & Solicitor, and on behalf of the Agents by Lang Michener LLP. At the date
hereof, the partners and associates of Lang Michener LLP, as a group and Mr. Neil Steenberg, do not own
beneficially, directly or indirectly, more than 1%, respectively, of any class of the outstanding securities
of the Company.
                                                     105
                        AUDITORS, TRANSFER AGENT AND REGISTRAR

Auditors

The Company’s auditors are Kajaine Limited Chartered Accountants, located at Unit 2 Alpine House,
Honeypot Lane, London NW9 9RX, United Kingdom.

Transfer Agent and Registrar

The transfer agent and registrar for the Common Shares is Computershare Investor Services Inc.
Company, located at 100 University Avenue, Toronto, Ontario, Canada, M5J 2Y1.

                                       MATERIAL CONTRACTS

Except for contracts made in the ordinary course of business, the following are the only material contracts
entered into by the Company since its incorporation or to be entered into prior to Closing:

    1. Stellar Agreement dated March 23, 2005 referred to under “The Properties – Liberia”;

    2. Lock-up Agreement between John Gray, Steven Poulton, Matthew Grainger, David Netherway,
       Manuel Lamboley and Danesh Varma and the Agents referred to under “Escrowed Securities”;

    3. Agency Agreement between the Company and the Agents dated March 24, 2008 referred to under
       “Plan of Distribution”;

    4. Escrow Agreement referred to under “Escrowed Securities”;

    5. Warrant Indenture referred to under “Description of Securities - Warrants”;

    6. Series 2007 Warrant Indenture referred to under “Description of Securities – Special Warrants”;
       and

    7. Shareholder Agreement between the Company, certain founding shareholders and Firebird Global
       Master Fund Ltd. dated October 21, 2005.

Copies of the above material contracts and the Technical Report may be inspected during distribution of
the Common Shares being offered under this Prospectus and for a period of 30 days thereafter during
normal business hours at the Company’s offices at Suite 1002, 111 Richmond Street West, Toronto,
Ontario, M5H 2G4.

                                PURCHASERS’ STATUTORY RIGHTS

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw
from an agreement to purchase securities. This right may be exercised within two business days after
receipt or deemed receipt of a Prospectus and any amendment. In several of the provinces, securities
legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, damages if
the Prospectus and any amendments contain a misrepresentation or is not delivered to the purchaser,
provided that such remedies are exercised by the purchaser within the time limit prescribed by the
securities legislation of the purchaser’s province. The purchaser should refer to any applicable provisions
of the securities legislation of the purchaser’s province for the particulars of these rights or consult with a
legal adviser.
                                                    106
Contractual Right of Action for Rescission

In the event that a holder of a Special Warrant, who acquires a Common Share of the Issuer upon the
exercise of the Special Warrant as provided for in this Prospectus, is or becomes entitled under applicable
securities legislation to the remedy of rescission by reason of this Prospectus or any amendment thereto
containing a misrepresentation, such holder shall be entitled to rescission not only of the holder’s exercise
of its Special Warrant(s) but also of the private placement transaction pursuant to which the Special
Warrant was initially acquired, and shall be entitled in connection with such rescission to a full refund of
all consideration paid to the Company on the acquisition of the Special Warrant. In the event such holder
is a permitted assignee of the interest of the original Special Warrant subscriber, such permitted assignee
shall be entitled to exercise the rights of rescission and refund granted hereunder as if such permitted
assignee was such original subscriber. The foregoing is in addition to any other right or remedy available
to a holder of the Special Warrant under section 130 of the Securities Act (Ontario) or otherwise at law.
                                                  107



                              GLOSSARY OF TECHNICAL TERMS

ºC                  Degree Celsius
Alkaline            A term applied to igneous rocks in which the feldspars are predominantly sodic
                    and/or potassic.

Alluvial            Derived by the action of rivers. Alluvial processes commonly concentrate heavy
                    minerals including gold and diamonds.

Alteration          Any change in the mineralogical composition of a rock brought about by physical or
                    chemical processes.

Amphibolite         A metamorphic rock consisting mainly of amphibole and plagioclase with little or
                    no quartz.

Anomaly             Any geological, geochemical or geophysical feature which exhibits differing
                    characteristics to its surroundings. Distinguished by geological, geochemical or
                    geophysical methods.

Archaean            The oldest period in the Precambrian – 4.6 to 2.5 billion years ago.

Artisanal miner     Local prospector who performs small-scale mining.

Artisanal mining    Small scale excavations and workings by artisanal miners.

Assay               To determine the proportions of metal in an ore or metals or geological sample. To
                    test an ore or mineral for its composition, purity, weight, or other properties of
                    commercial interest.

Atomic              A commonly used method of instrumental element analysis in mineral exploration
Absorption          using selective absorption of certain wave-lengths of light specific to the elements
Spectroscopy        being determined.
("AAS")

Au                  The symbol for gold.

Banded iron         Sedimentary rock commonly found in greenstone belts which is composed of
(ironstone)         alternating bands of minerals rich in iron and quartz.
formation ("BIF")

Basement            Any widespread association of crystalline igneous and or metamorphic rocks which
                    are covered unconformably by younger rocks.

Basic               A quartz-free igneous rock containing calcic rather than sodic feldspar (e.g., basalt
                    and gabbro).

Birimian            The name used for widespread West African Lower Proterozoic rock formations
                    which form greenstone belts and commonly host gold deposits (e.g., the Ashanti
                    mine in Ghana).
                                                  108
Cenozoic            An era of geological time, from the beginning of the Tertiary period (65 million
                    years ago) to the present.

Chert               A hard, dense, very fine-grained sedimentary rock, organic or inorganic in origin,
                    consisting of interlocking quartz crystals.

cm                  Centimetre.
Craton              A major structural unit of the Earth's crust that has attained stability, generally
                    igneous or metamorphic. The term is now restricted to ancient continental cores.

Cretaceous          Applied to the third and final period of the Mesozoic Era (144 to 65 million years
                    ago).

Diamond drill       A machine designed to rotate under pressure, using an annular diamond studded
                    cutting tool to produce a more or less continuous sample of the material that is
                    drilled.
Diorite             Coarse-grained intrusive igneous rock of intermediate composition.

Dolerite            A medium-grained, basic, igneous intrusive rock, mineralogically and chemically
                    similar to basalt and gabbro.

Dyke                A tabular igneous intrusion that cuts across pre-existing rock.

Eburnean orogeny    A West African phase of mountain-building in the Lower Proterozoic period (2.1
                    billion years ago).

Facies              Features which characterize a sediment as having been deposited in a particular
                    environment such as sedimentary structures, bedding characteristics, fossil and
                    mineral content.

Fault               A fracture in rocks along which there has been an observable amount of
                    displacement.

Ferricrete          Ferricrete – A term allied to duricrust which describes a rock type comprising
                    surficial sand and gravel cemented into a hard mass by iron oxide. Duricrust is a
                    hard crust which has formed in a tropical climate by the accumulation of insoluble
                    iron oxides, hydroxides and silica and by the leaching and removal of unstable
                    minerals by percolating groundwater.

Ferruginous         Red or rusty rock coloration due to the presence of ferric oxide.

Fire assay ("FA")   A method of sample decomposition and pre-treatment prior to the analysis by AAS
                    of gold and platinum group elements. Used widely in mineral exploration as a
                    method of analysing rock samples for gold.

Foliation           A general term for a planar arrangement of textural or structural features in any type
                    of rock.

Formation           A body of rock identified by its characteristics and stratigraphic position.

G/t Au              Grams of gold per tonne, equivalent to part per million (ppm).
                                                   109
Gabbro              A basic, intrusive, dark-coloured igneous rock; the coarse-grained equivalent of
                    basalt and dolerite.

Gneiss              A medium to coarse-grained, banded rock formed during high-grade regional
                    metamorphism.

Granodiorite        An intrusive, often large scale body of medium to coarse-grained igneous rock
                    which would be acidic where which rock has greater than 10% free silica and is
                    composed predominately of light-coloured minerals (quartz and feldspars) which
                    has relatively low density, for example rhyolite and granite.

Greenschist         A term used to describe an area of low-grade regionally metamorphosed schistose
(facies)            rock.

Greenstone (belt)   Archean or Proterozoic belt of volcano-sedimentary rocks, often elongate in shape
                    and commonly the host for gold deposits.

ha                  Hectares.
Hematite            An iron ore mineral (Fe2O3).

Hydrothermal        Heated or superheated water associated with igneous activity.
fluid

Inductively         An atomic emission spectroscopy analytical technique where liquid solutions are
coupled plasma      passed through a quartz tube surrounded by a high-frequency induction coil for
("ICP")             heating the sample to high temperatures. An important method for measuring trace
                    element concentration in samples of rock.

Intermediate        A term loosely applied to igneous rocks transitional to basic and acid (e.g. andesite
                    and diorite).

Intrusive           A body of igneous rock which has been forced into pre-existing rocks, often along
                    structural weaknesses (e.g., faults).

IP (induced         Method of ground geophysical surveying which employs the passing of an electrical
polarization)       current into the ground to test for indications of conductive metallic sulfides,
                    graphitic rocks, or saline groundwaters.

km                  Kilometre.
Kimberlite          A porphyritic peridotite containing the mica, phlogopite, commonly brecciated,
                    which occurs in pipes, dykes, and sills. It is the principal primary source of
                    diamond.

Laterite            A surficial material rich in iron and aluminum formed through intense leaching
                    under tropical conditions (a term allied to duricrust and ferricrete).

Logging             The process of recording the type and characteristics of the rock penetrated in
                    drilling a borehole, by a geologist, as evidenced by the drill cuttings and core
                    recovered from the drill hole.

Mafic               A general term used to describe ferromagnesian rock-forming silicates; also used to
                                                   110
                    describe basic igneous rocks (e.g., basalt, dolerite, gabbro).

Magnetite           Magnetite – An important iron ore mineral (Fe3O4).

Mesozoic

Meta                A prefix used to denote metamorphism of a rock type (e.g., metasedimentary).
                    Metamorphism covers the processes by which changes are brought about in the
                    Earth’s crust by the action of heat, pressure and chemically active fluids on pre-
                    existing rocks.

Migmatite           A mixed rock generally composed of a pre-existing host rock (often metamorphic)
                    and an invading igneous material.

Mineralisation      A natural aggregate of one or more minerals, which has not been delineated to the
                    extent that sufficient average grade or dimensions can be reasonably estimated or
                    called a “deposit” or “ore”.
Palaeozoic          An era of geological time from the end of the Precambrian to the beginning of the
                    Mesozoic (from 600 to 230 million years ago) where Mesozoic is an era of geologic
                    time, from the end of the Palaeozoic to the beginning of the Cenozoic (230 million
                    years to 65 million years ago).

Plutonic            Pertaining to a large body of igneous rock formed at great depths.

Precambrian         The earliest geological age (subdivided into Archean and Proterozoic) from 4.6 to
                    0.6 billion years ago.

Proterozoic         The Precambrian geological period that follows the Archean. Typically the age of
                    gold deposits in West Africa and Brazil.

Pyroclastic         Fragmental volcanic material (ash, rock and crystal fragments, glass), produced by
                    explosive eruptions.

Quartzite           A metamorphic rock consisting mainly of quartz, formed by recrystallization of
                    sandstone by either regional or thermal metamorphism.

Radiometric         In mineral exploration, a term used for a type of airborne or ground geophysical
                    survey which involves the measurement of radioactive elements (potassium,
                    thorium, uranium) in surface sediments and rocks; radiometric survey.

Reconnaissance      A rapid survey to gain general knowledge of the geology of a region.

Roll Front          A type of uranium deposition localized as a roll or interface separating an oxidized
                    interior from a reduced exterior. The reduced side of this interface is significantly
                    enriched in uranium.

Saprolite           A soft, earthy, typically clay-rich, decomposed rock, formed in situ by the chemical
                    weathering of igneous, sedimentary, and metamorphic rocks in humid and tropical
                    or subtropical climates. Saprolite is characterized by the preservation of structures
                    that were present in the unweathered rock.

Screen Fire Assay   A method of analyzing samples of rock or soil which are known to contain coarse
                                                 111
                   gold particles.

Sedimentary Rock   Rock formed from the accumulation and consolidation of sediment, usually in
                   layered deposits.

Shear zone         Moderate to large scale, usually elongate, zone of rocks which have been crushed
                   during movement of juxtaposed blocks. Shear zones are common hosts for Archean
                   or Proterozoic gold deposits.

Soil anomaly       An anomaly defined by a soil geochemical survey.

Soil geochemical   A widely used mineral exploration tool involving the chemical analysis of soil
survey             samples that are systematically collected along survey lines within a rectangular or
                   square grid.

Stockwork          A three-dimensional network of closely spaced planar to irregular veinlets.
                   Stockwork ore is commonly associated with zones of mineralisation and mineral
                   deposition.

Strike             The direction or compass bearing of an inclined bed, vein, or fault plane on a level
                   surface.

Strike length      Longest horizontal dimension of a body or zone of mineralisation.
Supergene          A term used to describe near surface processes often involving the enrichment of
                   gold in the near-surface environment in tropical terranes.

Tailings           The waste material deriving from finely crushed ore after certain recoverable metals
                   or minerals have been extracted.

Tectonic           An adjective used to relate a particular phenomenon to a structural or orogenic
                   concept.

Terrain            A tract or region of the Earth's surface considered as a physical feature.

Terrane            A region where a particular rock or group of rocks predominates.

Tourmaline         A group of minerals containing boron commonly found as an accessory mineral in
                   granitic pegmatites from the late-stage cooling of granitic bodies.

Tourmalinized      A term applied to a secondary geological process involving the introduction of
                   significant amounts of tourmaline into a pre-existing rock type.

Trenching          In mineral exploration, a process used to investigate soil or geochemical anomalies
                   by the excavation of narrow trenches across anomalous zones to observe geological
                   structures and to allow sampling.

Ultramafic         An igneous rock composed chiefly of ferromagnesian (mafic) minerals.

UTM                Universal Transverse Mercator: A map projection used widely as a coordinate
                   system.

Volcano-           Rock formed from the accumulation and consolidation of sediment and by
                   accumulation of magmatic products near a volcanic vent, usually in layered
                                               112
sedimentary Rock    deposits.

Weathering          The process by which rocks are broken down and decomposed by the action of
                    external agents such as wind, rain, temperature changes, plants and bacteria.

WGS                 World Geodetic System which defines a reference frame for the earth, for use in
                    geodesy and navigation.


                                      CONVERSION TABLE

The following table sets forth certain standard conversions from the Standard Imperial units to the
International System of Units (or metric units).

To Convert From                 To                            Multiply By

Feet                            Metres                                   0.3048
Metres                          Feet                                     3.2808
Miles                           Kilometres                               1.6093
Kilometres                      Miles                                    0.6214
Acres                           Hectares                                 0.4047
Hectares                        Acres                                    2.4711
Grams                           Ounce (troy)                           0.03215
Ounce (troy)                    Grams                                  31.1035
Tonnes                          Short tons                             1.10231
Short tons                      Tonnes                                 0.90718
Long tons                       Kilograms                             1016.046
Tonnes                          Long tons                              0.98421
Long tons                       Tonnes                                1.016046
113
114
        F-1




FINANCIAL STATEMENTS
                                                         F-2



AFRICAN AURA RESOURCES LIMITED, BVI


Consolidated Income Statement


For the                                        Period    Year          Year          Year
                                               ended     ended         ended         ended
                                               June 30   December 31   December 31   December 31
                                               2007      2006          2005          2004
(Stated in US dollars)

                                       Notes   $'000     $'000         $'000         $'000

General and administration expenses

  Administrative and office expenses           32        57            16            5
  Travel and subsistence                       23        15            4             5
  Depreciation                                 25        8             -             -
  Wages and salaries                           30        -             -             -
  Director fees and salaries                   166       168           80            11
  Foreign exchange (gain) loss                 36        7             -             -

 Share based payments                          709       -             363           10

  Operating loss                       4       (1,021)   (255)         (463)         (31)

 Interest income                               33        39            4             -

 LOSS                                          (988)     (216)         (459)         (31)


 Basic and diluted loss per share      7       (3.21)c   (1.10)c       (3.95)c       (62.00)c
                                                           F-3



AFRICAN AURA RESOURCES LIMITED, BVI


Consolidated Balance Sheet

As at
                                                 June 30         December 31   December 31   December 31
                                                 2007            2006          2005          2004
(Stated in US dollars)

                                         Notes   $'000           $'000         $'000         $'000
FIXED ASSETS
Intangible assets                        5       3,159           1,974         462           93
Property, plant and equipment            6       125             44            -             -
                                                 3,284           2,018         462           93

CURRENT ASSETS
   Other Debtors                         10      284             184           113           2
   Cash and bank                                 7,546           2,127         891           4
                                                 7,830           2,311         1,004         6

TOTAL ASSETS                                     11,114          4,329         1,466         99

EQUITY AND LIABILITIES

CAPITAL & RESERVES
Called-up share capital                  12      592             590           395           50
Share warrants                           13      7,019           -             -             -
Share premium account                    14      3,697           3,739         1,242         -
Share-based payments                             1,059           350           373           10
Foreign currency translation reserve             378             237           (66)          (7)
Profit and loss account - deficit                (1,694)         (706)         (490)         (31)
TOTAL EQUITY                                     11,051          4,210         1,454         22

CURRENT LIABILITIES
   Other creditors                       11      63              119           12            77
TOTAL LIABILITIES                                63              119           12            77
TOTAL          EQUITY              AND
LIABILITIES                                      11,114          4,329         1,466         99
                                                            F-4
AFRICAN AURA RESOURCES LIMITED, BVI
Consolidated Statement of Changes in Equity

                                                                                       Foreign
                                                                            Share      currency      Retained
                                          Share     Share         Share     based      translation   earnings
                                          capital   warrants      premium   payments   reserve       (deficit)   Total
                                          $'000     $'000         $'000     $'000      $'000         $'000       $'000
Balance as at January 1 2004
Proceeds on share issue                   50        -             -         -          -             -           50
Share based payments                      -         -             -         10         -             -           10
Foreign currency translation              -         -             -         -          (7)           -           (7)
Loss for the period                       -         -             -         -          -             (31)        (31)

Balance as at December 31 2004            50        -             -         10         (7)           (31)        22



At January 1 2005                         50        -             -         10         (7)           (31)        22

Share Issue                               345       -             1,242     -          -             -           1,587
Recognition of Share Based Payments       -         -             -         363        -             -           363
Foreign currency translation              -         -             -         -          (59)          -           (59)
Loss for the period                       -         -             -         -          -             (459)       (459)

At December 31 2005                       395       -             1,242     373        (66)          (490)       1,454



At January 1 2006                         395                     1,242     373        (66)          (490)       1,454

Issue of shares under share option plan   13        -             34        -          -             -           47
Share Issue                               184       -             2,478     -          -             -           2,662
Buy-back of ordinary shares               (2)       -             (14)      -          -             -           (16)
Expenses                                  -         -             (24)      -          -             -           (24)
Recognition of Share Based Payments       -         -             23        (23)       -             -           -
Foreign currency translation              -         -             -         -          303           -           303
Loss for the period                       -         -             -         -          -             (216)       (216)

At December 31 2006                       590                     3,739     350        237           (706)       4,210



At January 1 2007                         590                     3,739     350        237           (706)       4,210

Share Issue                               11        7,019         166       -          -             -           7,196
Buy-back of ordinary shares               (9)       -             (76)      -          -             -           (85)
Expenses                                  -         -             (132)     -          -             -           (132)
Recognition of Share Based Payments       -         -             -         709        -             -           709
Foreign currency translation              -         -             -         -          141           -           141
Loss for the period                       -         -             -         -          -             (988)       (988)
At June 30 2007                           592       7,019         3,697     1,059      378           (1,694)     11,051
                                                                    F-5

AFRICAN AURA RESOURCES LIMITED, BVI


Consolidated Cash Flow Statement

For the
                                                                  Period    Year          Year          Year
                                                                  ended     ended         ended         ended
(Stated in US dollars)                                            June 30   December 31   December 31   December 31
                                                                  2007      2006          2005          2004

                                                          Notes   $'000     $'000         $'000         $'000
Net Cash Outflow from
     operating activities                                         (1,021)   (255)         (463)         (31)
Items not involving cash
     Share based payments                                         709       -             363           10
     Currency translation adjustment                              141       303           (59)          (7)
     Depreciation                                                 25        8             -             -
Increase / (Decrease) in non-cash working capital items
     Receivables                                                  (100)     (71)          (111)         (2)
     Payables                                                     (56)      108           (66)          77
Net cash flow from operating activities                           (302)     93            (336)         47

Investing Activities
  Interest Income                                                 33        39            4             -
  Intangible assets                                               (1,185)   (1,512)       (369)         (93)
  Property, plant and equipment                                   (106)     (52)           -             -

Net Cash Outflow from capital investment and
financial investment                                              (1,258)   (1,525)       (365)         (93)

Net Cash Outflow before use of liquid resources
and financing                                                     (1,560)   (1,432)       (701)         (46)

Financing

Share issue                                                       7,196     2,709         1,587         50
Buy-back of ordinary shares                                       (85)      (16)          -             -
Expenses                                                          (132)     (24)           -             -
Net Cash Flow from financing                                      6,979     2,669         1,587         50

Net Increase in cash and cash equivalents                         5,419     1,237         886           4



Cash or cash equivalents at the beginning of the period           2,127     890           4             -

Cash or cash equivalents at the end of the period                 7,546     2,127         890           4

Net Increase in cash and cash equivalents                         5,419     1,237         886           4
                                                       F-6

AFRICAN AURA RESOURCES LIMITED, BVI
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the periods ended June 30 2007, December 31 2006, December 31 2005 and December 31 2004

(Stated in US dollars)

1.       NATURE OF OPERATIONS
        The Company, which commenced operations on February 4, 2004, is engaged in the acquisition,
        exploration and development of gold, uranium, iron ore and diamond properties in Africa. The
        Company is in the exploration stage and has no source of cash flows other than loans and equity
        offerings.
        These consolidated financial statements are prepared on a going concern basis which assumes that the
        Company will be able to realize assets and discharge liabilities in the normal course of business. The
        Company’s ability to continue on a going concern basis depends on its ability to successfully raise
        additional financing. If the Company cannot obtain additional financing the Company may be forced to
        realize its assets at amounts significantly lower than the current carrying value.
        Uncertainty also exists with respect to the recoverability of the carrying value of certain resource
        properties. The ability of the Company to realize on its investment in resource properties is contingent
        upon resolution of the uncertainties and continuing confirmation of the Company’s title to the resource
        properties.


2        BASIS OF PRESENTATION
2.1      The Company changed its year end to June 30 from December 31 in 2007. Therefore the financial
         statements are as at and for the six months ended June 30, 2007, and the years ended December 31, 2006,
         December 31, 2005 and December 31, 2004.
2.2      The consolidated financial statements have been prepared under the historical cost convention and in
         accordance with International Financial Reporting Standards (IFRS) adopted by the International
         Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting
         Interpretations Committee of the IASB.
2.3      Functional Currency
         The United States Dollar has been identified as the Company’s currency of measurement and is used for
         external reporting purposes.


3        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1      Basis of Consolidation
         The financial statements of entities which are controlled by the Company through voting equity
         interests, referred to as subsidiaries, are consolidated.
         The Group financial statements consolidate the financial statements of the company and of all subsidiary
         undertakings (“the Group”).
         Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting
         policies used into line with those used by other members of the Group.
         Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions are
         eliminated in preparing the consolidated financial statements.
                                                      F-7
3.2   Intangible Assets and Impairment
      The Company follows the method of accounting for its mineral properties whereby all costs related to
      acquisition, exploration and development are capitalized until the results of the projects, which are
      based on geographical areas (“properties” or “licences”) are known. The carrying value of pre-
      production and exploration properties is reviewed periodically and either written off when it is
      determined that the expenditures will not result in the discovery of economically recoverable mineral
      reserves or transferred to producing mining property, plant and equipment when commercial
      development commences.
      The recoverability of deferred exploration and evaluation costs is dependant upon a number of factors
      common to the natural resource sector. These include but are not limited to the extent to which the
      Company can establish economically recoverable reserve on the properties, the ability of the Company to
      obtain necessary financing to complete the development of such reserves, future profitable production from
      operations and the ability to sell production at a profit.
3.3   Property, plant and equipment
      Expenditure on additions and improvements is capitalised as incurred. Fixed assets are included at
      historical cost.
      Depreciation is provided at the following annual rates in order to write off each asset over its estimated
      useful life:
               Plant and machinery                 25% straight line basis
               Computer equipment                  25% straight line basis
               Motor vehicles                      25% straight line basis.
3.4   Measurement Uncertainty
      The preparation of financial statements requires management to make estimates and assumptions
      that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
      at the date of the financial statements and the reported amounts of revenues and expenses during the
      reporting period. Significant balances and transactions affected by management estimates include the
      valuation of investments, resource properties, deferred exploration costs, future income tax and stock-
      based compensation. Actual results could differ from those estimates.
      The amounts used to estimate fair values of stock options issued are based on estimates of future
      volatility of the Company’s share price, expected lives of the options, expected dividends to be
      paid by the Company and other relevant assumptions.

      By their nature, these estimates are subject to measurement uncertainty and the effect of changes in
      such estimates on the consolidated financial statements of future periods could be significant.
3.5   Foreign currency transactions
      The individual financial statements of each group entity are presented in the currency of the primary
      economic environment in which the entity operates (its functional currency). For the purpose of the
      consolidated financial statements, the results and financial position of each entity are expressed in United
      States Dollars, which is the functional currency of the Company, and the presentation currency for the
      consolidated financial statements.
      Transactions in foreign currencies are recorded at the rate of exchange ruling on the transaction date.
      Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange
                                                      F-8
      ruling at the balance sheet date. Gains and losses arising on translation are credited or charged against
      income.
      The results of operations not reporting in United States Dollars are translated at the average rate of
      exchange during the period as this is considered to be a reasonable approximation of the actual rates during
      the year and the operations balance sheets are translated at exchange rates ruling at the balance sheet date.
      Exchange differences which arise from the translation of the results and balance sheets of foreign
      subsidiary operations are taken to reserves.
3.6   Share based payments
      The Company has adopted IFRS 2 “Share Based Payments” to account for share options granted. For such
      grants of share options, the fair value as at the date of grant is calculated using the Black-Scholes option
      pricing model, taking into account the terms and conditions upon which the options were granted.
      The Company has used historical data to determine volatility in accordance with Black-Scholes modelling,
      however, the future volatility is inherently uncertain and the model has its limitations. While these
      estimates can have a material impact on share based compensation and hence results of operations, there is
      no impact on the Company’s financial condition.
      The factors affecting share based payments include estimates of when stock options might be exercised and
      the stock price volatility. The timing for exercise is out of the Company’s control and will depend, among
      other things, upon a variety of factors including the market value of the Company shares and financial
      objectives of the holders of the options.
3.7   Taxation
      Under the present laws of the British Virgin Islands, there are no applicable taxes on the profits or income
      of the Company. Deferred taxation, is recognised in respect of any timing differences that have originated
      but not reversed at the balance sheet date in the various subsidiary companies. When the future realization
      of income tax assets does not meet the test of being more likely than not to occur, a valuation allowance in
      the amount of the potential future benefit is taken and no net asset is recognised.
4     SEGMENT ANALYSIS
      The Company has not commenced production and therefore recorded no turnover.
      The analysis of the operating loss before taxation and of the net assets employed (total assets less total
      liabilities employed) by geographic segment of operation is shown below:
                                                         F-9


                Operating Loss                                 Net assets employed


                June 30   December   December    December      June 30      December         December   December
                          31         31          31                         31               31         31
                2007      2006       2005        2004          2007         2006             2005       2004


                $’000     $’000      $’000       $’000         $’000        $’000            $’000      $’000


Liberia                                                        1,948        1,241            470        99


Cameroon                                                       1,500        932              -          -


Corporate       (1,021)   (255)      (463)       (31)          7,603        2,037            984        (77)


                (1,021)   (255)      (463)       (31)          11,051       4,210            1,454      22




            5      INTANGIBLE ASSETS
                                       June 30   December 31    December 31          December 31
                                       2007      2006           2005                 2004


                                       $'000     $'000          $'000                $'000


 Resource properties and deferred
 exploration costs


 Opening                               1,974     462            93                   -


 Additions                             1,185     1,512          369                  93




 Closing                               3,159     1,974          462                  93
                                                                 F-10
                 The realisation of these intangible assets is dependent on the development of economic ore reserves and is
                 subject to a number of significant potential risks including:
                      Price fluctuations
                      Uncertainties over development and operational costs
                      Political and legal risks, including arrangements with governments for licences, profit sharing and
                      taxation
                      Funding requirements.



                                                    Period ended          Year ended          Year ended           Year ended
                                                    June 30               December 31         December 31          December 31
                                                    2007                  2006                2005                 2004
                                                    $’000                 $’000               $’000                $’000
Acquisition and deferred exploration costs,
by project


Liberia


  North Bea                                         1,132                 746                 285                  52
  East Kpo                                          783                   497                 177                  41


Cameroon


  Batouri                                           892                   531                 -                    -
  Tchollire II                                      74                    42                  -                    -
  Rey Bouba                                         64                    41                  -                    -
  Djoum III                                         83                    37                  -                    -
 Ntem                                               65                    40                  -                    -
 Akonolinga                                         66                    40                  -                    -


                                                    3,159                 1,974               462                  93


     Resource properties and deferred exploration costs
                 Liberia, West Africa
                 The Company holds two licences or Mineral Exploration Agreements ("MEAs") in northwestern Liberia for
                 gold and associated minerals, namely North Bea and East Kpo. Both licences were originally 400km2 in size
                 and were valid for an initial term of three years to January 31 2008. At that time, both licences were subject
                 to automatic renewal for a further two years and a concomitant reduction in area by 50% to 200km2 under
                 the terms of the MEA.
                                                           F-11
          Both these MEAs were approved on February 27, 2004 and became operational on February 1, 2005. The
          MEAs will allow the Company to work up to the feasibility stage at which time a Mineral Development
          Agreement (“MDA”) can be automatically applied for which permits commercial mining.
          The Company formed a Heads of Agreement (the “Stellar Agreement”) for a joint venture with Stellar
          Diamond Ltd (“Stellar”) a subsidiary of Mano River Resources Inc. on March 23, 2005. The Stellar
          Agreement provides Stellar with the opportunity to earn up to a 78% interest (Government of Liberia FCI
          10%, the Company 12%) in the diamond exploration rights on the North Bea licence over a four year period,
          through completing a four phase exploration program culminating in the completion of a feasibility study
          over one or more diamond bearing kimberlites. The Company has agreed to extend the period of the second
          phase program pending Stellar becoming a public company. African Aura has the option to grant Stellar the
          right to sole fund mine construction in return for a 2.0% gross production royalty and relinquishment of its
          12% interest.
          Cameroon, West Africa
          The Company holds six mineral exploration licences across Cameroon for gold, related minerals, uranium
          and diamonds. These comprise the
                   “Batouri” (1,000km2) licence first granted on April 6, 2006 and modified (enlarged) on April 3,
                   2007;
                   “Djoum III” (998km2) and “Akonolinga” (996km2) licences granted on August 1, 2006;
                   “Rey Bouba” (992km2) licence granted on May 29, 2007;

                   “Tchollire II” (992km2) licence granted on April 24, 2007; and
                   “Ntem” (987km2) licence granted on June 1, 2007.
          These licences are valid for an initial term of three years whereupon a reduction in area of 50% is required.
          The licence period is then extendable for a further four periods of two years each with a concomitant 50%
          reduction in area required at each extension. The permits allow the Company to work up to the feasibility
          stage at which time a mining licence can be automatically applied for which permits commercial mining

          The Company, through its 70% owned Seychelles registered subsidiary, Ridgeway Energy Limited
          (“Ridgeway”), is undertaking uranium exploration with a focus currently on Cameroon. Ridgeway holds
          two exploration permits in Cameroon for uranium, gold, diamonds, related minerals and iron ore. They
          comprise the “Essong” (991km2) licence granted on June 1 2007 and “Bantadje” (482km2) licence granted
          on September 6, 2007.
6          PROPERTY, PLANT AND EQUIPMENT
                                                   Plant and         Motor             Total
                                                   Equipment         Vehicles
                                                   $’000             $’000             $’000
    Cost or valuation


    At January 1 2006                               -                 -                 -
    Additions / (disposals) during period          8                 44                52


    At December 31 2006                            8                 44                52
                                                         F-12


    Accumulated Depreciation


    At January 1 2006                               -                    -              -
    Charged during period                          1                 7                 8


    At December 31 2006                            1                 7                 8


    Net book Value


    At December 31 2006                            7                 37                44




                                                   Plant and         Motor             Total
                                                   Equipment         Vehicles
    Cost or valuation


    At January 1 2007                              8                 44                52
    Additions / (disposals) during period          9                 97                106


    At June 30 2007                                17                141               158


    Accumulated Depreciation


    At January 1 2007                              1                 7                 8
    Charged during period                          1                 24                25


    At June 30 2007                                2                 31                33


    Net book Value


    At June 30 2007                                15                110               125




7       LOSS PER SHARE
           Basic earnings / loss per share (EPS) is computed by dividing the profit or loss for the period available to
           ordinary shareholders by the sum of the weighted average number of ordinary shares in issue and ranking
           for dividend during the period.
                                                            F-13
            The diluted loss per share reflects the potential dilution by including other common share equivalents, such
            as outstanding share options and share warrants, in the weighted average number of common shares
            outstanding during the year.
        Loss per share
                                                  June 30          December 31        December 31          December 31
                                                  2007             2006               2005                 2004


                                                  $’000            $’000              $’000                $’000


Numerator


Numerator for EPS - loss                          (1,021)          (255)              (463)                (31)




                                                  $’000            $’000              $’000                $’000
Denominator


Denominator for basic EPS (No. of shares)         31,759           23,194             11,734               50


Basic EPS                                         (3.21)c          (1.10)c            (3.95)c              (62.00)c




                                                  $’000            $’000              $’000                $’000
Denominator


Denominator for diluted EPS (No. of shares)       36,591           26,419             12,513               50


Diluted EPS                                       (3.21)c          (1.10)c            (3.95)c              (62.00)c
                                                              F-14
    8        INVESTMENTS
             The principal subsidiaries of the Company are as follows:



Name of company                                 Nature of            Country of         Date of                    Percentage
                                                business             incorporation      incorporation              owned




African Aura Resources (LIB) Limited            Holding Co.          Seychelles         February 10, 2006          100%
African Aura Resources (Liberia) Limited*       Licence Holder       Liberia            January 18, 2005           100%


African Aura Resources (CAM) Limited            Holding Co.          Seychelles         February 10, 2006          100%
African Aura Resources (Cameroon) SARL *        Licence Holder       Cameroon           May 22, 2006               100%
Caminex SARL *                                  Licence Holder       Cameroon           May 16, 2006               100%
Caminur SARL *                                  Inactive             Cameroon           May 18, 2006               100%


African Aura Resources (CAR) Limited            Holding Co           Seychelles         February 10, 2006          100%
African Aura     Resources    (Centrafrique)                         Central African
SURL *                                          Inactive             Republic           June 13, 2006              100%


                                                Service              United
African Aura Resources (UK) Limited             Company              Kingdom            September 22, 2006         100%


African Aura Resources (ZIM) SARL               Holding Co.          Seychelles         September 28, 2006         100%


Ridgeway Energy Limited                         Holding Co.          Seychelles         May 14, 2006               70%
Ridgeway Energy Cameroon SARL *                 Licence Holder       Cameroon           May 14, 2006               70%


    * Indirect
    9        TAXATION
             No liability to corporation tax arose on ordinary activities for the period ended June 30 2007 or for the prior
             years.
             The Company has tax losses in Liberia, Cameroon and United Kingdom that, under certain circumstances,
             may be carried forward to offset future taxable income as follows:


                   Period              Tax Loss        Rate of Tax
                                       $ '000


                   June 30 2007        135             30%
                                                     F-15
       The future income tax asset has not been recognised as recovery is not foreseeable until the Company puts
       one of its properties into production.
10     OTHER RECEIVABLES


                                    June 30          December 31        December 31        December 31
                                    2007             2006               2005               2004


                                    $'000            $'000              $'000              $'000


Other      receivables        and
prepayments                         284              184                113                2




11     OTHER PAYABLES


                                    June 30          December 31        December 31        December 31
                                    2007             2006               2005               2004


                                    $'000            $'000              $'000              $'000


Other payables and accruals         63               119                12                 77




12     SHARE CAPITAL
                                                                   Number         Total value


Authorised                                                                '000    $ ‘000


As at December 31 2004                                             50             50




On March 31 2005, the authorised share capital was
changed from $ 50,000 (50,000 shares of $ 1.00 each) to
$ 9,500,000 (£ 5,000,000) - divided into 500,000,000 shares
of $ 0.019 (£ 0.01 each)


As at December 31 2005 and December 31 2006                        500,000        9,500
                                                       F-16



On June 1 2007, the authorised share capital was
changed from £ 5,000,000 (divided into 500,000,000 shares of £
0.01 each) to Canadian $ 5,000,000 (divided into 500,000,000
shares of C$ 0.01 each)


As at June 30 2007                                               500,000        5,000




Issued and fully paid                                                           $’ 000


Issued during the year ended December 31 2004                    50             50




Shares as at December 31 2004 converted to shares of
nominal value £ 0.01 each                                        2,500          48


Issued during the year ended December 31 2005                    18,836         347




As at December 31 2005                                           21,336         395


Issued during the year ended December 31 2006                    10,566         197
Cancelled during the year ended December 31 2006                 (85)           (2)




As at December 31 2006                                           31,817         590


Issued during the period ended June 30 2007                      539            11
Cancelled during the year ended June 30 2007                     (436)          (9)




As at June 30 2007                                               31,920         592




12.1   During the year ended December 31 2004 the Company issued 50,000 shares at $ 1.00 each for $ 50,000 to
       founders.
                                                     F-17
12.2   During the year ended December 31 2005 the Company issued 18,836,216 shares as follows:
               7,500,000 shares for $141,900 to the founders in April 2005.
               3,540,000 shares for $335,346 pursuant to a private placement in June 2005.
               250,000 shares to a founder for $21,748 for BRGM data set for Cameroon in June 2005.
               1,000,000 shares to a founder for $86,990 for ownership in a Joint Venture with Romanones Reed
               Company in Equatorial Guinea in June 2005.
               5,470,000 shares for $964,386 pursuant to a private placement in October 2005. A further
               350,000 shares were issued in 2006 when proceeds were received.
               900,000 shares to Exploration Capital Ltd. in lieu of fees to a director (included in related party
               transactions).
               176,216 shares to directors in lieu of compensation (included in related party transactions).
12.3   During the year ended December 31 2006 the Company issued 10,566,100 shares as follows:
               350,000 shares for $62,223 pursuant to a private placement in October 2005 as the proceeds were
               actually received in January 2006.
               3,314,830 shares for gross proceeds of $806,375 were issued pursuant to a private placement.
               3,651,736 shares for gross proceeds of $1,217.421 were issued pursuant to a private placement.
               676,316 for $46,593 for exercise of shares stock options.
               333,333 shares valued at $89,999.91 ($0.27 per share) to a vendor for consultancy services. In
               addition the same vendor purchased 669,060 shares for $180,646.20 ($0.27 per share) each issued
               simultaneously for cash.
               319,375 shares to directors in lieu of compensation (included in related party transactions).
               1,251,450 shares for $217,727 as Finders Fee pursuant to a Finder’s Fee agreement with SIQUED
               Geostrategies Ltd dated April 1, 2006 in respect of their work completed on the Batouri gold
               occurrence in Cameroon. The Agreement detailed payments totalling 1,251,450 shares in African
               Aura. Thereafter, African Aura had the right to buy back a portion of these shares as follows:
               1.   For the first year after signing of the Agreement to purchase 350,000 shares at a price of
                    US$0.19 (GBP 0.10) per share.
               2.   On October 1, 2006, 85,725 shares for a consideration of US$15,000.
               3.   On March 1, 2007, 85,725 shares for a consideration of US$15,000.
               4.   On October 1, 2007, 315,000 shares for a consideration of US$55,000.
               5.   On October 1, 2008, 315,000 shares for a consideration of US$55,000
               The Agreement contains a provision that if African Aura elects to discontinue work on the Batouri
               licence at any time prior to the final buy back, SIQUED Geostrategies Ltd has agreed to sell the
               remaining shares that are subject to buy back to African Aura at a price of GBP 0.05 per share.
               The buyback options listed in paragraphs 1 to 4 above were exercised and African Aura acquired a
               total of 836,450 shares which were subsequently cancelled.
12.4   During the period ended June 30, 2007 the Company issued 539,604 shares as follows:
                323,568 shares for $107,871 pursuant to a private placement in December 2006 as the proceeds
                were actually received in January 2007.
                33,333 shares were issued for $8,992 to a director in lieu of commission for arranging the private
                placement of 3,314,830 shares in 2006.
                51,221 shares were issued for $17,401 to a director in lieu of commission for arranging the
                private placement of 3,651,736 shares in 2006.
                                                    F-18
            65,305 shares were issued to directors in lieu of compensation (included in related party
            transactions)
            66,177 shares were issued to staff in lieu of bonus.
13   SHARE WARRANTS
            The Company issued 16,605,388 Special Warrants at C$0.45 each for a private placement for
            gross proceeds of £3,526,163 ($7,018,854) in June 2007. This is a part of the total issue of
            21,121,062 Special Warrants at a price of C$0.45 per share with each Special Warrant being
            exchangeable at no additional cost into one common share in the capital of the Company and one
            half of one Purchase Warrant, each whole Purchase Warrant entitling the holder to purchase one
            Common Share at C$0.60 for a period of 18 months from the day on which, through an initial
            public offering by Prospectus, a reverse takeover transaction with a listed company, or other going
            public transaction, the Common Shares of the Company or a successor are listed for trading on the
            Toronto Stock Exchange or the TSX Venture Exchange by Canadian securities regulators.
            The balance of 4,515,674 Special Warrants for proceeds of $1,921,000 were issued in July 2007.
14   OPTIONS
            The Company has a stock option plan under which directors, officers, consultants and employees
            are eligible to receive stock options. The Board of Directors determines the terms and
            provisions of the options at the time of grant. Options under the plan generally have a term of
            ten years and are vested at the date of grant.
            The following share options were exercised during the financial year ended December 31, 2006:


      Issue Date              Option      Number            Exercise               Share price
                              Price       Exercised         Date                   at exercise date
                              $                                                    $


      October 1, 2004          0.04       131,579           September 1, 2006       0.29
      October 1, 2004          0.05       131,579           September 1, 2006       0.29
      October 1, 2004          0.05       131,579           September 1, 2006       0.29
      October 1, 2004          0.06       131,579           September 1, 2006       0.29
      June 1, 2005            0.09        100,000           November 1, 2006       0.29
      December 1, 2005        0.17        50,000            November 1, 2006       0.29


                                          676,316


            The total number of options over ordinary shares outstanding at June 30, 2007, (including those
            held by directors) was 5,125,000 (December 31, 2006: 3,225,000 and December 31, 2005:
            3,901,316). These options are exercisable as follows:


                                                                                   Price      Price
        Number                    Issue Date               Expiry Date             GBP/C$     US$
        1,025,000 *               June 1, 2005             June 1, 2015            £0.05      0.10
        1,250,000                 December 1, 2005         December 1, 2015        £0.10      0.20
        650,000                   December 1, 2005         December 1, 2015        £0.15      0.30
                                                F-19
     300,000                  December 1, 2005         December 1, 2015       £0.20       0.40
     400,000                  January 1, 2007          January 1, 2017        £0.17       0.34
     1,500,000                June 28, 2007            June 28, 2017          C$0.45      0.44


     5,125,000
         * 100,000 options were exercised in September 2007 by a Director.
The weighted average exercise price per share at June 30, 2007 was $0.29 and the total stock-based
compensation for June 2007 was $709,000 (December 2006 - $0; December 2005 - $363,000; December
2004 - $10,000). The fair value of the options to be expensed had been determined using the Black Scholes
option pricing model with the following assumptions: no dividends were paid, using a volatility factor for
six months to June 2007 of 88.28% (December 2006 - 76.07%; December 2005 – 58.5%; December 2004
58.5%); weighted average annual risk free rate of 5.00% (December 2006 – 5.00%; December 2005 –
5.00%; December 2004 – 5%) and an option life of 10 years.
Expected volatility has been calculated using the daily average of the price of the Company’s shares using
the latest placement price which have been negotiated on an arm’s length basis and compared with other
publicly traded, junior Canadian and UK mining companies known to Management.
                                                                            F-20
                        Details of the share options outstanding are as follows:
                                             June 30,                December                    December                  December 31,
                                               2007                  31, 2006                    31, 2005                     2004
                                        Weighted                    Weighted                   Weighted                    Weighted
                         Number         average         Number      average        Number      average        Number       average
                         of share       exercise        of share    exercise       of share    exercise       of share     exercise
                         options        price           options     price          options     price          options      price
                                        US$                         US$                          US$                       US$


Outstanding at the
beginning of the year    3,225,000      0.18            3,901,316   0.16           526,316       0.05
   Granted    during
the year                 1,900,000      0.43                                       3,375,000   0.18           526,316      0.05
   Exercised during
the year                                                (676,316)   0.07
   Expired    during
the year
Outstanding at the
end of the year          5,125,000      0.29            3,225,000   0.18           3,901,316   0.16           526,316      0.05


Exercisable at the
end of the year          5,125,000                      3,225,000                  3,901,316                  526,316


             15         FOREIGN CURRENCY AND INTEREST RATE RISKS AND EXPOSURES
                        Currency rate risk
                        Loans between companies which are members of the Group are made in the operating currency of the
                        lending company. In all other respects, the policy for all group companies is that they only trade in their
                        operating currency.
                        The Group’s expenses in Cameroon are incurred in Communauté Financière Africaine Franc (CFA). Any
                        weakening in the CFA would result in a reduction in expenses in United States Dollar terms, which would
                        be to the group’s advantage. There is an equivalent downside risk to the Group if the CFA strengthened,
                        which in turn would increase Cameroon’s operating expenses in United States Dollar terms.
                        The Group’s expenses in Liberia are incurred in United States Dollars.
                        Currency exposures
                        As at June 30, 2007, the Company held approximately $7,522,000 cash in bank accounts denominated in
                        U.K. pounds (December 31, 2006: $2,015,000 and December 31, 2005: $886,000). The Company has taken
                        no action to reduce its exposure to foreign currency risk.
                        Interest rate risk
                        The Group has no external borrowings and is therefore not subject to interest rate risk.
                                                        F-21
16     RELATED PARTY TRANSACTIONS
       The following table summarises the Company’s related party transactions for the year:
                                 June 30           December 31         December 31          December 31
                                 2007              2006                2005                 2004
                                 $’000             $’000               $’000                $’000


Directors compensation *         238               238                 120                  11
Commission                       -                 26                  -                    -


                                 238               264                 120                  11


      * $74,150 (2006: $70,104 and 2005: $40,280) has been capitalised as Intangible Assets. There is a
      provision in the mineral exploration licences with the governments of Cameroon and Liberia that permits a
      proportion of management costs to be set off against the work commitments within each country.
      Accordingly a third of the salary of the Chief Executive Officer and Chief Operating Officer has been
      assigned to each of Cameroon and Liberia, representing the proportion of the management time expended
      for these projects.
      Directors compensation and commission include shares issued in lieu of compensation – 65,305 shares:
      June 30, 2007, 403,929 shares: December 31, 2006 and 1,076,216 shares: December 31, 2005.
       These transactions are in the normal course of operations and are measured at the exchange amount, which
       is the amount of consideration established and agreed to by the related parties.
17     SUBSEQUENT EVENTS
       On March 24, the Company entered into an agreement in relation to a proposed initial public offering
       ("IPO") of 14,405,304 units at a price of C$0.55 per unit. Each unit is comprised of one common share of
       the Company and one-half of one common share purchase warrant. Each whole warrant entitles the holder
       to purchase one common share of the Company for a period of 24 months from the date of closing of the
       IPO at a price of C$0.80.
18     RECONCILIATION OF IFRS WITH GAAP
       Canadian GAAP Standards
       In 2005, the CICA approved the following Handbook Sections: 1530, Comprehensive Income, 3855,
       Financial Instruments – Recognition and Measurement, 3865, Hedges and 3251, Equity. These standards
       are effective for the Company beginning January 1 2007.
       The following provides further information on each of the new accounting standards as they relate to the
       Company.
       Comprehensive Income
       Other comprehensive income will be included as a separate component of the shareholders’ equity on the
       balance sheets. The major components that will be included in this category include unrealized gains and
       losses on financial assets classified as available-for-sale, unrealized foreign currency translation amounts,
       net of hedging, and changes in the fair value of the effective portion of cash flow hedging instruments.
       These amounts will be recorded in the statement of other comprehensive income until the criteria for
       recognition in the statement of income are met. Handbook section 3251 establishes standards for the
       presentation of equity and changes in equity during the reporting period. It specifies that an entity should
       separately present the following components of equity: retained earnings, accumulated other
       comprehensive income, contributed surplus, share capital and reserves.
                                                F-22
Financial Instruments – Recognition and Measurement
Under the new standard, for accounting purposes, financial assets will be classified as one of the following:
held-to-maturity, loans and receivables, trading or available-for-sale, and financial liabilities will be
classified as held-for-trading or other than held-for-trading. Financial assets and liabilities classified as
held-for-trading will be measured at fair value with gains and losses recognized in net income. Financial
assets held-to-maturity, loans and receivables and financial liabilities other than those held-for-trading, will
be measured at amortized cost.
Available-for-sale instruments will be measured at fair value with unrealized gains and losses recognized in
other comprehensive income. The standard permits an entity to designate any financial instrument, upon
initial recognition, as held-for-trading. All derivatives, including embedded derivatives that must be
separately accounted for, generally must be classified as held for trading and recorded at fair value in the
balance sheets.
Hedges
This new standard specifies the criteria under which hedge accounting can be applied and how hedge
accounting is to be executed for each of the permitted hedging strategies: fair value hedges, cash flow
hedges and hedges of a foreign currency exposure of a net investment in a self-sustaining foreign operation.
Non-monetary transactions
In June 2005, the CICA issued Handbook Section 3831, Non-Monetary Transactions, replacing Section
3830 of the same title. The new accounting standard requires all non-monetary transactions be measured at
fair value unless certain conditions are satisfied. The new requirements are effective for non-monetary
transactions initiated in periods beginning on or after January 1 2006.
The adoption of these principles effective January 1 2007 did not have any material impact on these
financial statements.
                                                     F-23


AFRICAN AURA RESOURCES LIMITED (BVI)


Consolidated Interim Income Statement
Unaudited
For the

                                                     Unaudited     Unaudited     Unaudited     Unaudited
                                                     3 months      3 months      6 months      6 months
                                                     ended         ended         ended         ended
                                                     December 31   December 31   December 31   December 31
                                                     2007          2006          2007          2006
(Stated in US dollars)

                                             Notes   $’000         $’000         $’000         $’000

General and administration expenses
        Administrative and office expenses           114           43            189           53
        Travel and subsistence                       28            4             59            7
        Wages and salaries                           85            -             121           -
        Directors fees and salaries                  67            59            130           104
        Foreign exchange (gain) loss                 2             4             (52)          8
Share based compensation                              -             -             -             -

Operating loss

  Continuing activities                              (296)         (110)         (447)         (172)

Interest income                                      96            11            134           24

LOSS                                         4       (200)         (99)          (313)         (148)


Basic and diluted loss per share             6       (0.63)c       (0.36)c       (0.98)c       (0.53)c
                                          F-24


AFRICAN AURA RESOURCES LIMITED (BVI)

Consolidated Interim Balance Sheet
As at
                                                        Unaudited    Audited
                                                      December 31    June 30
                                                            2007       2007
(Stated in US dollars)

                                            Notes           $'000      $'000
FIXED ASSETS
   Intangible assets                             5          5,005      3,159
   Tangible assets                                            196        125
                                                            5,201      3,284

CURRENT ASSETS
   Other Debtors                                 9            371        284
   Cash and bank                                            7,192      7,546
                                                            7,563      7,830

TOTAL ASSETS                                               12,764     11,114

EQUITY AND LIABILITIES

CAPITAL & RESERVES
   Called-up share capital                       11            591        592
   Share warrants                                12          8,940      7,019
   Share premium account                                     3,716      3,697
   Share-based payments                                      1,052      1,059
   Foreign currency translation reserve                        420        378
   Profit and loss account - deficit                       (2,007)    (1,694)
TOTAL EQUITY                                                12,712     11,051

CURRENT LIABILITIES
   Other creditors                               10            52         63
TOTAL LIABILITIES                                              52         63

TOTAL EQUITY AND LIABILITIES                               12,764     11,114
                                                        F-25



AFRICAN AURA RESOURCES LIMITED (BVI)


Consolidated Interim Statement of Changes in Equity
Unaudited
(Stated in US dollars)                                                          Foreign
                                                                     Share      currency      Retained
                                      Share     Share      Share     based      translation   earnings
                                      capital   warrants   premium   payments   reserve       (deficit)   Total
                                      $’000     $’000      $’000     $’000      $’000         $’000       $’000

At June 30 2006                       485       -          2,258     373        58            (558)       2,616

Share issue under share option plan   13        -          34        -          -             -           47
Share Issue                           94        -          1,454     -          -             -           1,548
Buy-back of ordinary shares           (2)       -          (14)      -          -             -           (16)
Share issue Expenses                  -         -          (16)      -          -             -           (16)
Share based payment                   -         -          23        (23)       -             -           -
Foreign currency translation          -         -          -         -          179           -           179
Loss for the period                   -         -          -         -          -             (148)       (148)

At December 31 2006                   590       -          3,739     350        237           (706)       4,210



At June 30 2007                       592       7,019      3,697     1,059      378           (1,694)     11,051

Share issue under share option plan   3         -          8         -          -             -           11
Share Issue                           2         -          53        -          -             -           55
Share Warrants                        -         1,921      -         -          -             -           1,921
Buy-back of ordinary shares           (6)       -          (49)      -          -             -           (55)
Share based payment                   -         -          7         (7)        -             -           -
Foreign currency translation          -         -          -         -          42            -           42
Loss for the period                   -         -          -         -          -             (313)       (313)

At December 31 2007                   591       8,940      3,716     1,052      420           (2,007)     12,712
                                                          F-26



AFRICAN AURA RESOURCES LIMITED (BVI)


Consolidated Interim Cash Flow Statement
Unaudited
For the six months ended

                                                                         Unaudited     Unaudited
(Stated in US dollars)                                                   December 31   December 31
                                                                         2007          2006

                                                                 Notes   $’000         $’000

Net Cash Inflow / (Outflow) from operating activities                    (447)         (172)

Items not involving cash
     Stock-based compensation
     Currency translation adjustment                                     42            179
Increase / (Decrease) in non-cash working capital items
     Amounts receivable                                                  (86)          352
     Accounts payable                                                    (11)          63
Net cash flow from operating activities                                  (502)         422

Investing Activities
  Interest Income                                                        134           24
  Property, plant and equipment                                          (70)          (44)
  Intangible assets                                                      (1,846)       (1,208)

Net Cash outflow from capital investment and
financial investment                                                     (1,782)       (1,228)

Net Cash Outflow before use of liquid resources
and financing                                                            (2,284)       (806)

Financing

Share Capital issued for cash                                            1,930         1,563
Cost of issue of share capital
Net Cash Flow from financing                                             1,930         1,563

Net Increase/(decrease) in cash and cash equivalents                     (354)         757


Cash or cash equivalents at the beginning of the period                  7,546         1,370

Cash or cash equivalents at the end of the period                        7,192         2,127

Net Increase/(decrease) in cash and cash equivalents                     (354)         757
                                                            F-27




AFRICAN AURA RESOURCES LIMITED BVI
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Unaudited
For the six months ended December 31 2007 (Stated in US dollars)

1        NATURE OF OPERATIONS
          The Company, which commenced operations on February 4 2004, is engaged in the acquisition,
          exploration and development of gold, uranium, iron ore and diamond properties in Africa. The
          Company is in the exploration stage and has no source of cash flows other than loans and equity
          offerings.
          These consolidated financial statements are prepared on a going concern basis which assumes that the
          Company will be able to realize assets and discharge liabilities in the normal course of business. The
          Company's ability to continue on a going concern basis depends on its ability to successfully raise additional
          financing. If the Company cannot obtain additional financing the Company may be forced to realize its
          assets at amounts significantly lower than the current carrying value.
2             BASIS OF PRESENTATION
2.1           The interim financial statements for the six months ended December 31 2007 have been prepared in
              accordance with IAS 34 ‘interim financial reporting’. The interim financial report should be read in
              conjunction with the annual financial statements for the period ended June 30 2007 when the Company
              changed its year end from December 31.
2.2           Functional Currency
              The United States Dollar has been identified as the Company’s currency of measurement and is used for
              external reporting purposes.
3             ACCOUNTING POLICIES
              The accounting policies adopted are consistent with those of the annual financial statements for
              the period ended June 30 2007 and the year ended December 31 2006, as described in the
              financial statements for the respective period ended June 30 2007 and year ended December 31
              2006.
4             SEGMENT ANALYSIS
              The Company has not commenced production and therefore recorded no turnover.
              The analysis of the operating loss before taxation and of the net assets employed (total assets less total
              liabilities employed) by geographic segment of operation is shown below:


                                        Operating Loss                                Net assets employed
                                    Unaudited          Unaudited
                                   6 months to        6 months to                  Unaudited                  Audited
                                  December 31       December 31                  December 31                  June 30
                                         2007               2006                       2007                     2007

                                          $'000                 $'000                     $'000                  $'000

    Liberia                                                                               2,564                  1,948
                                                           F-28
    Cameroon                                                                            2,960                 1,500

    Corporate                           (447)                 (172)                     7,188                 7,603

                                        (447)                 (172)                    12,712               11,051




5          INTANGIBLE ASSETS
Resource properties and deferred exploration costs
                                                                  Audited     Unaudited         Unaudited
                                                                  As at       Additions         As at
                                                                  July 1      during the        December 31
                                                                  2007        period            2007
                                                                  $'000       $'000             $'000
    Acquisition & deferred exploration costs, by project
     Liberia
      North Bea                                                   1,132       391               1,523
      East Kpo                                                    783         202               985


     Cameroon


      Batouri                                                     892         769               1,661
      Tchollire II                                                74          84                158
      Rey Bouba                                                   64          81                145
      Djoum III                                                   83          94                177
      Ntem                                                        65          77                142
      Akonolinga                                                  66          79                145
     Essong                                                       -           50                50
     Bantadje                                                     -           19                19


                                                                  3,159       1,846             5,005


                                                                  Unaudited   Unaudited         Audited
                                                                  As at       Additions         As at
                                                                  July 1      during the        December 31
                                                                  2006        period            2006
                                                                  $'000       $'000             $'000
    Acquisition & deferred exploration costs, by project
     Liberia
                                                            F-29


    North Bea                                                      460            286              746
    East Kpo                                                       306            191              497


     Cameroon


    Batouri                                                                       531              531
    Tchollire II                                                                  42               42
    Rey Bouba                                                                     41               41
    Djoum III                                                                     37               37
    Ntem                                                                          40               40
    Akonolinga                                                                    40               40


                                                                   766            1,208            1,974
           The realisation of these intangible assets is dependent on the development of economic ore reserves and is
           subject to a number of significant potential risks including:
                   Price fluctuations
                   Uncertainties over development and operational costs
                   Political and legal risks, including arrangements with governments for licences, profit sharing and
                   taxation
                   Funding requirements.
6       LOSS PER SHARE
              Basic earnings / loss per share (EPS) is computed by dividing the profit or loss for the period available to
              ordinary shareholders by the sum of the weighted average number of ordinary shares in issue and ranking
              for dividend during the period.
              The diluted loss per share reflects the potential dilution by including other common share equivalents, such
              as outstanding share options and share warrants, in the weighted average number of common shares
              outstanding during the period.
                                                        F-30



Loss per share
                                            Unaudited          Unaudited      Unaudited        Unaudited
                                            3     months       3     months
                                            ended              ended          6 months ended   6 months ended
                                            December 31        December 31    December 31      December 31
                                            2007               2006           2007             2006
                                            $'000              $'000          $'000            $'000


Numerator


Numerator for EPS - loss                    (200)              (99)           (313)            (148)


Denominator


Denominator for basic EPS (No. of shares)   31,843             27,702         31,908           27,670


Basic EPS                                   (0.63)c            (0.36)c        (0.98)c          (0.53)c
                                                                 F-31
    7        INVESTMENTS
             The principal subsidiaries of the Company are as follows:



Name of company                                    Nature of            Country of        Date of                  Percentage
                                                   business             incorporation     incorporation            owned




African Aura Resources (LIB) Limited               Holding Co.          Seychelles        February 10, 2006        100%
African Aura Resources (Liberia) Limited *         Licence Holder       Liberia           January 18, 2005         100%


Africa Aura Resources (CAM) Limited                Holding Co.          Seychelles        February 10, 2006        100%
African Aura Resources Cameroon SARL *             Licence Holder       Cameroon          May 22, 2006             100%
Caminex SARL *                                     Licence Holder       Cameroon          May 16, 2006             100%
Caminur SARL *                                     Inactive             Cameroon          May 18, 2006             100%


African Aura Resources (CAR) Limited               Holding Co.          Seychelles        February 10, 2006        100%
African Aura     Resources    (Centrafrique)                            Central African
SURL *                                             Inactive             Republic          June 13, 2006            100%


                                                   Service              United
African Aura Resources (UK) Limited                Company              Kingdom           September 22, 2006       100%
African Aura Resources (ZIM) SARL                  Holding co.          Seychelles        September 28, 2006       100%


Ridgeway Energy Ltd                                Holding Co.          Seychelles        May 14, 2006             70%
Ridgeway Energy Cameroon SARL *                    Licence Holder       Cameroon          May 14, 2006             70%
    * Indirect
    8        TAXATION
             No liability to corporation tax arose on ordinary activities for the period ended December 30 2007.
             The Company has tax losses in Liberia, Cameroon and United Kingdom that, under certain circumstances,
             may be carried forward to offset future taxable income as follows:


                   Period                    Unaudited
                                                              Rate      of
                                             Tax Loss         Tax
                                             $'000
                   6 Months ended
                   December 31 2007          240              30%


             The future income tax asset has not been recognised as recovery is not foreseeable until the Company puts
             one of its properties into production.
                                                           F-32
9           OTHER RECEIVABLES

                                                         Unaudited                  Audited
                                                       December 31                  June 30
                                                             2007                     2007

                                                              $'000                      $'000

Other receivables and prepayments                                 371                     284




10          OTHER PAYABLES

                                                         Unaudited                  Audited
                                                       December 31                  June 30
                                                             2007                     2007

                                                              $'000                      $'000

Other payables and accruals                                        52                      63




11          SHARE CAPITAL
    Unaudited                                      Number of            Share     Share
                                                   shares               capital   Premium
                                                   $'000                $'000     $'000


    At July 1 2006                                 26,385               485       2,258


    Shares issued to directors in lieu
    of compensation                                187                  4         49
    Buy-back of shares                             (86)                 (2)       (14)
    Proceeds from shares issued under
    share option scheme                            676                  13        34
    Proceeds from shares issued                    4,321                84        1,302
    Share-based payment                            -                    -         23
    Shares issued in lieu of consultancy service   333                  6         87


    At December 2006                               31,816               590       3,739




    At July 1 2007                                 31,921               592       3,697
                                                         F-33
 Shares issued to directors in lieu
 of compensation                                 130              3              53
 Proceeds from shares issued under
 share option scheme                             100              2              8
 Share-based payments                            -                -              7
 Buy-back shares                                 (315)            (6)            (49)


 At December 31 2007                             31,836           591            3,716




12       SHARE WARRANTS


         The Company issued 21,121,062 Special Warrants at a price of C$0.45 per share with each Special Warrant
         being exchangeable at no additional cost into one common share in the capital of the Company and one half
         of one Purchase Warrant, each whole Purchase Warrant entitling the holder to purchase one Common
         Share at C$0.60 for a period of 18 months from the day on which, through an initial public offering by
         Prospectus, a reverse takeover transaction with a listed company, or other going public transaction, the
         Common Shares of the Company or a successor are listed for trading on the Toronto Stock Exchange or the
         TSX Venture Exchange by Canadian securities regulators.
         Out of the above, 4,515,674 Special Warrants were issued in July 2007 for $1,921,000.
13       OPTIONS
                   The total number of options over ordinary shares outstanding at December 31 2007, (including
                   those held by directors) was 5,025,000 (June 30, 2007: 5,125,000). These options are exercisable
                   as follows:
              Unaudited
                                                                                         Price     Price
              Number                   Issue Date               Expiry Date              GBP/C$    US$
              925,000                  June 1 2005              June 1 2015              £0.05     0.10
              1,250,000                December 1 2005          December 1 2015          £0.10     0.20
              650,000                  December 1 2005          December 1 2015          £0.15     0.30
              300,000                  December 1 2005          December 1 2015          £0.20     0.40
              400,000                  January 1 2007           January 1 2017           £0.17     0.34
              1,500,000                June 28 2007             June 28 2017             C$0.45    0.44


              5,025,000


        The weighted average exercise price per share at December 31 2007 was $0.29 (June 30, 2007 $0.29).
                                                         F-34
        Details of the share options outstanding are as follows:
                                                                  Unaudited                        Audited
                                                                December 31                        June 30
                                                                       2007                           2007
                                                                   Weighted                       Weighted
                                               Number               average        Number          average
                                               of share             exercise       of share        exercise
                                               options                 price       options            price
                                                                       US $                           US $

 Outstanding at the beginning of the
 period                                      5,125,000                  0.29     3,225,000             0.18
 Granted during the period                           -                     -     1,900,000             0.43
 Exercised during the period                 (100,000)                  0.10              -               -
 Expired during the period
 Outstanding at the end of the period        5,025,000                  0.29     5,125,000             0.29

 Exercisable at the end of the period        5,025,000                           5,125,000



14      RELATED PARTY TRANSACTIONS
        The following table summarises the Company’s related party transactions for the period:
                                                 Unaudited               Unaudited
                                                 December 31             December 31
                                                 2007                    2006
                                                 $’000                   $’000


               Directors compensation *          212                     147
               Commission                        -                       17


                                                 212                     164


        * $ 81,000 (September 2006: $ 43,000) has been capitalised as Intangible Assets. There is a provision in the
        mineral exploration licences with the governments of Cameroon and Liberia that permits a fair proportion
        of management costs to be set off against the work commitments within each country. Accordingly a third
        of the salary of the Chief Executive Officer and Chief Operating Officer has been assigned to Cameroon
        and Liberia, representing the proportion of the management time expended for these projects.
        These transactions are in the normal course of operations and are measured at the exchange amount, which
        is the amount of consideration established and agreed to by the related parties.
15      SUBSEQUENT EVENTS
        On March 24, the Company entered into an agreement in relation to a proposed initial public offering
        ("IPO") of 14,405,304 units at a price of C$0.55 per unit. Each unit is comprised of one common share of
        the Company and one-half of one common share purchase warrant. Each whole warrant entitles the holder
        to purchase one common share of the Company for a period of 24 months from the date of closing of the
        IPO at a price of C$0.80.
        On November 16 2007, the Company filed the preliminary Prospectus.
                                                     F-35



16   RECONCILIATION OF IFRS WITH GAAP
     Canadian GAAP Standards
     In 2005, the CICA approved the following Handbook Sections: 1530, Comprehensive Income, 3855,
     Financial Instruments – Recognition and Measurement, 3865, Hedges and 3251, Equity. These standards
     are effective for the Company beginning January 1 2007.
     The following provides further information on each of the new accounting standards as they relate to the
     Company.
     Comprehensive Income
     Other comprehensive income will be included as a separate component of the shareholders’ equity on the
     balance sheets. The major components that will be included in this category include unrealized gains and
     losses on financial assets classified as available-for-sale, unrealized foreign currency translation amounts,
     net of hedging, and changes in the fair value of the effective portion of cash flow hedging instruments.
     These amounts will be recorded in the statement of other comprehensive income until the criteria for
     recognition in the statement of income are met. Handbook section 3251 establishes standards for the
     presentation of equity and changes in equity during the reporting period. It specifies that an entity should
     separately present the following components of equity: retained earnings, accumulated other
     comprehensive income, contributed surplus, share capital and reserves.
     Financial Instruments – Recognition and Measurement
     Under the new standard, for accounting purposes, financial assets will be classified as one of the following:
     held-to-maturity, loans and receivables, trading or available-for-sale, and financial liabilities will be
     classified as held-for-trading or other than held-for-trading. Financial assets and liabilities classified as
     held-for-trading will be measured at fair value with gains and losses recognized in net income. Financial
     assets held-to-maturity, loans and receivables and financial liabilities other than those held-for-trading, will
     be measured at amortized cost.
     Available-for-sale instruments will be measured at fair value with unrealized gains and losses recognized in
     other comprehensive income. The standard permits an entity to designate any financial instrument, upon
     initial recognition, as held-for-trading. All derivatives, including embedded derivatives that must be
     separately accounted for, generally must be classified as held for trading and recorded at fair value in the
     balance sheets.
     Hedges
     This new standard specifies the criteria under which hedge accounting can be applied and how hedge
     accounting is to be executed for each of the permitted hedging strategies: fair value hedges, cash flow
     hedges and hedges of a foreign currency exposure of a net investment in a self-sustaining foreign operation.
     Non-monetary transactions
     In June 2005, the CICA issued Handbook Section 3831, Non-Monetary Transactions, replacing Section
     3830 of the same title. The new accounting standard requires all non-monetary transactions be measured at
     fair value unless certain conditions are satisfied. The new requirements are effective for non-monetary
     transactions initiated in periods beginning on or after January 1 2006.
     The adoption of these principles effective January 1 2007 did not have any material impact on these
     financial statements.
                                                   C-1




                                  CERTIFICATE OF THE COMPANY

Dated: March 24, 2008

The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities
offered by this Prospectus as required by Part 9 of the Securities Act (British Columbia), by Part 9 of the
Securities Act (Alberta), by Part VII of The Securities Act (Manitoba), by Part XV of the Securities Act
(Ontario), and by Section 63 of the Securities Act (Nova Scotia) and the respective regulations thereunder.



      (signed) “John Gray”                             (signed) “Maz Mannan”
      Chief Executive Officer                          Chief Financial Officer


                                   On behalf of the Board of Directors


      (signed) “Danesh Varma”                          (signed) “Matthew Grainger”
      Director                                         Director



                                CERTIFICATE OF THE PROMOTER

Dated: March 24, 2008

The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities
offered by this Prospectus as required by Part 9 of the Securities Act (British Columbia), by Part 9 of the
Securities Act (Alberta), by Part VII of The Securities Act (Manitoba), by Part XV of the Securities Act
(Ontario), and by Section 63 of the Securities Act (Nova Scotia) and the respective regulations thereunder.



      (signed) “Steven Poulton”
                                                    C-2


                                 CERTIFICATE OF THE AGENTS

Dated: March 24, 2008

To the best of our knowledge, information and belief, the foregoing constitutes full, true and plain
disclosure of all material facts relating to the securities offered by this Prospectus as required by Part 9
of the Securities Act (British Columbia), by Part 9 of the Securities Act (Alberta), by Part VII of The
Securities Act (Manitoba), by Part XV of the Securities Act (Ontario) and by Section 63 of the
Securities Act (Nova Scotia) and the respective regulations thereunder.


                               Thomas Weisel Partners Canada Inc.


                               By: ”John Jentz”(signed)
                               Director


                               Haywood Securities Inc.


                               By: “John Willett”(signed)
                               Managing Director Investment Banking

				
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