The following should be read in conjunction with the consolidated financial statements of the Company included elsewhere herein.

Forward-Looking Statements

This report contains certain forward-looking statements and information relating to the Company that are based on the beliefs and assumptions made by the Company's management as well as information currently available to the management. When used in this document, the words "anticipate", "believe", "estimate", and "expect" and similar expressions, are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are discussed in the Company's Annual Report on Form 10-KSB for the year ended May 31, 2005 and its Form SB-2 Registration Statement, as amended, filed with the U.S. Securities and Exchange Commission on September 6, 2005 and August 26, 2005, respectively, under the caption " Risk Factors" . Certain risks exist with respect to the Company and its business, which risks include: its limited assets, lack of revenues and only losses since inception, industry risks, limited geological work conducted on existing property, the need for additional capital; environmental risks; risks inherent in having its operations outside the United States such as political and economic unrest and instability, the threat of military actions and terrorist activities; among other factors. These factors raise substantial doubt about the ability of our Company to continue as a going concern. Readers are also urged to refer to the section entitled "Cautionary Statements" in the Company's aforementioned filings for a broader discussion of such risks and uncertainties. The Company does not intend to update the forward-looking statements contained in this report.

Overview -- Plan of Operation

We were formed as a mineral exploration company on January 21, 1998, and we are still in our exploration stage and have not had any revenues and only losses since inception. Accordingly, a comparison of our financial information for accounting periods would likely not be meaningful or helpful in making an investment decision regarding our Company. Since we are an exploration company, our plan of operation for the next twelve months is referred to below as a "Plan of Exploration". We anticipate that this will cost, over the next 12 months, approximately $1,900,000. This remains the same as the plan that was in effect as of fiscal year end May 31, 2007 because we have not obtained the requisite financing. Specifically, we have never had revenues and for the quarter ended August 31, 2007, we received no cash infusion of debt or equity, and for the quarter ended November 30, 2007, we received only $20,000 in equity contributions and no debt financing..

Since the exploration business is essentially a research and development activity, our future business focus depends upon current results where future plans can change radically at any time. Accordingly, it would not be meaningful, and perhaps would be misleading, to make estimates of anticipated expenditures beyond the next 12 months.

We have insufficient capital for our next 12 months. Accordingly, we will not be able to proceed with and/or complete our exploration programs, or meet our administrative expense requirements, without additional financing, We anticipate that additional funding will be in the form of equity financing from the public and/or private sale of our common stock. As of November 30, 2007, we had 100,000 warrants outstanding, the exercise of which would provide us with $25,000 in gross proceeds. However, we cannot be assured that any of the warrants will be exercised. Their exercise is dependent upon many factors including the trading price of our common stock. Even the proceeds from the exercise of all the warrants that are outstanding (of which we cannot be assured) would be insufficient to complete our anticipated capital needs over our next 12 months.

We may also seek to obtain short-term loans from our directors or principal shareholders. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through loans from our directors or principal shareholders to meet our obligations over the next twelve months. If we are unable to raise sufficient additional funding through equity financing and/or loans, we will next attempt to obtain joint venture partners on a project by project basis to help lessen the expenses involved on each project (which would correspondingly reduce our portion of any revenues that may result if a property is successfully developed, of which there can be no assurance.) If we are unsuccessful with that approach, we will attempt to renegotiate the underlying agreements on all or some of the properties to lower the obligations and allow us to maintain the properties.

If we do require additional financing and it is unavailable to us on reasonable terms or at all, it is unlikely that we will be successful in our business plan.

Plan of Exploration

The "Plan of Exploration" for 2008 is composed of: (1) an exploration program,
(2) metallurgical testing, and (3) property development. Each is outlined below with estimated costs included. The "Plan of Exploration" and the expenditures are dependant upon obtaining sufficient funding, of which we have no assurance. All three areas of the 2008 Plan of Exploration are expected to progress simultaneously. Each is expected to be under the supervision of qualified professionals.

Proposed Exploration Program

Definition and confirmation drilling is planned in the areas where mineralization is believed to be present ("Discovery Zones"). Confirmation sampling of surface exposures has been completed with the results consistent with MIM reports. A total of 21 reverse drill holes were completed during the previous exploration campaign. Our approach will be to "core" drill and confirm their results, expand the resource and block out a mineable area. The core will be available for inspection at our warehouse and office facility in Morelia. A total of twenty drill holes, 500 ft. in depth are planned.

Five drill holes have been designated for deep drilling to test the potential for a porphyry target at depth. Two locations have been targeted for deep drilling to date. The locations of the remaining three holes are dependent upon the results of the first two drill holes, the results of the definition drilling, reconnaissance mapping and information obtained from other exploration techniques.

Exploration drilling to expand the near surface mineralized material within the initial discovery zones is planned for all three zones we have labeled the Main zone, North zone and Cuendeo to the south. The geophysical induced polarization (IP) anomaly is 3 kilometers in length from north to south leaving large gaps between the three mineralized zones open for exploration drilling.

Expanding the geochemical soil survey of the concession has been planned to include the entire three kilometer long anomaly and the remaining concession limits.

Continued field reconnaissance and sampling will be ongoing and completed during road construction inspection, soil surveys and drilling.

Metallurgical Testing

Metallurgical testing of the ore will be performed by a qualified laboratory.
The testing of the ores is a multifaceted process. Oxide and sulfide ores are both present within the mineralized zones. The processes to concentrate and extract the metals from oxide and sulfide ores are different. In addition, copper and precious metals also require different processing. In other words, each metal will require a process for handling the oxide ore and the sulfide ore.

Installation of a pilot t plant is proposed. To test the mined ores and produce samples on a trial basis to determine the economic feasibility of further mining. The design has yet to be determined and will be dependent upon the results of the metallurgical testing. The pilot plant is not expected to be built until 2009.

Property Development


Development of the property includes the construction of new roads and drill
pads for exploration drilling and access to remote areas of the concession.  New
roads will open areas for sampling and mapping. In addition channel cuts and
trenching will be completed as directed by the geologic staff while the heavy
equipment is building the new roads.


Estimated expenditures:                              $450,000
Definition Drilling…………………………………..
Exploration Drilling………………………………...                  $450,000
Assaying…………………………………………….                           $100,000
Surveying…………………………………………....                         $50,000
Geochemical Soil Survey…………………………...                 $100,000
Metallurgical Testing……………………………….                    $50,000
Heavy equipment contracting and road construction.   $100,000
Support equipment………………………………….                       $50,000
Field work…………………………………………..                         $100,000
Support staff………………………………………...                      $100,000
Administration………………………………………                        $100,000
Travel & hotel………………………………………                        $200,000
Miscellaneous expenses…………………………….                    $50,000

Total…………………………………………………                           $1,900,000

If the required additional financing is unavailable to us on reasonable terms or at all, it is unlikely that we will be successful in our current business plan.
We currently have no material commitments for capital requirements. Inflation has not significantly impacted the Company's operations.

Results of operations for the three month and six month periods ending November 30, 2007 and November 30, 2006

We have never had any revenues and only losses, including during the three and six month periods ending November 30, 2007 and November 30, 2006. We do not anticipate earning revenues from exploration activities until such time, if at all, that we have successful exploration results. We are presently in the exploration stage of our mining exploration business. We can provide no assurance that we will discover economic mineralization levels of minerals, or if such minerals are discovered, that we will enter into commercial production.

We incurred operating expenses in the amount of $296,339 for the six months ended November 30, 2007, and $296,246 for the comparable period ended November 30, 2006.

Our net loss decreased from $296,649 to $46,201 for the three month period and from $401,540 to $295,579 during the six months ended November 30, 2006 and 2007, respectively. The change was primarily due to a decrease in salaries, geological exploration fees, professional and consulting fees. Our payroll expenses increased from $80,154 to $108,785 during the six month period, however, it decreased during the three month period from $48,692 to $12,416. Our consulting fee expenses decreased from $173,895 to $58,837 and the professional expense from $49,706 to $31,398 during the six month period. The effect in the three month period was a reduction in consulting from $173,895 to $637 and in professional fees from $25,551 to $2,000 in years 2006 and 2007, respectively.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.