Plan of Operations

Our plan of operations for the next twelve months is to focus on the exploration of our mineral properties in Tanzania. We are also seeking opportunities to acquire other mineral exploration properties that, in the opinion of our consulting geologist, offer attractive mineral exploration opportunities. We anticipate that we will require for the next twelve months:

(a) $1,500,000 for exploration programs;

(b) $1,015,000 for management and consulting expenses; and

(c) $85,000 administration and operating expenses.

At May 31, 2008, we had cash of $53,610 and a working capital deficit of $1,259,818. As set forth in our current report on Form 8-K as filed on August 20, 2008, we completed private placements of shares and units on August 15, 2008, pursuant to which we raised approximately $1,767,500. Nonetheless, we do not have sufficient funds to pursue our plan of operations for the next twelve months. We are continuing to seek to raise funds through a private placement offerings of our shares of common stock. However, there can be no assurance that we will complete any such private placement offerings or that the funds raised will be sufficient for us to pay our expenses for the next twelve months.

During the twelve month period following the date of this report, we anticipate that we will not generate any revenue. Accordingly, we will be required to obtain additional financing in order to pursue our plan of operations. We believe that debt financing will not be an alternative for funding additional phases of exploration as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our exploration program going forward. In the absence of such financing, we will not be able to continue exploration of our mineral claims and our business plan will fail. Even if we are successful in obtaining equity financing to fund our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our mineral claims. If we do not continue to obtain additional financing, we will be forced to abandon our mineral claims and our plan of operations.

We have entered into a SA Agreement with Canaco in respect of our mineral claims as described in Item 1, Description of Business. We may consider entering into additional joint venture arrangements to provide the required funding to develop the mineral claims. We have not undertaken any efforts to locate other joint venture partners for the mineral claims. Even if we determined to pursue another joint venture partner, there is no assurance that any third party would enter into a joint venture agreement with us in order to fund the exploration of our mineral claims. If we entered into another joint venture arrangement, we would likely have to assign a significant percentage of our interest in our mineral claims to the joint venture partner.

Results of Operations

The following table sets out our loss for the periods indicated:

                                            Accumulated
                                          from January 5,
                                           2004 (Date of   For the Year For the Year
                                           Inception) to      Ended        Ended
                                              May 31,        May 31,      May 31,
                                                2008           2008         2007
                                                 $              $            $

Revenue                                                  -            -            -

Expenses

  General and administrative                     5,587,923      679,053    3,799,484
  Impairment (recovery) of mineral
property costs                                  17,499,571    (100,000)   12,322,071
  Mineral property costs                           270,295       42,403      174,891
  Rent                                              28,391       10,686        5,233

Total Expenses                                  23,386,180      632,142   16,301,679

Net Loss Before Other Expense                 (23,386,180)    (632,142) (16,301,679)

Other Expense

  Mineral property option payments                 156,017      156,017            -
  Loss on sale of investment
securities                                        (57,071)     (15,804)     (41,267)

Net Loss                                      (23,287,234)    (491,929) (16,342,946)

Revenues

We have had no operating revenues since our inception on January 5, 2004 to May 31, 2008. We anticipate that we will not generate any revenues for so long as we are an exploration stage company.

General and Administrative Expenses

Our general and administrative expenses in the year ended May 31, 2008 decreased to $679,053 from $3,799,484 in the year ended May 31, 2007, primarily as a result of a decrease in stock-based compensation in the current year.

Impairment (Recovery) of Mineral Property Costs

In the year ended May 31, 2008, we recorded a $100,000 recovery of mineral property costs, as compared to an impairment of mineral property costs of $12,322,071 in the year ended May 31, 2007.

Mineral Property Costs

In the year ended May 31, 2008, we incurred mineral property costs of $42,403, compared to mineral property costs of $174,891 in the year ended May 31, 2007. We expense our mineral property costs as they are incurred.

Rent

In the year ended May 31, 2008, our rent expenses increased to $10,686 from $5,233 for our prior fiscal year.

In the year ended May 31, 2008, we received 156,017 in mineral property option payments (2007 - $nil).

Loss on Sale of Investment Securities

In the year ended May 31, 2008, we incurred a loss on the sale of investment securities of $15,804 (2007 - $41,267).

Net Loss

As a result of the above, our net loss for the year ended May 31, 2008 was $491,929,as compared to $16,342,946 in the year ended May 31, 2007.

Liquidity and Capital Resources

We had cash of $53,610 as at May 31, 2008 and a working capital deficit of $1,259,818. During the 12 month period following the date of this annual report, we anticipate that we will not generate any revenue. We do not have sufficient funds to pursue our plan of operations as set forth above. Accordingly, we will be required to obtain additional financing in order to pay our planned expenses during the next 12 months. As indicated above under "Plan of Operations", as set forth in our current report on Form 8-K as filed on August 20, 2008, we completed private placements of shares and units on August 15, 2008, pursuant to which we raised approximately $1,767,500. Nonetheless, we do not have sufficient funds to pursue our plan of operations for the next twelve months. We are continuing to seek to raise funds through a private placement offerings of our shares of common stock. However, there can be no assurance that we will complete any such private placement offerings or that the funds raised will be sufficient for us to pay our expenses for the next twelve months.

We will be required to obtain additional financing in order to continue to pursue our plan of operations. We believe that debt financing will not be an alternative for funding additional phases of exploration as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our exploration program going forward. In the absence of such financing, we will not be able to continue exploration of our mineral claims and our business plan will fail. Even if we are successful in obtaining equity financing to fund our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our mineral claims. If we do not continue to obtain additional financing, we will be forced to abandon our mineral claims and our plan of operations.

Net Cash Used in Operating Activities

Net cash used in operating activities in the year ended May 31, 2008 was $457,346, compared to $1,277,132 in the year ended May 31, 2007. We anticipate that cash used in operating activities will increase in 2008 as we pursue our plan of operations.

Cash Used in or Provided by Investing Activities

In the year ended May 31, 2008, investing activities provided cash of $198,447, compared to $297,674 cash used by investing activities in the year ended May 31, 2007, primarily because we did not have mineral property acquisition costs in the year ended May 31, 2008.

Cash Provided By Financing Activities

We have funded our business to date primarily from sales of our common stock. In the year ended May 31, 2008, we raised net proceeds of $308,000, compared to $1,577,200 in the year ended May 31, 2007, in each case primarily from the sale of our common stock.

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive exploration activities. For these reasons our auditors stated in their report on our audited financial statements for the year ended May 31, 2008 that they have substantial doubt we will be able to continue as a going concern.

Future Financings

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned exploration activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles and are expressed in U.S. dollars. For a summary of significant accounting policies, please see Note 2 to our financial statements for our fiscal year ended May 31, 2008, which are included in this annual report.