Current AssetsCash (note 2) US$ 35,063 Accounts receivable (note 3) 9,177 Prepaid taxes and expenses (note 5) 5,866

50,106

Non Current AssetsAccounts receivable - related parties (note 4) 85,442 Loans receivable - related parties (note 4) 71,574 Furniture and equipment, net (note 6) 9,243 Costos de exploración 1,497 Other Assets 2,752

170,508

Total Assets 220,614

Current LiabilitiesAccounts payable 1,486

Non Current LiabilitiesLoans payable - related parties (note 4) 282,708

Total Liabilities 284,194

Stockholders' EquityAuthorized capital stock (500 shares authorized, issued and

in circulation with a nominal value of C$100 equivalent to US$5.55 each share) 2,777

Accumulated deficit (66,357)Total Stockholders' Equity (63,580)Total Liabilities and Stockholders' EquityUS$ 220,614

The declaration of accounting policies and the accompanyingnotes from Nº1 through Nº14, are integral part of the financialstatements.

LIABILITY AND STOCKHOLDERS' EQUITY

ASSETS

MINAS, S.A.(Constituted in Nicaragua)

Balance SheetAs of December 31, 2006

(Expressed in U.S. dollars)

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Income US$ -

Operating expensesExpenses as employee benefits (note 9) 25,216 General expenses (note 10) 39,516 Depreciation 835

65,567

Operating loss 65,567

Other expensesBanking services 588 Others 355

943

Adjustment for conversion (153)

Loss for the period US$ 66,357

The declaration of accounting policies and theaccompanying notes from Nº1 through Nº14, are integral

MINAS(Constituted in Nicaragua)

Statement of IncomeFor the six months ended December 31, 2006

(Expressed in U.S. dollars)

4