UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

S           QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

£           TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.          Yes  S    No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).          Yes  £    No  S

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 34,448,176 shares of common stock as of May 16, 2008.

INDEX

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this quarterly report include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding the market price of copper, availability of funds, government regulations, permitting, common share prices, operating costs, capital costs, outcomes of ore reserve development, recoveries and other factors. Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and development, availability of funds, environmental reclamation, operating costs and permit acquisition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in our annual report on Form 10-KSB for the year ended December 31, 2007, this quarterly report on Form 10-Q, and, from time to time, in other reports that we file with the Securities and Exchange Commission (the "SEC"). These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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The following unaudited interim financial statements of FinMetal Mining Ltd. (sometimes referred to as "we", "us" or "our Company") are included in this quarterly report on Form 10-Q:

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In the opinion of the Company's management, all adjustments considered necessary for a fair presentation of these unaudited financial statements have been included and all such adjustments are of a normal recurring nature. Operating results for the three-month period ended March 31, 2008 are not necessarily indicative of the results that can be expected for the year ended December 31, 2008.

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The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As at March 31, 2008, the Company has cash and cash equivalents in the amount of $809,989 (December 31, 2007: $1,947,912) which are over the federally insured limit. As at March 31, 2008, the Company has $Nil of cash equivalents (December 31, 2007: $Nil).

Furniture and office and computer equipment is carried at cost and is amortized over its estimated useful life at rates of 20 to 30% declining balance per year. The property and equipment is written down to its net realizable value if it is determined that its carrying value exceeds estimated future benefits to the Company.

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Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive.

The Company has adopted SFAS No 143, Accounting for Assets Retirement Obligations, which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. SFAS No. 143 requires the Company to record a liability for the present value of the estimated site restoration costs with corresponding increase to the carrying amount of the related long-lived assets. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. As at March 31, 2008 and December 31, 2007, the Company does not have any asset retirement obligations.

Long-term assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis.

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Historically, the Company has not entered into derivative contracts either to hedge existing risks or for speculative purposes.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ from those estimates.

The Company is not exposed to significant interest, credit or currency risk arising from these financial instruments due to their short term nature.

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Pursuant to an agreement dated October 6, 2006 the Company has the option to acquire a 100% interest in 4 different mineral properties (Petrovaara, Poskijarvi-Kokka, Rautavaara and Tainiovaara) by paying option payments for a total of €1,000,000 in cash for each property over a period of 4 years. The option payments are to be paid annually at the beginning of each year as follows: 1^st year €100,000 (paid), 2^nd year €100,000, 3^rd year €300,000 and 4^th year €500,000 per property for a total of €4,000,000 if all 4 properties are acquired fully; and by making a work commitment of €1,000,000 on each property of which 25% must be conducted annually. All properties are subject to a 2% NSR. The 1^st year payments for all 4 properties totalling $523,400 (€400,000) was paid during the fiscal year ended December 31, 2006. The optionor is currently in the process of completing registration of its mineral claims with the Finnish Ministry of Industry and Trade. The due date of the second option payment of €100,000 with respect to the Rautavaara Property is extended pursuant to an amendment agreement to April 30, 2008 in consideration of a €10,000 extension payment (paid) and payment of applicable government and landowner payments according to Finnish law (paid). The due date for the first year work commitment of €250,000 with respect to the Rautavaara Property is extended to August 31, 2008 and the first year work commitment of €250,000 with respect to the Tainiovarra Property is extended to May 31, 2008. In fiscal 2008, the Company decided not to exercise the second year option with respect to each of these Properties.

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Under the terms of the Option Agreement, the Company has the right to acquire ownership from Magnus of up to a 51% interest in certain claim reservations, and pending claims comprising the Property as more particularly set forth in the Option Agreement.

It is intended that the Company will be the operator of the joint venture and can earn a 51% interest in the Property by fulfilling U.S. $10 million in work commitments and €3 million in option payments.

In order to exercise the option, the Company will be required to spend U.S. $10 million in work commitments with minimum expenditures as follows:(a) U.S. $1.8 million by November 30, 2008; (b) U.S. $2.2 million by November 30, 2009; (c) U.S. $2.8 million by November 30, 2010; and (d) U.S. $3.2 million by November 30, 2011. In addition, the Company is required to make a total of €3 million in option payments to Magnus over four years as follows: (a) €30,000 by May 22, 2007 (which payment has been made); (b) €270,000 upon execution of the Option Agreement (which payment has been made); (c) €600,000 by November 30, 2008, (d) €900,000 by November 30, 2009; and (e) €1,200,000 by November 30, 2010.

There are certain inherent risks relating to the title to the mineral properties and mining and exploration rights that the Company has an interest in through its above noted option agreements, as registration of some of the mineral claims with the Finish government has not yet been completed. The Company, therefore, cannot give any assurance that it will have valid title on its mineral property interests.

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On November 30, 2006 the Company granted 1,950,000 restricted shares at a deemed price of $1.24 per share to officers of the company. Fifty percent of these shares vest on January 1, 2008 and the balance on January 1, 2009. On December 27, 2007 all 1,950,000 restricted shares were cancelled and returned

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During fiscal 2007, the Company adopted the 2007 Stock Incentive Plan, (the "Plan") which provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, performance shares and performance units, and stock awards to officers, directors or employees of, as well as advisers and consultants to, the Company.

All stock options and rights are to vest over a period determined by the Board of Directors and expire not more than ten years from the date granted. Pursuant to the Plan, the maximum aggregate number of shares that may be issued for awards is 10,000,000 and the maximum aggregate number of shares that may be issued for incentive stock options is 10,000,000.

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The weighted average fair value of the 3,300,000 options granted to officers and directors in 2007 was estimated at $1.24 per share using the Black-Scholes option-pricing model, using the following assumptions: risk-free interest rate of 4.11%, dividend yield of 0%, volatility of 120.85% and expected life of approximately 5 years. Related stock based compensation in the amount of $425,351 was charged to operation during the three months ended March 31, 2008 (2007: $Nil), and cumulatively $3,666,379 from April 17, 2007 to March 31, 2008.

The weighted average fair value of the 50,000 options granted to a consultant in 2007 was estimated at $0.14 per share using the Black-Scholes option-pricing model, using the following assumptions: risk-free interest rate of 4.11%, dividend yield of 0%, volatility of 146.97% and expected life of approximately 5 years. Related stock based compensation in the amount of $Nil was charged to operations during the three months ended March 31, 2008 (2007: $Nil) and cumulatively $4,504 from April 17, 2007 to March 31, 2008.

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During the three months ended March 31, 2008 the Company:

• paid $101,451 (2007: $86,996) for consulting and management fees and management salaries to current officers and directors of the Company
• paid $25,486 (2007: $Nil) for consulting fees included in mineral property acquisition and exploration expenditures, to companies controlled by the Vice-President of Exploration and the President.

These transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

• The Company is committed for one year, commencing November 1, 2007, for monthly consulting services in the amount of $5,000 to a party who shall provide business development strategies and corporate marketing.
• The Company committed for a one year period commencing January 1, 2008, to a consulting firm for monthly services in the amount of $1,500, for website maintenance.
• The Company is further committed, commencing May 1, 2007, for monthly consulting services in the amount of $ 17,000 to its Vice President of Exploration.

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Certain prior year amounts have been reclassified to conform to the current year presentation.

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In this document: (i) the terms "we", "us", "our", the "Company" and "FinMetal" refer to FinMetal Mining Ltd. and our subsidiaries, unless the context otherwise requires; (ii) references to "FinMetal OY" mean FinMetal Mining OY, a wholly-owned subsidiary of the Company, and its subsidiaries; and (iii) "€" refers to Euros and "$" refers to United States dollars.

The following discussion of our financial condition, changes in financial condition and results of operations for the three months ended March 31, 2008 and 2007 should be read in conjunction with our unaudited interim financial statements and related notes for the three months ended March 31, 2008 and 2007. The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth below under the heading "Risk Factors".

We are an exploration stage company engaged in the assessment, acquisition and exploration of mineral properties.

We were incorporated on September 5, 1997 under the laws of the State of Nevada. On January 7, 2005, we completed a one new for six old reverse stock split of our shares of common stock. On March 9, 2006, we completed a one new for 100 old reverse stock split of our shares of common stock. On June 13, 2006, we completed an eight new for one old forward stock split of our shares of common stock. These reverse and forward stock splits are reflected in this Report. On November 27, 2006, we acquired FinMetal OY. Our authorized capital is 100,000,000 common shares with a par value of $0.00001 per share and our shares trade on the OTC Bulletin Board and the Pink Sheets.

We did not have any operations prior to the acquisition of our wholly-owned subsidiary, FinMetal OY, a corporation organized under the laws of Finland, on November 27, 2006. We acquired all of the outstanding shares of FinMetal OY in consideration for the issuance to the shareholder of FinMetal OY of 1,000,000 of our shares of common stock and a payment of €211,482 in cash (including €11,482 representing transfer taxes). As more fully described herein, at the time we acquired FinMetal OY, FinMetal OY owned the option to acquire a 100% interest in four mineral properties located in Finland, and better known as the Petrovaara, Poskijärvi-Kokka, Rautavaara and Tainiovaara properties, along with all existing property data (collectively, the "FinMetal Oy Properties"). As further described below, we no longer have an interest in these properties.

On January 22, 2007, we entered into a letter agreement with Ab Apofas OY ("Apofas"), pursuant to which Apofas granted to us the sole and exclusive option to acquire, subject to a 2% gross proceeds royalty, a 100% undivided interest in and to five mineral property concession registration interest assets known as the Poronmannikko and Sarkiahonkangas gold prospects, which are located in northern Finland (collectively, the "Apofas Properties" and also known as the Oijarvi Gold Project). As further described below, we allowed this option to lapse on April 30, 2008.

On June 11, 2007, we entered into a definitive Mineral Property Option and Joint Venture Agreement with Magnus Minerals OY, a Finnish corporation, ("Magnus"), pursuant to which we and Magnus agreed to an option and a joint venture to explore the "Enonkoski area" in Finland (collectively, the "Enonkoski Property") primarily for nickel-copper-platinum group elements. It is intended that we will be the operator of the joint venture and can earn a 51% interest in certain valid claim reservations and pending claims comprising the Enonkoski Property by fulfilling $10 million in work commitments and €3 million in option payments, as more fully described below.

As indicated above, we acquired our wholly owned subsidiary, FinMetal Oy, on November 27, 2006. At the time we acquired FinMetal OY, FinMetal OY owned the option, pursuant to an October 6, 2006 option agreement by and between FinMetal Oy and Magnus Minerals OY ("Magnus"), to acquire a 100% interest in four mineral properties located in Finland, and better known as the Petrovaara, Poskijärvi-Kokka, Rautavaara and Tainiovaara properties, along with all existing property data. Under the original terms of the option agreement, FinMetal Oy would earn the interest in such properties (i) by paying option payments of 1,000,000 euros in cash for each property (that is, 4,000,000 euros with respect to all four properties) over a period of four years, to be paid annually at the beginning of each year with respect to each property as follows: 100,000 euros in the first year, 100,000 euros in the second year, 300,000 euros in the third year, and 500,000 euros in the fourth year, and (ii) by making a work commitment of 1,000,000 euros on each property (for a total work commitment of 4,000,000 euros), of which 25% must be conducted each year over a period of four years. All properties are subject to a 2% net smelter royalty in favour of Magnus.

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On December 28, 2007, FinMetal Oy and Magnus entered into Amendment No. 1 to the option agreement, pursuant to which the terms of the original option agreement were amended as follows:

• the due date of the second option payment of 100,000 euros with respect to the Rautavaara property was extended to April 30, 2008 in consideration of a 10,000 euro extension payment (which has been paid) and by FinMetal Oy keeping the claims in good standing by paying the applicable government and landowner payments according to Finnish law (we have decided to allow this option to lapse, so we have not made this second option payment);

• after the abovementioned extension payment has been paid and the second year option payment has been paid with respect to the Rautavaara property, the due date of the first year work commitment of 250,000 euros with respect to such property shall be extended such that such work commitment shall not be due until August 31, 2008; and

• the due date of the first year work commitment of 250,000 euros with respect to the Tainiovarra property shall be extended such that such work commitment shall not be due until May 31, 2008 (we have decided to allow this option to lapse).

In addition, the parties to the amendment acknowledged therein that FinMetal Oy decided not to exercise the second year option with respect to each of the Petrovaara and Poskijärvi-Kokka properties and that full interest in and to such properties (including claims in good standing for at least one year, and all data and information both old and new gathered by FinMetal Oy) shall be transferred to Magnus within one month at FinMetal Mining Oy's expense, and thereafter FinMetal Oy shall have foregone any claim on the Petrovaara and Poskijärvi-Kokka properties. As indicated above, we have decided to allow our options with respect to the Rautavaara and Tainiovarra properties to lapse.

Under the terms of our January 22, 2007 letter agreement with Apofas, and in order to exercise our option to acquire a 100% undivided interest in and to five mineral property concession registration interest assets known as the Poronmannikko and Sarkiahonkangas gold prospects (subject to a 2% gross proceeds royalty), we are required to make the following non-refundable cash payments to Apofas totalling €1.0 million in the following manner: (i) the first payment of €150,000 is due on or before April 1, 2007 (paid); (ii) the 2^nd payment of €150,000 is due on or before April 1, 2008 (subsequently extended by agreement to be paid by April 30, 2008); (iii) the 3^rd payment of €300,000 is due on or before April 1, 2009; and (iv) the final payment of €400,000 is due on or before April 1, 2010. We have decided to allow this option to lapse, so we have not made the second option payment.

On June 11, 2007, we entered into a definitive Mineral Property Option and Joint Venture Agreement with Magnus Minerals OY, a Finnish corporation, ("Magnus"), pursuant to which we and Magnus agreed to an option and a joint venture to explore the "Enonkoski area" in Finland (collectively, the "Enonkoski Property") primarily for nickel-copper-platinum group elements. It is intended that we will be the operator of the joint venture and can earn a 51% interest in certain valid claim reservations and pending claims comprising the Enonkoski Property by fulfilling $10 million in work commitments and €3 million in option payments, as more fully described below.

In order to exercise our option, we will be required to spend $10 million in work commitments with minimum expenditures as follows: (a) $1.8 million by November 30, 2008; (b) $2.2 million by November 30, 2009; (c) $2.8 million by November 30, 2010; and (d) $3.2 million by November 30, 2011. In addition, we will be required to make a total of €3 million in option payments to Magnus over four years as follows: (a) €30,000 by May 22, 2007 (which payment has now been made); (b) €270,000 upon execution of the Option Agreement (which payment has been made); (c) €600,000 by November 30, 2008, (d) €900,000 by November 30, 2009; and (e) €1,200,000 by November 30, 2010.

We must spend 50% or more of our work commitments ($5 million) and option payments (€1.5 million) before any earn-in is realized. Once the 50% has been reached, we will have a 25.5% interest in the Enonkoski Property and our interest will increase proportional to our work commitments and option payments to the maximum of 51%, at which point both our and Magnus' interests are to be converted to working interests.

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There are no known reserves on any of the properties underlying our mineral property interests, and our work is exploratory in nature.

As noted above, we are not pursuing our option with respect to the Petrovaara, Poskijärvi-Kokka, Rautavaara, Tainiovarra or Apofas properties. As such, our planned exploration program covers the Enonkoski properties.

With respect to the Enonkoski properties, the Hälväla Nickel Mine is the main focus of our 2008 exploration program. Our initial exploration program has been designed to check the validity of the reported resource estimate and the deep high grade drill intersection followed by a down-hole electromagnetic survey to seek extensions. The work planned in this area will consist of detailed geology using existing drill core and down-hole and surface geophysics with the primary objective of locating high grade ore bodies amenable to underground mining, with a secondary target of shallow low grade ore. By the end of fiscal 2008, we plan to fly an airborne electromagnetic survey (approximately 6,000 line-km) and conduct a drill program of approximately 5,000 meters. We began our airborne geophysical survey in the summer of 2007. The survey, designed to locate conductive minerals associated with nickel, utilizes an AeroTEM II system - a high-resolution helicopter-borne electromagnetic (EM) system developed by Canadian company Aeroquest. The survey is being used to locate drilling targets. Airborne EM is particularly effective over glacial terrains, such as Finland, where sediments may hide ore bodies. The conductive sulphide minerals that FinMetal is seeking are typically close the surface, due to glacial erosion. Aeroquest will provide FinMetal with advanced data processing and interpretation in industry standard formats and high quality coloured maps. Geophysicist Steve Balch, our Vice President of Exploration, who has expert knowledge of the AeroTEM system, is supervising quality control and assurance during data acquisition.

Our plan of operations within the next twelve months is to pursue our planned exploration program as described above. In particular, we plan to complete the following objectives within the time periods specified, subject to our obtaining the funding necessary:

• first year work commitment expenditures of $1.8 million with respect to the Enonkoski properties to be incurred by November 30, 2008; and
• a third option payment of 600,000 euros (US$935,460 based on the noon buying rate on May 16, 2008 of Euro 1.00 : US$1.5591) with respect to the Enonkoski properties to be paid by November 30, 2008,

Thus, we estimate that our expenditures over the next twelve months will be approximately $3.3 million dollars. As at March 31, 2008, we had cash and cash equivalents of $869,647 and a working capital of $757,699. As such, our ability to make our planned exploration expenditures and to pay for our general administrative expenses will be subject to us obtaining additional financing.

During the 12 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 continue our plan of operations during and beyond the next twelve months. 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 do not have any financing arranged and 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 complete exploration program. In the absence of such financing, we will not be able to pursue our exploration program, we will be forced to abandon our mineral property interests and our business will fail.

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We have not had any revenues from operations for the past two fiscal years. We had a net loss of $1,157,588 for the three months ended March 31, 2008 as compared to a net loss of $727,169 for the three months ended March 31, 2007. The increase in our net loss was primarily the result of $561,289 in stock-based compensation during the three months ended March 31, 2008 (three months ended March 31, 2007 - $290,160) and increased mineral property acquisition and exploration expenditures, which were $341,732 in the three months ended March 31, 2008 (three months ended March 31, 2007 - $Nil).

At March 31, 2008, we had cash and cash equivalents of $869,647 (December 31, 2007 - $1,957,856) and a working capital of $757,699 (December 31, 2007 - $1,368,636). Although we believe that our existing cash balance is sufficient for our near-term day-to-day general administrative expenses, we will require additional financing in order to pursue our planned exploration as outlined under "Plan of Operations" above.

Operating activities in the three month periods ended March 31, 2008 and 2007 used cash of $1,068,543 and $470,488 respectively, which reflect our recurring operating losses.

In the three period ended March 31, 2008, we used $19,666 in investing activities ($9,666 for purchase of equipment and $10,000 for website development costs), as compared to $35,406 (all for purchase of equipment) used in investing activities during the period ended March31, 2007.

As we have had no revenues since inception, we have financed our operations primarily by using existing capital reserves, obtaining debt financing and through private placements of our stock. We did not obtain any cash from financing activities in the three months ended March 31, 2008. Financing activities in the three months ended March 31, 2007 provided cash of $2,670,000, all of which was from subscription funds received.

There are no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, which individually or in the aggregate is material to our investors.

Not applicable.

Our Chief Executive Officer, Daniel Hunter, and our Principal Financial Officer, Kenneth Phillippe, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report, and in their opinion our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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We currently are not a party to any material legal proceedings and, to our knowledge, no such proceedings are threatened or contemplated.

Our common shares must be considered a speculative investment. Readers should carefully consider the risks described below before deciding whether to invest in shares of our common stock. If we do not successfully address the risks described below, there could be a material adverse effect on our business, financial condition or results of operations, and the trading price of our common stock may decline and investors may lose all or part of their investment. We cannot assure any investor that we will successfully address these risks.

None of our officers or directors is employed full time by the Company. The management and growth of our company depends on the continued involvement of our management team, none of whom are employed full time. Should any of our management resign we might not be able to replace them. We do not have employment agreements in place with any of our officers nor do we carry key-person insurance. All of our officers have other business interest, which results in them devoting only a portion of their time to the business of the company. A conflict of interest between our officers' other business interests and us could be detrimental to us.

We have a limited history of operations making it difficult to evaluate our current value and chance of success. We only recently acquired our acquire exploration properties. We have a limited history of operations and there is no guarantee that we will acquire any further exploration interests. Our limited history makes it difficult to evaluate the current value of our shares and our chances of success in the future leading to volatility in the value of your investment.

We have incurred net losses since inception and anticipate that losses will continue. We have not generated any revenues to date. We have no history of earnings and there is no assurance that our business will be profitable. As at March 31, 2008, we have experienced a cumulative net loss of $13,337,100, and we expect to continue incurring operating losses and accumulating deficits in future periods. We cannot guarantee that we will be successful in generating revenues in the future. A failure to generate revenues will likely cause us to go out of business.

We have limited financial resources and will have to raise additional funds to continue and expand our business. There can be no certainty that market conditions will enable us to raise the funds required. Failure to do so will result in the failure of our business. As at March 31, 2008, we had cash and cash equivalents of $869,647 and working capital of $757,699. Our anticipated expenditures for the next 12 months are approximately $3.3 million.

We presently do not have sufficient capital to satisfy the expected expenditures, have no revenues and will rely principally on the issuance of common shares to raise funds to finance the expenditures that are expected to be incurred during the next 12 months. There is no assurance that market conditions will enable us to raise funds when required, and any additional equity financing will likely be dilutive to existing shareholders. Should we fail to raise additional funds, we will be unable to carry out our plan of operations.

Based upon our financial position our auditor has expressed doubt about our ability to continue as a going concern. We will be unable to continue as a going concern if we are unable to earn sufficient revenues from operations or to raise additional capital through debt or equity financings to meet our future capital obligations. As of March 31, 2008 we have working capital of $757,699, which is not sufficient to cover our planned expenditures over the next twelve months. If we do not raise the capital required to carry out our plan of operations beyond that date, we may be unable to continue as a going concern and you may lose your entire investment.

The mineral exploration industry is very competitive and we may not be able to effectively compete with other companies in bidding for and securing property interests resulting in a high risk of failure for our company. We are in competition with other companies with greater financial resources and expertise in bidding for the acquisition of mineral property interests from various state authorities and permit holders, in purchasing or leasing equipment necessary to explore for minerals and in obtaining the services of personnel in the exploration for minerals. Our inability to compete raises the risk that we will be unable to secure material property interests and carry out our plan of operations.

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There is no assurance that we will discover any minerals. Failure to discover minerals will make it difficult for us to remain as a going concern. We have no known reserves on any of our properties and there is no assurance that commercial quantities of any minerals will be discovered. In addition, even if minerals are discovered, the costs of extraction to market may render any deposit found uneconomic. If we do not find minerals reserves or if we cannot develop reserves, either because we do not have sufficient capital to do so or the costs of extraction are uneconomical, we will have to cease operations and investors who have purchased shares may lose their investment.

Geological conditions are variable and unpredictable and heighten exploration risk. Mineral exploration and development involves a high degree of risk and few properties that are explored are ultimately developed into producing properties. Even if production is commenced, the production will inevitably decline and may be affected or terminated by changes in geological conditions that cannot be foreseen or remedied. A change in geological conditions may render a discovery uneconomic.

The marketing and sale of mineral products is subject to government regulation that may impair our ability to sell minerals or limit the prices available. Even if we make discoveries in commercial quantities, development of a discovery may take a number of years and financial conditions at that time cannot be predicted. The availability of products sold, or to be sold, may be restricted or rendered unavailable due to factors beyond our control, such as change in laws in the jurisdictions in which we may be operating, changes in the source of supply in foreign countries and prohibition on use due to testing and licensing requirements.

The price for commodities is volatile and determined by factors beyond our control. Prices for minerals may fluctuate widely from time to time depending on international demand, production and other factors that cannot be foreseen. A decline in price may render a discovery uneconomic.

Failure to meet the prescribed terms and conditions of any required permit for the exploration of our properties may result in the loss or abandonment of the permit. The terms and conditions of any required permit or license granting us, directly or indirectly, the right to explore for and develop minerals may prescribe a work program and the date or dates before which such work program must be satisfied. Varying circumstances, including our financial resources, availability of required equipment, and other matters, may result in the failure to satisfy the terms and conditions of a permit or license and result in the complete loss of the interest in the permit or license.

We are subject to numerous local laws and regulations that are subject to change, including tax and land title claims. Any material change could have an adverse effect on our business and our ability to operate. There is no assurance that governmental regulation will not vary, including regulations relating to prices, royalties, allowable production, environmental matters, import and export of minerals and protection of water resources and agricultural lands. We will be subject to numerous governmental regulations that relate directly and indirectly to our operations including but not limited to title, production, marketing and sale of minerals, taxation, and environmental matters. There is no assurance that the laws relating to the ownership of mineral property interests and the operation of our business in the jurisdiction in which we operate will not change in a manner that may materially and adversely affect our business.

We presently do not carry liability or title insurance and do not plan to secure any in the future. The lack of insurance makes us vulnerable to excessive potential claims and loss of title. We do not maintain insurance against public liability, environmental risks or title. The possibility exists that title to future prospective properties may be lost due to an omission in the claim of title and any claims against us may result in liabilities we will not be able to afford resulting in the failure of the business and the complete loss of your investment.

Our business will be subject to laws that control the discharge of materials into the environment and we may be liable for environmental damages. The laws relating to the protection of the environment have become more stringent and may expose us to liability for the conduct of, or conditions caused by others or for our actions that were in compliance with all applicable laws at the time such acts were performed. The application of these requirements or the adoption of new requirements could have a material adverse effect on our business.

We conduct our business in Euros, the value of which fluctuates against the U.S. currency. An appreciation in the Euro against the US dollar may have adverse effects on our business. We hold cash reserves in US dollars but are incurring a significant proportion of our expenses in Euros. An increase in value of the Euro versus the US dollar would have a detrimental effect on our results of operations as expenses incurred would, in turn, increase in US dollars. While certain fluctuation can be expected to continue there can be no assurance that the exchange rate will stabilize at current rates.

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Our common shares are quoted through the facilities of the OTC Bulletin Board and the Pink Sheets. The price of our common shares is very volatile and thinly traded making the sale of shares very difficult. There can be no assurance that a stable market for our common shares will ever develop or, if it should develop, be sustained. It should be assumed that the market for our common shares will continue to be highly illiquid, sporadic and volatile and shareholders may not be able to sell their shares in the public market. These securities should not be purchased by anyone who cannot afford the loss of the entire investment.

We may issue more shares of common stock, which would dilute the value of the common stock held by our current shareholders. Our Articles of Incorporation authorize the issuance of 100,000,000 shares of common stock. We will likely issue additional shares to acquire further capital in order to carry out our intended operations or expand current operations, or to provide additional financing in the future. The issuance of any such shares may result in a reduction of the book value or market price of our outstanding common shares. If we do issue any additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of all other shareholders and may result in a change of control.

We have no history of earnings and there is no assurance that if we do that dividends will be declared. We have no history of earnings and there is no assurance that our business will be profitable and, even if profitable, there is no assurance that our board of directors will declare dividends on our common shares.

Broker-dealers may be discouraged from effecting transactions in our shares of common stock because they are considered penny stock and are subject to the penny stock rules. The Securities and Exchange Commission (the "SEC") has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks." Penny stocks generally are equity securities with a price of less than $5.00 per share. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that a penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements often have the effect of reducing the level of trading activity in any secondary market for a stock that becomes subject to the penny stock rules. Our common stock is currently subject to the penny stock rules, and accordingly, investors may find it difficult to sell their shares, if at all.

None.

None.

None

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