-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GvyO+n90ZO9Bg6iJHOti3Wocm202cjZOc4y+02c8NoyMhUHsDJ4+wfcYPhIPpo+0 1qZhsk7A+PPrUGshPTpVtQ== 0001062993-10-001416.txt : 20100503 0001062993-10-001416.hdr.sgml : 20100503 20100503150529 ACCESSION NUMBER: 0001062993-10-001416 CONFORMED SUBMISSION TYPE: 20-F PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100503 DATE AS OF CHANGE: 20100503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENTOURAGE MINING LTD CENTRAL INDEX KEY: 0001239672 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 20-F SEC ACT: 1934 Act SEC FILE NUMBER: 000-50305 FILM NUMBER: 10792295 BUSINESS ADDRESS: STREET 1: SUITE 614 STREET 2: 475 HOWE STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 2B3 BUSINESS PHONE: 604-669-4367 MAIL ADDRESS: STREET 1: SUITE 614 STREET 2: 475 HOWE STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 2B3 20-F 1 form20f.htm ANNUAL REPORT FOR YEAR ENDED DECEMBER 31, 2009 Entourage Mining Ltd.: Form 20-F - Filed by newsfilecorp.com

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

FORM 20-F

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report: _______________

For the transition period from _______________to _______________

Commission file number 000-50305

ENTOURAGE MINING LTD.
(Exact name of Registrant as specified in its charter)

Province of British Columbia, Canada
(Jurisdiction of incorporation or organization)

475 Howe Street, Suite 614, Vancouver, British Columbia V6C 2B3
(Address of principal executive offices)

Gregory F. Kennedy, President
Address: Same as above
Telephone: (604) 669-4367
Facsimile: (604) 669-4368
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class Name of each exchange on which registered
N/A N/A

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Common Shares Without Par Value
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None
(Title of Class)


Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 7,738,693 common shares issued and outstanding as of December 31, 2009; and, 9,696,855 shares issued and outstanding as of the date of this Report.

Indicate by check mark if the registrant is a well-seasoned issuer, as defined in Rule 405 of the Securities Act
[   ]Yes [x] No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
[   ]Yes [x] No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.
[X] Yes [   ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12-b of the Exchange Act (Check One):

Large Accelerated Filer [   ] Accelerated Filer [   ] Non-accelerated Filer [X]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP [X]   International Financial Reporting Standards as Issued Other [    ]   By the International Accounting Standards Board [    ]

If this is an Annual Report, indicate by a check mark whether the Registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act)
[   ] Yes      [X] No


ENTOURAGE MINING LTD.
Form 20-F Annual Report
Table of Contents

PART I   4
     
ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 4
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 4
ITEM 3. KEY INFORMATION 4
ITEM 4. INFORMATION ON THE COMPANY 7
ITEM 4A. UNRESOLVED STAFF COMMENTS 14
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 14
ITEM 6. DIRECTORS, SENIOR MANAGEMENTS AND EMPLOYEES 17
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 20
ITEM 8. FINANCIAL INFORMATION 21
ITEM 9. THE OFFER AND LISTING 22
ITEM 10. ADDITIONAL INFORMATION 23
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 28
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 28
     
PART II   28
   
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 28
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 28
ITEM 15.T CONTROLS AND PROCEDURES 28
ITEM 16.A AUDIT COMMITTEE FINANCIAL EXPERT 29
ITEM 16.B CODE OF ETHICS 29
ITEM 16.C PRINCIPAL ACCOUNTANT FEES AND SERVICES 29
ITEM 16.D EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 30
ITEM 16.E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS  30
ITEM 16.F CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT 30
ITEM 16.G CORPORATE GOVERNANCE 30
     
PART III   30
     
ITEM 17. FINANCIAL STATEMENTS 30
ITEM 18. FINANCIAL STATEMENTS 52
ITEM 19. EXHIBITS 52

3


FORWARD-LOOKING STATEMENTS

We caution you that certain important factors (including without limitation those set forth in this Form 20-F) may affect our actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this Form 20-F Annual Report, or that are otherwise made by or on our behalf. For this purpose, any statements contained in this annual report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “except,” “believe,” “anticipate,” “intend,” “could,” estimate,” or “continue,” or the negative or other variations of comparable terminology, are intended to identify forward-looking statements.

PART I

ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3. KEY INFORMATION

3.A Selected Financial Data

The following tables set forth our financial data for the last five years ended December 31. We derived all figures from financial statements, which were examined by our independent auditors. This information should be read in conjunction with financial statements included in this annual report.

Our financial statements included in this annual report and the table set forth below, have been prepared in accordance U. GAAP. All amounts are expressed in Canadian dollars.

Selected Financial Data
(CDN$, except per share data)



Year
Ended
12/31/09
Year
Ended
12/31/08
Year
Ended
12/31/07
Year
Ended
12/31/06
Year
Ended
12/31/05
Revenue Nil Nil Nil Nil Nil
Net Income (Loss) (727,683) (414,840) (598,783) (2,973,161) (10,068,841)
Earnings(Loss) Per Share (1) (0.11) (0.05) (0.08) (0.40) (5.71)
Dividends Per Share (1) Nil Nil Nil Nil Nil
Wtd. Avg. No. Shares (1) 6,378,834 7,698,191 7,675,144 7,438,028 1,764,754
           
Working Capital (239,318) (553,551) (139,410) 87,596 323,563
Mineral Properties Nil Nil Nil Nil Nil
Long Term Debt Nil Nil Nil Nil Nil
Shareholder’s Equity (Deficit) (237,769) (551,487) (136,647) 91,312 328,583
Total Assets 14,427 16,673 22,570 193,763 514,036

(1) These line items take into consideration the Company’s 10 for 1 reverse stock split, effective on March 6, 2009. Unless otherwise specified herein, all share information presented herein takes into consideration such reverse stock split.

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars.

4


Since June 1, 1970, the government of Canada has permitted a floating exchange rate to determine the value of the Canadian dollar as compared to the United States dollar. On April 28, 2010, the exchange rate in effect for Canadian dollars exchanged for United States dollars (the US dollars that a Canadian dollar buys) was $.0.9874. This exchange rate is based on the noon buying rates in New York City, for cable transfers in Canadian dollars, as certified for customs purposes by the Bank of Canada. For the past five years ended December 31 and for the last six month ends from October 1, 2009 to March 31,2010, the following exchange rates were in effect for Canadian dollars exchanged for United States dollars (the US dollars that a Canadian dollar buys), calculated in the same manner as above:

Annual Period Average
   
Year ended Dec 31, 2009 $0.8757
Year ended Dec 31, 2008 $0.9441
Year ended Dec. 31, 2007 $0.9913
Year ended Dec 31, 2006 $0.8789
Year ended Dec 31, 2005 $0.8818
   
   
Monthly Period Low - High
   
Month ended Oct 31, 2009 $0.9123-$0.9755
Month ended Nov 30, 2009 $0.9234-$0.9590
Month ended Dec 31, 2009 $0.9304 -$0.9687
Month ended Jan 31, 2010 $0.9350 -$0.9780
Month ended Feb 28, 2010 $0.9283- $0.9642
Month ended Mar 31, 2010 $0.9470- $0.9938

The above information was obtained from the Bank of Canada.

3.B Capitalization and indebtedness

Not applicable

3.C Reasons for the offer and use of proceeds

Not applicable

3.D Risk factors

Any investment in our common shares involves a high degree of risk. You should consider carefully the following information before you decide to buy our common shares. If any of the events discussed in the following risk factors actually occurs, our business, financial condition or results of operations would likely suffer. In this case, the market price of our common shares could decline, and you could lose all or part of your investment in our shares. In particular, you should consider carefully the following risk factors:

We have a history of losses.

We have incurred losses in our business operations since inception, and we expect that we will continue to lose money for the foreseeable future. From our incorporation to December 31, 2009, we have incurred net losses totaling $16,698,240. Very few junior resource companies ever become profitable and typically incur large losses until they enter production or are able to sell a mineral property to a major resource company. Failure to achieve and maintain profitability may adversely affect the market price of our common shares.

Very few mineral properties are ultimately developed into producing mines.

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. Most exploration projects do not result in the discovery of commercially mineable deposits of ore.

5


Substantial expenditures will be required for us to establish ore reserves through drilling, to develop metallurgical processes, to extract the metal from the ore 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 mineral deposit, no assurance can be given that we will discover minerals in sufficient quantities to justify commercial operations or that we can obtain the funds required for development on a timely basis. The economics of developing precious and base metal mineral properties is affected by many factors including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.

If we do not obtain additional financing, our business will fail.

Our current operating funds are less than necessary to acquire an interest in, and to conduct exploration on, a mineral property, and therefore we will need to obtain additional financing in order to complete our business plan. As at December 31, 2009, we had cash on hand of $2,212 and a working capital deficiency of $239,318. Our business plan calls for significant expenses in connection with the acquisition and exploration of mineral claims. We will require additional financing in order to complete these activities. In addition, we will require additional financing to sustain our business operations if we are not successful in earning revenues once we complete exploration on any mineral property we acquire. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required.

We believe the only realistic source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders.

Because management has only limited formal training in resource exploration, the business has a higher risk of failure.

None of our directors or officers has any significant technical training or experience in resource exploration or mining. We rely on the opinions of consulting geologists that we retain from time to time for specific exploration projects or property reviews. As a result of our management’s lack of formal training in resource exploration, there may be a higher risk of our being unable to complete our business plan.

Mineral exploration involves a high degree of risk against which we are not currently insured.

Unusual or unexpected rock formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are risks involved in the operation of mines and the conduct of exploration programs. We have relied on and will continue to rely upon consultants and others for exploration expertise.

It is not always possible to fully insure against such risks and we may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our common stock.

We may require permits and licenses that we may not be able to obtain.

Our operations may require licenses and permits from various governmental authorities. There can be no assurance that we will be able to obtain all necessary licenses and permits that may be required to conduct exploration, development and mining operations at any projects we acquire. Furthermore, as mineral projects near completion proper permitting and environmental review may be required.

Metal prices fluctuate widely.

Factors beyond our control may affect the marketability of any resource we discover. Metal prices have fluctuated widely, particularly in recent years. The effect of these factors cannot accurately be predicted.

The resource industry is very competitive.

The resource industry is intensely competitive in all its phases. We compete with many companies possessing greater financial resources and technical facilities than us for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.

6


Our operations may be adversely affected by environmental regulations.

Our operations may be subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, release 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, which means that standards, enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for us and our directors, officers and consultants. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of our operations.

We do not maintain environmental liability insurance.

The trading market for our shares is not always liquid.

Although our shares trade on the OTC Bulletin Board of the Financial Industry Regulatory Authority, Inc. (FINRA), the volume of shares traded at any one time can be limited, and, as a result, there may not be a liquid trading market for our shares. We also cannot assure you that any other market will be established in the future. The price of our common stock may be highly volatile and your liquidity may be adversely affected in the future.

Our common stock is thinly traded, so you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.

There is limited market activity in our stock and we are too small to attract the interest of many brokerage firms and analysts. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained. While we are trading on the Over-The-Counter Bulletin Board (“OTC”), our trading volume may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in OTC stocks and certain major brokerage firms restrict their brokers from recommending OTC stocks because they are considered speculative, volatile, thinly traded and the market price of the common stock may not accurately reflect our underlying value. The market price of our common stock could be subject to wide fluctuations in response to quarterly variations in our revenues and operating expenses, announcements of new products or services by us, significant sales of our common stock, the operating and stock price performance of other companies that investors may deem comparable to us, and news reports relating to trends in our markets or general economic conditions.

Our securities may be subject to penny stock regulation.

Our stock is subject to “penny stock” rules as defined in 1934 Securities and Exchange Act rule 3151-1. The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Our common shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities. Penny stocks generally are equity securities with a price of less than U.S. $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

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 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 current 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. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.

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 the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common shares in the United States and shareholders may find it more difficult to sell their shares.

ITEM 4. INFORMATION ON THE COMPANY

4.A History and development of the Company

Our Registered Office and principal office is located at 614 – 475 Howe Street, Vancouver, British Columbia, Canada. Our telephone number is (604)-669-4367

7


We were originally incorporated under the name “Entourage Holdings Ltd.” pursuant to the Business Corporations Act (British Columbia) on June 16, 1995. On June 25, 1996, we changed our name to Entourage Mining Ltd.

On February 18, 1998, we became a reporting Issuer as defined under the Securities Act of the Province of British Columbia, Canada.

Our shares commenced trading on February 2, 2004 on the OTC Bulletin Board in the United States under the symbol ETGMF. On March 6, 2009 we completed a 10 for 1 reverse stock split and our symbol was subsequently changed to ENMGF. Unless otherwise specified herein, all share information presented herein takes into consideration such reverse stock split.

We had one subsidiary company, Entourage USA Inc., located at 711 S. Carson Street, Suite 4, Carson City, NV 89701. The charter of Entourage USA was not renewed in December 2008.

We are a reporting issuer in the United States and our Annual Report and 6K filings can be found on the SEC’s EDGAR system at www.sec.gov. We are a reporting issuer in certain Canadian jurisdictions and our required disclosure filings for Canada can be found at www.sedar.com.

4.B Business overview

We are a natural resource company engaged in the acquisition and exploration of natural resource properties. We commenced operations in 1996 and currently have mineral property option agreements to acquire:

  • An unencumbered 100% interest in the Pires Gold Project located in Goias State, Central Brazil; and

  • An unencumbered 65% interest in 47 prospective uranium claim blocks in Costebelle Township known as the Doran property in eastern Quebec.

A description of the properties underlying these interests is set forth below under Item 4.D “Property, plants and equipment.”

We also intend to seek and acquire additional properties worthy of exploration and development.

Competition

The mineral property exploration business, in general, is intensively competitive and there is not any assurance that even if commercial quantities of ore are discovered, a profitable market will exist for sale of same. Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of mineral and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may make it difficult for us to receive an adequate return on investment.

We will compete with many companies possessing greater financial resources and technical facilities for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.

The Company is exploring for gold in Central Brazil. Many factors have caused the price of gold to escalate to $1160 per oz. as of April 1, 2010 from $240 per ounce in 2002. There are many junior gold exploration companies in direct competition with the Company and a discovery of gold mineralization by the Company would not have any effect on the price of gold.

The Company is prospecting for uranium in Quebec. It is anticipated that uranium generated power will become more popular in the decades to come as rising oil prices and political strife in the world’s oil producing regions continue. The price of U3O8 (yellow cake) had risen from $7US/ lb in 2005 to $135US/lb. in early 2007. The weekly spot price for U3O8 as at April1, 2010 was US$41.60.

Regulations

We are subject to the various environmental and business regulations of the jurisdictions in which we conduct mineral exploration.

These regulations can be onerous and, in some cases, expensive to comply with. In particular, we may be required to expend funds to reclaim or restore land disturbed by mineral exploration.

8


It is possible that we may not be able to afford to comply with various environmental and business regulations in the jurisdictions in which we conduct mineral exploration and would, as a result, have to curtail or cease operations and exploration.

The jurisdictions in which we are presently operating are, in our view, known as jurisdictions that are friendly to mining activity and we believe that we can meet applicable regulatory requirements.

Management & Employees

We do not have any employees other than our directors and officers.

Our President and Chief Executive Officer, Gregory F. Kennedy, devotes approximately 75% of his business time to our affairs. We had a management agreement with Mr. Kennedy that was described in the “Related Party Transactions” section of the Company’s 2005 Annual Report and filed on EDGAR on July 1, 2006. This agreement was revised on July 3, 2007 to a fee of $7,500 per month to Mr. Kennedy. As set forth in note 9 to the financial statements included herewith, this agreement was cancelled effective December 31, 2008.

Where necessary, we employ consultants, who in turn employ labourers, to further exploration on our mineral resource properties.

Office Space

We utilize about 700 square feet of office space in Vancouver, British Columbia. Our rent is approximately $1,600 per month.

4.C Organizational structure

Not applicable

4.D Property, plant and equipment

As our properties are not at an advanced stage of exploration, no reserve estimates are made nor are we, as of yet certain what if any reserves will be on the properties.

The Pires Gold Project

Option Agreement and Claim Information

On June 17, 2009, the Company signed a definitive Mineral Option agreement (the “Option”) with Infogeo Locaçeos Ltda. (“Infogeo”), a private Brazilian company, whereby the Company has the option to earn a 100% unencumbered interest in the Pires Gold Project (formerly known as the” Buon Sucesso Proyecto”) situated in southern Goiás State, Central Brazil.

When acquired, the Pires Gold Project consisted of 5 mineral licenses covering more than 8501 hectares (21,000 acres) located 2.5 hours drive from Brasilia and about 1 hour outside of the small city of Pires do Rio, Goiás State. Subsequent to the acquisition, the Company dropped two of the southernmost claim blocks and acquired 5 new claims: the Garimpo (acquired July 2009) and four other claim blocks surrounding the original land package. At present, the total package is approximately 12, 000 hectares. Subsequent to the changes indicated the property is rectangular in shape and is approximately 8 kilometers long and 5 kilometers wide.

The Pires Property covers sericite schist, chlorite schist and quartzites that have been intensely weathered under oxidizing tropical conditions. Metamorphic foliation of the schists and quartzites dips mainly to the west, and appears to be tightly folded. These metamorphic rocks belong to the Brasilia Belt, a region where terrains from the west have been thrust eastward over the ancient (Archean) Sao Francisco craton.

Under the terms of the Option, the Company must expend:

Expenditure Option

To earn a 40% interest in the property (First Milestone), in year one:

  (i)

pay to the Optionor (or its nominee) USD $50,000 as follows:

  (A)

USD $25,000 within seven days of the execution of the Agreement (paid), and

  (B)

USD$25,000 within 45 days of the execution of the Agreement (paid); and

9



(ii) expend not less than USD $300,000 (the “First Target”) in exploration expenditures on the property on or before May 31, 2010.
(iii) Entourage agrees to pay an additional $10,000 USD (paid) upon approval of the DNPM of the new license covering the Garimpo area.

To earn an additional 20% (60% Total) interest in the property (Second Milestone), in year two:

  (i) paying USD $100,000 to the Optionor (or its nominee) on or before January 16, 2010 (paid), and
(ii) expend not less than USD $300,000 (less the amount by which any exploration expenditures pursuant to item (ii) of the First Milestone exceeded the First Target) (the “Second Target”) in exploration expenditures on the property before January 16, 2011.

To earn an additional 15% (75% Total) interest in the property option (Third Milestone), in year three:

  (i)

issue the Optionor 100,000 common shares of the Company on or before January 16, 2011 (subject to any regulatory approvals required), and

  (ii)

expend up to USD $1,000,000 to complete and submit a final report by January 16, 2012, (Any excess expended in years one and two is to be applied against this $1,000,000 expenditure requirement.)

Option to Purchase 25% (100% Total) (Upon completion of the Third Milestone)

Purchase up to 20% of an interest in the property, by paying the Optionor USD$1,000,000 for each 5% incremental interest in the Property, and USD $2,000,000 for the remaining 5% interest.

Pires Property Description

The Company is exploring for Sediment Hosted Vein (SHV) gold deposits gold on 6 mineral licenses (two claim blocks deleted in the Spring 2010) covering 8,797.7hectares in southern Goiás State, Brazil. Another 4 licenses have been applied for which will extend the property north, east and west by 8000 hectares when the application process is completed. In January 2010, the Company filed two reports to relinquish two claims at the southernmost portion of the property where sampling indicated little mineralization.

Location and Accessibility

Access to the Pires is good, with the property being a two-and-a-half hour drive from Brasilia (capital of Brazil) on a paved highway that crosses the licences. The licences comprise the Pires Property (“Pires”), upon which Entourage has an option agreement to acquire up to 100% from the Brazilian property holder Infogeo Locaçeos Ltda. (“Infogeo”). Under the agreement, Entourage can earn a 40% interest in the property upon completion of US$300,000 of exploration work before May 31, 2010. By completing another US$300,000 of work before January 16, 2011 and paying the landholder 100,000 shares of Company stock, Entourage can earn a 60% interest in all the licenses. If Entourage then defines a minable deposit to the satisfaction of the Brazilian government, Entourage will then earn a 75% interest by completing another US$1,000,000 of work before January 16, 2012 and paying the landholder 100,000 shares of Company stock before January 16, 2011 and the Company has an option to acquire up to the remaining 25% for up to US$6 million.

2009 Exploration Program

The exploration program began with due diligence replication of reported highly enriched gold float samples. Entourage has collected float quartz vein, outcrop and soil samples with enriched gold concentrations. The five highest gold (Au) values to date are 405 grams per tonne (g/t), 297 g/t, 114, g/t, 80 g/t, 77 g/t, 70 g/t and 55 g/t (analyses completed at SGS-Geosol and Intertek Laboratories in Brazil, and ACME Analytical Laboratory in Canada). These highly enriched samples were collected from different parts of the property located up to 15 km apart on strike. Hand trenching has succeeded in exposing some of these occurrences as undeformed quartz veins in or close to bedrock near the float samples, and locally abundant concentrations suggest that other samples are also proximal to source.

The Pires Property covers metasedimentary strata that were deformed during the Neoproterozoic compressional event that formed the Brasilia thrust belt. Syn-deformational quartz veins and boudins comprise one of the two deposit types targeted for exploration on the Pires Property. Post deformational quartz veins carrying high values of gold possibly associated with the regional Transbrasiliano extensional event in the latest Neoproterozoic are the second deposit type targeted at Pires. Mineralization of the second, undeformed extensional quartz vein type is described in 2 places on the Property (the Garimpo, and Point 1 areas) located more than 13 km apart. To date, no mineral resource or reserves have been defined on the Property. The Pires Property merits further exploration and a two-phase program is recommended herein. Phase 1 includes: continuing surface sampling in unsampled or minimally sampled areas of the Property; completion of ongoing structural and geological mapping; surface geochemistry; hand trenching; a ground magnetic test grid; and 450 m of drilling. The estimated budget of the recommended Phase 1 program is CDN$220,500. Phase 1 should be completed by May 31, 2010. Phase 2 is dependent on the results of Phase 1, and recommends further exploration work estimated at another CDN$580,000. The largest recommended expenditure for Phase 2 is drilling to test an assumed 3 or 4 target areas, dependent on the results of Phase 1. On February 17, 2010, the Company filed, on SEDAR and EDGAR, a National Instrument 43-101 compliant report on the Pires property.

10


On April 4, 2010, the Company began drilling the first targets identified on the Point 1 area (claim 860715/2006). As of this report, the initial three holes have been drilled and results are pending. The Company intends to drill a minimum of 600 meters and intends to drill two holes in the Garimpo area (86087/2009) subject to drill availability.

The Doran Uranium Property

Option Agreement and Claim Data

In March of 2005, we entered into an option agreement with Fayz Yacoub, a professional geologist and businessman from Vancouver, whereby we could acquire 44 claim blocks prospective for uranium situated in Costebelle Township in eastern Quebec. Subsequent to entering into the property agreement, 3 additional claims blocks have been added to the project.

The Doran Uranium property consists of 47-contiguous mineral claims (polygons) covering approximately 2473.3 hectares in the Baie Johan Beetz area of Costebelle Township, Quebec. The claim block is centered at GPS 548009 E and 5572265 N.

Pertinent claim data is as follows:

Title #
Row
Column
Surface Area
(ha)
CDC 0048705 05 20 55.01
CDC 0048706 05 21 55.01
CDC 0048707 05 22 55.01
CDC 0048708 05 23 55.01
CDC 0048709 06 20 55.00
CDC 0048710 06 23 55.00
CDC 0048711 07 20 54.99
CDC 0048712 10 24 54.96
CDC 0048713 11 21 54.95
CDC 0048714 11 24 54.95
CDC 0048715 14 22 54.92
CDC 0048716 14 23 54.92
CDC 0048651 07 22 54.99
CDC 0048652 07 23 54.99
CDC 0048653 08 22 54.98
CDC 0048654 08 23 54.98
CDC 0048655 09 22 54.97
CDC 0048656 09 23 54.97
CDC 0048657 10 22 54.06
CDC 0048658 10 23 54.96
CDC 0048659 11 22 54.95

11



CDC 0048660 11 23 54.95
CDC 0048661 12 22 54.94
CDC 0048662 12 23 54.94
CDC 0048663 13 22 54.93
CDC 0048664 13 23 54.93
CDC 0048665 06 21 55.00
CDC 0048666 06 22 55.00
CDC 0048667 07 21 54.99
CDC 0064114 08 20 54.98
CDC 0064115 08 21 54.98
CDC 0064116 09 20 54.97
CDC 0064117 09 21 54.97
CDC 0064118 10 21 54.96
CDC 0064119 12 21 54.94
CDC 0064120 12 24 54.94
CDC 0064121 13 21 54.93
CDC 0064122 13 24 54.93
CDC 0064123 14 21 54.92
CDC 0064124 14 24 54.92
CDC 0064125 15 21 54.91
CDC 0064126 15 22 54.92
CDC 0064127 15 23 54.92
CDC 0064128 15 24 54.92
CDC 2024598 n/a n/a 54.92
CDC2024599 n/a n/a 54.92
CDC 0097498* n/a n/a 50.12

* Claim CDC 0097498 provides access to the property and may not be prospective for mineralization.

Location and Accessibility

The Doran property is located in the southeastern part of Quebec, along the north shore of the Gulf of St. Lawrence, and about 25 kilometers west of Aguanish, approximately 109 kilometers east of Havre St. Pierre. The property extends inland from the Gulf of St Lawrence a distance of approximately 10 kilometers to the north. Locally this area is known as “Moyenne Cote Nord” or middle coast north of the St. Lawrence Seaway.

The property is situated within the Costebelle Township, NTS map sheet 12 L/08. Access to the property is by daily scheduled flights to Natashquan-Aguanish, then by car from Aguanish to the Pashshibou River and to the southern part of the property.

The topography of the property for the most part is rolling hills having a maximum relief of 100 meters with elevation ranging from sea level to 100 meters. All mineralized areas of interest are located comfortably above sea and river levels.

The climate around the property area is characterized by long winters, generally extending from late October until mid-April.

Exploration

Exploration, including geological mapping, rock sampling, trenching and shallow drilling on the Doran Uranium Deposit resulted in the estimation of a historical uranium resource which requires verification to conform to Canadian NI 43-101 geological reporting standards. Before these standards were initiated, previous work on the property, done by Aguanish Uranium Inc., Noranda and Lacana Mining, was successful in locating and partially exposing several potential target areas, including the Doran East Centre target where three holes were drilled (1978) 14 feet apart with cores returning values of 6.4, 6.4 and 9.2 Lbs. Per ton uranium (U3 O8).

12


We made a down payment of $35,000 to acquire the option and agreed to a work commitment of $200,000 of exploration in the first year of the Doran Uranium Property agreement.

We expended $245,591 in exploration work on the property in fiscal year 2005 and a National Instrument 43-101 compliant report by Eric Ostensoe (P.Geo.) was commissioned. In late February 2006, Mr. Ostensoe completed his report and the Company posted the report on SEDAR and EDGAR (March 9, 2006) as well as on our website. In April 2007 an updated NI 43-101 Technical Report was prepared by Michel Proulx, M.Sc., P. Geo and Michel Boilly, Ph.D., P.Geo, both Qualified Persons as that term is described in National Instrument 43-101, and this report was filed on SEDAR by Abbastar Holdings Ltd. on May 2, 2007.

In May 2006, we advanced to On Track Explorations, the Doran project operator, $150,000CDN to commence drilling and ground exploration work as outlined in Mr. Ostensoe’s report. Drilling commenced thereafter on the “Main Zone” of the Doran property. Our option agreement on the Doran property requires that we expend $300,000 in year two of the agreement.

We spent $346,166 on drilling and exploration in fiscal 2006 and reported drill results on July 20, 2006. As well, in July 2006 the Government of Quebec reimbursed our company $57,745 as part of the Province’s mining exploration incentive program. This rebate was based upon our 2005 drilling exploration expenses.

In early February 2007 we contracted the services of Forages La Virole to commence drilling on the “L” anomaly situated in the north of the Doran property but four to six foot snow drifts prevented the drilling contractor from reaching the “L” anomaly so the work program was cancelled.

On February 13, 2007, we entered into a Mineral Property Option agreement with Abbastar Holdings Ltd. (“Abbastar”), a Vancouver based TSX Venture listed company, whereby Abbastar could earn up to 70% interest in the Doran property by paying us a one time $100,000 CDN payment (paid) and expending $5,000,000 over four years. The TSX Venture Exchange approved this transaction on May 30, 2007.

On May 11, 2007, our Company and Abbastar announced that drilling had commenced on the “L” anomaly of the Doran project and in all 32 holes were drilled for a total of 3,273.26 meters of diamond drilling and 1158 samples were analyzed representing 2,469.24 linear meters or 75% of the drill hole length. The results of our Phase II drilling campaign were reported August 23, 2007. A sample of the results are as follows:

  • Hole H17A (L Anomaly): 16.99m of 0.0435% U3O8 (.87lb/t),
  • Hole H18 (L Anomaly): 24.1m of 0.033% U3O8 (.66lb/t) (including 16.5m of .73lb/t announced June 28, 2007),
  • Hole H18A (L Anomaly): 7.25m of 0.023% U3O8 (.46lb/t),
  • Hole H19 (L Anomaly): 3.52m of 0.039% U3O8 (.78lb/t),
  • Hole H22 (L Anomaly): 18.44m of 0.024% U3O8 (.48lb/t),
  • Hole H27 (L Anomaly): 5.8m of 0.33% U3O8 (.66lb/t),
  • Hole H31 (N Anomaly): 0.66 meters of .29%U3O8 (5.8lb/t)(at surface).

The holes were divided into four zones with particular emphasis on the “L” zone where 18 drill holes were spotted to evaluate the lateral and depth extensions of this zone. The first four drill holes (17, 17A, 18, 18A) drilled at different azimuths and plunge angles and set up to test the L19 anomaly, recorded encouraging near surface results including 16.99 meters (55 feet) of .87lb/short ton U3O8 and 24.1 meters (79 feet) of .66lb/ton U3O8, as well, holes 27 and 27A, intersected three and four pegmatites respectively. The first pegmatite, H27, returned .66lb/ton U3O8 over 5.8 meters. The L zone remains open in all directions while lateral extension and depth extension are unknown. Best interval drill results are posted on our website.

The 2007 drilling program confirmed the existence of uranium mineralization in the northeast grid (L, N, X and Y). Findings corroborated the channel sample results of 2006 that showed mineralization to be non-uniformly distributed among the pegmatites and even within each pegmatite. Drill holes revealed that the thickness of the radioactive pegmatites range from one meter to roughly 20 meters along holes and are presented as sub-parallel multiple slabs slightly dipping to the west and separated from each other by sterile rocks. All pegmatites have been intersected at a maximum of 90 vertical meters from surface.

To date, the Doran Showing, located at the south of Doran (drilled in 2006 & Fall 2007) and the North East grid have both been successfully drilled in confirming the presence of a series of sub-parallel uranium bearing pegmatites.

13


Senior Project Geologist, Michel Proulx M. Sc. (P.Geo. and a qualified person, as that term is defined in Canadian Mining National Instrument 43-101 policy) recommended follow up drilling on the Doran Showing (Phase III) as well as an additional 4,000 meters of drilling on the L zone to gain a better understanding of the behavior of the uranium-bearing pegmatite bodies, the structural geology context and of uranium phase minerals.

The fall 2007 drilling campaign was completed in early November of that year. The program comprised 1,691 metres of drilling in 15 drill holes and was designed to test the area between the North End zone and the Hot Spot zone, the lateral extent of the Hot Spot zone, and to determine the south extension and thickness of the Hill Top pegmatite, all of which are part of the Doran showing.

This campaign was designed to further delineate the Doran Showing where we drilled in the summer of 2006. The Doran Showing consists of four distinct pegmatite-bearing structures: The Main Zone, the North End Zone, Dyke Zone and Hot Spot.

Results from this drill campaign were announced on February 4, 2008. The 2007 program comprised 1,691 metres of drilling in 15 drill holes and was designed to test the area between the North End zone and the Hot Spot zone, the lateral extent of the Hot Spot zone, and to determine the south extension and thickness of the Hill Top pegmatite, all of which are part of the Doran showing. The fall 2007 drill campaign achieved similar results to the 2006 campaign and all 15 drill holes encountered uranium mineralization.

In total over 6000 meters have been completed on the Doran property by our company and Abbastar and the companies are encouraged that the goal of delineating a Rossing type (Namibia) uranium deposit may be realized.

Abbastar completed a fall 2008 program in September-October. This program completed the second phase of the Mineral Option Agreement between Entourage and Abbastar dated February 14, 2007 and Abbastar has now earned a 35% interest in the Doran property.

The fall 2008 exploration campaign consisted of channel sampling of previously unexplored anomalies (F, G, H, I, K and LL) situated WSW of the L anomaly that was drilled in the spring of 2007. Additionally, anomalies E, Q, BB, S and RR, located due south of the L anomaly were also tested. On February 24, 2009, Abbastar Uranium released the following information on the Fall 2008 exploration program:

North section of the Doran property:

Results of the 2008 ground-based radiometric survey demonstrated a good spatial correlation between the highest-count rates and the localization of the previously determined airborne anomalies BB, P, Q, R and S.

The G zone represents the most interesting uranium site with an average value of 0.56 lb/ton U3O8 from 22 samples collected with a range of 0.06 to 0.88 U3O8 lb/t, with a high value at 3.11 lb/t U3O8.

Nearby anomalies F and H also display relatively high uranium values (F at 0.63 lb/t U3O8 from six samples with a range of 0.27 to 1.20 U3O8 lb/t and H at 0.5 lb/t U3O8 from four samples with a range of 0.21 to 1.06 lb/t U3O8).

South section of Doran property:

The large extent of the radioactive pegmatite outcrops, the encouraging assay obtained and the proximity of the west zone to the main Doran showing make the former a prime target for future drilling.

The completion of the Fall 2008 exploration program earned Abbastar an additional 15% interest in the property and Abbastar has now earned a 35% interest in the Doran property. As of December 31, 2009, Abbastar had earned a 35% interest in the Doran property but, has allowed the balance of their option to expire.

ITEM 4A. UNRESOLVED STAFF COMMENTS
   
Not applicable.
   
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

5.A Operating results

Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. Accordingly, we must raise cash from sources other than the sale of minerals found on the properties. That cash must be raised from other sources. Our only other source for cash at this time is investments by others in our Company. We must raise cash to implement our project and stay in business. Even if we raise money, we do not know how long the money will last. It depends upon the amount of exploration we conduct and the cost thereof.

14


We will attempt to raise additional money through a subsequent private placement, public offering or through loans. If we do not raise all of the money we need, we will have to find alternative sources of funding, like a public offering, a private placement of securities, or loans from our officers or others.

Our exploration program is explained in as much detail as possible in the business section of this annual report. We are not going to buy or sell any plant or significant equipment during the next twelve months. We will not buy any equipment until we have located a body of minerals and we have determined they are economical to extract from the land.

Year ended December 31, 2009 compared to year ended December 31, 2008

Our loss (as well as operating expenses) for the year ended December 31, 2009 (“Annual 2009”) totaled $727,683 or $0.11 per share compared to $414,840 or $0.05 per share for the period ended December 31, 2008 (“Annual 2008”). The losses in Annual 2009 were higher mainly because:

  • The Company expended $262,182 in mineral property acquisition and exploration costs in Annual 2009, whereas we expended $nil in mineral property acquisition and exploration costs in Annual 2008 because all the Doran property’s costs were Abbastar’s responsibility. During Annual 2008 we received a refund of $9,485 from the Nevada division of the Bureau of Land Management and received a $49,237 refund from the Quebec government in exploration tax credits from previous years, while in Annual 2009 we received $nil in any government refunds relating to exploration work.

  • During Annual 2009 the stock based compensation expense was $228,510 whereas during Annual 2008 the stock based compensation was nil.

  • As a result of increased business activities during Annual 2009, the office and sundry expenses were $41,932 whereas during Annual 2008 the office and sundry expenses were $34,231.

  • Professional fees were $108,462 during Annual 2009 compared to $62,006 during Annual 2008. This was due to the completion of litigation during annual 2009 with CMKM and 1010 and the increase in legal costs to effect a 10:1 reverse stock split in March 2009.

However during Annual 2009 the losses were partly reduced by the following decreased expenses:

  • During Annual 2009, management fees were $78,000 compared to $300,000 during Annual 2008. This was due to the elimination of management contracts at December 31, 2008.

  • During annual 2009 the consulting fees were $nil compared to $60,000 during Annual 2008. This was due to elimination of a consulting contract at December 31, 2008.

  • The promotion and travel expenses were $5,844 in Annual 2009 compared to $15,758 in Annual 2008 due to reduced promotional activities.

Year ended December 31, 2008 compared to year ended December 31, 2007

Our loss (as well as operating expenses) for the year ended December 31, 2008 (“Annual 2008”) totaled $414,840 or $0.05 per share compared to $598,783 or $0.08 per share for the period ended December 31, 2007 (“Annual 2007”). The losses in Annual 2008 were lower mainly because:

  • The Company expended $nil in mineral property acquisition and exploration costs in Annual 2008 because all the Doran property’s costs were Abbastar’s responsibility. During Annual 2008 we received a refund of $9,485 from the Nevada division of the Bureau of Land Management and received a $49,237 refund from the Quebec government in exploration tax credits from previous years, while in Annual 2007 we expended a net total of $61,462 in mineral property acquisition and exploration costs. This constituted primarily of the option payments of $75,000 cash and 500,000 shares ($175,530) for the Doran (Quebec) uranium property (which were reduced by $100,000 received from
  • Abbastar for optioning the Doran property to them) and approximately $61,655 in actual exploration costs on the Doran property (which were reduced by $150,723 due to Quebec mineral exploration credit refunds).

15


  • During Annual 2008 the stock based compensation expense was nil whereas during Annual 2007 the stock based compensation (which mostly resulted from re-pricing of existing 505,000 stock options to US$2.50 per share) was $113,074.

  • As a result of reduced business activities during Annual 2008, the office and sundry expenses were $34,231 whereas during Annual 2007 the office and sundry expenses were $56,532; similarly, promotion and travel expenses were $15,758 in Annual 2008 compared to $77,481 in Annual 2007.

However, during Annual 2008 management fees were $300,000 compared to $195,000 during Annual 2007. This was due to revised fee agreements. Professional fees were $62,006 during Annual 2008 compared to $34,568 for Annual 2007. This was due to ongoing litigation during annual 2008 with 101047025 Saskatchewan Ltd. and CMKM Diamonds Inc.

5.B Liquidity and capital resources

As of the date of this report, we have yet to generate any revenues from our business operations.

On December 31, 2009 the Company had $2,212 in cash compared to $894 on December 31, 2008. On December 31, 2009 we had a negative working capital position of $239,318 compared to a negative working capital position of $553,551 on December 31, 2008.

During the year ended December 31, 2009, the Company completed a non-brokered private placement of 4,037,500 units at a price of U.S$0.15 each for a total proceed of $683,057, and the Company received total proceed of $74,693 from exercise of warrants.

During the year ended December 31, 2008 we received no monies from issuances of any common shares.

We received net cash of $473,300 from financing activities in 2009, as compared to 309,099 in 2008 and $149,215 in 2007. The net cash received from financing activities in 2009 consists of $26,862 from a loan payable, $337,686 as repayment to due to related parties, $757,749 in net proceeds from the sale of our common stock, and $26,375 in subscriptions received.

Subsequent to December 31, 2009, the Company completed a non-brokered private placement of 1,613,162 units at a price of U.S. $0.15 each. Each unit consists of one common share and one share purchase warrant, each warrant enabling the purchaser to buy an additional share for a period of one year at a price of US $0.25 each.

On February 18, 2010, Ansell Capital Corp., (“Ansell”) a TSX Venture listed company advanced the Company $75,000 CDN, pursuant to a Letter of Intent to a possible Plan of Arrangement among the companies; these monies were used to pay down the Company’s accounts payable; furthermore, Ansell set up an exploration expense account to allow Ansell to expend $200,000 USD as due diligence before making a definitive decision to effect the Plan of Arrangement.

We do not need any funds in the near future for the exploration work on our Doran property since the Company is the 65% unencumbered owner of the Doran property. However, we need to raise funds soon to fund our ongoing general and administrative costs, although there is no guarantee that we will be able to do so.

5.C Research and development, patents and licenses, etc.

Our methods of exploration, development and extraction are not unique to our company but are common in our industry.

We do not rely on patents, technological licenses or intellectual property licenses in our operations.

We did not have any research and development expenditures in the year ended December 31, 2009 or any past years.

5.D Trend information

Our Doran mineral property is prospective for uranium. There are few producers of uranium in the world in a market that is dominated by senior producers Cameco (Canada), Areva (formerly Cogema, France) Energy Resources (Australia), Denison (Canada) and SXR (South Africa). The market for uranium is a homogeneous, integrated commodities market.

The market is not one that is particularly susceptible to the influence of one or more large suppliers or buyers. The world average grade from producing uranium mines is 0.15 per cent U3O8, with spot uranium prices having risen from a cyclical low of US$7.10 (U.S.) per pound in late 2000 to US$135/lb. on June 11, 2007. The weekly spot price for U3O8 as at April 26, 2010 was US$41.50/lb.

16


The Pires property is prospective for gold. Gold is a highly liquid commodity that trades continuously for 24 hours per day in various locations worldwide including New York, London, Sydney and Hong Kong. Brazil hosts many gold deposits of varying grades and sizes. Should our property become a producer, its impact on world gold supplies and price would be negligible.

5.E Off-balance sheet arrangements

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

5.F Tabular disclosure of contractual obligations

None

5.G Safe harbor

Not applicable.

ITEM 6. DIRECTORS, SENIOR MANAGEMENTS AND EMPLOYEES

6.A Directors and senior management

The following is a list of the current directors and senior officers of the Company, their municipalities of residence, their current position with the Company and their principal occupations:

Name of Director Age Principal Occupation
     
Gregory F. Kennedy
President, Director
Victoria, BC
60

President of the Company

     
Dr. Paul Shatzko
Director, Chairman and
Secretary
Langley, BC
76


Director, Chairman and Secretary


     
Michael B. Hart
Director,
Roberts Creek, BC
61

Director

     
Executive Officers:    
     
Name of Officer Age Office
     
Gregory F. Kennedy 60 President, Chief Executive Officer
Paul Shatzko 76 Secretary and Chairman
Pradeep Varshney 53 Chief Financial Officer

Our directors hold office until our next annual meeting of shareholders and until their successors have been elected and qualified. Our officers are elected by our board of directors at our annual meeting after each of our annual meetings of shareholders and hold office until their death, or until they resign or have been removed from office.

The following describes the business experience of our directors and executive officers, including other directorships held in reporting companies:

17


Gregory F. Kennedy – Director, President and Chief Executive Office

At our annual general meeting in April 2004, Mr. Kennedy was appointed as President of our company. Since May 2003, Greg Kennedy has been a director of the Company. In July 2002, Mr. Kennedy became a Director of Abbastar Holdings Ltd. (TSX:V-ABA.H.), formerly Fountain House Holdings located in Vancouver, British Columbia. In May 2007 ABA.H changed its name from Abbastar Holdings to Abbastar Uranium, reflecting a change of business and graduation to a Tier II listing on the TSX Venture Exchange. Mr. Kennedy ceased to be a director of Abbastar in August 2006. Since October 2007, he has been a director and secretary of Trijet Mining Corp.

Since November 2002, Mr. Kennedy was the President and a Director of Digital Capital.com, Inc., a Delaware corporation, located in Squamish, British Columbia. Digital Capital.com, Inc. was a blank check corporation with no business purpose other than to merge with or acquire another corporation. Digital Capital.com, Inc. did not merge with any entity and the company ceased to exist in 2004.

Due to a medical condition, from December 2000 to July 2001, Mr. Kennedy was not employed and furnished limited consulting services as an independent contractor. From November 1998 to December 2000, Mr. Kennedy was Marketing Director of Titan Trading Analytics Inc. located in Vancouver, British Columbia. Titan Trading is a purveyor of computer software designed for the securities and investment community. From January 1991 to November 1998, Mr. Kennedy was a stockbroker with McDermid St. Lawrence Securities, now Raymond James Canada, located in Vancouver, British Columbia.

Dr. Paul Shatzko – Director, Chairman and Secretary

Dr. Shatzko is a retired radiologist and self employed businessman; he is a director of several public companies and a director of Entourage Mining Ltd. since July 31, 2004. Since October 2007, he has been a director and President of Trijet Mining Corp.

Michael B. Hart - Director

Mr. Hart has worked in the financial markets sector with a number of large financial institutions between 1983 and 1990 where he acted as an account executive and financial consultant. From 1990-1995, Mr. Hart fulfilled the responsibilities of business and sales manager within the automotive industry. Subsequent to 1995, Mr. Hart worked with an investment-banking group that was responsible for taking projects from Carinat up to the public markets and has had experience with public companies in the oil and gas industry. Currently, is a member of the Board of Directors of AMG Oil Ltd. Mr. Hart is a Member of the Board and the Corporate Secretary for Entourage Mining Ltd.

Corey Klassen- Director

Mr. Klassen, did not stand for re-election at the Annual General Meeting in 2009.

Pradeep Varshney, Chief Financial Officer

Pradeep Varshney is a Certified General Accountant. In addition, he has an MBA from the University of Western Ontario, and an MS (Chemical Engineering) from the University of New Hampshire, USA. Mr. Varshney has been involved with public companies for the last 16 years. Since October 2007, he has been a director and CFO of Trijet Mining Corp. He was formerly the CFO of Mountain Province Diamonds Inc. and Gee-Ten Ventures Inc.

6.B Compensation

We are required, under applicable securities legislation in Canada, to disclose to our shareholders details of compensation paid to our directors. The following fairly reflects all material information regarding compensation paid to our directors in our fiscal year ended December 31, 2009

18


 Summary Compensation Table   





NAME AND
PRINCIPAL
POSITION






YEAR
ANNUAL COMPENSATION  LONG-TERM COMPENSATION




Salary
($)




Bonus
($)



Other Annual
Compensation
($)
Awards


LTIP
payouts
($)



All Other
Compensation
($)

Restricted
Stock
Awards
($)
Securities
Underlying
Options/
SAR’s
(#)
Gregory F. Kennedy,
President, Chief Executive Officer & Director
2009

Nil

Nil

30,000

Nil

Nil

Nil

Nil

Michael Hart,
Secretary &Director
2009
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Paul Shatzko,
Chairman & Director
2009
Nil
Nil
30,000
Nil
Nil
Nil
Nil

6.C Board practices

The directors hold office until the next annual general meeting of the shareholders at which time they may stand for re-election. We are required to hold an annual general meeting once in every calendar year and not longer than thirteen months from the last annual general meeting.

No director currently has service contracts with us, nor are they entitled to any termination benefits.

We do not have an executive committee.

Our audit committee is comprised of Gregory F. Kennedy, Dr. Paul Shatzko and Michael Hart. Members of the audit committee oversee our accounting and financial reporting process and the audits of our financial statements. The audit committee also receives and addresses complaints regarding accounting, internal controls, and auditing issues. No complaints have been received by us as of the date hereof. Further, the audit committee provides protection for whistle blowers. Again, no whistle blowing issues have presented themselves to us as of the date hereof. The audit committee functions in a collective manner with respect to all issues that come before it.

6.D Employees

We have no employees other than our officers and directors. When we engage in exploration of our resource properties, we use geological consultants and contract labor to support them.

6.E Share ownership

Our directors and officers own beneficially the following shares as of the date of this annual report:

Name
Number of Shares Owned
Percentage of Outstanding
Common Shares1
Gregory F. Kennedy 825,000 8.6%
Paul Shatzko 809,6662 8.4%
Michael Hart 450,000 4.7%
Pradeep Varshney 438,2003 4.5%

  1.

Based on 9,696,855 issued and outstanding shares as of the date of this Report.

  2.

Includes common shares held by spouse,

  3.

Includes common shares held by spouse

19


The Company Stock Option Plan provides for equity participation in the Company by its directors, officers, employees and consultants through the acquisition of common shares pursuant to the grant of options to purchase common shares. The exercise price for options granted under the Stock Option Plan is determined by the closing trading price on the day immediately preceding the date of grant or such other price as the Directors, in their discretion, may determine. The Company has reserved and authorized 720,000 shares (on a post-reverse stock split basis) for issuance under the Stock Option Plan.

Options can be exercisable for a term of up to five years, subject to earlier termination in the event of death or the optionee’s cessation of services to the Company; and options granted under the stock option plan are non-assignable, except by will or the laws of descent and distribution.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A Major shareholders

As used in this section, the term “beneficial ownership” with respect to a security is defined by Regulation 228.403 under the Securities Exchange Act of 1934, as amended, as consisting of: (1) any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power (which includes the power to vote, or to direct the voting of such security) or investment power (which includes the power to dispose, or to direct the disposition of, such security); and (2) any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership.

As of the date of this annual report, there are 9,696,855 common shares issued and outstanding in our capital stock. We were authorized to issue 100,000,000 common shares at December 31, 2009; subsequent to December 31, 2009, the Company changed its authorized capital to unlimited*.

*Notice of Alteration electronically filed with the BC Registrar of Companies on April 22, 2010 at 9:02 am PDT.

As of the date of this annual report, the following persons known to us were the beneficial owner of more than five percent of our outstanding common shares:

Name Number of Shares Percentage of Total
Gregory F Kennedy 825,000 8.5%
Paul Shatzko 809,666 8.4%

Of our 79 registered shareholders, 46 shareholders are Canadian residents (who hold approximately 67.1% of our issued and outstanding shares), 28 shareholders are United States residents (who hold approximately 30.3% of our issued and outstanding shares) and 5 shareholders are foreign residents (who hold approximately 2.6% of our issued and outstanding shares).

Each of our issued common shares entitles the holder to one vote in general meeting. There are no disproportionate or weighted voting privileges.

We are not controlled directly or indirectly by any other corporation or any other foreign government or by any other natural or legal person, severally or jointly.

There are no arrangements the operation of which at a subsequent date may result in a change in our control.

Our trust and transfer agent is Computershare Trust Company of Canada, which is located at 4th Floor – 510 Burrard Street, Vancouver, British Columbia, Canada V6C 3B9.

7.B Related party transactions

During the Fiscal Year Ended December 31, 2009

Amounts payable to related parties as of December 31, 2009 of $91,066 (2008 - $428,752) is owing to directors, to a company controlled by an officer, and to a public company with directors in common, for management fees, consulting fees and for expenses paid on behalf of the Company. The amounts are non-interest bearing, unsecured, and have no fixed terms of repayment.

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During the year ended December 31, 2009 the Company incurred $78,000 (2008 - $300,000 and 2007 - $195,000) in management fees to its directors and officers.

The above transactions have been in the normal course of operations and, in management’s opinion, undertaken with the same terms and conditions as transactions with unrelated parties.

From January 1, 2010 to the date of this report

Gregory Kennedy and Paul Shatzko are each earning management fees of $2,500 per month from us. RSA Management Services Inc., a company controlled by Pradeep Varshney, is earning management fees of $1,500 per month from us.

7.C. Interests of experts and counsel

Not Applicable

ITEM 8. FINANCIAL INFORMATION

8.A Consolidated Statements and other Financial Information

The following financial statements for the year ended December 31, 2009 with comparatives for December 31, 2008 and December 31, 2007 (except for the balance sheet, which does include comparative for December 31, 2007), have been audited by an independent auditor, are accompanied by an audit report and are attached and incorporated herein:

(a)

balance sheet;

(b)

income statement;

(c)

statement showing changes in equity;

(d)

cash flow statement;

(e)

related notes and schedules required by the comprehensive body of accounting standards pursuant to which the financial statements are prepared; and

(f)

a note analyzing the changes in each caption of shareholders’ equity presented in the balance sheet.

Incorporated herewith are the comparative financial statements covering the latest three financial years, audited in accordance with a comprehensive body of auditing standards.

Export Sales

We have not had any export sales in our latest financial year ended December 31, 2009 and, as a result, the percentage of export sales for the Company was zero.

Legal Proceedings

On August 27, 2007 we filed a Writ of Summons and Statement of claim against 101047025 Saskatchewan Ltd. (“1010”) and CMKM Diamonds Inc. (“CMKM”) for breach of contract of the October 20, 2005 Mineral Property Option and Assignment Agreements among the parties. We sought to have the Supreme Court of British Columbia set aside the aforementioned contracts for failure, on behalf of the defendants, to complete the terms as set out in those contracts. In October 2008 we entered into a proposed settlement agreement that was subsequently agreed to verbally by all parties. This settlement became effective July 03, 2009 and all legal matters among the Company and CMKM have been resolved definitively.

As a result of the settlement, CMKM returned 4,500,000 common shares of the Company in exchange for a cash payment of US $85,000 (paid). The shares were returned to treasury and cancelled. The Company has also settled its claims with 1010 and agreed to return the Smeaton properties in return for the withdrawal of all claims against the Company by 1010.

Management is not aware of any material proceedings in which any director, any member of management or any of the Company’s affiliates are a party adverse to, or have a material interest adverse to, our company.

Dividend Policy

We have not paid dividends on the common shares in any of its last five fiscal years. The directors of our company will determine if and when dividends should be declared and paid in the future based on the Company’s financial position at the relevant time. All of the common shares of our company are entitled to an equal share in any dividends declared and paid.

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8.B Significant Changes

There have been no significant changes, as that term is defined in the rules and policies governing the use of the Form 20F, since the date of the audited financial statements included herein.

ITEM 9. THE OFFER AND LISTING

9.A. Offer and listing details

Our shares commenced trading on February 2, 2004 on the OTC Bulletin Board in the United States under the symbol ETGMF. On March 6, 2009 we completed a 10 for 1 reverse stock split and our symbol was subsequently changed to ENMGF.

The following table sets forth the high and low closing prices in US funds of our common shares traded, taking into account our 10 for 1 reverse split effective March 6, 2009.

Annual Periods High Low
January 1, 2005 to December 31, 2005 $6.10 $1.10
January 1, 2006 to December 31, 2006 $5.30 $1.70
January 1, 2007 to December 31, 2007 $3.30 $0.60
January 1, 2008 to December 31, 2008 $1.00 $0.10
January 1, 2009 to December 31, 2009 $0.75 $0.11

Quarterly Periods

  High Low
January 1, 2008 to March 31, 2008 $0.80 $0.30
April 1, 2008 to June 30, 2008 $1.00 $0.30
July 1, 2008 to September 30, 2008 $0.80 $0.20
October 1, 2008 to December 31, 2008 $0.70 $0.10
January 1, 2009 to March 31, 2009 $0.75 $0.10
April 1, 2009 to June 30, 2009 $0.72 $0.12
July 1, 2009 to September 30, 2009 $0.60 $0.25
October 1, 2009 to December 31, 2009 $0.50 $0.27
January 1, 2010 to March 31, 2010 $0.48 $0.21

Monthly Periods

  High Low
October 2009 $050 $0.27
November 2009 $0.47 $0.32
December 2009 $0.30 $0.20
January 2010 $0.35 $0.21
February 2010 $0.48 $0.24
March 2010 $0.40 $0.21

9.B Plan of distribution

Not applicable

9.C Markets

Our shares commenced trading on February 2, 2004 on the OTC Bulletin Board in the United States under the symbol ETGMF, however, a lack of liquidity may make it difficult to resell shares.

On March 6, 2009 we completed a 10 for 1 reverse stock split and our symbol was subsequently changed to ENMGF.

There are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in any of our securities.

9.D Selling shareholders

Not applicable

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9.E Dilution

Not applicable

9.F Expenses of the issue

Not applicable

ITEM 10. ADDITIONAL INFORMATION

10.A Share Capital

Not Applicable.

10.B Memorandum and articles of association

We have no bylaws under British Columbia law. We have Articles of Incorporation. A summary of certain provisions of our Articles of Incorporation is provided below.

1.

Our Memorandum and Articles of Incorporation do not limit in any manner our business purpose. As such, no provision relating to the same is contained in the Memorandum or Articles of Incorporation.

     
2.

Directors

     
a.

A director shall disclose the nature and extent of his interest in a contract or transaction. A director shall not vote on any contract or transaction in which he is interested. The foregoing shall not apply to: (1) a loan to us which the director is guaranteeing repayment; (2) any contract or transaction for the benefit of a holding company or a subsidiary corporation of which the a director is a director; (3) any contract by a director to subscribe for or underwrite securities in which a director is interested if all the other directors are interested; (4) determining the remuneration of the directors: (5) purchasing and maintaining insurance to cover directors against liability incurred by them as directors; or, (6) indemnification of any director.

     
b.

Directors are empowered to vote compensation to them even in the absence of an independent quorum.

     
c.

Our board of directors may from time to time on our behalf borrow money. We have no prohibition against loaning money to a director.

     
d.

There are no provisions for retirement or non-retirement of directors under an age limit requirement.

     
e.

There is no number of shares that must be owned for director's qualification.

     
3.

Shares

     
a.

The board of directors may from time-to-time declare and authorize payment of dividends. No dividend will be paid otherwise than out of funds and/or assets properly available therefore. There is no time limit after which dividend entitlement lapses.

     
b.

Each shareholder shall have one vote for each share of common stock owned by him. At each annual meeting the entire board of directors retire and shareholders shall elect an new board of directors. There are no staggered intervals and cumulative voting is not provided for.

     
c.

Shareholders do not have the right to share in our profits.

     
d.

Shareholders are entitled to share in any surplus upon liquidation, after the payment of all creditors and superior equity securities.

     
e.

We may redeem any of our shares at the price and on the terms as determined by our board of directors.

     
f.

There are no sinking fund provisions.

     
g.

Shareholders are not liable for further capital calls.

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h.

There are no provisions discriminating against any existing or prospective holder of common stock as a result of a shareholder owning a substantial number of shares of common stock.

     
4.

No alteration shall be valid as to any outstanding shares unless the holders of the shares consent thereto or by a resolution passed by 3/4s of the outstanding shares.

     
5.

The annual general meeting of shareholders is called by written notice mailed by the board of directors to each shareholder of record. A quorum shall be a least two persons represented at the meeting either in person or by proxy. Extraordinary (special) general meetings are called by written notice mailed by the board of directors to each shareholder of record. The quorum remains the same for Extraordinary Meetings. There are no conditions of admission to the meetings.

     
6.

There are no limitations on the rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities, imposed by the laws of British Columbia, or our articles or other constituent document.

     
7.

There are no provisions in our articles that would have an effect of delaying, deferring or preventing a change in our control and that would operate only with respect to any merger, acquisition or corporate restructuring involving us.

     
8.

There are no provisions in our articles that require the disclosure of shareholder ownership.

     
9.

The law applicable to us is not significantly different from that in the host country.

     
10.

The conditions imposed by the articles governing changes in the capital are not more stringent than is required by law.

     
10. C

Material contracts

There are no material contracts except as discussed in this Annual Report and except as entered into in the ordinary course of business. The following material contracts referred to in this Annual Report may be inspected at our offices during normal business hours.

  1.

Agreement dated March 15, 2005 between Fayz Yacoub and the Company, and amended March 6, 2007 whereby the Company can acquire a 100% interest in the Doran Uranium Property (referenced by way of the Company’s 20- F filed with the SEC on July 1, 2005);

     
  2.

Agreement dated April 21, 2005 between the Company and CMKM Diamonds, Inc. whereby CMKM may acquire up to a 10% interest in the Company’s Black Warrior Project (referenced by way of the Company’s 20-F filed with the SEC on July 1, 2005);

     
  3.

Assignment Agreement dated October 20, 2005 between the Company and CMKM Diamonds Inc., whereby the Company assumed all of the rights of CMKM, if any, in the Hatchet Lake Property (referenced by way of the Company’s 6-K filed with the SEC on November 23, 2005);

     
  4.

Agreement dated October 20, 2005 between the Company and 101047025 Saskatchewan Ltd., whereby the Company may acquire up to 80% interest in the Smeaton/Forte a la Corne properties (referenced by way of the Company’s 6-K filed with the SEC on November 25, 2005); and

     
  5.

Agreement dated February 13, 2007 between the Company and Abbastar Uranium Corp. (formerly Abbastar Holding Ltd.) whereby Abbastar may earn up to 70% interest in the Doran uranium prospect in Costebelle Township, Quebec. (referenced by way of the Company’s 6-K filed February 14, 2007).

     
  6.

Agreement dated June 17, 2009 between the Company and Infogeo Servicos e Locacoes Ltda,, whereby the Company can earn a 100% interest in the Pires gold project in south central Brazil.

     
  7.

Letter of Intent (“LOI”) signed February 18, 2010 with Ansell Capital Corp., (“Ansell”) a TSX Venture listed company, pursuant to which Ansell proposes to acquire all of the outstanding and issued shares of the Company through a plan of arrangement (the “Arrangement”) under the British Columbia Corporations Act.

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10.D Exchange Controls

There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares, other than withholding tax requirements. See “Item 10.E Taxation”.

There is no limitation imposed by Canadian law or by our constituent documents on the right of a non-resident to hold or vote common shares, other than are provided in the Investment Canada Act (Canada). The following summarizes the principal features of the Investment Canada Act (Canada).

The Investment Canada Act (Canada) requires certain “non-Canadian” individuals, governments, corporation or other entities who wish to acquire a “Canadian business” (as defined in the Investment Canada Act), or establish a “new Canadian business” (as defined in the Investment Canada Act) to file either a notification or an application for review with a governmental agency known as “Investment Canada”. The Investment Canada Act requires that certain acquisition of control of Canadian business by a “non-Canadian” must be reviewed and approved by the Minister responsible for the Investment Canada Act on the basis that the Minister is satisfied that the acquisition is “likely to be of net benefit to Canada”, having regard to criteria set forth in the Investment Canada Act. Only acquisitions of control are reviewable under the Investment Canada Act; however, the Investment Canada Act provides detailed rules for the determination of whether control has been acquired and, pursuant to those rules, the acquisition of one-third or more of the voting shares of a corporation may, in some circumstances, be considered to constitute an acquisition of control. Certain reviewable acquisitions of control may not be implemented before being approved by the Minister; if the Minister does not ultimately approve a reviewable acquisition, which has been completed, the acquired Canadian business must be divested. Failure to comply with the review provisions of the Investment Canada Act could result in, amongst other things, an injunction or a court order directing disposition of assets of shares.

10.E Taxation

The following summary is not, and is not to be construed as, tax advice to any particular Shareholder. Each prospective and current Shareholder is urged to obtain independent advice as to the applicable Canadian, U.S. or other tax consequences of an investment in common shares applicable to the Shareholder’s particular circumstances.

Certain US Federal Income Tax Consequences

The following is a general discussion of the material United States Federal income tax law for U.S. holders that hold such common shares as a capital asset, as defined under United States Federal income tax law and is limited to discussion of U.S. Holders that own less than 10% of the common stock. This discussion does not address all potentially relevant Federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of Federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences.

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended to the date hereof (the “Code”), Treasury Regulations, published Internal Revenue Service (“IRS”) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time. In addition, this discussion does not consider the potential effects, both adverse and beneficial, of any future legislation that, if enacted, could be applied, possibly on a retroactive basis, at any time. The following discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Company and no opinion or representation with respect to the United States Federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares of the Company should consult their own tax advisors about the Federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Company.

U.S. Holders

As used herein, a “U.S. Holder” is a holder of common shares of the Company who or which is a citizen or individual resident (or is treated as a citizen or individual resident) of the United States for federal income tax purposes, a corporation or partnership created or organized (or treated as created or organized for federal income tax purposes) in the United States, including only the States and District of Columbia, or under the law of the United States or any State or Territory or any political subdivision thereof, or a trust or estate the income of which is includable in its gross income for federal income tax purposes without regard to its source, if, (i) a court within the United States is able to exercise primary supervision over the administration of the trust and (ii) one or more United States trustees have the authority to control all substantial decisions of the trust.

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For purposes of this discussion, a U.S. Holder does not include persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers and Holders who acquired their stock through the exercise of employee stock options or otherwise as compensation.

Distributions on common shares of the Company

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions to the extent that the Company has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder’s United States Federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder’s United States Federal taxable income by those who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below). To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holder’s adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder that is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder that is a corporation.

Dividends paid on the common shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Company if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Company. The availability of this deduction is subject to several complex limitations, which are beyond the scope of this discussion.

Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations, which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate shares of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign source income bears to his or its world-wide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. There are further limitations on the foreign tax credit for certain types of income such as “passive income,” “high withholding tax interest,” “financial services income,” “shipping income” and certain other classifications of income. The availability of the foreign tax credit and the application of the limitations on the credit are fact specific and holders and prospective holders of common shares of the Company should consult their own tax advisors regarding their individual circumstances.

Disposition of common shares of the Company

A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between the amount of cash plus the fair market value of any property received, and the Holder’s tax basis in the common shares of the Company. This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder. Any capital gain will be a short-term or long-term capital gain or loss depending upon the holding period of the U.S. Holder. Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders that are individuals, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders which are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

Certain Canadian Federal Income Tax Consequences

The following discussion summarizes the principal Canadian federal income tax considerations generally applicable to a person who owns one or more common shares of the Company (the “Shareholder”), and who at all material times for the purposes of the Income Tax Act (Canada) (the “Canadian Act”) deals at arm’s length with the Company, holds all common shares solely as capital property, is a non-resident of Canada, and does not, and is not deemed to, use or hold any Common share in or in the course of carrying on business in Canada. It is assumed that the common shares will at all material times be listed on a stock exchange that is prescribed for the purposes of the Canadian Act.

26


This summary is based on the current provisions of the Canadian Act, including the regulations thereunder, and the Canada-United States Income Tax Convention (1980) (the “Treaty”) as amended. This summary takes into account all specific proposals to amend the Canadian Act and the regulations thereunder publicly announced by the government of Canada to the date hereof and the Company’s understanding of the current published administrative and assessing practices of Canada Customs and Revenue Agency. It is assumed that all such amendments will be enacted substantially as currently proposed, and that there will be no other material change to any such law or practice, although no assurances can be given in these respects. Except to the extent otherwise expressly set out herein, this summary does not take into account any provincial, territorial or foreign income tax law or treaty.

This summary is not, and is not to be construed as, tax advice to any particular Shareholder. Each prospective and current Shareholder is urged to obtain independent advice as to the Canadian income tax consequences of an investment in common shares applicable to the Shareholder’s particular circumstances.

A Shareholder generally will not be subject to tax pursuant to the Canadian Act on any capital gain realized by the Shareholder on a disposition of a Common share unless the Common share constitutes “taxable Canadian property” to the Shareholder for purposes of the Canadian Act and the Shareholder is not eligible for relief pursuant to an applicable bilateral tax treaty. A Common share that is disposed of by a Shareholder will not constitute taxable Canadian property of the Shareholder provided that the Common share is listed on a stock exchange that is prescribed for the purposes of the Canadian Act (the Toronto Stock Exchange is so prescribed), and that neither the Shareholder, nor one or more persons with whom the Shareholder did not deal at arm’s length, alone or together at any time in the five years immediately preceding the disposition owned, or owned any right to acquire, 25% or more of the issued shares of any class of the capital stock of the Company. In addition, the Treaty generally will exempt a Shareholder who is a resident of the United States for the purposes of the Treaty, and who would otherwise be liable to pay Canadian income tax in respect of any capital gain realized by the Shareholder on the disposition of a Common share, from such liability provided that the value of the Common share is not derived principally from real property (including resource property) situated in Canada or that the Shareholder does not have, and has not had within the 12-month period preceding the disposition, a “permanent establishment” or “fixed base,” as those terms are defined for the purposes of the Treaty, available to the Shareholder in Canada. The Treaty may not be available to a non-resident Shareholder that is a U.S. LLC, which is not subject to tax in the U.S. Any dividend on a Common share, including a stock dividend, paid or credited, or deemed to be paid or credited, by the Company to a Shareholder will be subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, or such lesser rate as may be available under an applicable income tax treaty. Pursuant to the Treaty, the rate of withholding tax applicable to a dividend paid on a Common share to a Shareholder who is a resident of the United States for the purposes of the Treaty will be reduced to 5% if the beneficial owner of the dividend is a company that owns at least 10% of the voting stock of the Company, and in any other case will be reduced to 15%, of the gross amount of the dividend. It is Canada Customs and Revenue Agency’s position that the Treaty reductions are not available to a Shareholder that is a “limited liability company” resident in the United States. The Company will be required to withhold any such tax from the dividend, and remit the tax directly to Canada Customs and Revenue Agency for the account of the Shareholder.

ALL PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES.

10.F Dividends and paying agents

Not Applicable to Annual Reports on Form 20F.

10.G Statement by experts

Not Applicable to Annual Reports on Form 20F.

10.H Documents on Display

The documents concerning the Company which are referred to in this Report on Form 20F are located at its principal executive offices at the address on the face page of this Report.

10.I Subsidiary information

We had one subsidiary, Entourage USA Inc. located 711 S. Carson Street, Suite 4, Carson City, NV 89701. The charter of Entourage USA was not renewed in December 2008.

27



ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We do not have market portfolios and do not engage in trading risk sensitive instruments or financial instruments. We are an extractive enterprise.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

We have had no material defaults in payment of principal, interest or sinking or purchase fund installments. We are an extractive enterprise.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable

ITEM 15.T CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2009, pursuant to Rule 13a-15(b) of the Exchange Act. Based no this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2009.

Management’s Annual Report on Internal Control Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

As of December 31, 2009, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under COSO and SEC rules were: (1) lack of a functioning audit committee and lack of a majority of independent directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company’s Chief Financial Officer in connection with the preparation of our financial statements as of December 31, 2009 and communicated the matters to our management and board of directors.

Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an affect on the Company’s financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of independent directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures, could impact the Company’s financial statements for the future years.

28


We are committed to improving our financial organization. As part of this commitment, we hope to create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

Management believes that the appointment of one or more independent directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company’s Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result in proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future.

Any effort to increase the size of the Board of Directors, appoint independent directors or personnel is conditional upon the Company to raise additional capital.

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Our management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only the management’s report in this annual report.

Changes in Internal Control over financial reporting

During the year ended December 31, 2009, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16. [reserved]
   
ITEM 16.A AUDIT COMMITTEE FINANCIAL EXPERT

We do not have an audit committee financial expert serving on our audit committee. Given the Company’s small size and limited operations, to date we have been unable to attract a financial expert to serve on our board of directors.

ITEM 16.B CODE OF ETHICS

We have a written Code of Ethics, which was filed as an exhibit to our Annual Report on Form 20-F for our fiscal year ended December 31, 2007, and which is incorporated by reference as an exhibit hereto.

ITEM 16.C PRINCIPAL ACCOUNTANT FEES AND SERVICES

a) Audit Fees

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the Company’s principal accountant(s) for the audit of the Company’s annual financial statements, together with services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $16,092 for the year ended December 31, 2008 and $24,536 for the year ended December 31, 2007.

29


(b)  Audit-Related Fees

The aggregate fees billed for each of the last two fiscal years for assurance and related services by the principal accountant that were reasonably related to the performance of the audit or review of the Company’s financial statements but are not reported under paragraph (a) of this Item were $2,625 for the year ended December 31, 2008 and $3,180 for year December 31, 2007.

(c)   Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning and tax return preparation were $2,310 for the year ended December 31, 2008 and $3,710 for the year ended December 31, 2007.

(d)   All Other Fees

The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant other than services disclosed in paragraphs (a) through (c) of this Item were $nil for the year ended December 31, 2008 and $nil for year ended December 31, 2007.

ITEM 16.D  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

The disclosure required under Exchange Act Rule 10A-3(d) is not applicable to our company.

ITEM 16.E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

No purchase was made by or on behalf of our Company or any “affiliated purchaser” of any of our equity securities within past two years.

ITEM 16.F CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not Applicable.

ITEM 16.G CORPORATE GOVERNANCE

Not Applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

Our financial statements are attached hereto immediately before the signatures section.

30


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

 

DECEMBER 31, 2009, 2008 AND 2007
(Stated in Canadian Dollars)


INDEPENDENT AUDITORS’ REPORT
 

To the Shareholders of Entourage Mining Ltd

We have audited the consolidated balance sheets of Entourage Mining Ltd (an exploration stage company) as at December 31, 2009 and 2008 and the consolidated statements of operations, stockholders’ deficit and cash flows for the years ended December 31, 2009, 2008 and 2007 and the period from June 16, 1995 (inception) through December 31, 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. The consolidated financial statements of Entourage Mining Ltd. for the period from January 16, 1995 (inception) to December 31, 2003 were reported upon by other auditors whose report dated May 6, 2004 included an explanatory paragraph regarding the Company’s ability to continue as a going concern. The financial statements of Entourage Mining Ltd. for the period from January 16, 1995 (inception) to December 31, 2003 reflect a total net loss of $958,486 of the related cumulative totals. Our opinion, insofar as it relates to amounts included for such prior periods, is based solely on the reports of such other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Entourage Mining Ltd. at December 31, 2009 and 2008 and the results of its operations and its cash flows for the years ended December 31, 2009, 2008 and 2007 and the period from June 16, 1995 (inception) through December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

“DMCL”
 
DALE MATHESON CARR-HILTON LABONTE LLP
CHARTERED ACCOUNTANTS
Vancouver, Canada
April 29, 2010

32


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS
(Stated in Canadian Dollars)

    DECEMBER 31,  
    2009     2008  
    $     $  
ASSETS            
             
Current            
       Cash   2,212     894  
       Advances and prepaid expenses   1,377     1,084  
       Goods and services and Quebec sales tax recoverable   9,289     12,631  
    12,878     14,609  
Equipment, net of depreciation (Note 3)   1,549     2,064  
             
    14,427     16,673  
             
LIABILITIES            
             
Current            
       Accounts payable   134,268     139,408  
       Loan payable (Note 5)   26,862     -  
       Due to related parties (Note 7)   91,066     428,752  
    252,196     568,160  
             
STOCKHOLDERS’ DEFICIT            
             
Capital Stock (Note 6)            
       Authorized:            
                   Unlimited common voting shares without par value            
       Issued:            
                     7,738,693 common shares (2008 – 7,698,193)   13,107,970     12,383,714  
             
Additional paid in capital   3,263,866     3,035,356  
             
Obligation to issue shares (Notes 4 and 6)   88,635     -  
             
Deficit accumulated during the exploration stage   (16,698,240 )   (15,970,557 )
    (237,769 )   (551,487 )
             
    14,427     16,673  

CONTINGENCIES AND COMMITMENTS (Notes 1, 4, 6 and 10)
SUBSEQUENT EVENTS
(Note 5 and 13)

Approved by the Board of Directors:

“Gregory F. Kennedy” “Paul Shatzko”

The accompanying notes are an integral part of these consolidated financial statements.

33


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in Canadian Dollars)

    YEARS ENDED     June 16, 1995  
                      (inception)  
    DECEMBER 31,     To  
                      December 31,  
    2009     2008     2007     2009  
    $     $     $     $  
Expenses                      
 Depreciation   515     699     953     6,295  
 Consulting   -     60,000     58,594     268,235  
 Consulting – stock based compensation (Note 6)   213,422     -     101,774     2,926,980  
 Financing fee – stock based compensation (Note 6)   15,088     -     11,300     26,388  
 Interest and bank charges   2,238     868     1,119     16,055  
 Management fees (Note 7)   78,000     300,000     195,000     1,025,154  
 Mineral property costs (recovery) (Note 4 and 11)   262,182     (58,722 )   61,462     11,194,369  
 Office and sundry   41,932     34,231     56,532     525,174  
 Professional fees   108,462     62,006     34,568     501,734  
 Travel and promotion   5,844     15,758     77,481     275,018  
                         
Loss Before Income Taxes   (727,683 )   (414,840 )   (598,783 )   (16,765,402 )
                         
Deferred income tax recovery (Note 8)   -     -     -     67,162  
                         
Net Loss   (727,683 )   (414,840 )   (598,783 )   (16,698,240 )
                         
                         
Loss Per Share, basic and diluted $  (0.11 ) $  (0.05 ) $  (0.08 )      
                         
                         
Weighted Average Common Shares Outstanding   6,378,834     7,698,191     7,675,144        

The accompanying notes are an integral part of these consolidated financial statements.

34


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Stated in Canadian Dollars)

                            DEFICIT        
                            ACCUMULATED        
    NUMBER           OBLIGATION     ADDITIONAL     DURING        
    OF           TO ISSUE     PAID-IN     EXPLORATION        
    SHARES     AMOUNT     SHARES     CAPITAL     STAGE     TOTAL  
          $     $     $     $     $  
                                     
Share issued for cash   1     1     -     -     -     1  
Loss for the period   -     -     -     -     (38,624 )   (38,624 )
Balance, December 31, 1995   1     1     -     -     (38,624 )   (38,623 )
Shares issued for cash   913,000     276,500     -     -     -     276,500  
Loss for the year   -     -     -     -     (210,592 )   (210,592 )
Balance, December 31,1996   913,001     276,501     -     -     (249,216 )   27,285  
Loss for the year   -     -     -     -     (74,529 )   (74,529 )
Balance, December 31, 1997   913,001     276,501     -     -     (323,745 )   (47,244 )
Loss for the year   -     -     -     -     (60,148 )   (60,148 )
Balance, December 31, 1998   913,001     276,501     -     -     (383,893 )   (107,392 )
Loss for the year   -     -     -     -     (70,046 )   (70,046 )
Balance, December 31, 1999   913,001     276,501     -     -     (453,939 )   (177,438 )
Loss for the year   -     -     -     -     (66,855 )   (66,855 )
Balance, December 31, 2000   913,001     276,501     -     -     (520,794 )   (244,293 )
Loss for the year   -     -     -     -     (58,749 )   (58,749 )
Balance, December 31, 2001   913,001     276,501     -     -     (579,543 )   (303,042 )
Forgiveness of amounts due to related party   -     -     -     200,671     -     200,671  
Loss for the year   -     -     -     -     (59,428 )   (59,428 )
Balance, December 31, 2002   913,001     276,501     -     200,671     (638,971 )   (161,799 )
April 25, 2003 – shares issued for mineral property   600,000     60,000     -     -     -     60,000  
Loss for the year   -     -     -     -     (319,515 )   (319,515 )
Balance, December 31, 2003   1,513,001     336,501     -     200,671     (958,486 )   (421,314 )
February 5, 2004 – shares issued for cash at $2.20 per share   99,750     219,450     -     -     -     219,450  
February 5, 2004 – deferred tax recovery on 10,800 flow-through shares   -     (2,376 )   -     -     -     (2,376 )
June 8, 2004 – shares issued for cash at $4.04 per share   69,800     282,331     -     -     -     282,331  
August 24, 2004 – stock options exercised at $3.30 per share   10,000     32,983     -     -     -     32,983  

The accompanying notes are an integral part of these consolidated financial statements.

35


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Stated in Canadian Dollars)

                            DEFICIT        
                            ACCUMULATED        
    NUMBER           OBLIGATION     ADDITIONAL     DURING        
    OF           TO ISSUE     PAID-IN     EXPLORATION        
    SHARES     AMOUNT     SHARES     CAPITAL     STAGE     TOTAL  
        $     $     $     $     $  
                                     
December 31, 2004 – shares issued for cash at $1.80 per share inclusive of 13,250 shares as finders’ fees   294,800     510,876     -     -     -     510,876  
August 24, 2004 – shares issued for mineral property database at $3.90 per share   15,000     58,788     -     -     -     58,788  
September 24, 2004 – shares returned on cancellation of escrow   (375,000 )   (7,500 )   -     7,500     -     -  
Stock based compensation   -     -     -     421,000     -     421,000  
Loss for the year   -     -     -     -     (956,446 )   (956,466 )
Balance, December 31, 2004   1,627,351     1,431,053     -     629,171     (1,914,932 )   145,292  
January 6, 2005, refund for overpayment in 2004 private placement   -     (3,000 )   -     -     -     (3,000 )
March 21, 2005, shares issued for property acquisition at U.S. $3.00 per share   12,500     45,604     -     -     -     45,604  
Sept. 22, 2005, flow-through shares issued at $2.00 per share   29,500     59,000     -     -     -     59,000  
September, 2005, deferred tax recovery on 29,500 flow-through shares   -     (20,119 )       -     -     (20,119 )
Sept. 22, 2005, units issued at U.S. $1.50 per unit   55,000     97,152     -     -     -     97,152  
Oct. 7, 2005, units issued at U.S. $1.10 per unit   127,500     165,154     -     -     -     165,154  
Oct.-Dec 2005, shares issued on exercise of stock options at U.S. $1.50 per share   25,000     44,147     -     -     -     44,147  
Oct. 2005, shares issued on exercise of warrants at $3.00 per share   5,000     15,000     -     -     -     15,000  

The accompanying notes are an integral part of these consolidated financial statements.

36


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Stated in Canadian Dollars)

                            DEFICIT        
                            ACCUMULATED        
    NUMBER           OBLIGATION     ADDITIONAL     DURING        
    OF           TO ISSUE     PAID-IN     EXPLORATION        
    SHARES     AMOUNT     SHARES     CAPITAL     STAGE     TOTAL  
          $     $     $     $     $  
                                     
Nov. 17, 2005, units issued at U.S. $1.50 per share inclusive of 20,000 shares finders’ fees   553,334     944,800     -     -     -     944,800  
Stock based compensation   -     -     -     163,400     -     163,400  
Forgiveness of amounts due to related party   -     -     -     102,327     -     102,327  
Obligation to issue shares   -     -     8,638,667           -     8,638,667  
Loss for the year         -     -     -     (10,068,841 )   (10,068,841 )
Balance, December 31, 2005   2,435,185     2,778,791     8,638,667     894,898     (11,983,773 )   328,583  
January 3, 2006, shares issued for property acquisition at a deemed price of US $1.50 per share   4,888,889     8,638,667     (8,638,667 )   -     -     -  
Jan.-Aug. 2006, shares issued on exercise of stock options at US $1.50 per share   41,000     69,317     -     -     -     69,317  
February 2006, shares issued on exercise of warrants at $3.00 per share   74,450     223,350     -     -     -     223,350  
March 7, 2006, shares issued for property acquisition at U.S. $3.60 per share   12,500     51,772     -     -     -     51,772  
May 24, 2006, shares issued for flow-through private placement at US $2.50 per share   34,000     93,585     -     -     -     93,585  
Aug.-Nov. 2006, shares issued on exercise of warrants at US $2.50 per share   95,500     269,149     -     -     -     269,149  
Dec. 2006, shares issued for flow- through private placement at $2.30 per share   20,000     46,000     -     -     -     46,000  
Stock based compensation   -     -     -     2,027,384     -     2,027,384  
Deferred tax recovery on 54,000 flow-through shares   -     (44,667 )       -     -     (44,667 )
Loss for the year   -     -     -     -     (2,973,161 )   (2,973,161 )
Balance, December 31, 2006   7,601,524     12,125,964     -     2,922,282     (14,956,934 )   91,312  

The accompanying notes are an integral part of these consolidated financial statements.

37


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Stated in Canadian Dollars)

                            DEFICIT        
                            ACCUMULATED        
    NUMBER           OBLIGATION     ADDITIONAL     DURING        
    OF           TO ISSUE     PAID-IN     EXPLORATION        
    SHARES     AMOUNT     SHARES     CAPITAL     STAGE     TOTAL  
          $     $     $     $     $  
                                     
Balance, December 31, 2006, carried forward   7,601,524     12,125,964     -     2,922,282     (14,956,934 )   91,312  
March 12, 2007, shares issued for Property option payment at US$3.00 per share deemed price   50,000     175,530     -     -     -     175,530  
March 27, 2007, shares issued for options exercise at US$1.50 per share   5,000     8,760     -     -     -     8,760  
March 31, 2007, shares issued for Private Placement at US$1.50 per share net of finder’s fee of $4,537   26,669     41,647     -     -     -     41,647  
Stock based compensation   -     -     -     113,074     -     113,074  
April 3, 2007, shares issued for Options exercise at US$1.50 per share   5,000     8,507     -     -     -     8,507  
June 18, 2007, shares issued for debt at US$2.00 per share   10,000     23,306     -     -     -     23,306  
Loss for the year   -     -     -     -     (598,783 )   (598,783 )
Balance, December 31, 2007   7,698,193     12,383,714     -     3,035,356     (15,555,717 )   (136,647 )
Loss for the year   -     -     -     -     (414,840 )   (414,840 )
Balance, December 31, 2008   7,698,193     12,383,714     -     3,035,356     (15,970,557 )   (551,487 )
Subscriptions received   -     -     26,375     -     -     26,375  
June 22, 2009, shares issued for Private Placement at US$0.15 per share   4,037,500     683,057     -     -     -     683,057  
Warrants exercise @US$0.20 per share during the year   353,000     74,692     -     -     -     74,692  
July 24, 2009, shares returned to treasury in exchange for US$85,000 cash payment   (4,500,000 )   (95,753 )   -     -     -     (95,753 )
December 16, 2009, shares issued For amendment to property option agreement at a deemed price of US$0.395 per share   150,000     62,260     62,260     -     -     124,520  
Stock based compensation         -     -     228,510     -     228,510  
Loss for the year   -     -     -     -     (727,683 )   (727,683 )
Balance, December 31, 2009   7,738,693     13,107,970     88,635     3,263,866     (16,698,240 )   (237,769 )

The accompanying notes are an integral part of these financial statements.

38


ENTOURAGE MINING LTD.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in Canadian Dollars)

                      June 16, 1995  
    YEARS ENDED     (inception)  
    DECEMBER 31,     to  
                      December 31,  
    2009     2008     2007     2009  
    $     $     $     $  
CASH FLOWS FROM OPERATING ACTIVITIES                        
Net Loss   (727,683 )   (414,840 )   (598,783 )   (16,698,240 )
Adjustments to reconcile net loss to net cash from operating activities:                
           Depreciation   515     699     953     6,295  
           Stock based compensation   228,510     -     113,074     2,953,368  
           Shares issued for mineral property acquisition   62,260     -     175,530     9,092,621  
           Obligation to issue for mineral property acquisition   62,260     -     -     62,260  
           Shares issued for debt   -     -     23,306     23,306  
           Deferred tax recovery   -     -     -     (67,162 )
Changes in non-cash operating working capital items:                        
           Advances and prepaid expenses   (293 )   -     26,910     (1,377 )
           Goods and services & Quebec sales tax recoverable   3,342     3,853     18,958     (9,289 )
           Accounts payable   (5,140 )   99,844     (33,535 )   134,268  
NET CASH FLOWS USED IN OPERATING ACTIVITIES   (376,229 )   (310,444 )   (273,587 )   (4,503,950 )
                         
CASH FLOWS USED IN INVESTING ACTIVITIES                        
       CMKM settlement   (95,753 )   -     -     (95,753 )
       Equipment   -     -     -     (7,845 )
NET CASH FLOWS USED IN INVESTING ACTIVITIES   (95,753 )   -     -     (103,598 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES                        
       Loan payable   26,862     -     -     26,862  
       Due to related parties   (337,686 )   309,099     90,301     394,064  
       Net proceeds on sale of common stock   757,749     -     58,914     4,162,459  
       Subscriptions received   26,375     -     -     26,375  
NET CASH FLOWS FROM FINANCING ACTIVITIES   473,300     309,099     149,215     4,609,760  
                         
INCREASE (DECREASE) IN CASH   1,318     (1,345 )   (124,372 )   2,212  
CASH, BEGINNING OF YEAR   894     2,239     126,611     -  
                         
CASH, END OF YEAR   2,212     894     2,239     2,212  

SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES (Note 9)

The accompanying notes are an integral part of these consolidated financial statements.

39



1.

ORGANIZATION AND BASIS OF PRESENTATION

   

Organization

   

The Company was incorporated in the Province of British Columbia, Canada on June 16, 1995.

   

Exploration Stage Activities

   

The Company have not produced any revenues from its principal business or commenced significant operations and is considered an exploration stage company as defined by SEC Guide 7 with reference to Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) topic 915. In the exploration stage, management devotes most of its time to conducting exploratory work and developing its business.

   

Going Concern Uncertainty

   

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. This contemplates that assets will be realized and liabilities and commitments satisfied in the normal course of business. As reported in the accompanying consolidated financial statements, the Company has incurred a net loss of $727,683 for the year ended December 31, 2009 and has accumulated a net loss of $16,698,240 since its inception. The Company has no sources of revenue. The continuance in the future of the Company is dependent upon its ability to obtain additional financing as needed to pursue new business opportunities and ultimately upon generating profitable operations from its mineral property exploration and development business. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management has plans to seek additional capital through a private placement of its common stock and loans from related parties to fund expenditures for the next year. Although there are no assurances that management’s plans will be realized, management believes that the Company will be able to continue operations in the future. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

   
2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States and in management’s opinion have been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:


  a)

Accounting Standards Codification

     
 

On October 1, 2009, the Company adopted the changes issued by the FASB to the authoritative hierarchy of Generally Accepted Accounting Principles (“GAAP”). These changes establish the FASB Accounting Standards CodificationTM as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the ASC. These changes and the ASC itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Company’s consolidated financial statements.

1



2.

SIGNIFICANT ACCOUNTING POLICIES (continued)

     
b)

Basis of Presentation

     

These consolidated financial statements include the accounts of the Company and its wholly owned inactive subsidiary, Entourage USA Inc. which was incorporated in the State of Nevada on November 3, 2003. The subsidiary’s charter was not renewed and was allowed to lapse in 2009.

     
c)

Cash and Cash Equivalents

     

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As at December 31, 2009 and 2008 the Company held no cash equivalents.

     
d)

Mineral Claim Payments and Exploration Expenditures

     

The Company is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. The Company assess the carrying cost for impairment under the FASB ASC topic 360 at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs subsequently incurred to develop such property are capitalized. Such costs will be amortized using the units-of- production method over the established life of the proven and probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

     
e)

Use of Estimates

     

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions of future events that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. Significant areas requiring the use of management estimates relate to allocations of expenditures to resource property interests, mineral property carrying values, useful lives of equipment for depreciation and amortization, asset impairment tests, and determination of fair value for stock based transactions and non-cash stock based compensation. Other areas requiring estimates include deferred tax balances and valuation allowances. Financial results as determined by actual events could differ from those estimates.

     
f)

Equipment

     

Equipment is stated at cost less accumulated depreciation. Depreciation is calculated using the declining balance method as follows:


Office furniture 20% on declining balance basis
Computer equipment 30% on declining balance basis

  g)

Environmental Costs

     
 

Environmental expenditures that relate to current operations are charged to operations or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are charged to operations. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company’s commitments to plan of action based on the then known facts.

2



2.

SIGNIFICANT ACCOUNTING POLICIES (continued)

     
h)

Capital Stock – Flow-through shares

     

Under United States GAAP when flow-through shares are issued, the proceeds are allocated between the issue of shares and the sale of tax benefits. The allocation is made based on the difference between the quoted price of the existing shares and the amount that the investor pays for the flow-through shares. The stockholders' equity is reduced and a liability is recognized for this difference. The liability is reversed when the tax benefits are renounced and a deferred tax asset is recognized at that time. Income tax expense (recovery) is the difference between the amount of the deferred tax liability and the asset recognized on issuance. During the years ended December 31, 2009 and 2008 the Company did not issue any flow-through shares.

     
i)

Foreign Currency Translation

     

The functional currency of the Company is Canadian dollars and these financial statements are presented in Canadian dollars unless otherwise noted. Foreign denominated monetary assets and liabilities are translated to their Canadian dollar equivalents using foreign exchange rates in effect at the balance sheet date. Non- monetary items are translated at historical exchange rates, except for items carried at market value, which are translated at the rate of exchange in effect at the balance sheet date. Revenues and expenses are translated at average rates of exchange during the year. Exchange gains and losses arising on foreign currency translation are included in the determination of operating results for the period.

     
j)

Financial Instruments and Risk Management

     

The Company’s financial instruments consist of cash, accounts payable, loan payable and amounts payable to related parties. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of the Company’s current assets and current liabilities are estimated by management to approximate their carrying values based on the immediate or short-term maturity of these instruments.

     

Foreign Exchange Risk

     

The Company is subject to foreign exchange risk for purchases denominated in foreign currencies. The Company operates outside of the U.S. primarily in Canada and Brazil and is exposed to foreign currency risk due to the fluctuation between the currency in which the Company operates and the United States Dollars. Foreign currency risk arises from the fluctuation of foreign exchange rates and the degree of volatility of these rates relative to the United States dollar.

     

Fair Value of Financial Instruments

     

The Company accounts for the fair value measurement and disclosure of financial instruments in accordance with FASB ASC topic 820 which requires a publicly traded company to include disclosures about the fair value of its financial instruments whenever it issues summarized financial information for interim reporting periods. Such disclosures include the fair value of all financial instruments, for which it is practicable to estimate that value, whether recognized or not recognized in the statement of financial position; the related carrying amount of these financial instruments; and the method(s) and significant assumptions used to estimate the fair value.

3



2.

SIGNIFICANT ACCOUNTING POLICIES (continued)


 

Concentration of Operations

     
 

The Company’s operations are all related to the minerals and the mining industry. A reduction in mineral prices or other movements in the minerals market could have an adverse effect on its operations.

     
 

Concentration of Credit Risk

     
 

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and receivables.

     
  k)

Income Taxes

     
 

Income taxes are accounted for under the asset and liability method as stipulated by ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities or a change in tax rate is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts to be realized by the use of a valuation allowance. A valuation allowance is applied when in management’s view it is more likely than not (50%) that such deferred tax will not be utilized.

     
 

In the event that an uncertain tax position exists in which the Company could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by the taxing authorities. Reserves for uncertain tax position would then be recorded if the Company determined it is probable that a position would not be sustained upon examination or if a payment would have to be made to a taxing authority and the amount is reasonably estimable. As of December 31, 2009, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities.

     
  l)

Stock Based Compensation

     
 

The Company has a stock-based compensation plan which is described more fully in Note 6. The Company measures the compensation cost of stock options and other stock-based awards to employees and directors at fair value at the grant date and recognizes compensation expense over the requisite service period for awards expected to vest.

4



2.

SIGNIFICANT ACCOUNTING POLICIES (continued)

     
l)

Stock Based Compensation (continued)

     

Except for transactions with employees and directors, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Additionally, the Company has determined that the dates used to value the transaction are either:

     

(1) The date at which a commitment for performance by the counter party to earn the equity instruments is established; or

     

(2) The date at which the counter party’s performance is complete.

     
m)

Basic and Diluted Loss Per Share

     

Basic net loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the reporting period. Diluted net income per common share includes the dilution that could occur upon the exercise of options and warrants to acquire common stock, computed using the treasury stock method which assumes that the increase in the number of shares is reduced by the number of shares that the Company could have repurchased with the proceeds from the exercise of options and warrants (which are assumed to have been made at the average market price of the common shares during the reporting period).

     

On January 1, 2009, the Company adopted changes issued by the FASB to the calculation of earnings per share. These changes state that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method for all periods presented. The adoption of this change had not impact on the Company’s basic or diluted net loss per share because the Company have never issued any share-based awards that contain nonforfeitable rights.

     

Potential shares of common stock are excluded from the diluted loss per share computation in net loss periods as their inclusion would be anti-dilutive.

     

At December 31, 2009 and 2008, the Company had 7,738,693 and 7,698,193, shares of common stock issued and outstanding, respectively, 3,684,500 and nil warrants outstanding, respectively and 720,000 and 639,000 options outstanding, respectively.

     
n)

Government Grants

     

The Company is eligible for certain grants from the Province of Quebec, Canada. The Company recognizes these grants once the amount is determinable and collection is reasonable. Government grants are accounted for as an offset of mineral property costs.

5



2.

SIGNIFICANT ACCOUNTING POLICIES (continued)

     
o)

Recently adopted accounting policies

     

On June, 2009, the Company adopted the changes issued by FASB ASC topic 855 to Subsequent Events. ASC 855 establishes authoritative accounting and disclosure guidance for recognized and non-recognized subsequent events that occur after the balance sheet date but before financial statements are issued. ASC 855 also requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The adoption of the changes to ASC 855 had no impact on the Company’s consolidated financial statements.

     

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company.

     
3.

EQUIPMENT


            2009                 2008        
      Cost     Accumulated     Net Book           Accumulated     Net Book  
            depreciation     Value     Cost     depreciation     Value  
      $     $     $     $     $     $  
  Office furniture   2,812     1,982     830     2,812     1,775     1,037  
  Computer equipment   5,033     4,314     719     5,033     4,006     1,027  
      7,845     6,296     1,549     7,845     5,781     2,064  

6



4.

MINERAL EXPLORATION PROPERTIES


  (a)

The Pires Gold Project

     
 

On June 17, 2009, and as amended on November 13, 2009, the Company signed a definitive Mineral Property Option agreement with Infogeo Servicos E Locacoes (“Infogeo”), a private arms length Brazilian company, whereby the Company acquired an option to acquire a 100% interest in the Pires Gold Project (“Pires” or the “Pires Property”), pursuant to the following terms:

To earn a 40% interest in the property (First Milestone), in year one:

  (i)

pay to the Optionor (or its nominee) USD $50,000 as follows:

       
  (A)

USD $25,000 within seven days of the execution of this Agreement (paid), and

       
  (B)

USD$25,000 within 45 days of the execution of this Agreement (paid); and

       
  (ii)

expend not less than USD $300,000 (the “First Target”) in exploration expenditures on the property on or before May 31, 2010.

To earn an additional 20% (60 % total) interest in the property (Second Milestone), in year two:

  (i)

paying USD $100,000 to the Optionor (or its nominee) on or before January 16, 2010 (paid), and

     
  (ii)

expend not less than USD $300,000 (less the amount by which any exploration expenditures pursuant to item (ii) of the First Milestone exceeded the First Target) (the “Second Target”) in exploration expenditures on the property before January 16, 2011.

To earn an additional 15% (75% Total) interest in the property option (Third Milestone), in year three:

  (i)

issue to the Optionor 100,000 common shares of the Company on or before January 16, 2011 (subject to any regulatory approvals required), and

     
  (ii)

expend up to USD $1,000,000 to complete and submit a final report by January 16, 2012, (Any excess expended in years one and two is to be applied against this $1,000,000 expenditure requirement).

Option to Purchase 25% (100% total) (Upon completion of the Third Milestone)

Purchase up to 20% of an interest in the property, by paying the Optionor USD$1,000,000 for each 5% incremental interest in the Property, and USD $2,000,000 for the remaining 5% interest.

Pursuant to the amendment on November 13, 2009, the Company agreed to issue a total of 300,000 (150,000 issued prior to December 31, 2009 and 150,000 issued subsequently) common shares of the Company in return for extension of the Year 1 exploration expenditures requirement. The Company recorded $62,260 for 150,000 shares issued before the year end in capital stock and $62,260 for remaining 150,000 shares issued subsequent to the year end as obligation to issue shares (Note 6). The shares were valued at $0.42 (Cdn$0.40) per share.

7



4.

MINERAL PROPERTY INTERESTS (continued)


  (b)

Doran Property, Quebec

         
  i)

By agreement dated March 15, 2005, the Company obtained an option to acquire a 100% interest in certain mineral properties in south-central Quebec (the “Doran Property”) in exchange for cash payments of $220,000, the issuance of 75,000 common shares and the expenditure of $1,000,000 on the Doran Property over three years, as follows:

         
  a.

$35,000 and 12,500 common shares within ten business days of the date of approval of the agreement (paid and issued);

  b.

$35,000 and 12,500 common shares on or before March 15, 2006 (paid and issued); and expending $200,000 on or before March 15, 2006 (incurred);

  c.

$75,000 (paid in 2007) and 25,000 common shares on or before March 15, 2007 (issued in 2007); and expending $300,000 on or before March 15, 2007 (incurred by Abbastar Holdings Inc. (“Abbastar”) – Note 4b iii)); and

  d.

$75,000 (paid in 2008 by Abbastar – see below) and 25,000 common shares on or before March 15, 2008 issued in 2007); and expend an additional $500,000 on or before March 15, 2008 (incurred by Abbastar – see below).

After all the above terms have been met, the Company has earned 100% interest of the property in the year.

  ii)

The property interest is subject to a 2.5% Net Smelter Return (NSR). The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1,750,000.

     
  iii)

On February 13, 2007 the Company entered into an option agreement (the “Option”) with Abbastar Holdings Inc. (“Abbastar”), a TSX Venture Exchange listed company, whereby Abbastar may earn up to a 70% interest in the Doran Property by making a one time cash payment of $100,000 CDN (received) to the Company and spending $5,000,000 on the Doran Property over 4 years (The Company retains the right to purchase the NSR on the Doran Property). The terms of the Option provide that Abbastar may earn its interest in the Doran property as follows:

     
 

20% interest by spending $500,000 on or before February 13, 2008 (spent);

    15% additional interest by expending an additional $1,000,000 on or before February 13, 2009 (spent);
  15% additional interest by expending an additional $1,500,000 on or before February 13, 2010; and
  20% additional interest by expending an additional $2,000,000 on or before February 13, 2011.
 

 

 

As of December 31, 2009, Abbastar had earned a 35% interest in the Doran property but, has allowed the balance of their option to expire.

     
  iv)

In consideration for the Doran Property vendor consenting to the Option Agreement with Abbastar, the Company issued the balance of shares (50,000) due to the Doran Property vendor on March 12, 2007.

     
  v)

On March 15, 2008, after the final payment of $75,000 was made by Abbastar on behalf of the Company, the Company became the owner of the Doran Property and Abbastar had earned a 20% interest in the property by spending $500,000 on the property. The completion of the 2008 fall exploration program, by Abbastar, earned Abbastar an additional 15% interest in the Doran property as outlined above.

8



4.

MINERAL PROPERTY INTERESTS (continued)


  (c)

Hatchet Lake Property (Saskatchewan)

     
 

By agreement dated April 7, 2005, as amended October 20, 2005, the Company obtained an option to acquire a 50% right in a certain prospective mineral property located in the Athabasca Basin area of Saskatchewan (the “Hatchet Lake Property”).

     
 

As consideration for the agreement (the “Hatchet Lake Agreement”), the Company issued 1,500,000 of its common shares to the CMKM Diamonds Inc. (“CMKM”) shareholders in 2006.

     
 

In September 2007, the Company abandoned the property. The Company has no liabilities incurred by abandoning the Hatchet Lake Properties and no further payments are required.

     
  (d)

The Smeaton/Forte a la Corne Property (Saskatchewan)

     
 

By agreement dated October 20, 2005, as amended November 16, 2005, the Company entered into an option agreement with 101047025 Saskatchewan Ltd. (a private company) ("1010") to acquire an undivided 80% mineral rights interest in and to the Smeaton/Forte a la Corne diamond property in Saskatchewan (the “Smeaton Agreement”).

     
 

Under the terms of this agreement the Company issued 3,388,889 common shares in its capital stock (the "Smeaton/Fort a la Corne Shares") on January 3, 2006 of which 3,000,000 common were issued to CMKM and 388,889 shares were issued to 1010. The 3,388,889 shares were recorded as mineral property expenditures and an obligation to issue shares totaling $5,988,167 in the year ended December 31, 2005.

     
 

The Smeaton/Forte a la Corne diamond property was the subject of an agreement between 1010 and CMKM dated August 1, 2003.

     
 

On August 28, 2007, the Company filed a Writ of Summons and Statement of Claim against 1010 and CMKM in the Supreme Court of British Columbia seeking to have the Court set aside the both the Hatchet Lake and Smeaton Agreements.

     
 

During the year ended December 31, 2009 the Company settled its outstanding legal disputes with CMKM and 1010, and returned the Smeaton properties to 1010 (Note 10).


5.

LOAN PAYABLE

   

On August 4, 2009 an arms length party loaned the Company US$25,000 for a period of 90 days, at 12% per annum. The loan was unsecured but, as further consideration for the loan, the Company granted the lender 100,000 stock options, exercisable at US$0.35 each for a period of five years. The fair value of the stock option grant was recorded as finance expense of $15,088. Both the loan and all interest accrued thereon were repaid on February 10, 2010.

9



6.

CAPITAL STOCK

     
a)

Issued Shares

     

Effective March 6, 2009 the Company completed a reverse split of its common shares at a ratio of one new share for every ten old share held. The capitalization of 100,000,000 common shares with no par value remains the same after the reverse stock split. All previous references to shares of common stock, weighted average common share outstanding, stock options and warrants have been restated to give effect to the 1:10 reverse stock split unless otherwise stated.

     

During the year ended December 31, 2009, the Company closed a private placement of 4,037,500 units (at a price of US $0.15 per unit for gross proceeds of US$605,625. Each unit consisted of one common share and one share purchase warrant exercisable on or before June 12, 2010 at a price of US $0.20 per share.

     

During the year ended December 31, 2009 the Company settled its outstanding legal disputes with CMKM and 1010 (Note 4). As a result of the settlement, CMKM returned 4,500,000 common shares of the Company in exchange for a cash payment of US $85,000. The shares were returned to treasury and cancelled.

     

During the year ended December 31, 2009, 353,000 shares were issued pursuant to the exercise of warrants at US$0.20 per share.

     
b)

Stock Options

     

In February 2004 the Company implemented a Stock Option Plan (“SOP”) for its officers, directors and employees to allow for up to 160,000 share purchase options to be granted at US $2.50 per share, for a period not to exceed five years. In November 2004 the SOP was amended to provide for the issuance of up to 220,000 incentive stock options to directors, officers, employees and non-investor relations consultants. During January, 2006 the Company increased the stock option plan from 220,000 shares to 720,000 shares.

     

All the stock options granted by the Company previously expired in February 2009.

     

Activity under the SOP is summarized as follows:


            Weighted Average     Weighted  
      Options     Exercise Price     Average  
      Outstanding     (U.S. $)     Life  
  Balance, December 31, 2008 and 2007   639,000     2.25     0.09  
  Options granted during the year   720,000     0.35     4.60  
  Options expired during the year   (639,000 )   2.25        
  Balance, December 31, 2009   720,000     0.35     4.60  

During the year ended December 31, 2009 the Company granted a total of 720,000 stock options at an exercise price of US$0.35 per share for a five-year term. At December 31, 2009 these 720,000 stock options were outstanding. The fair value of the stock option grant was calculated using the Black-Scholes option pricing model with the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 336%, (3) risk free interest rate of 3% and, (4) expected life of 5 years. Total expenses of $228,510 was recorded as stock-based compensation, $213,422 (2008 - $Nil, 2007 - $101,774) was related to consulting and $15,088 (2008 - $Nil, 2007 - $11,300) was related to financing fee (Note 5).

10



6.

CAPITAL STOCK (continued)

     
b)

Stock Options (continued)

     

The following table summarizes information concerning outstanding and exercisable common stock options under the SOP as at December 31, 2009:


    Remaining   Number of  
    Contractual Weighted Options Weighted
Exercise Options Life Average Currently Average Exercise
Price Outstanding (in years) Exercise Price Exercisable Price
U.S. $0.35 720,000 4.6 U.S. $0.35 720,000 U.S. $0.35

  c)

Warrants

     
 

On June 12, 2009, pursuant to a private placement, 4,037,500 warrants at an exercise price of US$0.20 per share were issued. Each warrant is exchangeable for one common share and expires on June 12, 2010.


            Weighted        
            Average     Weighted  
      Warrants     Exercise Price     Average  
      Outstanding     (US$)     Life  
  Balance December 31, 2008   -     -     -  
  Issued during the year   4,037,500     U.S. $0.20     -  
  Exercised during the year   (353,000 )   U.S. $0.20     -  
  Balance December 31, 2009   3,684,500     U.S. $0.20     0.45  

  d)

Obligation to issue shares

       
 

The balance as at December 31, 2009 included the followings:

       
  i.

Subscription proceeds of $26,375 for private placement completed after December 31, 2009 (Note 13).

       
  ii.

150,000 common shares issued after December 31, 2009 related to amendment to property option agreement (Note 4).


7.

RELATED PARTY TRANSACTIONS

   

Amounts payable to related parties as of December 31, 2009 of $91,066 (2008 - $428,752) is owing to directors, to a company controlled by an officer, and to a public company with directors in common, for management fees, consulting fees and for expenses paid on behalf of the Company. The amounts are non-interest bearing, unsecured, and have no fixed terms of repayment.

   

During the year ended December 31, 2009 the Company incurred $78,000 (2008 - $300,000; 2007 - $195,000) in management fees to its directors and officers.

   

The above transactions have been recorded at exchange amount that is the amount of consideration established and agreed to by the related parties.

11



8.

INCOME TAXES

   

The actual income tax provisions differ from the expected amounts calculated by applying the Canadian combined federal and provincial corporate income tax rates to the Company’s loss before income taxes. The components of these differences are as follows:


      2009     2008     2007  
      $     $     $  
  Income (loss) before income tax   (727,683 ) $  (414,840 ) $  (598,783 )
  Combined statutory rate   30%     31%     34.1%  
  Expected income tax recovery   (218,000 )   (129,000 )   (204,000 )
                     
  Increase (decrease) resulting from:                  
               Change in valuation allowance   (16,000 )   (31,000 )   167,000  
               Expiring loss carry forwards   18,000     18,000     -  
               Impact of tax rate changes   147,000     142,000     -  
               Permanent differences   69,000     -     37,000  
                     
  Future income tax provision (recovery)   -     -     -  

The Company’s tax-effected deferred income tax assets are estimated as follows:

    2009     2008  
    $     $  
Mineral properties tax base in excess of carrying value   2,758,000     2,785,000  
Non-capital losses available   482,000     469,000  
Other   6,000     8,000  
Potential deferred income tax assets   3,246,000     3,262,000  
Less: valuation allowance   (3,246,000 )   (3,262,000 )
Net Deferred Income Tax Asset   -     -  

As the criteria for recognizing deferred income tax assets have not been met due to the uncertainty of realization, a valuation allowance of 100% has been recorded for the current and prior year.

The Company has approximately $1,928,000 (2008 - $1,801,000) of non-capital losses which can be applied to reduce future taxable income, expiring as follows:

Year of Expiry   Amount  
    $  
2010   73,000  
2014   212,000  
2015   211,000  
2026   339,000  
2027   429,000  
2028   422,000  
2029   242,000  
    1,928,000  

The Company has certain resource related deductions and other losses of approximately $11,033,000 (2008 - $10,712,000) which may be available to be offset against future taxable income in Canada. The realization of these tax benefits in future years will be recorded as an adjustment to the corporate tax provision in the year realized.


12



9. SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES

      Year ended     Year ended     Year ended   
      December 31, 2009     December 31, 2008     December 31, 2007   
  Cash paid during the year for:    $     $      
  Interest   -     529     453  
  Income taxes   -     -     -  

During the year ended December 31, 2009, the Company:

  a)

issued 150,000 shares at a value of $62,260 under the option agreement to acquire an interest in the Pires Gold Project, situated in Brazil; and

  b)

Issued 100,000 stock options, valued at $15,088, in consideration for a loan payable; and

  c)

Issued 620,000 stock options, valued at $213,422.


There were no non-cash transactions during the year ended December 31, 2008.

   
10.

SETTLEMENT

   

The Company filed a Writ of Summons and Statement of Claim against CMKM and 1010 in the Supreme Court of British Columbia On August 27, 2007 seeking to have the Court set aside both the Hatchet Lake and Smeaton Agreements (Note 4).

   

During the year ended December 31, 2009 the Company settled its outstanding legal disputes with CMKM and 1010. As a result of the settlement, CMKM returned 4,500,000 common shares of the Company in exchange for a cash payment of US $85,000 (paid). The shares were returned to treasury and cancelled. The Company also settled its claims with 1010 and agreed to return the Smeaton properties in return for the withdrawal of all claims against the Company by 1010.

   
11.

GOVERNMENT GRANTS

   

The Company is entitled to apply for certain refundable tax credits, of between 12% and 35%, in respect of qualifying mining exploration expenses incurred in the Province of Quebec, Canada. This tax credit recovery has been applied against the exploration costs incurred. In 2008 the Company received a total of $49,236 in refundable taxes and mining duties (2007 – $150,723) applied for in tax returns for December 31, 2007 and December 31, 2006. The Company did not expend any money on exploration in Quebec in 2008 and 2009.

13



12.

FINANCIAL INSTRUMENTS

   

The FASB ASC topic 820 on fair value measurement and disclosures establishes three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), observable inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2), and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).

   

The carrying values and fair values of the Company’s financial instruments are as follows:


            December 31,2009     December 31, 2008  
            Carrying     Fair     Carrying     Fair  
      Level     value     value     value     value  
  Cash   Level 1   $  2,212   $  2,212   $  894   $  894  
  Accounts payable and accrued liabilities   Level 2   $  134,268   $  134,268   $  139,408   $  139,408  
  Loan payable   Level 2   $  26,862   $  26,862   $  -   $  -  
  Due to related parties   Level 2   $  91,066   $  91,066   $  428,752   $  428,752  

The carrying amount approximates fair value because of the short maturity of the instruments.

   
13.

SUBSEQUENT EVENTS


  (a)

The Company completed a non-brokered private placement of 1,613,162 units at a price of U.S. $0.15 each. Each unit consists of one common share and one share purchase warrant, each warrant enabling the purchaser to buy an additional share for a period of one year at a price of US $0.25 each.

       
 

(b)

On February 18, 2010 the Company signed a Letter of Intent (“LOI”) with Ansell Capital Corp., (“Ansell”) a TSX Venture listed company, pursuant to which Ansell proposes to acquire all of the outstanding and issued shares of the Company through a plan of arrangement (the “Arrangement”) under the British Columbia Business Corporations Act. The terms of the Arrangement will provide for a one to one common share, option and warrant swap between Ansell and the Company shareholders. The proposed Arrangement is subject to court, shareholder and regulatory approval. Execution of a definitive agreement is targeted for May 30, 2010.

       
 

Pursuant to the terms of the LOI Ansell agreed to:

       
 

i)

advance no less than US $200,000 to be jointly administered by Ansell and the Company, which funds to be spent on qualifying expenditures to satisfy the Company’s work commitments in respect of the Pires Property May 31, 2010 work commitment; and

       
 

ii)

advance the Company $75,000 to pay certain agreed payables prior to the execution of the definitive agreement.

       
  (c)

A total of 203,333 shares were issued pursuant to the exercise of warrants at US$0.15 per share for net proceeds of $31,763.

       
  (d)

Effective on April 22, 2010, the Company changed to its authorized capital to unlimited common shares without par value.

       
  (e)

Subsequent events were reviewed to the date the financial statements were issued, and management has determined there are no material transactions that has not been disclosed.

14



ITEM 18. FINANCIAL STATEMENTS

Not applicable. Financial statements are provided under Item 17.

ITEM 19. EXHIBITS

Exhibit No. Exhibit

1.1

Memorandum and Articles of Incorporation and Amendments thereto (1)

4.1

Agreement dated March 17, 2003, between the Company and the YK Group (1)

4.2

Agreement dated June 1, 2004 between the Company and Goodsprings Development Corp. whereby the Company can acquire up to a 100% interest in and to the Black Warrior Project (2)

4.3

Agreement dated March 15, 2005 between Fayz Yacoub and the Company whereby the Company can acquire a 100% interest in the Doran Uranium Property (2)

4.4

Agreement dated April 7, 2005 between Star Uranium Corp. (formerly known as United Carina Resources Corp.) and the Company whereby the Company can acquire a 20% right in the Hatchet Lake Property (2)

4.5

Agreement dated April 21, 2005 between the Company and Star Uranium Corp. (formerly known as United Carina Resources Corp.) whereby Star may acquire up to a 10% interest in the Company’s Black Warrior Project (2)

4.6

Agreement dated April 21, 2005 between the Company and CMKM Diamonds, Inc. whereby CMKM may acquire up to a 10% interest in the Company’s Black Warrior Project (2)

4.7

Agreement between the Company and Star Uranium dated October 21, 2005 whereby the Company may acquire a 50% interest in the Hatchet Lake (3)

4.8

Assignment Agreement between the Company and CMKM Diamonds Inc. whereby the Company may acquire any and all interest of CMKM Diamonds Inc.’s interest in the Hatchet Lake Property (3)

4.9

Agreement between the Company and 101047025 Saskatchewan Ltd. whereby the Company may acquire an 80% interest in the Smeaton Property (4)

4.10

Agreement between the Company and Goodsprings Development Corp. whereby Goodsprings extended the terms of the Company’s June 1, 2006 property payment as four quarterly payments (5)

4.11

Entourage-101047025 Saskatchewan Ltd. claim file for the Smeaton Property (5)

4.12

Smeaton Property location map with legend (5)

4.13

Hatchet Lake Property map with legend (5)

4.14

Revised Smeaton claim file (6)

4.15

Entourage-Abbastar Uranium Option Agreement Dated February 13, 2007 (7)

4.16

Mineral Option Agreement with Infogeo Locaçeos Ltda.*

11.1

Entourage Mining Company Ethics Policy (7)

12.1

Certification of Principal Executive Officer *

12.2

Certification of Principal Financial Officer *

13.1

Certification pursuant to 18 U.S.C. Section 1350 *

*Included as an exhibit hereto.

(1)

Incorporated by reference from our Registration Statement on Form 20-F filed with the SEC on June 6, 2003.

(2)

Incorporated by reference from our 20-F filed with the SEC on July 1, 2005.

(3)

Incorporated by reference from the Company’s 6-K filed with the SEC on November 23, 2005.

(4)

Incorporated by reference from the Company’s 6-K filed with the SEC on November 25, 2005.

(5)

Incorporated by reference from our Annual Report on Form 20-F filed with the SEC on July 3, 2006.

(6)

Incorporated by reference from our Annual Report on Form 20-F filed with the SEC on June 29, 2007.

(7)

Incorporated by reference from our Annual Report on Form 20-F filed with the SEC on June 30, 2008.

52


SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

ENTOURAGE MINING LTD.

Dated: April 30, 2010

“Gregory F. Kennedy”
Gregory F. Kennedy
President, Director

53


EX-4.16 2 exhibit4-16.htm MINERAL OPTION AGREEMENT Entourage Mining Ltd.: Exhibit 4.16 - Filed by newsfilecorp.com

MINERAL PROPERTY OPTION AGREEMENT

THIS AGREEMENT is dated for reference the 17th day of June, 2009.

BETWEEN:

  INFOGEO SERVIÇOS E LOCAÇÕES LTDA, a corporation duly organized pursuant to the laws of Brazil and having an office at Alameda da Princesas 570, sala 2, Bairro São Luis, Belo Horizonte, Minas Gerais, 31275-180, Brazil.  
     
  (the “Optionor”)  
     
AND:
  ENTOURAGE MINING LTD., a company duly incorporated pursuant to the laws of the Province of British Columbia, Canada, and having an office situated at Suite 614 – 475 Howe Street, Vancouver, BC V6C 2B3  
     
   (the “Optionee”)  

WHEREAS: 

(A)             The Optionor is the registered and beneficial owner of certain mineral licenses, claims, concessions or reservations ( for convenience herein collectively “mineral claims”), and all mining leases and other mining rights and interests derived from any such mineral claims, situated in Goias State, Brazil known as the “Pires Do Rio Property” group of mineral claims, the specific description of such mineral claims and respective ownership interests are attached hereto as Schedule “A” (and herein called the “Property”);

(B)            The Optionor has agreed to grant an exclusive option to the Optionee to acquire up to a 100% undivided interest in and to the Property by paying certain consideration and by incurring certain exploration Expenditures as set forth herein;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants and agreements as set out herein, the parties agree as follows:

PART 1
DEFINITIONS

1.1            Definitions. In this Agreement, except as otherwise expressly provided or as the context otherwise requires,

(a)            “Area of Common Interest” means the area lying within five kilometres of the perimeter of the Property (for greater clarity, as increased by §2.6);


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(b)            “Business Day” means a day that is not a Saturday, Sunday or statutory holiday in the Province of British Columbia;

(c)            “DNPM” means the Departamento Nacional de Produção Mineral of Brazil; (d) “Effective Date” means the of this Agreement; (e) “Expenditure Options” has the meaning set out in §2.1(a);

(f)            “Exploration Expenditures” means all expenditures on the exploration and development of the Property, and other costs and expenses which directly benefit the Property with respect to the exploration of the Property;

(g)            “Final Report” means the exploration report to be filed and approved by the DNPM in respect of the Property, the contents of which establish the existence of a resource that is technically and economically recoverable;

(h)            “Garimpo” means the small artisanal mine located to the north of the Property; (i) “Initial Payment” means the amount set out in item (a)(i) of Schedule B; (j) “Milestone” has the meaning set out in §2.2(a); (k) “mineral claim” has the meaning set forth in Recital (A) above;

(l)            “Option” means the exclusive right herein granted by the Optionor to the Optionee to permit the Optionee to acquire up to a 100% undivided right, title and interest in the Property, consisting of the Expenditure Options and the Purchase Options;

(m)            “Option Period” means the period from the date above written on page one to and including the earliest of

  (i)

the date of the full exercise of the Option,

     
  (ii)

the termination hereof pursuant to Part 7, and

     
  (iii)

in respect of the Expenditure Options only, January 16, 2012.

(n)            “Optionee Shares” means common shares in the capital of the Optionee;

(o)            “Property” has the meaning set out in Recital (A) above as expanded by §2.6, and includes all Property Rights thereto;

(p)            “Property Rights” means all licenses, permits, easements, rights-of-way, surface or water rights, mineral claims and other rights, approvals obtained by either of the parties either before or after the date of this Agreement and necessary or desirable for the development of the Property, or for the purpose of placing the Property into production or continuing production therefrom;

(q)            “Purchase Options” has the meaning set out in §2.1(b);


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(r)            “Schedules” means the documents attached hereto as follows:

  (i)

Schedule A – Mineral Claims Comprising the Property

  (ii)

Schedule B – Option Milestones

1.2            Interpretation. In this Agreement,

(a)            definitions given in this Article and elsewhere in this Agreement will apply equally to both the singular and plural forms of the terms defined and to the male, female and neuter genders,

(b)            a reference to a party will include its successors and permitted assigns,

(c)            the insertion of headings in this Agreement is for convenience of reference only and will not affect the construction or interpretation of this Agreement, and

(d)            the word “or” does not imply an exclusive relationship between the matters being connected and the word “including” is not intended to limit in any fashion the matter being described (whether or not followed by a phrase such as “without limitation” or “but not limited to”).

PART 2
GRANT AND EXERCISE OF OPTION

2.1            Grant of Options. The Optionor hereby grants to the Optionee the sole and exclusive right and option, subject to the terms of this Agreement, to earn up to a 100% undivided interest in the Property free and clear of all liens, charges and encumbrances, as follows:

(a)            up to 75% of an interest in the Property as set out on Schedule B (the “Expenditure Options”),

(b)            up to 20% of an interest in the Property, by way of the Optionee paying to the Optionor USD$1,000,000 for each 5% increment of an interest in the Property (each a “Purchase Option”), subject to §2.3, and

(c)            5% of an interest in the Property, by way of the Optionee paying to the Optionor USD$2,000,000 the final 5% increment of an interest in the Property (a “Purchase Option”), subject to §2.3.

2.2            Exercise of Expenditure Options. For greater clarity,

(a)            upon meeting the milestones set out in Schedule B with respect to each Expenditure Option, (each a “Milestone”), the Optionee will receive the corresponding interest in the Property in the second column of the table on Schedule B, free and clear of all liens, charges and encumbrances as set out in §(e),

(b)            the percentages listed in the second column of Schedule B refer to the percentage of the Property as a whole,


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(c)            if the Optionee spends, in respect of any Milestones that require an amount of Exploration Expenditures,

(i)            less than the specified amount of Exploration Expenditures, it may pay to the Optionor the difference between the amount it actually spent and the specified sum before the expiry of that period in full satisfaction of the Exploration Expenditures to be incurred, or

(ii)            more than the specified amount of Exploration Expenditures, the excess will be carried forward and applied to the Exploration Expenditures to be incurred in succeeding milestones,

(d)            the Optionee may, in its sole discretion, at any time accelerate the payment of the consideration and incur the Exploration Expenditures on the Property in respect of each Milestone to exercise the Option and thereby earlier acquire its interest in the Property corresponding to such Milestone, and

(e)            if and when each Milestone has been achieved, the corresponding right, title and interest indicated in Schedule B in and to the Property will thereupon vest in the Optionee, free and clear of all liens, charges, encumbrances and claims. If and when all of the Milestones have been achieved and all of the Purchase Options have been exercised, a 100% undivided right, title and interest in and to the Property will thereupon have vested in the Optionee, free and clear of all liens, charges, encumbrances and claims.

2.3            Prerequisite for Purchase Options. The Optionee may only exercise the Purchase Options after the submission of a substantively valid and reasonable Final Report to DNPM or achieves 75% JV interest in the Property by expending USD$1,000,000 (Third Target).

2.4            Property Conveyance Documents. The Optionor will, forthwith after the exercise of the Option, any Expenditure Option or any Purchase Option by the Optionee, deliver to the Optionee duly executed transfers of the Property in the form required under the laws of Brazil to transfer the interest in the Property acquired by the Optionors.

2.5            Right of Entry. Throughout the Option Period, the directors and officers of the Optionee and its servants, agents and independent contractors, will have the sole and exclusive right in respect of the Property to

(a)            enter thereon,

(b)            have exclusive and quiet possession thereof,

(c)            do such prospecting, exploration, development or other mining work thereon and thereunder as the Optionee in its sole discretion may determine advisable,

(d)            bring upon and erect upon the Property buildings, plant, machinery and equipment as the Optionee may deem advisable, and


- 5 -

(e)            remove therefrom and dispose of reasonable quantities of ores, mineral and metals for the purpose of obtaining assays or making other tests.

2.6            Additional Property. The Property forming part of the Option will be deemed to include

(a)            any property or Property Rights acquired by either the Optionee or the Optionor within the Area of Common Interest, and

(b)            any property or Property Rights acquired by either the Optionee or the Optionor in the Garimpo

(each, in this §2.6, “Additional Property”), and, for greater clarity, without additional consideration from either party,

(c)            if such Additional Property is acquired by the Optionee, an interest in such Additional Property equal to the pro rata interest held by the Optionor in the other Property at termination of this Agreement will be transferred by the Optionee to the Optionor on termination of this Agreement without additional cost, and

(d)            if such Additional Property is acquired by the Optionors, an interest in such Additional Property equal to the pro rata interest then held by the Optionee will be transferred by the Optionor to the Optionee upon the acquisition of such Additional Property, and the remaining interest in such Additional Property will form part of the then unexpired Option.

PART 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF OPTIONOR

3.1            Representations, Warranties and Covenants. The Optionor covenants, represents and warrants to the Optionee that

(a)            it is now, and will be throughout the Option Period, the registered and beneficial owner of all of the mineral claims comprising the Property, free and clear of all liens, charges and claims of others and no taxes, royalties or lease payments or like amounts are due in respect of any of the mineral claims, and the mineral claims comprised in the Property have been duly and validly located and recorded pursuant to the applicable mining laws of Brazil, and are in good standing in the office of the relevant government mining recording office on the date hereof and until the dates set opposite the respective names thereof in Schedule A,

(b)            there is no adverse claim or challenge against or to the ownership of or title to any of the mineral claims comprising the Property, nor to the knowledge of the Optionor is there any basis therefor, and the Optionor will promptly notify the Optionee if it becomes aware of same,

(c)            there are no, and throughout the Option Period will not be any, outstanding agreements or options to acquire or purchase the Property or any portion thereof except for this Option Agreement, and no person other than the Optionor and the Optionee, pursuant to the provisions hereof, has, or will have during the Option Period, any royalty or other interest whatsoever in production from any of the mineral claims comprising the Property,


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(d)            no third party consent of any kind is required by the Optionor to enter into this Agreement and grant the Option contemplated hereby,

(e)            on execution hereof, the Optionor will deliver or cause to be delivered to the Optionee true and accurate copies of all available maps and other documents and technical data in its possession respecting the Property,

(f)            all maps, documents and technical data that have been, to date, provided to the Optionee on behalf of the Optionor in connection with the Property are true and correct in all material respects and do not fail to disclose anything that ought reasonably to have been disclosed about the Property, including information that could materially affect the Option the Property in an adverse manner,

(g)            the execution and delivery of this Agreement and the agreements contemplated hereby by the Optionor will not violate or result in the breach of the laws of any jurisdiction applicable or pertaining thereto, and

(h)            this Agreement constitutes a legal, valid and binding obligation of the Optionor under both Brazilian and British Columbia law.

3.2            Reliance. The Optionor acknowledges and confirms that the Optionee is relying on the foregoing representations and warranties in the entering into this Agreement.

3.3            Survival. The representations and warranties contained in §3.1 are provided for the exclusive benefit of the Optionee, and a breach of any one or more thereof may be waived by the Optionee in whole or in part at any time without prejudice to its rights in respect of any other breach of the same or any other representation or warranty; and the representations and warranties contained in §3.1 will survive the execution hereof and continue throughout the Option Period and for two years thereafter.

PART 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF OPTIONEE

4.1            Representations, Warranties and Covenants. The Optionee represents, warrants and covenants to the Optionor that

(a)            it has been duly incorporated and validly exists as a corporation in good standing under the laws of British Columbia and will obtain such necessary registrations as are necessary to explore and hold legal interests in mining properties in Brazil in the event that the Option is exercised;


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(b)            neither the execution and delivery of this Agreement by the Optionee nor the performance by the Optionee of its obligations hereunder conflicts with the Optionee’s constating documents or any agreement to which it is bound;

(c)            the execution, delivery and performance by the Optionee of this Agreement and any other agreement or instrument to be executed and delivered by it hereunder and the consummation by it of all the transactions contemplated hereby and thereby have been duly authorised by all necessary corporate action on the part of the Optionee;

(d)            each of this Agreement and any other agreement or instrument to be executed and delivered by the Optionee hereunder constitutes a legal, valid and binding obligation of the Optionee enforceable against it in accordance with its terms;

(e)            excepting only as otherwise disclosed herein, the Optionee is not subject to, or a party to, any charter or by–law restriction, any law, any claim, any encumbrance or any other restriction of any kind or character which would prevent consummation of the transaction contemplated by this Agreement or any other agreement or instrument to be executed and delivered by the Optionee hereunder;

(f)            it is, and during the Option Period it will be, a reporting issuer under the Securities Act (British Columbia); and

(g)            with respect to any Optionee Shares issued to the Optionor or its nominee,

(i)            such Optionee Shares will, at the time of delivery, be duly authorized and validly allotted and issued as fully paid and non-assessable free of any liens, charges or encumbrances, and

(ii)            on the issuance the certificate or certificates representing the Optionee Shares, every consent, approval, authorization, order or agreement of the any regulating authority that is required for the issuance of the Optionee Shares, as applicable, and the delivery to the Optionor or its nominee of such certificate or certificates to be valid will have been obtained and will be in effect.

4.2            Reliance. The Optionee acknowledges and confirms that the Optionor is relying on the foregoing representations and warranties in the entering into this Agreement.

4.3            Survival. The representations and warranties contained in §4.1 are provided for the exclusive benefit of the Optionor and a breach of any one or more thereof may be waived by the Optionor in whole or in part at any time without prejudice to its rights in respect of any other breach of the same or any other representation or warranty; and the representations and warranties contained in §4.1 will survive the execution hereof and continue throughout the Option Period.

PART 5
OBLIGATIONS OF OPTIONEE DURING OPTION PERIOD

5.1            Payments. The Optionee will,


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(a)            within 45 days of the execution of this Agreement, the Optionee will complete payment of the Initial Payment to the Optionor (or its nominee) as set out in Schedule A, and

(b)            unless the Optionee has terminated this Agreement as set out in §7.2, the Optionee will pay to the Optionor (or its nominee) USD$10,000 within 30 days of DNPM granting a new exploration license contiguous with the Property, which covers the Garimpo, upon which the Garimpo will be included in the Property pursuant to §2.6.

5.2            Ongoing Obligations. During the Option Period, the Optionee will

(a)            maintain in good standing those mineral claims comprised in the Property by the payment of fees, taxes and rentals and the performance of all other actions and in order to keep such mineral claims free and clear of all liens and other charges arising from the Optionee’s activities thereon except those at the time contested in good faith by the Optionee,

(b)            permit the directors, officers, employees and designated consultants of the Optionor, at their own risk, access to the Property at all reasonable times, and providing the Optionor agrees to indemnify the Optionee against and to save the Optionee harmless from all costs, claims, liabilities and expenses that the Optionee may incur or suffer as a result of any injury (including injury causing death) to any director, officer, employee or designated consultant of the Optionor while on the Property,

(c)            deliver to the Optionor on or before each twelve month period of this Agreement, a report (including up-to-date maps if there are any) describing the results of work done since the last such report, together with reasonable details of Exploration Expenditures made,

(d)            do all work on the Property in a good and workmanlike fashion and in accordance with all applicable laws, regulations, orders and ordinances of any governmental authority, and

(e)            indemnify and save the Optionors harmless in respect of any and all costs, claims, liabilities and expenses arising out of the Optionee’s activities on the Property and, without limiting the generality of the foregoing will, during the currency of this Agreement, cause any of its independent contractors to carry not less than $1 million in third party liability insurance in respect of their operations conducted on the Property on behalf of the Optionee, such insurance to be for the benefit of the Optionee and the Optionors; provided that neither the Optionee nor its independent contractors will incur any obligation thereunder in respect of claims arising or damages suffered after termination of the Option if upon termination of the Option any workings on or improvements to the Property made by the Optionee are left in as safe a condition as existed on the date hereof.


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PART 6
SURRENDER AND ACQUISITION OF PROPERTY INTERESTS BEFORE
TERMINATION OF AGREEMENT

6.1            Right. The Optionee may, during the Option Period, elect to abandon any one or more of the mineral claims comprised in the Property by giving notice to the Optionor of such intention by giving notice in writing.

6.2            Optionor Election. For a period of thirty days after the date of delivery of such notice the Optionor may elect to retain any or all of the mineral claims in respect of which such notice has been given.

6.3            Procedure of Election. Any mineral claims so retained, if in good standing at the date hereof or if the Optionee causes the same to be placed in good standing after the date hereof, will be in good standing for at least twelve months. If the Optionor fails to make request to retain any mineral claims as aforesaid within such 30-day period, the Optionee may then abandon such mineral claim without further notice to the Optionor. Upon any such transfer or abandonment the mineral claims so abandoned will for all purposes of this Agreement cease to form part of the Property.

PART 7
DEFAULT AND TERMINATION

7.1            Termination upon Default. If at any time during the Option Period either party fails to perform any obligation hereunder or any representation or warranty given by it proves to be untrue (such party being the “defaulting party”), then the other party (the “non-defaulting party”) may terminate this Agreement (without prejudice to any other rights it may have) providing

(a)            it first gives to the party allegedly in default a notice of default containing particulars of the obligation which such has not performed, or the warranty breached,

(b)            the defaulting party does not dispute the default within ten days of such notice,

(c)            if it is reasonably possible to cure the default without irreparable harm to the non-defaulting party, the defaulting party does not, within thirty days after delivery of such notice of default, cure such default by appropriate payment or commence to correct such default and diligently prosecute the matter until it is corrected, and

(d)            the non-defaulting party may not advance or defend a claim on the basis that it is not reasonably possible to cure the default without irreparable harm to the non-defaulting party unless the non-defaulting party stated the same within the notice given under §7.1(a) .

7.2            Termination by Optionee. The Optionee may at any time terminate this Option by giving notice of termination to the Optionor and will thereupon be relieved of any further obligations in connection herewith but will remain liable for obligations which have accrued to the date of notice.


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7.3            Obligations upon Termination. If the Option is terminated otherwise than upon the exercise thereof pursuant to Part 2, the Optionee will

(a)            leave in good standing for a period of at least twelve months from the termination of the Option Period those mineral claims comprised in the Property that are in good standing on the date hereof and any other mineral claims comprised in the Property that the Optionee acquires after the date hereof, and

(b)            deliver at no cost to the Optionor within ninety days of such termination copies of all reports, maps, assay results and other relevant technical data compiled by or in the possession of the Optionee with respect to the Property and not theretofore furnished to the Optionor.

7.4            Optionee Post-Termination Rights. Notwithstanding termination of the Option, the Optionee will have the right, within a period of ninety days following the end of the Option Period, to remove from the Property all buildings, plant, equipment, machinery, tools, appliances and supplies which have been brought upon the Property by or on behalf of the Optionee.

PART 8
FORMATION OF JOINT VENTURE

8.1            Establishing a Joint Venture. Upon the earlier of

(a)            the Optionee acquiring a 75% interest in the Property by virtue of having completed all of the Milestones pursuant to the Expenditure Options, or

(b)            the termination of this Agreement where the Optionee has acquired either a 40% interest in the Property by completing the First Target in Schedule B, or a 60% interest in the Property by completing the Second Target in Schedule B.

two representatives from each of the parties will form a joint venture committee and will regularly meet and negotiate so that the parties enter into a joint venture agreement on terms mutually agreed upon between them, subject to §8.2.

8.2            Terms of Joint Venture. Without establishing a joint venture in this Agreement, unless otherwise agreed by the joint venture committee referred to in §8.1, the parties agree that the joint venture agreement referred to in §8.1 will include the following provisions:

(a)            the Optionee and the Optionor will share in the Exploration Expenditures on a pro rata basis based on the interests in the Property held by them from time to time, provided that if a party that fails to pay its portion of the Exploration Expenditures, the other party may pay the defaulting party’s portion in exchange for an interest in the Property equal to the quotient obtained by dividing such Exploration Expenditures by the combined value of Exploration Expenditures on the Property by the Optionor and Optionee, and

(b)            if this Agreement has terminated, the Optionee and the Optionor will grant to each other a right of first refusal to acquire its interest in the Property on terms no less favourable than those offered by a bona fide third party purchaser.


- 11 -

(c)            If either the Optionee or Optionor intends to sell its earned interest or any part thereof, the other party will have the option to share in proceeds of the sale on a pro rata basis based on their interests in the Property at the time of the sale.

For clarity and for the purposes of this Agreement, the Optionor is deemed to have spent USD$500,000 prior to the signing of this Agreement.

8.3            Absence of Joint Venture Agreement. In the absence of a formal joint venture agreement as set out in §8.1, the parties will conduct themselves in accordance with §8.2 if any of the conditions of §8.1 are met.

     PART 9
ARBITRATION

9.1            Disputes. All questions or matters in dispute with respect to the interpretation of this agreement will, insofar as lawfully possible, be submitted to arbitration pursuant to the terms hereof using “final offer” arbitration procedures.

9.2            Condition. Before any party submits any matter to arbitration pursuant to the provisions hereof, the party intending to refer any matter to arbitration must have given not less than ten days’ prior written notice of its intention so to do to the other party together with particulars of the matter in dispute. On the expiration of such ten days, the party who gave such notice may proceed to commence procedure in furtherance of arbitration as provided in this Part 9.

9.3            Process. The party desiring arbitration (“First Party”) will nominate in writing three proposed arbitrators, and will notify the other party (“Second Party”) of such nominees, and the other party will, within ten days after receiving such notice, either choose one of the three or recommend three nominees of its own. All nominees of either party must hold accreditation as either a lawyer, accountant or mining engineer. If the First Party fails to choose one of the Second Party’s nominees then all six names will be placed into a hat and one name will be randomly chosen by the president of the First Party and that person if he/she is prepared to act will be the nominee.

9.4            Arbitrating Body. Except as specifically otherwise provided in this Part 9 the arbitration herein provided for will be conducted in accordance with the Guidelines of the Arbitration Center of the Brazil-Canada Chamber of Commerce in accordance with its Guidelines, in the City of Belo Horizonte, Brasil, and will be fully conducted in the English Language. The parties will thereupon each be obligated to proffer to the arbitrator within twenty-one days of his/her appointment a proposed written solution to the dispute and the arbitrator will within ten days of receiving such proposals choose one of them without altering it except with the consent of both parties.

9.5            Costs. The expense of the arbitration will be paid as specified in the award.

9.6            Binding Option. The parties may agree that the award of the arbitrator will be final and binding upon each of them.


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PART 10
GENERAL

10.1            Confidentiality. No information furnished by the Optionee to the Optionor hereunder in respect of the activities carried out on the Property by the Optionee, will be published or made public by the Optionor in any manner whatsoever without the written consent of the Optionee, but such consent in respect of the reporting of factual data will not be unreasonably withheld, and will not be withheld in respect of information required to be publicly disclosed pursuant to applicable securities or corporate laws. This provision will terminate three years after the termination of the Option.

10.2            Assignment. The Optionee may assign all or part of its obligations under this Option Agreement during the Option Period to a third party (the “Assignee”) with consent of the Optionor, such consent not to be unreasonably withheld, conditioned or delayed, providing also that the Assignee agrees to execute an acknowledgement to be bound by the terms hereof insofar as the Optionor’s rights hereunder are concerned.

10.3            Force Majeure. If the Optionee is at any time during the Option Period either prevented or delayed in complying with the Exploration Expenditure requirement provisions of this Agreement in Part 2 by reason of strikes, walk–outs, labour shortages, power shortages, fuel shortages, fires, wars, acts of God, governmental regulations restricting normal operations, shipping delays or any other reason or reasons beyond the control of the Optionee (and for greater certainty excluding factors related to a lack of funding) (each, in this §10.3, a “Force Majeure Event”), the time limited for the performance by the Optionee of its obligations hereunder will be extended by a period of time equal in length to the period of each such prevention or delay. The Optionee will, within seven days of it becoming aware of a Force Majeure Event give notice to the Optionor of such Force Majeure Event and, upon cessation of such Force Majeure Event, will furnish the Optionor with notice to that effect together with particulars of the number of days by which the obligations of the Optionee hereunder have been extended by virtue of such Force Majeure Event and all preceding Force Majeure Events.

10.4            Notice. Each notice, demand or other communication required or permitted to be given under this Agreement will be in writing and will be sent by personal delivery, fax or prepaid registered mail to the addresses of the parties written on page 1. The date of receipt of such notice, demand or other communication, if given by registered mail, will be deemed conclusively to be the third Business Day after having been so mailed (except in the case of interruption of postal services for any reason whatever, in which case the date of receipt will be the date on which the notice, demand or other communication is actually received by the addressee) and, if delivered by personal delivery during business hours (being the hours during which the recipient is customarily open for business) on that same Business Day. Faxed notices to Optionee should be sent to (604) 669-4368, and faxed notices to Optionor should be sent to Fax number- 55-31-34 41 43 48, in each case with a copy to follow by regular mail. Either party may at any time and from time to time notify the other party in writing of a change of address and the new address to which notice will be given to it thereafter until further change.

10.5            Entire Agreement. This Agreement is the entire agreement, and will supersede and replace any other agreement or arrangement, whether oral or written, heretofore existing between the Optionor and Optionee in respect of the subject matter of this Agreement. No modification, alteration or waiver of the terms herein contained will be binding unless the same is in writing, dated subsequently hereto, and fully executed by the Parties.


- 13 -

10.6            Consents and Waivers. No consent or waiver expressed or implied by either party in respect of any breach or default by the other in the performance of such other of its obligations hereunder will be deemed or construed to be a consent to or a waiver of any other breach or default.

10.7            Further Acts. The parties will promptly execute or cause to be executed all documents, deeds, conveyances and other instruments of further assurance which may be reasonably necessary or advisable to carry out fully the intent of this Agreement or to record wherever appropriate the respective interests from time to time of the parties in the Property.

10.8            Enurement. This Agreement will enure to the benefit of and be binding upon the parties and their respective successors and assigns, subject to the conditions hereof.

10.9            Governing Law. This Agreement will be construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein. This agreement is to be construed as an option only and nothing herein will obligate the Optionee to do anything or pay any amount except where expressly herein provided.

10.10            Relationship. Nothing herein will constitute or be taken to constitute the Parties as partners or create any fiduciary relationship between them.

10.11            Counterparts. This Agreement may be executed in counterpart and by facsimile.

IN WITNESS WHEREOF this Option Agreement has been executed on behalf of the Optionor and the Optionee by their duly authorized officers on the day and year first above written.

ENTOURAGE MINING LTD.

Per: Gregory Kennedy”     
           Authorized Signatory

INFOGEO SERVIÇOS E LOCAÇÕES LTDA.

Per: Oscar`Yokoi”            
           Authorized Signatory


SCHEDULE “A”—MINERAL CLAIMS COMPRISING THE PROPERTY

Claim Titleholder Location Size (Ha) Substance Exploration Permit
860.714/2006

Optionor

Ipameri, Goiás

1,000.00

Gold

#7278, expiring
July 25, 2009
860.715/2006

Optionor

Ipameri, Goiás

2,000.00

Gold

#7279, expiring
July 25, 2009
860.085/2007



Optionor



Campo Alegre
de Goiás,
Goiás and
Ipameri, Goiás
1,935.32



Gold



#2484, expiring
April 16, 2010


860.086/2007



Optionor



Campo Alegre
de Goiás,
Goiás and
Ipameri, Goiás
1,611.80



Gold



#2485, expiring
April 16, 2010


860.087/2007


Optionor


Campo Alegre
de Goiás,
Goiás and
Ipameri, Goiás
1,954.52


Gold


#2768, expiring
April 16, 2010



- 2 -


- 3 -

SCHEDULE B—EXPENDITURE OPTION MILESTONES

The following table sets out the milestones by which the Optionee may obtain up to a 75% interest in the Property pursuant to the Expenditure Options:

Milestone
Property %
Earned
     
(a) Initial Milestone” consisting of the following events: 40%
     
(i)            the Optionee paying to the Optionor (or its nominee) USD $50,000 as follows (the “Initial Payment”): (A) USD$25,000 within seven days of the execution of this Agreement, and (B) USD$25,000 within 45 days of the execution of this Agreement; and
     
(ii)            the Optionee expending not less than USD$300,000 (the “First Target”) in Exploration Expenditures on the Property on or before January16, 2010.
     
(b) Second Milestone” consisting of the following events: 20%
     
(i)            the Optionee paying USD$100,000 to the Optionor (or its nominee) on or before January 16, 2010, and (60% total)
     
(ii)            the Optionee expending not less than USD$300,000 (less the amount by which any Exploration Expenditures pursuant to item (a)(ii) of the Initial Milestone exceeded the First Target) (the “Second Target”) in Exploration Expenditures on the Property between January 17, 2010 and January 16, 2011, inclusive.
     
(c) Third Milestone” consisting of the following events: 15%
     
(i)            the Optionee issuing to the Optionor (or its nominee) 100,000 Optionee Shares on or before January 16, 2011 (subject to any regulatory approvals required), and (75% total)
     
(ii)            Optionee having spent, by January 16, 2012: sufficient funds to complete and submit the Final Report by January 16, 2012, or has spent an additional USD $1,000,000 of Exploration Expenditures (any excess of $1,000,000 to be apportioned as outlined in 8.2(a))(less the amount by which any Exploration Expenditures pursuant to item (b)(ii) of the Second Milestone exceeded the Second Target) (the “Third Target”).
  TOTAL 75%


EX-12.1 3 exhibit12-1.htm CERTIFICATION Entourage Mining Ltd.: Exhibit 12.1 - Filed by newsfilecorp.com

EXHIBIT 12.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Gregory F. Kennedy, certify that:

1.

I have reviewed this Annual Report on Form 20-F of Entourage Mining Ltd.;

     
2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     
3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

     
4.

The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the company and have:

     
(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     
(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     
(c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     
(d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

     
5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of company’s board of directors (or persons performing the equivalent functions):

     
(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

     
(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.


Date: April 30, 2010  
     
  “Gregory F Kennedy"  
Name: Gregory F. Kennedy  
Title: President and CEO  
  (Principal Executive Officer)  


EX-12.2 4 exhibit12-2.htm CERTIFICATION Entourage Mining Ltd.: Exhibit 12.2 - Filed by newsfilecorp.com

EXHIBIT 12.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Pradeep Varshney, certify that:

1.

I have reviewed this Annual Report on Form 20-F of Entourage Mining Ltd.;

     
2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     
3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

     
4.

The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the company and have:

     
(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     
(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     
(c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     
(d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

     
5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of company’s board of directors (or persons performing the equivalent functions):

     
(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

     
(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.


Date: April 30, 2010  
     
  “Pradeep Varshney”  
Name: Pradeep Varshney  
Title: Chief Financial Officer  
  (Principal Financial Officer)  


EX-13.1 5 exhibit13-1.htm CERTIFICATION Entourage Mining Ltd.: Exhibit 13.1 - Filed by newsfilecorp.com

Exhibit 13.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Entourage Mining Ltd. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2009 (the “Report”), each of the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

   
2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: April 30, 2010  
   
“Gregory F Kennedy”  
Gregory F. Kennedy, President and C.E.O.  
(Principal Executive Officer)  
   
   
Date: April 30, 2010  
   
“Pradeep Varshney”  
Pradeep Varshney, Chief Financial Officer  
(Principal Financial Officer)  

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.


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-----END PRIVACY-ENHANCED MESSAGE-----