34,481,119 SHARES OF COMMON STOCK

WITS BASIN PRECIOUS MINERALS INC.

PROSPECTUS

August __ , 2006

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company is governed by Minnesota Statutes Chapter 302A. Minnesota Statutes Section 302A.521 provides that a corporation shall indemnify any person made or threatened to be made a party to any proceeding by reason of the former or present official capacity of such person against judgments, penalties, fines, including, without limitation, excise taxes assessed against such person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorney’s fees and disbursements, incurred by such person in connection with the proceeding, if, with respect to the acts or omissions of such person complained of in the proceeding, such person has not been indemnified by another organization or employee benefit plan for the same expenses with respect to the same acts or omissions; acted in good faith; received no improper personal benefit and Section 302A.255, if applicable, has been satisfied; in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful; and in the case of acts or omissions by persons in their official capacity for the corporation, reasonably believed that the conduct was in the best interests of the corporation, or in the case of acts or omissions by persons in their capacity for other organizations, reasonably believed that the conduct was not opposed to the best interests of the corporation. Subdivision 4 of Section 302A.521 of the Minnesota Statutes provides that a company’s articles of incorporation or by-laws may prohibit such indemnification or place limits upon the same. The Company’s articles and by-laws do not include any such prohibition or Limitation. As a result, the Company is bound by the indemnification provisions set forth in Section 302A.521 of the Minnesota Statutes.

As permitted by Section 302A.251 of the Minnesota Statutes, the Articles of Incorporation of the Company provide that a director shall have no personal liability to the Company and its shareholders for breach of his fiduciary duty as a director, to the fullest extent permitted by law.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses in connection with the issuance and distribution of the securities registered hereby are set forth in the following table:

SEC registration fee	$	1,500
Legal fees and expenses		70,000
Accounting fees and expenses		35,000
Miscellaneous		95,000
Total	$	201,500

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

On June 26, 2003, we entered into a joint venture with Hawk Precious Minerals USA, Inc., (“Hawk USA”) a Minnesota corporation and wholly owned subsidiary of Hawk Precious Minerals Inc., (a corporation organized under the laws of the Canadian Province of Ontario) for the exploration of gold minerals in the Republic of South Africa. Subject to the terms of a Joint Venture and Joint Agreement, we issued to Hawk USA 3,750,000 shares of our unregistered common stock, $0.01 par value, as additional consideration to complete the joint venture. In connection with this issuance, we relied upon the exemptions from registration provided by Sections 4(2) and 3(b) of the Securities Act of 1933 and Rules 505 and 506 promulgated thereunder, since this was a private transaction, not constituting a public offering.

On November 7, 2003, as further specified in the Joint Venture and Joint Agreement, we issued to Hawk USA 2,500,000 shares of our unregistered common stock, $0.01 par value, to “Buy Out” their 50 percent interest in Active Hawk LLC. In connection with this issuance, we relied upon the exemptions from registration provided by Sections 4(2) and 3(b) of the Securities Act of 1933 and Rules 505 and 506 promulgated thereunder, since this was a private transaction, not constituting a public offering.

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On November 4, 2003, we issued to Windsor Capital Corporation 500,000 shares of our common stock to provide consulting fees in connection with marketing and public relations over a period of two years. In connection with this issuance, we relied upon the exemptions from registration provided by Sections 4(2) and 3(b) of the Securities Act of 1933 and Rules 505 and 506 promulgated thereunder, since this was a private transaction, not constituting a public offering.

Pursuant to a purchase agreement dated February 6, 2004, between us and Argyle Securities Limited (“Argyle”), a corporation formed under the laws of Saint Vincent, we purchased substantially all of the outstanding stock of Brazmin Ltda., a limited liability company formed under the laws of Brazil, effective February 6, 2004 and we issued to Argyle 700,000 original issue shares of our unregistered common stock, $0.01 par value, as additional consideration to complete the purchase agreement. In connection with this issuance, we relied upon the exemptions from registration provided by Sections 4(2) and 3(b) of the Securities Act of 1933 and Rules 505 and 506 promulgated thereunder, since this was a private transaction, not involving any general solicitation and not constituting a public offering. On August 3, 2004, we completed the sale of Brazmin back to Argyle and we received from Argyle 400,000 shares of the 700,000 shares of our common stock that it had received as partial consideration.

In October 2003, we completed a private placement of 10,190,000 units of our securities, each unit consisting of one share of common stock and a one-year warrant (the expiration date was extended until April 28, 2006) to purchase one-half of one share of common stock at a price of $0.75 per share (subsequently reduced to $0.25 per share). The units were sold at a price of $0.25 per unit, resulting in gross proceeds of $2,547,500 before agent commissions ($250,500) and other offering related expenses ($45,397). We relied on the exemption from registration provided by Section 4(2) and Rule 506 under the Securities Act, as each investor in the private placement was “accredited” (as defined by Rule 501(a)), no general solicitation was involved, and the private placement did not otherwise involve a public offering. We agreed to file a registration statement under the Securities Act of 1933 covering the resale of the shares purchased in the private placement. In accordance with the terms of the private placement, because such registration statement was not declared effective by the Securities and Exchange Commission by February 11, 2004, we issued to the investors an additional one-fifth of one share of our common stock for each unit purchased in the private placement, or 2,038,000 shares.

On May 28, 2004, we raised gross proceeds of $650,000 pursuant to the issuance of an 18-month secured convertible promissory note to Pandora Select Partners LP (“Pandora”), a Virgin Islands fund. In lieu of cash, we satisfied a portion of our obligations (April through November 2005) by issuing 2,400,000 shares of our common stock. As further consideration for the financing, we issued to Pandora a warrant to purchase up to 928,571 shares of our common stock at a price of $0.40 per share, subject to adjustment. We also issued warrants to purchase an aggregate of 200,000 shares of our common stock to two affiliates of Pandora as origination fees. Furthermore, we issued an additional warrant to purchase up to 475,000 shares of our common stock for consulting services. In connection with this transaction, we relied on the exemption from registration provided by Sections 4(2) and 4(6) of the Securities Act of 1933, as well as Rule 506 of Regulation D because we had a reasonable basis to believe that all parties were accredited investors and the offering involved no general solicitation.

On June 10, 2004, we entered into an option agreement to earn a 70 percent interest in 5 mining claims in the McFaulds Lake area of northern Ontario, held under an option by an affiliate of ours, Hawk Precious Minerals Inc. As partial consideration payment required by the option agreement, we issued 200,000 shares of our non-registered common stock. In connection with this transaction, we relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as the offering of the shares do not involve a public offering since Hawk Precious Minerals Inc., is a sophisticated investor and no general solicitation was involved.

From September through October 2004, certain warrant holders exercised warrants held. We offered to the warrant holders a limited time reduction of the exercise price, by which the holders were allowed to exercise one warrant at a reduced price of $0.25 for one share of our common stock. A total of 576,431 warrants were exercised, for gross proceeds of $144,108. The range of the original price of the warrants exercised was from $0.50 to $5.50 per share. We relied on the exemption from registration provided by Section 4(2) and Rule 506 under the Securities Act, as each warrant holder was “accredited” (as defined by Rule 501(a)), no general solicitation was involved, and the transaction did not otherwise involve a public offering.

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On January 7, 2005, we completed a private placement of units of our securities, each unit consisting of one share of our common stock and a warrant to purchase one-half share of common stock at an exercise price of $0.25 per share. The warrants have an expiration date of December 31, 2006. We sold an aggregate of 25,050,000 units, resulting in gross proceeds of $2,505,000. The offering was conducted as a private placement pursuant to the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the Investors are “accredited investors” as such term is defined in Rule 501(a) promulgated under the Securities Act. In connection with the private placement, we engaged a placement agent, Galileo Asset Management SA, Switzerland. As compensation for their services, we paid a cash commission of $22,750, and issued a warrant to purchase 195,000 shares, at an exercise price of $0.25 per share. On April 28, 2006, they exercised their warrant and received a Class C Redeemable Warrant to purchase up to 97,500 shares of our common stock in a Regulation D/Section 4(2) private placement.

In January 2005, we closed on an assignment of a purchase agreement by and among us, Hunter Gold Mining Corporation and Ken Swaisland. Swaisland sold us his rights to purchase the assets of the Hunter Corporation. The Hunter Corporation owns a 100 percent interest in the Bates-Hunter Gold Mine located in Central City, Colorado. We issued 250,000 shares of our common stock to Swaisland (valued at $0.34 per share, the closing sale price on January 21, 2005) and a further 25,000 shares to an unrelated third party for the assignment on February 2, 2005 (valued at $0.36 per share). We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the consultant is “accredited” (as defined by Rule 501(a)) promulgated under the Securities Act, that no general solicitation was involved, and the transaction did not otherwise involve a public offering.

In January 2005, we entered into a one-year consulting agreement with Caribbean Consultants Holdings Associated S.A., as a non-exclusive consultant, to provide the Company with public relations and marketing services outside of the continental United States and as consideration for such services, the Company granted to Caribbean a warrant to purchase up to 2,000,000 shares of our common stock, at an exercise price of $0.225 per share. We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the consultant is “accredited” (as defined by Rule 501(a)) promulgated under the Securities Act, that no general solicitation was involved, and the transaction did not otherwise involve a public offering. On April 28, 2006, they exercised their warrant and received a Class C Redeemable Warrant to purchase up to 1,000,000 shares of our common stock in a Regulation D/Section 4(2) private placement.

In May 2005, we entered into warrant exercise agreements with two consultants, allowing them a reduced exercise price on previously issued and outstanding warrants for a period of one year. They held an aggregate of 3,063,834 warrants exercisable with a range of original pricing was from $0.40 to $5.50 per share. Each warrant exercise agreement allows for monthly exercises with an exercise price of $0.20 per share. From May 2005 through March 31, 2006, an aggregate of 1,489,600 warrants were exercised. The agreements expired March 31, 2006. We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that each warrant holder is “accredited” (as defined by Rule 501(a)) promulgated under the Securities Act, that no general solicitation was involved, and the transaction did not otherwise involve a public offering.

In August 2005, as additional consideration to a promissory note holder, we agreed to amend the terms of a warrant to purchase up to 500,000 shares of our common stock, with the reduction of the exercise price from $0.25 per share to $0.01 per share. The holder exercised the entire 500,000 shares. In October 2005, we issued him 150,000 shares of our un-registered common stock as penalty charges due for not paying the principal due as specified in the note. In November 2005, we issued the note holder 500,000 shares of our un-registered common stock as additional consideration for extending the note. We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the promissory note holder is “accredited” (as defined by Rule 501(a)) promulgated under the Securities Act, that no general solicitation was involved, and the transaction did not otherwise involve a public offering.

In October 2005, we issued to a promissory note holder, 500,000 shares of our un-registered common stock as additional consideration for extending the note. We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the promissory note holder is “accredited” (as defined by Rule 501(a)) promulgated under the Securities Act, that no general solicitation was involved, and the transaction did not otherwise involve a public offering.

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During fiscal 2005, we entered into various agreements with consultants for services in public and investor relations. A total of 1,353,567 shares of our un-registered common stock were issued as follows: in March we issued 75,000 shares; in April we issued 500,000 shares; in May we issued 60,000 shares; in June we issued 576,000 shares; in September we issued 50,000 shares and in December we issued 92,567 shares. We issued an aggregate 1,136,000 shares of our un-registered common stock and 450,000 warrants to purchase shares of our common stock to eight consultants for their services, with some services extending into 2006. Additionally, we granted an aggregate of 150,000 two-year warrants to two individuals for their on-going efforts towards the Bates-Hunter project in Colorado. All warrants were issued at or above market price on date of grant. We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company reasonably believes that each consultant is “sophisticated,” no general solicitation was involved, and the transaction did not otherwise involve a public offering.

On January 30, 2006, we entered into an exclusive private placement agreement with Midtown Partners & Co., LLC, as placement agent, to provide the Company with assistance in a private placement transaction. No transactions were completed with their assistance. Effective March 31, 2006, we terminated the exclusive agreement with the issuance of a stock purchase warrant to purchase up to 250,000 shares of our common stock, with an exercise price of $0.25 per share and an expiration date of March 31, 2011. We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the placement agent is “accredited” (as defined by Rule 501(a)) promulgated under the Securities Act, that no general solicitation was involved, and the transaction did not otherwise involve a public offering.

In March 2006, we issued 150,000 shares of our common stock to the principal owner of a public relations firm, in exchange for amounts due for services rendered totaling $35,065, which we had previously recorded as accounts payable. We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the owner is “accredited” (as defined by Rule 501(a)) promulgated under the Securities Act, that no general solicitation was involved, and the transaction did not otherwise involve a public offering.

During the three months ended March 31, 2006, we issued to two of the three promissory note holders warrants to purchase an aggregate of up to 3,500,000 shares of our un-registered common stock, with an exercise price of $0.12 per share as required under the terms of the promissory notes. In April 2006, we entered into amendments to the arrangements with each of the three note holders, extending the maturity of each of the notes for an additional 30 days. In consideration of these extensions, we issued an aggregate of 110,000 shares of our common stock to the note holders. The notes had accumulated an aggregate of $69,239 in interest payable and in May 2006, we paid $65,886 of the accrued interest by the issuance of 329,432 shares of our common stock. We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the promissory note holders are “accredited” (as defined by Rule 501(a) promulgated under the Securities Act) that no general solicitation was involved, and the transaction did not otherwise involve a public offering.

On April 18, 2006, we entered into a letter-of-intent with Journey Resources Corporation, a corporation duly organized pursuant to the laws of the Providence of British Columbia, relating to our option to earn up to an undivided 50 percent interest in certain mining claims comprising the Vianey Mine located in Mexico. We issued 100,000 shares of our common stock, which allowed us a due diligence period until June 30, 2006. On June 28, 2006, we closed on an option agreement with Journey and issued an additional 500,000 shares of our common stock in order to earn the first 25 percent interest in Vianey. In connection with this issuance, we relied upon the exemptions from registration provided by Section 4(2) of the Securities Act of 1933 and Rules 505 and 506 promulgated thereunder, since this was a private transaction, not involving any general solicitation and not constituting a public offering.

On April 28, 2006, we completed a round of financing through the exercise of issued and outstanding warrants. One incentive of the exercise offer was the receipt of one Class C Redeemable Warrant for each two shares purchased upon exercise of previously held warrants. Therefore, we are issuing Class C Redeemable Warrants to purchase an aggregate of up to 7,788,700 shares of our common stock, an exercise price of $0.50 per share, which expire on April 28, 2009. The offering was conducted as a private placement pursuant to the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company believes that the Investors are “accredited investors” as such term is defined in Rule 501(a) promulgated under the Securities Act, that no general solicitation was involved, and the transaction did not otherwise involve a public offering.

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On June 29, 2006, we executed a Memorandum of Agreement between the Company and Hawk Precious Minerals Inc., (the “Hawk Memorandum”). Hawk Precious Minerals Inc., a corporation organized under the laws of Ontario, Canada (“Hawk”), is an affiliate of ours. H. Vance White, our Chief Executive Officer and a director, is also an officer and director of Hawk. Under the terms of the Hawk Memorandum, we acquired a 50 percent interest in certain mining claims located in northern Ontario, held entirely by Hawk by issuing Hawk 40,000 shares of our common stock (which shares are being offered on a resale basis in this prospectus). In connection with this issuance, we relied upon the exemptions from registration provided by Section 4(2) of the Securities Act of 1933 and Rules 505 and 506 promulgated thereunder, since this was a private transaction, not involving any general solicitation and not constituting a public offering.

During 2006 and through the date of this prospectus, the Company has entered into various agreements with consultants for services related to management services, strategic planning, investor relations, capital markets and website marketing. We issued an aggregate 5,432,000 shares of our un-registered common stock and 3,500,000 warrants to purchase shares of our common stock to twelve consultants for their services, with some services extending into 2007. Certain warrants were issued below market price on date of grant. We relied on the exemption from registration provided by Rule 506 of Regulation D under Section 4(2) of the Securities Act of 1933, as amended. The Company reasonably believes that each consultant is “sophisticated,” no general solicitation was involved, and the transaction did not otherwise involve a public offering.

ITEM 27. EXHIBITS.

The following exhibits are filed as part of this Registration Statement:

Exhibit**		Description of Document

3.1		Articles of Incorporation, as amended through July 10, 2003 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form SB-2 filed on February 14, 2005 (File No. 333-122338)).
3.2		By-Laws (incorporated by reference to Exhibit 3.2 to Form 10-KSB for the year ended December 31, 2004 (File No. 1-12401)).
4.1		Form of Common Stock certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Form S-2 filed on November 26, 2003 (File No. 333-110831)).
4.2		Form of Warrant issued to Pandora Select Partners, L.P. (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed June 4, 2004).
4.3		Form of Warrant issued to two affiliates of Pandora Select Partners, L.P. (incorporated by reference to Exhibit 4.2 of the Registrant’s Form 8-K filed June 4, 2004).
4.4		Form of Warrant issued to Hawk Precious Minerals Inc. (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed October 15, 2004).
4.5		Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed December 16, 2004).
4.6		Form of Common Stock Purchase Warrant dated November 1, 2005 (incorporated by reference to Exhibit 4.1 to Form 10-QSB for the quarter ended September 30, 2005 (File No. 1-12401)).
4.7		Form of Class C Redeemable Warrant (previously filed as same exhibit number with the Registration Statement on Form SB-2 filed on July 14, 2006 (File No. 333-135765).

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Exhibit**		Description of Document

4.8		Form of Warrant issued to Boston Financial Partners, Inc., (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed July 13, 2006).
5.1		Opinion of Maslon Edelman Borman & Brand, LLP (previously filed as same exhibit number with the Registration Statement on July 14, 2006 (File No. 333-135765).
10.1		Stock Option Agreement (incorporated by reference to Exhibit 6.1 to Registrant’s Form 1-A (File No. 24D-3802 SML)).
10.2		1997 Incentive Plan (incorporated by reference to Exhibit 10.23 to Registrant’s Form 10-K for the year ended December 31, 1996 (File No. 0-27968)).
10.3		2000 Director Stock Option Plan, as amended (incorporated by reference to Exhibit 4.1 to Registrant’s Form S-8 filed November 19, 2003 (File No. 333-110590)).
10.4		2001 Employee Stock Option Plan (incorporated by reference to Exhibit 10.18 to Form 10-K for the year ended December 31, 2001 (File No. 1-12401)).
10.5		Join Venture and Joint Contribution Agreement dated June 26, 2003 by and among the Registrant, Hawk Precious Minerals Inc. and Hawks Precious Minerals USA, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed July 1, 2003).
10.6		Member Control Agreement of Active Hawk Minerals, LLC dated June 26, 2003 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed July 1, 2003).
10.7		2003 Director Stock Option Plan (incorporated by reference to Exhibit 4.2 to Registrant’s Form S-8 filed November 19, 2003 (File No. 333-110590)).
10.8		Quota Purchase Agreement by and between the Registrant and Argyle Securities Limited, dated February 6, 2004 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed February 12, 2004).
10.9		Purchase Agreement by and among the Registrant and Pandora Select Partners L.P. dated May 28, 2004 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed June 4, 2004).
10.10		Secured Convertible Promissory Note by the Registrant to Pandora Select Partners L.P. dated May 28, 2004 (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed June 4, 2004).
10.11		Registration Rights Agreement by and among the Registrant and Pandora Select Partners L.P. dated May 28, 2004 (incorporated by reference to Exhibit 10.3 of the Registrant’s Form 8-K filed June 4, 2004).
10.12		Security Agreement by and between the Registrant and Pandora Select Partners L.P. dated May 28, 2004 (incorporated by reference to Exhibit 10.4 of the Registrant’s Form 8-K filed June 4, 2004).
10.13		Assignment of Option Agreement between and by the Registrant, Hawk Precious Minerals Inc. and Richard Nemis “In Trust” dated June 10, 2004 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed June 14, 2004).
10.14		Option Agreement between the Registrant and Richard Nemis “In Trust” dated May 12, 2004 (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed June 14, 2004).
10.15		Agreement by and among the Registrant and Argyle Securities Limited, dated July 19, 2004 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed August 4, 2004).

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Exhibit**

Description of Document

10.16		Shareholders Agreement by and among AfriOre International (Barbados) Limited, the Registrant, and Kwagga Gold (Barbados) Limited, dated August 27, 2004 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed September 1, 2004).
10.17		Amendment to Shareholders Agreement by and among AfriOre International (Barbados) Limited, the Registrant, and Kwagga Gold (Barbados) Limited, dated August 30, 2004 (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed September 1, 2004).
10.18		Proposal by and among the Registrant, Hunter Gold Mining Corporation, Hunter Gold Mining, Inc., and Ken Swaisland, dated September 16, 2004 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed September 16, 2004).
10.19		Form of Promissory Note by the Registrant to Hawk Precious Minerals Inc., dated October 13, 2004 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed October 15, 2004).
10.20		Form of Subscription Agreement and Investment Representation (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed December 16, 2004).
10.21		Form of Supplement to Subscription Agreement and Investment Representation (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed December 16, 2004).
10.22		Letter Agreement dated December 2, 2003 by and between Ken Swaisland and Hunter Gold Mining Corporation regarding purchase and sale of shares of Hunter Gold Mining Corporation (incorporated by reference to Exhibit 10.24 to the Registrant’s Form SB-2 filed on February 14, 2005 (File No. 333-122338)).
10.23		Assignment of Purchase Option Agreement by and between the Registrant and Kenneth Swaisland, dated August 12, 2004 (incorporated by reference to Exhibit 10.24 to Form 10-KSB for the year ended December 31, 2004 (File No. 1-12401)).
10.24		Amended and Restated Loan and Security Agreement by the Registrant to Pacific Dawn Capital, LLC dated November 1, 2005 (incorporated by reference to Exhibit 10.1 to Form 10-QSB for the quarter ended September 30, 2005 (File No. 1-12401)).
10.25		Amended Secured Convertible Promissory Note by the Registrant to Pacific Dawn Capital, LLC dated September 30, 2005 (incorporated by reference to Exhibit 10.2 to Form 10-QSB for the quarter ended September 30, 2005 (File No. 1-12401)).
10.26		Loan and Security Agreement by the Registrant to Andrew Green dated November 1, 2005 (incorporated by reference to Exhibit 10.3 to Form 10-QSB for the quarter ended September 30, 2005 (File No. 1-12401)).
10.27		Secured Convertible Promissory Note by the Registrant to Andrew Green dated November 1, 2005 (incorporated by reference to Exhibit 10.4 to Form 10-QSB for the quarter ended September 30, 2005 (File No. 1-12401)).
10.28		Letter Agreement dated December 31, 2005 by and between the Registrant and Hunter Gold Mining Corporation regarding amending the option agreement for the purchase of the shares of Hunter Gold Mining Corporation (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed January 18, 2006).
10.29		Consulting Agreement by and among the Registrant and Corporate Resource Management, Inc., dated May 15, 2006 (incorporated by reference to Exhibit 10.1 to Form 10-QSB for the quarter ended March 31, 2006 (File No. 1-12401)).

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Exhibit**

Description of Document

10.30		Consulting Agreement by and among the Registrant and Boston Financial Partners, Inc., dated June 1, 2006 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed July 13, 2006).
10.31		Management Services Agreement by and between the Registrant and Hawk Precious Minerals Inc., dated June 5, 2006 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed June 8, 2006).
10.32		Warrant Agreement between the Registrant and American Stock Transfer & Trust Company, dated June 28, 2006 (previously filed as same exhibit number with the Registration Statement on July 14, 2006 (File No. 333-135765).
10.33		Memorandum of Agreement between the Registrant and Hawk Precious Minerals Inc., dated June 29, 2006 (incorporated by reference to Exhibit 10.3 of the Registrant’s Form 8-K filed June 30, 2006).
10.34		Memorandum of Agreement between the Registrant, Hawk Precious Minerals Inc., and MacDonald Mines Exploration Ltd., dated June 29, 2006 (incorporated by reference to Exhibit 10.4 of the Registrant’s Form 8-K filed June 30, 2006).
10.35		Standby Joint Venture Financing Agreement by and among the Registrant and Andrew Green dated August 18, 2006 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed August 23, 2006).
16.1		Letter from Virchow, Krause & Company, LLP dated January 3, 2005 (incorporated by reference to Exhibit 16.1 of the Registrant’s Form 8-K filed January 3, 2005).
16.2		Letter from Walter E. Brooks dated January 12, 2005 (incorporated by reference to Exhibit 16.1 of the Registrant’s Form 8-K filed January 18, 2005).
23.1**		Consent of Carver Moquist & O’Connor, LLC.
23.2		Consent of Maslon Edelman Borman & Brand, LLP (included as part of Exhibit 5.1 hereof).
24.1		Power of Attorney (previously filed with the Registration Statement on July 14, 2006 (File No. 333-135765).

ITEM 28. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

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(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; and

(4) That, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, Georgia on August 24, 2006.


	WITS BASIN PRECIOUS MINERALS INC.

	By:	/s/ Stephen D. King
		Stephen D. King
		President

Pursuant to the requirements of the Securities Exchange Act of 1933, this registration statement has been signed by the following persons in the capacities and dates indicated.

Name	Title	Date

/s/ Mark D. Dacko
by: Mark D. Dacko as attorney-in-fact for H. Vance White	Chief Executive Officer and Director (principal executive officer)	August 24, 2006

/s/ Stephen D. King
by: Stephen D. King	President and Director	August 24, 2006

/s/ Mark D. Dacko
Mark D. Dacko	Chief Financial Officer, Secretary and Director (principal financial and accounting officer)	August 24, 2006

/s/ Mark D. Dacko
by: Mark D. Dacko as attorney-in-fact for Norman D. Lowenthal	Director	August 24, 2006

II-10

Minnesota	1040	84-1236619
(State or jurisdiction of	Primary Standard Industrial	(IRS Employer
incorporation or organization)	Classification Code Number	Identification No.)

Prospectus Summary	3

Risk Factors	9

Special Note Regarding Forward-Looking Statements	15

Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Business	24

Management	38

Security Ownership of Certain Beneficial Owners and Management	41

Certain Relationships and Related Transactions	42

Market for Common Equity and Related Shareholder Matters	44

Use of Proceeds	45

Selling Securityholders	46

Plan of Distribution	52

Description of Common Stock	54

Description of Class C Redeemable Warrants	55

Disclosure of Commission Position On Indemnification for Securities Act Liabilities	55

About this Prospectus	56

Where You Can Find More Information	56

Legal Matters	56

Experts	56

Changes in Accountants	57

Index to Financial Statements	F-1

Class C Redeemable Warrants offered	7,788,700 warrants
Common stock offered	34,481,119 shares
Common stock outstanding before the offering⁽¹⁾	89,604,406 shares
Common stock outstanding after the offering⁽²⁾	118,781,526 shares
Common Stock OTCBB symbol	WITM
Class C Redeemable Warrant symbol⁽³⁾	N/A

	Years Ended December 31,				May 1, 2003 (inception) to December 31,
	2005		2004		2005
Expenditures reported by Kwagga/AfriOre	$	613,857	$	865,340	$	1,979,197
Expenditures related to Brazmin		--		195,572		195,572
Expenditures related to McFaulds Lake		--		24,251		24,251
Expenditures related to Bates-Hunter		415,776		70,379		486,155
Issuance of shares and warrant expense (1)		104,753		--		104,753
Issuance of shares to Hawk USA (2)		--		--		4,841,290
	$	1,134,386	$	1,155,542	$	7,631,218

		Annual Compensation			Long-Term Compensation Awards	All Other Compen- sation ($)
Name and Principal Position	Year	Salary($)	Bonus($)	Other Annual Compensation ($)	Securities Underlying Options/SARs(#)
H. Vance White ⁽¹⁾ Chief Executive Officer and Director	2005 20042003	-- -- --	-- -- --	-- -- --	450,000 -- 1,000,000	-- -- --
Mark D. Dacko⁽²⁾ Chief Financial Officer, Secretary and Director	2005 20042003	$ 90,000 $ 90,000 $ 90,000	-- -- --	-- -- --	450,000 125,000⁽³⁾ 350,000	-- -- --

Name	Age	Positions with the Company

H. Vance White	61	Chief Executive Officer and Director
Stephen D. King	50	President and Director
Mark D. Dacko	54	Chief Financial Officer, Secretary and Director
Norman D. Lowenthal	68	Director

			Percent total
	Number of		options granted			Exercise/				Grant date
	options		to employees in			base		Expiration		present
	granted		fiscal 2005			price ($)		date		value (c)
Mr. White (a)		250,000		28	%	$	0.26		5/2/2015	$	64,810
Mr. White (b)		200,000		22	%	$	0.15		10/20/2015	$	29,860
Mr. Dacko (a)		250,000		28	%	$	0.26		5/2/2015	$	64,810
Mr. Dacko (b)		200,000		22	%	$	0.15		10/20/2015	$	29,860

	Number of				Number of shares				Value of unexercised
	shares				underlying unexercised				in-the-money options
	acquired on		Value		options at Dec. 31, 2005				at Dec. 31, 2005 (a)
	exercise		Realized		Exercisable		Unexercisable		Exercisable		Unexercisable

Mr. White		--	$	--		1,450,000		--	$	--	$	--

Mr. Dacko		--	$	--		965,000		--	$	--	$	--

Name and Address	Amount of Beneficial Ownership (1)			Percentage of Class

H. Vance White		4,962,500 (2	)		5.4
80 South 8^th Street, Suite 900
Minneapolis, MN 55402

Stephen D. King		2,700,000 (3	)		2.9
80 South 8^th Street, Suite 900
Minneapolis, MN 55402

Norman D. Lowenthal		1,000,000 (4	)		1.1
Private Bag X60
Saxonwold, 2132 South Africa

Mark D. Dacko		965,000 (5	)		1.1
80 South 8^th Street, Suite 900
Minneapolis, MN 55402
All directors and officers as a group		9,627,500			10.1

Andrew Green		10,750,000 (6	)		10.9
5101 Creek Road
Cincinnati, OH 45242

Thomas Brazil		9,744,867 (7	)		10.5
17 Bayns Hill Road
Boxford, MA 01921

Hawk Precious Minerals Inc.		3,512,500 (8	)		3.9
2500 - 120 Adelaide St. W.
Toronto, ON M5H 1T1

Period	High		Low

Quarter Ended March 31, 2004	$	1.33	$	0.68
Quarter Ended June 30, 2004	$	0.91	$	0.33
Quarter Ended September 30, 2004	$	0.51	$	0.20
Quarter Ended December 31, 2004	$	0.41	$	0.16

Quarter Ended March 31, 2005	$	0.46	$	0.20
Quarter Ended June 30, 2005	$	0.29	$	0.14
Quarter Ended September 30, 2005	$	0.20	$	0.10
Quarter Ended December 31, 2005	$	0.27	$	0.08

Quarter Ended March 31, 2006	$	0.37	$	0.14
Quarter Ended June 30, 2006	$	0.57	$	0.20

Name of Selling Securityholder	Number of Class C Redeemable Warrants Beneficially Owned Before Offering(1)		Number of Class C Redeemable Warrants Offered by Selling Securityholder		Percentage Beneficial Ownership After Offering
Zoran Arandjelovic (a)		100,000		50,000		*
Michael Baybak		100,000		100,000		--
Arthur P. Bergeron		375,000		375,000		--
Bergman Industries, Inc (b)		62,500		62,500		--
Robert Bishop		25,000		25,000		--
Boston Financial Partners, Inc (c)		387,500		387,500		--
Barbara Bowman		10,000		10,000		--
Laurence H. Brady		62,500		62,500		--
Marsha Mucci, Custodian for Patrick Brazil		37,500		37,500		--
Marsha Mucci, Custodian for Sean Brazil		37,500		37,500		--
Marsha Mucci, Custodian for Thomas Justin Brazil		37,500		37,500		--
Kenneth Brimmer		103,333		103,333		--
Jerald L. Broussard		25,000		25,000		--
Capital Z Corporation (d)		100,000		50,000		*
Caribbean Consultants Holdings Associated S.A. (e)		1,000,000		1,000,000		--
CAS Associates, LLC (f)		25,000		25,000		--
The Catalyst Group, LLC (g)		25,000		25,000		--
John J. Connors		62,500		62,500		--
Raymond Cormier		375,000		375,000		--
Yvon Cormier		125,000		125,000		--
Christopher R. Esposito		62,500		62,500		--
Everest Ltd (h)		625,000		625,000		--
Henry Fong		275,250		275,250		--
Galileo Asset Management SA (i)		97,500		97,500		--
Philip M. Georgas		250,000		250,000		--
Gordon Gregoretti		150,000		150,000		--
Michael Hamblett		350,000		350,000		--
Haywood Securities Inc ITF Bernie Hertel		25,000		25,000		--
Haywood Securities Inc ITF Gregg Layton		250,000		250,000		--
John F. Healey		5,000		5,000		--
Thomas H. Healey		35,000		35,000		--
William J. Hickey		25,000		25,000		--
Michael J. Horgan and Doris E. Horgan JTWROS		25,000		25,000		--
Patrick J. Horgan		50,000		50,000		--
HSBC Private Bank (Suisse) S.A. (j)		50,000		50,000		--
Ivanhoe Irrevocable Trust (k)		25,000		25,000		--
Martin Lowenthal		175,000		175,000		--
N. D. Lowenthal (l)		100,000		100,000		--
The Mayflower Group, Ltd (m)		62,500		62,500		--
Wayne W. Mills		511,867		511,867		--
Sara D. Mower		112,500		112,500		--
Noble Consultants (St. Lucia) Ltd (n)		250,000		250,000		--
Noble Securities Holding Ltd (o)		315,000		315,000		--
Penson Financial ITF Claire Spencer		25,000		62,500		--
Daniel S. & Patrice M. Perkins, JTWROS (p)		87,500		50,000		*
Piper Jaffray, as Custodian FBO Daniel S. Perkins IRA (p)		87,500		25,000		*
Piper Jaffray, as Custodian FBO Patrice M. Perkins IRA (p)		87,500		12,500		*
Piper Jaffray, as Custodian FBO James G. Peters IRA		22,500		22,500		--

Piper Jaffray, as Custodian FBO David H. Potter IRA	31,250	31,250	--
Bruce D. Reichert	10,000	10,000	--
Research Capital Corp ITF David Jones	25,000	25,000	--
Research Capital Corp ITF Bradley Kipp	2,000	2,000	--
Martin & Jacqueline Shaevel, JTWROS	62,500	62,500	--
Anthony J. Spatacco Jr.	62,500	62,500	--
Elvira Stinghi	400,000	400,000	--
Lawrence R. & Lori R. Turel, JT by the Entireties	20,000	20,000	--
Michael B. Ullman	150,000	25,000	1.6
Michael B. & Carla L. Ullman, JTWROS	150,000	125,000	*
James J. Walsh	25,000	25,000	--
Bear, Stearns Securities Corp for the account of Winchester Fiduciary Services Ltd (q)	25,000	25,000	--
Total Warrants Offered		7,788,700

Name of Selling Securityholder	Shares Beneficially Owned Before Offering			Shares of Outstanding Common Stock Offered by Selling Securityholder			Shares of Common Stock Offered by Selling Securityholders Issuable Upon Exercise of Warrants			Total Shares of Common Stock Offered by Selling Securityholder		Percentage Beneficial Ownership After Offering
Andcor Companies, Inc (a)		71,653			--			71,653	⁽¹⁾		71,653		--
Zoran Arandjelovic (b)		740,000	⁽²⁾		--			50,000	⁽³⁾		50,000		*
Michael Baybak		1,450,000	⁽⁴⁾		150,000			100,000	⁽³⁾		250,000		1.3
Arthur P. Bergeron		2,142,430	⁽⁵⁾		--			375,000	⁽³⁾		375,000		2.0
Bergman Industries, Inc (c)		457,500	⁽⁶⁾		--			62,500	⁽³⁾		62,500		*
Robert Bishop		195,000	⁽⁷⁾		--			25,000	⁽³⁾		25,000		*
Boston Financial Partners, Inc (d)		9,744,867	⁽⁸⁾		625,000			1,387,500	⁽⁹⁾		2,012,500		8.6
Barbara Bowman		58,000	⁽¹⁰⁾		--			10,000	⁽³⁾		10,000		*
Laurence H. Brady		437,500	⁽⁶⁾		--			62,500	⁽³⁾		62,500		*
Marsha Mucci, as custodian for Patrick Brazil		292,500	⁽¹¹⁾		--			37,500	⁽³⁾		37,500		*
Marsha Mucci, as custodian for Sean Brazil		292,500	⁽¹¹⁾		--			37,500	⁽³⁾		37,500		*
Marsha Mucci, as custodian for Thomas Justin Brazil		292,500	⁽¹¹⁾		--			37,500	⁽³⁾		37,500		*
Kenneth Brimmer		103,333			--			103,333	⁽³⁾		103,333		--
Walter E. Brooks		200,000			--			200,000⁽	⁽¹²⁾		200,000		--
Jerald L. Broussard		175,000	⁽⁷⁾		--			25,000	⁽³⁾		25,000		*
Capital Z Corporation (e)		740,000	⁽¹³⁾		--			50,000	⁽³⁾		50,000		*
Caribbean Consultants Holdings Associated SA (f)		3,000,000	⁽¹⁴⁾		--			1,000,000	⁽³⁾		1,000,000		2.2
CAS Associates, LLC (g)		175,000	⁽⁷⁾		--			25,000	⁽³⁾		25,000		*
The Catalyst Group, LLC (h)		175,000	⁽⁷⁾		--			25,000	⁽³⁾		25,000		*
Jayvee & Co ITF Cecec S.A. (i)		900,000			400,000			500,000	⁽¹⁵⁾		900,000		--
John J. Connors		437,500	⁽⁶⁾		--			62,500	⁽³⁾		62,500		*
Raymond Cormier		2,625,000	⁽⁵⁾		--			375,000	⁽³⁾		375,000		2.5
Yvon Cormier		875,000	⁽¹⁶⁾		--			125,000	⁽³⁾		125,000		*
Ronald Eibensteiner		1,916,334	⁽¹⁷⁾		--			50,000	⁽¹⁸⁾		50,000		2.1
Christopher R. Esposito		437,500	⁽⁶⁾		--			62,500	⁽³⁾		62,500		*
Everest Ltd (j)		1,875,000	⁽¹⁹⁾		--			625,000	⁽³⁾		625,000		1.4
Henry Fong		1,435,250	⁽²⁰⁾		--			275,250	⁽³⁾		275,250		1.3
Douglas G. Furth		450,000			450,000			--			450,000		--
Galileo Asset Management SA (k)		1,167,500	⁽²¹⁾		--			97,500	⁽³⁾		97,500		1.2
Philip M. Georgas		1,838,000	⁽²²⁾		--			250,000	⁽³⁾		250,000		1.8
Peggy Glasgow		300,000			300,000			--			300,000		--
Andrew Green		10,750,000	⁽²³⁾		3,650,000	⁽²⁴⁾		6,000,000	⁽²⁵⁾		9,650,000		1.2
Gordon Gregoretti		499,000	⁽²⁶⁾		--			150,000	⁽³⁾		150,000		*
Michael Hamblett		2,684,650	⁽²⁷⁾		--			350,000	⁽³⁾		350,000		2.6
Hawk Precious Minerals Inc (l)		3,512,500	⁽²⁸⁾		40,000			--			40,000		3.9
Haywood Securities Inc ITF Bernie Hertel		75,000	⁽⁷⁾		--			25,000	⁽³⁾		25,000		*
Haywood Securities Inc ITF Gregg Layton		750,000	⁽²⁹⁾		--			250,000	⁽³⁾		250,000		*
John Healey		39,000	⁽³⁰⁾		--			5,000	⁽³⁾		5,000		*
Thomas J. Healey		273,000	⁽³¹⁾		--			35,000	⁽³⁾		35,000		*
William J. Hickey		295,000	⁽⁷⁾		--			25,000	⁽³⁾		25,000		*
Michael J. Horgan and Doris E. Horgan JTWROS		195,000	⁽⁷⁾		--			25,000	⁽³⁾		25,000		*
Patrick J. Horgan		350,000	⁽³²⁾		--			50,000	⁽³⁾		50,000		*
HSBC Private Bank (Suisse) SA		390,000	⁽³²⁾		--			50,000	⁽³⁾		50,000		*

Ariel Imas	12,500		--		12,500	⁽³³⁾	12,500	--
Infinity Advisors Inc. (m)	300,000		--		300,000	⁽³⁴⁾	300,000	--
Ivanhoe Irrevocable Trust (n)	195,000	⁽⁷⁾	--		25,000	⁽³⁾	25,000	*
Bruce Jordan	100,000		--		100,000	⁽³³⁾	100,000	--
Journey Resources Corp (o)	600,000		600,000		--		600,000	--
Deb Kramer (p)	2,000,000		--		2,000,000	⁽³⁵⁾	2,000,000	--
Richard Kreger	100,000		--		100,000	⁽³³⁾	100,000	--
Laura League	200,000		200,000		--		200,000	--
Martin Lowenthal	1,265,000	⁽³⁶⁾	--		175,000	⁽³⁾	175,000	1.2
N. D. Lowenthal (q)	1,000,000	⁽³⁷⁾	--		100,000	⁽³⁾	100,000	1.0
The Mayflower Group, Ltd (r)	437,500	⁽⁶⁾	--		62,500	⁽³⁾	62,500	*
Midtown Partners & Co., LLC (s)	37,500		--		37,500	⁽³³⁾	37,500	--
Millennium Consulting Group (t)	250,000		250,000		--		250,000	--
Wayne W. Mills	3,100,051	⁽³⁸⁾	--		511,867	⁽³⁾	511,867	2.9
Kirk McKinnon	100,000		--		100,000	⁽³⁹⁾	100,000	--
Sara D. Mower	792,000	⁽⁴⁰⁾	--		112,500	⁽³⁾	112,500	*
Wayde Newman	100,000		100,000		--		100,000	*
Noble Consultants (St. Lucia) Ltd(u)	1,750,000	⁽²⁹⁾	--		250,000	⁽³⁾	250,000	1.7
Noble Securities Holding Ltd (v)	945,000	⁽⁴¹⁾	--		315,000	⁽³⁾	315,000	*
Pacific Dawn Capital, LLC (w)	4,548,976	⁽⁴²⁾	648,976		3,900,000	⁽⁴³⁾	4,548,976	--
Penson Financial ITF Claire Spencer	437,500	⁽⁶⁾	--		62,500	⁽³⁾	62,500	*
Daniel S. & Patrice M. Perkins, JTWROS (x)	711,500	⁽⁴⁴⁾	--		50,000	⁽³⁾	50,000	*
Piper Jaffray, as custodian FBO Daniel S. Perkins IRA	711,500	⁽⁴⁴⁾	--		25,000	⁽³⁾	25,000	*
Piper Jaffray, as custodian FBO Patrice M. Perkins IRA	711,500	⁽⁴⁴⁾	--		12,500	⁽³⁾	12,500	*
Piper Jaffray, as custodian FBO James G. Peters IRA	185,500	⁽⁴⁵⁾	--		22,500	⁽³⁾	22,500	*
Piper Jaffray, as custodian FBO David H. Potter IRA	258,750	⁽⁴⁶⁾	--		31,250	⁽³⁾	31,250	*
Bruce D. Reichert	230,750	⁽⁴⁷⁾	--		10,000	⁽³⁾	10,000	*
Research Capital Corp. ITF David Jones	195,000	⁽⁷⁾	--		25,000	⁽³⁾	25,000	*
Research Capital Corp. ITF Bradley Kipp	15,600	⁽⁴⁸⁾	--		2,000	⁽³⁾	2,000	*
Richard Schler	100,000		--		100,000	⁽³⁹⁾	100,000	*
Martin & Jacqueline Shaevel, TIC	437,500	⁽⁶⁾	--		62,500	⁽³⁾	62,500	*
Lisa Shouler	599,567		599,567		--		599,567	*
Anthony J. Spatacco Jr.	209,500	⁽⁶⁾	--		62,500	⁽³⁾	62,500	*
Elvira Stinghi	2,800,000	⁽⁴⁹⁾	--		400,000	⁽³⁾	400,000	2.7
Dennis J. Stoica	2,100,000		2,000,000		100,000		2,100,000	--
Patrick J. Sweeney	1,526,767	⁽⁵⁰⁾	526,767	⁽⁵¹⁾	1,000,000	⁽⁵²⁾	1,526,767	*
Lawrence R. & Lori R. Turel, JT in the Entireties	242,925	⁽⁵³⁾	--		20,000	⁽³⁾	20,000	*
Michael Ullman	1,070,000	⁽⁵³⁾	--		25,000	⁽³⁾	25,000	1.2
Michael B. & Carla L. Ullman, JTWROS	1,070,000	⁽⁵⁴⁾	--		125,000	⁽³⁾	125,000	1.1
James Walsh	75,000	⁽⁷⁾	--		25,000	⁽³⁾	25,000	*
Richard M. Wexler	469,694	⁽⁵⁵⁾	--		300,000	⁽⁵⁶⁾	300,000	*
Winchester Fiduciary Services Ltd (y)	175,000	⁽⁷⁾	--		25,000	⁽³⁾	25,000	*
Sheri Zimmer	280,456		280,456		--		280,456	--
Total Shares Offered			10,820,766		23,660,353		34,481,119

(a)		Andcor Companies, Inc is controlled by Dennis Anderson.
(b)		Zoran Arandjelovic, a director of our Company from November 2003 until April 2004, also controls the shares of Capital Z Corporation.
(c)		Bergman Industries, Inc is controlled by Jonathan Bergman.
(d)		Boston Financial Partners, Inc is owned and controlled by Thomas E. Brazil.
(e)		Capital Z Corporation is owned and controlled by Zoran Arandjelovic, who was a director of our Company from November 2003 until April 2004.
(f)		Caribbean Consultants Holdings Associated SA is a foreign entity.
(g)		CAS Associates, LLC is controlled by Carolyn A. Shediac.
(h)		The Catalyst Group, LLC is controlled by Robert Raffa.
(i)		Cecec SA is a Uruguay South America corporation.
(j)		Everest Ltd is a foreign entity.
(k)		Galileo Asset Management SA is Switzerland corporation.
(l)		H. Vance White is an officer and director of our Company and also of Hawk Precious Minerals Inc a Canadian corporation.
(m)		Infinity Advisors Inc is controlled by Mark Kroeger.
(n)		Ivanhoe Irrevocable Trust is managed by Russell Schechter, Trustee.
(o)		Journey Resources Corp is a Canadian corporation which we entered into an option agreement for the Vianey Mine Concession located in Mexico.
(p)		Deb Kramer is the spouse of Stephen D. King. Mr. King is currently our President and a director.
(q)		Norman D. Lowenthal is currently a director of our Company.
(r)		The Mayflower Group, Ltd is controlled by Marshall Sterman.
(s)		Midtown Partners & Co LLC shares are voted by Bruce Jordan.
(t)		Millennium Consulting Group shares are voted by Douglas G. Furth.
(u)		Noble Consultants (St. Lucia) Ltd is a foreign entity.
(v)		Noble Securities Holding Ltd is a foreign entity.
(w)		Pacific Dawn Capital LLC is controlled by Donald Stoica.
(x)		Mr. and Mrs. Perkins also beneficially own 50,000 and 25,000 shares, respectively, through IRAs established for their benefit. Mr. Perkins is also offering hereby 50,000 shares held in his IRA and Mrs. Perkins is also offering 25,000 shares held in her IRA.
(y)		Winchester Fiduciary Services Ltd is a foreign entity.

		__________________

(1)		Represents warrants (56,593 expire in 2006 and 15,060 expire in 2007, and range in exercise prices from $0.83 to $5.00 per share) issued in connection with services performed in 2001.
(2)		Includes 50,000 shares issuable upon exercise of Class C Redeemable Warrants and 50,000 shares issuable upon exercise of Class C Redeemable Warrants held in the name of Capital Z Corporation.
(3)		Represents shares issuable upon exercise of Class C Redeemable Warrants.
(4)		Includes (i) 100,000 shares issuable upon exercise of Class C Redeemable Warrants; (ii) 250,000 warrants of Michael Baybak and Company; and (iii) 500,000 shares of Windsor Capital Corporation, both of which Mr. Baybak is the controlling person.
(5)		Includes 375,000 shares issuable upon exercise of Class C Redeemable Warrants.
(6)		Includes 62,500 shares issuable upon exercise of Class C Redeemable Warrants.
(7)		Includes 25,000 shares issuable upon exercise of Class C Redeemable Warrants.
(8)		Includes 3,387,500 shares of our common stock issuable upon the exercise of warrants (includes 387,500 shares issuable upon exercise of Class C Redeemable Warrants and 1,000,000 shares issuable upon exercise of a two-year warrant issued in connection with a consulting agreement (at a price of $0.62 per share). Also includes 91,500 shares owned by Mr. Brazil’s spouse. Mr. Brazil disclaims beneficial ownership of these shares.
(9)		Includes 387,500 shares issuable upon exercise of Class C Redeemable Warrants and 1,000,000 shares issuable upon exercise of a two-year warrant issued in connection with a consulting agreement (at a price of $0.62 per share).
(10)		Includes 10,000 shares issuable upon exercise of Class C Redeemable Warrants.
(11)		Includes 37,500 shares issuable upon exercise of Class C Redeemable Warrants.
(12)		Represents a two-year warrant (at a price of $0.30 per share) issued in connection with a consulting agreement. Mr. Brooks was a director of our Company from June 2003 until January 2005.
(13)		Includes 50,000 shares issuable upon exercise of Class C Redeemable Warrants and 50,000 shares issuable upon exercise of Class C Redeemable Warrants held in the name of Zoran Arandjelovic.
(14)		Includes 1,000,000 shares issuable upon exercise of Class C Redeemable Warrants.
(15)		Represents two-year warrants (250,000 at a price of $0.50 per share and 250,000 at a price of $0.60 per share) issued in connection with a consulting agreement.
(16)		Includes 125,000 shares issuable upon exercise of Class C Redeemable Warrants.
(17)		Includes 900,000 shares issuable upon the exercise of two warrants held by Wyncrest Capital, Inc., an entity owned and controlled by Ronald E. Eibensteiner.

(18)		Represents 50,000 shares issuable upon the exercise of a warrant, at an exercise price of $1.00 per share, issued in 2002 related to financing.
(19)		Includes 625,000 shares issuable upon exercise of Class C Redeemable Warrants.
(20)		Includes 275,250 shares issuable upon exercise of Class C Redeemable Warrants.
(21)		Includes 250,000 shares issuable upon exercise of a warrant (at a price of $0.25 per share, which expires December 31, 2006) and 97,500 shares issuable upon exercise of Class C Redeemable Warrants.
(22)		Includes 500,000 shares issuable upon exercise of a warrant (at a price of $0.25 per share, which expires December 31, 2006) and 250,500 shares issuable upon exercise of Class C Redeemable Warrants.
(23)		Includes (i) 6,000,000 shares issuable upon the exercise of certain warrants and (ii) 3,000,000 shares of common stock Mr. Green has the right to acquire on or prior to March 31, 2007, pursuant to the terms of a standby joint venture financing agreement with the Company, executed on August 18, 2006.
(24)		Includes 3,000,000 shares of common stock Mr. Green has the right to acquire on or prior to March 31, 2007, pursuant to the terms of a standby joint venture financing agreement with the Company, executed on August 18, 2006.
(25)		Represents 6,000,000 shares issuable upon the exercise of certain warrants, at an exercise price of $0.12 per share issued in connection with a promissory note.
(26)		Includes 150,000 shares issuable upon exercise of Class C Redeemable Warrants.
(27)		Includes 350,000 shares issuable upon exercise of Class C Redeemable Warrants.
(28)		Includes (i) 3,242,500 shares held in the name of Hawk Precious Minerals USA, Inc., a wholly owned subsidiary of Hawk Precious Minerals Inc; and (ii) 30,000 shares issuable upon exercise of a warrant held by Hawk Precious Minerals Inc.
(29)		Includes 250,000 shares issuable upon exercise of Class C Redeemable Warrants.
(30)		Includes 5,000 shares issuable upon exercise of Class C Redeemable Warrants.
(31)		Includes 35,000 shares issuable upon exercise of Class C Redeemable Warrants.
(32)		Includes 50,000 shares issuable upon exercise of Class C Redeemable Warrants.
(33)		Represents shares issuable upon exercise of a five-year warrant issued to terminate an exclusive private placement agreement with Midtown Partners & Co., LLC. Midtown subsequently assigned a portion of its 250,000 warrant into the names of three affiliates of Midtown.
(34)		Represents a two-year warrant (at a price of $0.50 per share) issued in connection with a consulting agreement.
(35)		Represents warrants issued for personal guaranties by Stephen D. King (at a price of $0.15 per share, which expire in 2007) issued in connection with two promissory notes of the Company. Subsequently, Mr. King assigned the warrants into the name of his spouse.
(36)		Includes 175,000 shares issuable upon exercise of Class C Redeemable Warrants.
(37)		Includes (i) 100,000 shares issuable upon exercise of Class C Redeemable Warrants and (ii) 700,000 director stock options, all of which are vested.
(38)		Includes (i) 511,867 shares issuable upon exercise of Class C Redeemable Warrants, (ii) 250,000 shares held by Blake Capital Partners, LLC; and (iii) 680,401 shares held by Intention Capital, LLC all of which Mr. Mills is the sole shareholder.
(39)		Represents a two-year warrant (at a price of $0.20 per share) issued in connection with a consulting agreement.
(40)		Includes 112,500 shares issuable upon exercise of Class C Redeemable Warrants.
(41)		Includes 315,000 shares issuable upon exercise of Class C Redeemable Warrants.
(42)		Includes 4,000,000 shares issuable upon the exercise of certain warrants.
(43)		Represents 3,900,000 shares issuable upon the exercise of certain warrants, at an exercise price of $0.12 per share issued in connection with a promissory note.
(44)		Includes 87,500 shares issuable upon exercise of Class C Redeemable Warrants.
(45)		Includes 22,500 shares issuable upon exercise of Class C Redeemable Warrants.
(46)		Includes 31,250 shares issuable upon exercise of Class C Redeemable Warrants.
(47)		Includes (i) 10,000 shares issuable upon exercise of Class C Redeemable Warrants and (ii) 76,750 shares issuable upon exercise of other warrants.
(48)		Includes 2,000 shares issuable upon exercise of Class C Redeemable Warrants.
(49)		Includes 400,000 shares issuable upon exercise of Class C Redeemable Warrants.
(50)		Includes (i) 1,000,000 shares issuable upon the exercise of a warrant and (ii) 526,767 shares of common stock Mr. Sweeney has the right to acquire on or prior to August 31, 2006, pursuant to the terms of a promissory note of the Company issued in the favor of Mr. Sweeney.
(51)		Represents 526,767 shares of common stock Mr. Sweeney has the right to acquire on or prior to August 31, 2006, pursuant to the terms of a promissory note of the Company issued in the favor of Mr. Sweeney.
(52)		Represents 1,000,000 shares issuable upon the exercise of a warrant, at an exercise price of $0.12 per share issued in connection with a promissory note.
(53)		Includes 20,000 shares issuable upon exercise of Class C Redeemable Warrants and 35,000 shares issuable upon exercise of a warrant (at a price of $0.25 per share, which expires December 31, 2006).
(54)		Includes 150,000 shares issuable upon exercise of Class C Redeemable Warrants.
(55)		Includes 400,000 warrants (300,000 at a price of $0.25 per share, 50,000 at a price of $0.50 per share, and 50,000 at a price of $0.75 per share) all issued in connection with a various consulting agreements.
(56)		Represents shares issuable upon the exercise of two-year warrants, at an exercise price of $0.25 per share, issued in connection with a consulting agreement.

Interim Financial Statements for the Three and Six Months Ended June 30, 2006 and 2005		Page

Condensed Consolidated Balance Sheets as of June 30, 2006 (Unaudited) and December 31, 2005		F-2

Unaudited Condensed Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2006 and June 30, 2005		F-3

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2006 and June 30, 2005		F-4

Notes to Unaudited Condensed Consolidated Financial Statements		F-5


Financial Statements for the Years Ended December 31, 2005 and 2004

Report of Independent Registered Public Accounting Firm		F-12

Consolidated Balance Sheets as of December 31, 2005 and 2004		F-13

Consolidated Statements of Operations for the Years Ended December 31, 2005 and 2004		F-14

Consolidated Statements of Shareholders’ Equity and Comprehensive Loss for the Years Ended December 31, 2005 and 2004		F-15

Consolidated Statements of Cash Flows for the Years Ended December 31, 2005 and 2004		F-19

Notes to Consolidated Financial Statements		F-20

	June 30, 2006			December 31, 2005
ASSETS
CURRENT ASSETS:
Cash and equivalents	$	1,493,492		$	117,816
Investment		23,204			11,260
Prepaid expenses		1,929,538			163,396
Total current assets		3,446,234			292,472

PROPERTY AND EQUIPMENT, net		84,437			89,559
PARTICIPATION MINING RIGHTS, net		44,312			120,803
DEBT ISSUANCE COSTS, net		--			4,662
	$	3,574,983		$	507,496

LIABILITIES and SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Notes payable, net of original issue discount	$	--		$	301,111
Accounts payable		25,824			136,223
Accrued expenses		81,529			65,972
Total current liabilities		107,353			503,306


COMMITMENTS and CONTINGENCIES

SHAREHOLDERS’ EQUITY:
Common stock, $.01 par value, 150,000,000 shares
authorized; 89,104,406 and 65,674,329 shares issued
and outstanding, respectively		891,044			656,743
Additional paid-in capital		41,686,246			34,487,774
Stock subscriptions receivable		(445,225	)		--
Warrants		7,114,432			6,418,685
Accumulated deficit		(22,932,460	)		(22,932,460	)
Deficit accumulated during exploration stage, subsequent
to April 30, 2003		(22,845,552	)		(18,618,908	)
Accumulated other comprehensive loss		(855	)		(7,644	)
Total shareholders’ equity		3,467,630			4,190
	$	3,574,983		$	507,496

	Three Months Ended June 30,						Six Months Ended June 30,						May 1, 2003 (inception) to June 30,
	2006			2005			2006			2005			2006
Revenues	$	--		$	--		$	--		$	--		$	--

Operating Expenses:
General and administrative		1,016,680			1,421,993			2,063,712			2,469,033			8,980,644
Exploration expenses		429,585			358,967			657,775			627,987			8,288,993
Depreciation and amortization		10,455			52,825			13,976			105,650			453,026
Stock issued as penalty		--			--			--			--			2,152,128
Loss on impairment of Brazmin		--			(75,000	)		--			(75,000	)		667,578
Loss on disposal of assets		--			--			--			--			1,633
Total operating expenses		1,456,720			1,758,785			2,735,463			3,127,670			20,544,002
Loss from Operations		(1,456,720	)		(1,758,785	)		(2,735,463	)		(3,127,670	)		(20,544,002	)

Other Income (Expense):
Other income (expense), net		3,901			(183	)		3,901			(1,724	)		6,126
Interest expense		(821,046	)		(117,688	)		(1,495,082	)		(241,450	)		(2,572,750	)
Total other expense		(817,145	)		(117,871	)		(1,491,181	)		(243,174	)		(2,566,624	)
Loss from Operations before Income Tax
Benefit and Discontinued Operations		(2,273,865	)		(1,876,656	)		(4,226,644	)		(3,370,844	)		(23,110,626	)
Benefit from Income Taxes		--			--			--			--			243,920
Loss from Continuing Operations	$	(2,273,865	)	$	(1,876,656	)	$	(4,226,644	)	$	(3,370,844	)	$	(22,866,706	)

Discontinued Operations
Gain from discontinued operations		--			--			--			--			21,154
Net Loss	$	(2,273,865	)	$	(1,876,656	)	$	(4,226,644	)	$	(3,370,844	)	$	(22,845,552	)

Basic and Diluted Net Loss
Per Common Share:
Continuing operations	$	(0.03	)	$	(0.03	)	$	(0.06	)	$	(0.06	)	$	(0.51	)
Discontinued operations		--			--			--			--			--
Net Loss	$	(0.03	)	$	(0.03	)	$	(0.06	)	$	(0.06	)	$	(0.51	)

Basic and diluted weighted average
outstanding shares		81,451,709			60,467,091			74,633,474			59,296,713			44,541,923

								May 1, 2003
		Six months ended June 30,						(inception) to
		2006			2005			June 30, 2006
OPERATING ACTIVITIES:
Net loss	$	(4,226,644	)	$	(3,370,844	)	$	(22,845,552	)
Adjustments to reconcile net loss to cash
flows from operating activities:
Depreciation and amortization		13,976			105,650			453,026
Loss on disposal of assets		--			--			1,633
Loss on impairment of Brazmin		--			--			742,578
Issuance of common stock for exploration rights & exp		169,646			94,000			5,104,936
Amortization of participation mining rights		76,491			413,895			2,055,688
Amortization of debt issuance costs		4,662			43,832			138,858
Amortization of original issue discount		798,889			216,666			1,701,281
Amortization of prepaid consulting fees related to issuance of warrants and common stock		813,947			493,069			2,633,709
Compensation expense related to stock options and warrants		419,524			265,500			1,169,522
Contributed services by an executive		50,000			50,000			254,500
Issuance of common stock as penalty related to October 2003 private placement		--			--			2,152,128
Interest expense related to issuance of common stock, warrants and options to purchase common stock		721,630			7,833			810,420

Unrealized loss on investment		--			1,771			--
Changes in operating assets and liabilities:
Accounts receivable, net		--			30,770			43,017
Prepaid expenses		(305,164	)		98,328			(125,058	)
Accounts payable		(71,399	)		(122,934	)		11,682
Accrued expenses		15,557			(114,352	)		(139,058	)
Net cash used in operating activities		(1,518,885	)		(1,786,816	)		(5,836,690	)

INVESTING ACTIVITIES:
Purchases of property and equipment		(8,854	)		--			(103,466	)
Proceeds from sale of Brazmin		--			--			25,000
Investment in participation mining rights		--			--			(2,239,121	)
Net cash used in investing activities		(8,854	)		--			(2,317,587	)

FINANCING ACTIVITIES:
Payments on long-term debt		(1,100,000	)		(127,781	)		(1,434,645	)
Private placement advances held in escrow		--			(734,950	)		--
Cash proceeds from issuance of common stock		--			1,628,669			4,725,272
Cash proceeds from exercise of stock options		--			--			169,900
Cash proceeds from exercise of warrants		3,653,415			68,000			3,956,353
Cash proceeds from short-term debt		350,000			250,000			1,100,000
Cash proceeds from long-term debt		--			--			650,000
Debt issuance costs		--			--			(138,858	)
Net cash provided by financing activities		2,903,415			1,083,938			9,028,022

Change in Cash and Liabilities of Discontinued Ops		--			--			(77,293	)
Increase (Decrease) in Cash and Equivalents		1,375,676			(702,878	)		796,452
Cash and Equivalents, beginning of period		117,816			1,122,348			697,040
Cash and Equivalents, end of period	$	1,493,492		$	419,470		$	1,493,492

	June 30,		December 31,
	2006		2005
Prepaid consulting fees	$	1,903,255	$	142,276
Other prepaid expenses		26,283		21,120
	$	1,929,538	$	163,396

	June 30, 2006			December 31, 2005
Investment made in Kwagga	$	2,100,000		$	2,100,000
Historical value assigned to the FSC & Holdsworth Projects		246,210			246,210
Miscellaneous costs (1)		82,889			82,889
Gross participation mining rights		2,429,099			2,429,099
Less exploration expenditures report by AfriOre and Kwagga		(2,055,688	)		(1,979,197	)
Less amortization of historical and miscellaneous costs		(329,099	)		(329,099	)
	$	44,312		$	120,803

	June 30, 2006			Dec. 31, 2005
Gross debt issuance costs	$	7,361		$	7,361
Less: amortization of debt issuance costs		(7,361	)		(2,699	)
Debt issuance costs, net	$	--		$	4,662

Original gross proceeds	$	750,000
Less: original issue discount at time of issuance of note for common stock and warrants		(521,304	)
Less: beneficial conversion feature		(179,977	)
		48,719
Less: principal payments		--
Add: amortization of original issue discount and beneficial conversion feature		252,392
Balance at December 31, 2005		301,111
Add: additional draws received in the 1^st Quarter 2006		350,000
Less: original issue discount at time of issuance of note for warrants		(252,014	)
Less: beneficial conversion feature		(97,986	)
Add: amortization of original issue discount and beneficial conversion feature		798,889
Less: principal payments		(1,100,000	)
Balance at June 30, 2006	$	--

Balance at December 31, 2005	$	(7,644	)
Unrealized gain		6,789
Balance at June 30, 2006	$	(855	)

							Additional
	Common stock						paid-in
	Shares			Amount			capital			Warrants
BALANCE, December 31, 2003		30,297,181		$	302,972		$	27,423,258		$	4,146,438

Issuance of 700,000 shares of common stock and
150,000 5-year warrants to purchase Brazmin
Ltda in February 2004		700,000			7,000			679,000			147,000
Issuance of 2,380,000 shares of common stock
deemed as penalty shares related to October
2003 private placement		2,038,000			20,380			2,131,748			--
Exercise of stock option by former directors in
February and March 2004		240,000			2,400			150,000			--
Issuance of 1,928,571 warrants in connection with
April 2004 secured promissory note payable and
personal guaranty		--			--			--			650,000
Issuance of 200,000 shares of common stock in June
2004 for option agreement of McFaulds Lake		200,000			2,000			82,000			--
Partial consideration returned for terminating the
purchase of Brazmin Ltda.		(400,000	)		(4,000	)		(112,000	)		--
Conversion of accounts payable to common stock
at $0.27 per share in August 2004		250,000			2,500			65,000			--
Exercise of 576,461 warrants at $0.25 per share
under repricing offer in September & October 2004		576,431			5,764			138,344			--
Issuance of 30,000 warrants at $1.00 per share in
connection with bridge loan with affiliate		--			--			--			7,633
Issuance of 100,000 warrants at $0.10 per share in
November 2004 for financial services		--			--			--			33,834
Issuance of common stock at $0.10, in private
placement in December 2004 and warrants at
$0.25 per share		8,450,000			84,500			507,000			253,500
Deferred compensation related to consulting
Agreements for Brazmin Ltda.		--			--			109,967			--
Conversion of accounts payable to common stock
at $0.26 per share in December 2004		250,000			2,500			62,500			--
Additional stock option compensation under
variable plan accounting		--			--			72,000			--
Contributed services by an executive		--			--			80,000			--
Net loss and comprehensive loss		--			--			--			--
BALANCE, December 31, 2004		42,601,612			426,016			31,388,817			5,238,405

Issuance of common stock and warrants in January
2005 private placement at $0.10 per unit (net of
offering costs of $31,331)		16,600,000			166,000			1,015,159			447,510
Issuance of 275,000 shares of common stock in
January 2005 for purchase option rights of
Bates-Hunter Gold Mine		275,000			2,750			91,250			--
Conversion of note payable principal and interest
into common stock from April thru November 2005		2,400,000			24,000			304,861			--

	Accumulated deficit			Deficit accumulated (1)			Accumulated other compre- hensive loss		Total
BALANCE, December 31, 2003	$	(22,932,460	)	$	(6,552,220	)	$	--	$	2,387,988

Issuance of 700,000 shares of common stock and
150,000 5-year warrants to purchase Brazmin
Ltda in February 2004		--			--			--		833,000
Issuance of 2,380,000 shares of common stock
deemed as penalty shares related to October
2003 private placement		--			--			--		2,152,128
Exercise of stock option by former directors in
February and March 2004		--			--			--		152,400
Issuance of 1,928,571 warrants in connection with
April 2004 secured promissory note payable and
personal guaranty		--			--			--		650,000
Issuance of 200,000 shares of common stock in June
2004 for option agreement of McFaulds Lake		--			--			--		84,000
Partial consideration returned for terminating the
purchase of Brazmin Ltda.		--			--			--		(116,000	)
Conversion of accounts payable to common stock
at $0.27 per share in August 2004		--			--			--		67,500
Exercise of 576,461 warrants at $0.25 per share
under repricing offer in September & October 2004		--			--			--		144,108
Issuance of 30,000 warrants at $1.00 per share in
connection with bridge loan with affiliate		--			--			--		7,633
Issuance of 100,000 warrants at $0.10 per share in
November 2004 for financial services		--			--			--		33,834
Issuance of common stock at $0.10, in private
placement in December 2004 and warrants at
$0.25 per share		--			--			--		845,000
Deferred compensation related to consulting
agreements for Brazmin Ltda.		--			--			--		109,967
Conversion of accounts payable to common stock
at $0.26 per share in December 2004		--			--			--		65,000
Additional stock option compensation under
variable plan accounting		--			--			--		72,000
Contributed services by an executive		--			--			--		80,000
Net loss and comprehensive loss		--			(6,335,999	)		--		(6,335,999	)
BALANCE, December 31, 2004		(22,932,460	)		(12,888,219	)		--		1,232,559

Issuance of common stock and warrants in January
2005 private placement at $0.10 per unit (net of
offering costs of $31,331)		--			--			--		1,628,669
Issuance of 275,000 shares of common stock in
January 2005 for purchase option rights of
Bates-Hunter Gold Mine		--			--			--		94,000
Conversion of note payable principal and interest
into common stock from April thru November 2005		--			--			--		328,861

	2005			2004
Risk-free interest rate		4.5% - 7.0	%		4.5	%
Expected volatility factor		176% - 190	%		200	%
Expected dividend		--			--
Expected option term		10 years			10 years

	Number			Weighted Average Exercise Price		Range of Exercise Price
Outstanding at December 31, 2003		16,552,551		$	2.56	$	0.50 - $60.00

Granted		6,108,571			0.32		0.10 - 1.50
Cancelled or expired		(10,000	)		60.00		60.00
Exercised		(576,431	)		0.29		0.25 - 5.50
Outstanding at December 31, 2004		22,074,691			1.96	$	0.10 - $37.50

Granted		20,795,000			0.20		0.12 - 0.75
Cancelled or expired		(1,448,543	)		1.21		0.62-37.50
Exercised		(1,294,150	)		0.13		0.01 - 0.20
Outstanding at December 31, 2005		40,126,998		$	1.10	$	0.10 - $5.50

Warrants exercisable at December 31, 2005		40,126,998		$	1.10	$	0.10 - $5.50

	Number of Options			Weighted Average Exercise Price
Options outstanding - December 31, 2003		5,550,724		$	1.66

Granted		1,125,000			0.62
Canceled or expired		(1,185,724	)		3.30
Exercised		(490,000	)		0.64
Options outstanding - December 31, 2004		5,000,000			1.16

Granted		2,350,000			0.21
Canceled or expired		(868,000	)		0.79
Exercised		(350,000	)		0.23
Options outstanding - December 31, 2005		6,132,000		$	0.88


Weighted average fair value of options
granted during the year ended December 31, 2005				$	0.17
Weighted average fair value of options
granted during the year ended December 31, 2004				$	0.61

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Weighted Average Number Outstanding		Weighted Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.15 to $2.75		5,731,000		5.1 years	$	0.62		5,731,000	$	0.62
$3.00 to $5.00		401,000		2.1 years		4.64		401,000		4.64
$0.15 to $5.00		6,132,000		4.5 years	$	0.88		6,132,000	$	0.88

Deferred tax assets:	2005			2004
Net operating loss carryforwards	$	2,800,000		$	1,000,000
Exploration rights		2,450,000			1,985,000
Accrued liabilities and other		123,000			55,000
Total deferred tax asset		5,373,000			3,040,000
Valuation allowance		(5,373,000	)		(3,040,000	)
	$	—		$	—

	2005			2004
Current tax provision	$	—		$	—
Deferred tax provision		(2,333,000	)		5,423,000
Valuation allowance		2,333,000			(5,423,000	)
Total income tax provision	$	—		$	—

	2005			2004
Federal statutory tax rate		(35.0	%)		(35.0	%)
State taxes, net of federal benefit		(6.0	%)		(6.0	%)
Valuation allowance		41.0	%		41.0	%
Effective tax rate		(0.0	%)		(0.00	%)