EX-99.3 4 exhibit993.htm Exhibit 99.3







DORATO RESOURCES INC.

FILING STATEMENT

Dated:  April 3, 2008

Neither the TSX Venture Exchange Inc. nor any securities regulatory authority has in any way passed upon the merits of the Transaction described in this Filing Statement







TABLE OF CONTENTS





ARTICLE 1

SUMMARY OF FILING STATEMENT

2

1.1

Cautionary Language

2

1.2

General

2

1.2.1

Principal Terms of the Change of Business

2

1.2.2

Summary of Interests of any Insider, Promoter or Control Person

of the Issuer and their Respective Associates and Affiliates

(before and after giving effect to the Change of Business)

4

1.2.3

Non-Arm’s Length Transaction

4

1.2.4

Summary of Estimated Funds Available to the Resulting Issuer

4

1.2.5

Selected Pro Forma Consolidated Financial Information

5

1.2.6

Details of the Issuer’s Listing on the Exchange

5

1.2.7

Statement of Market Price of the Securities of the Issuer

5

1.2.8

Summary of Relationship or Other Arrangement between the

Issuer and the Sponsor

5

1.2.9

Details of Any Conflict of Interest

5

1.2.10

Interests of Experts

5

1.2.11

Risk Factors

6

ARTICLE 2

INFORMATION CONCERNING THE ISSUER

10

2.1

CORPORATE STRUCTURE

10

2.1.1

Name and Incorporation

10

2.2

General Development of the Business

10

2.2.1

History

10

2.2.2

The Financing

11

2.3

Selected Consolidated Financial Information and Management’s

Discussion and Analysis

11

2.3.1

Selected Financial Information

11

2.3.2

Management Discussion and Analysis

11

2.4

Description of the Securities

13

2.5

Stock Option Plan

13

2.6

Prior Sales

14

2.7

Executive Compensation

15

2.7.1

Executive Officers of the Issuer

15

2.7.2

Directors of the Issuer

16

2.7.3

Other Remuneration

16

2.8

Non-Arm’s Length Party Transactions/Arm’s Length Transactions

16

2.9

Legal Proceedings

17

2.10

Auditor, Transfer Agents and Registrars

17

2.11

Material Contracts

17

ARTICLE 3

INFORMATION CONCERNING THE TARGET ASSETS UNDER

THE OPTION AGREEMENTS

17

3.1

NARRATIVE DESCRIPTION OF THE TARGET ASSETS

17

3.1.1

General

17

3.1.2

Target Assets – Cordillera del Condor Property

17

ARTICLE 4

INFORMATION CONCERNING THE RESULTING ISSUER

36

4.1

Corporate Structure

36

4.1.1

Name and Incorporation

36

4.1.2

Intercorporate Relationships

36

4.2

Narrative Description of the Business

36

4.2.1

Stated Business Objectives

36

4.2.2

Milestones

36

4.2.3

Exploration and Development for Resulting Issuer with Mineral Project

37

4.3

Description of the Securities

37

4.4

Pro Forma Consolidated Capitalization

37

4.4.1

Pro Forma Consolidated Capitalization

37

4.4.2

Fully Diluted Share Capital

38

4.5

Available Funds and Principal Purposes

38

4.5.1

Funds Available

38

4.5.2

Dividends and Dividend Policy

38

4.6

Principal Securityholders

39

4.7

Directors, Officers and Promoters

39

4.7.1

Name, Address, Occupation and Security Holdings

39

4.7.2

Management

40

4.7.3

Penalties or Sanctions

40

4.7.4

Personal Bankruptcies

40

4.7.5

Conflicts of Interest

41

4.7.6

Other Reporting Issuer Experience

41

4.8

Executive Compensation

41

4.8.1

Executive Compensation

41

4.9

Indebtedness of Directors and Officers

42

4.10

Investor Relations Arrangements

42

4.11

Options to Purchase Securities

42

4.11.1

Outstanding Stock Options

42

4.11.2

Stock Option Plan

42

4.12

Escrowed Securities

42

4.13

Auditor(s), Transfer Agent(s) and Registrar(s)

43

ARTICLE 5

GENERAL MATTERS

43

5.1

Sponsorship and Agent Relationship

43

5.1.1

Sponsor

43

5.1.2

Relationships

43

5.2

Experts

43

5.2.1

Opinions

43

5.2.2

Interest of Experts

43

5.2.3

Expertised Reports

44

5.3

Other Material Facts

44

5.3.1

Other Material Facts

44

5.4

Board Approval

44

5.4.1

Board Approval

44

ARTICLE 6

FINANCIAL STATEMENTS

44











In this Filing Statement, unless there is something in the subject matter or context inconsistent therewith, the capitalized terms set forth hereunder have the following meanings:

“Common Shares” means the common shares in the capital of the Issuer;

“Company” means a corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity other than an individual;

“Control Person” means any person or company that holds or is one of a combination of persons or companies that holds a sufficient number of any of the securities of the issuer so as to materially affect the control of the Issuer, or that holds more than 20% of the outstanding voting securities of the Issuer except where there is evidence showing that the holder of those securities does not materially affect the control of the Issuer;

 “Exchange” means the TSX Venture Exchange Inc.;

“Financing” means the Non-Brokered Private Placement;

“Insider” means in relation to the Issuer:

(a)

a director or senior officer of the Issuer;

(b)

a director or senior officer of another issuer that is an Insider or a subsidiary of the Issuer; or

(c)

a person that beneficially owns or controls, directly or indirectly, voting shares carrying more than 10% of the voting rights attached to all outstanding voting shares of the Issuer;

 “NI-43-101” means National Instrument 43-101 Standards of Disclosure for Mineral Projects promulgated by the Canadian Securities Administrators;

“Non-Brokered Private Placement” has the meaning set forth under the heading “1.2.1(c) The Financing”;

“Option Agreements” means, collectively, the option agreements regarding the Vicmarama Property, the Maravilla Property, the Lahaina 1 Property, the Lahania 2 Property, and the Afrodita Property;

“Person” means a company or individual;

“Placement Shares” means the Common Shares to be issued on closing of the Financing;

“Resulting Issuer” means Dorato Resources Inc. after completing the Change of Business;

“Shareholder” means a holder of Common Shares of the Issuer;

FINANCIAL AND OTHER INFORMATION

In this Filing Statement, unless otherwise specified, all dollar amounts are expressed in United States Dollars (“US$” or “$”).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar.

ARTICLE 1









ARTICLE 2
SUMMARY OF FILING STATEMENT

2.1

CAUTIONARY LANGUAGE

The following is a summary of information in connection with DORATO RESOURCES INC. (“Dorato” or the “Issuer”) and, assuming completion of the Change of Business and the Financing set out hereunder and should be read together with the more detailed information and financial data and statements contained elsewhere in this filing statement (the “Filing Statement”).

2.2

GENERAL

The purpose of this Filing Statement is to provide information with respect to the Issuer’s proposed Change of Business to the mining sector under Exchange policies.

2.2.1

Principal Terms of the Change of Business

(a)

Reactivation

The Issuer has entered into five agreements with several different vendors to acquire options to earn interests in several prospective mineral exploration properties located in Peru. The acquisition by the Issuer of the mining property options will constitute a Change of Business to the mining sector.  The Issuer has been inactive for 3 years when it ceased its operations as a company that was involved in the development of music transfer software.  The proposed Change of Business requires the Issuer to satisfy applicable Exchange requirements including shareholder approval and the filing of this Filing Statement.  

The Issuer will transfer its listing to the Exchange effective on the Change of Business.  The Issuer’s Common Shares are currently listed on the NEX Board of the Exchange under the symbol “DRI.H”.  The Issuer has been classified by the Exchange as an “inactive issuer”.  

At a shareholders’ meeting held on June 22, 2004, shareholders of the Issuer approved a change of the Issuer’s primary business focus to other business opportunities, including the acquisition, exploration and development of natural resources properties.

The Issuer will seek the approval of its shareholders to the Change of Business as and by way of written consent resolution, based on a review of the matters contained in this Filing Statement.

(b)

Option Agreements

Dorato has the option to earn 100% interest in 18 mineral claims, comprising an aggregate of 16,158 hectares (the “Vicmarama Property”). In order to earn a 100% interest in the Vicmarama Property, Dorato has agreed to issue a total of 750,000 common shares. Upon acceptance by the Exchange 250,000 shares will be issued and the remaining 500,000 shares will be issued over the following 24 months.  Dorato has also agreed to pay $250,000 as consideration for the Vicmarama Property.

Dorato has the option to earn 100% interest in 18 mineral claims, comprising an aggregate of 14,500 hectares (the “Maravilla Property”).  In order to earn a 100% interest, Dorato has agreed to issue 1,500,000 common shares.  Upon acceptance by the Exchange 250,000 of these shares will be issued and the remaining 1,250,000 shares will be issued over the following 24 months.  Dorato has also agreed to pay $300,000 as consideration for the Maravilla Property.

Dorato has the option to earn 100% interest in 11 mineral claims, comprising an aggregate of 9,659 hectares (the “Lahaina 2 Property”).  In order to earn a 100% interest in the Lahaina 2 Property, Dorato has agreed to issue 1,500,000 common shares.  Upon acceptance by the Exchange  250,000 of these shares will be issued and the remaining 1,250,000 shares will be issued over the following 24 months.  Dorato has also agreed to pay $400,000 as consideration for the Lahaina 2 Property.

Dorato has the option to earn 100% interest in 17 mineral claims, comprising an aggregate of 15,468 hectares (the “Lahaina 1 Property”).  In order to earn a 100% interest in the Lahaina 1 Property, Dorato has agreed to issue 3,400,000 common shares.  Upon acceptance by the Exchange 400,000 of these shares will be issued and the remaining 3,000,000 shares will be issued over the following 36 months.  Dorato has also agreed to pay $270,000 as consideration for the Lahaina 1 Property.

Dorato Peru S.A.C., a wholly-owned subsidiary of Dorato incorporated on April 25, 2007, has also entered into an agreement with the sole shareholders of Compania Minera Afrodita S.A.C., (“Afrodita”), a company registered in Lima, Peru which owns certain mining concessions in the area of the Mineral Claims.  Under the terms of the agreement, Dorato has been granted the option to purchase all of the shares of Afrodita in return for the issuance of 3,000,000 shares and the payment of $8,000,000 payable over 36 months.

A summary of the cash payments and Common Share deliveries under all of the Option Agreements is set forth below:











Project

Common Shares Issued

Cash Payment

Vicmarama Property

750,000

$250,000

Maravilla Property

1,500,000

$300,000

Lahaina 1 Property

3,400,000

$270,00

Lahaina 2 Property

1,500,000

$400,000

Afrodita Property

3,000,000

$8,000,000

Total:

10,150,000

$9,220,000


(c)

The Financing

In order to meet the financing conditions set forth in the Option Agreements, to enable the Issuer to incur the necessary exploration expenditures and to ensure that the Issuer has additional funds to cover general administrative and overhead expenses over the next 12 months, the Issuer is completing a non-brokered private placement financing for gross proceeds of Cdn. $10,200,000 as soon as the Issuer’s change of business has been approved along with the reactivation.  

The Issuer is offering up to 17,000,000 Common Shares at a price of Cdn. $0.60 per share. In addition to the statutory four month hold period, the subscribers will voluntarily agree that the Shares be held in escrow for one year with 50% of the Shares being released after four months, a further 25% being released after eight months, and the final 25% being released after one year.

Canaccord Capital Corporation has agreed to act as Sponsor in regards to the Change of Business pursuant to the policies of the Exchange.

The transaction is subject to regulatory approval.  

2.2.2

Summary of Interests of any Insider, Promoter or Control Person of the Issuer and their Respective Associates and Affiliates (before and after giving effect to the Change of Business)


Name and Position

Interest Before Change of Business and the Financing

Interest After Change of Business
and the Financing

Percentage Before Change of Business and the Financing

Percentage After Change of Business and the Financing

Anton J. Drescher,

President and CEO

1,245,221 common shares

1,784,221 common shares

18.33%

6.39%

Donna M. Moroney,

Corporate Secretary & CFO

45,000 common shares

60,000 common shares

<1%

<1%

Gerhard J. Drescher,

Director

25,000 common shares

37,000 common shares

<1%

<1%

Rowland Perkins,

Director

25,000 common shares

37,000 common shares

<1%

<1%

Jeffrey Pontius,

Proposed Director

Nil

200,000 common shares

N/A

<1%


2.2.3

Non-Arm’s Length Transaction

The Change of Business contemplated in this Filing Statement is an arm’s length transaction.

2.2.4

Summary of Estimated Funds Available to the Resulting Issuer

As at February 29, 2008, the Issuer had working capital of $354,805.  On closing of the Financing, the Issuer will receive an additional Cdn. $10,200,000.  The estimated funds available to the Issuer, after completion of the Change of Business, including the working capital of the Issuer, the proceeds from the Financing, net of expenses in connection with the Financing will be approximately $10,554,002. The principal purposes of those funds, after giving effect to the Change of Business to meet the financing conditions set forth in the Option Agreements.  

Reference is made to the heading “Target Assets – Cordillera del Condor Property” for disclosure concerning the Phase I exploration program on the Cordillera del Condor Property











Principal Use of Funds

Amount

Estimated expenses of the Change of Business and the Financing

$          130,000

General and administrative expenses for the 18 months following closing of the Change of Business and the Financing

250,000

Recommended Phase 1 exploration program on Properties for 18 months following closing of the Change of Business and the Financing

2,354,000

Property payments due on closing of the Change of Business and the Financing

1,920,000

Unallocated working capital

5,900,002

Total

$    10,554,002


The Issuer intends to spend the funds available to it on the completion of the Change of Business as forth above.  There may be circumstances where, for sound business reasons, a reallocation of funds may be necessary.

2.2.5

Selected Pro Forma Consolidated Financial Information

The Company’s selected unaudited pro forma financial information as at October 31, 2007 is as follows:

  

Cash and cash equivalents

$            9,415,967

Total assets

14,240,943

Total liabilities

25,899

Shareholder’s equity

$          14,215,044


2.2.6

Details of the Issuer’s Listing on the Exchange

The Issuer's Common Shares trade on NEX board of the Exchange under the symbol “DRI.H”.

2.2.7

Statement of Market Price of the Securities of the Issuer

The Issuer’s shares were halted on October 19, 2007 pending the announcement of theChange of Business. The market price of the securities on the date of the halt was Cdn. $0.67. The Change of Business was announced on November 19, 2007. As of April 3, 2008 the market price of the securities was $1.78.

2.2.8

Summary of Relationship or Other Arrangement between the Issuer and the Sponsor

Canaccord Capital Corporation has been retained as a Sponsor in accordance with the Exchange policies.

2.2.9

Details of Any Conflict of Interest

The directors and officers of the Issuer are aware of the existence of laws governing the accountability of directors and officers for corporate opportunity and the laws requiring disclosure by directors and officers of conflicts of interest.  The Issuer will rely upon such laws in respect of any such conflict of interest or in respect of any breach of duty by any of the Issuer’s directors or officers.  All such conflicts are required to be disclosed by such directors or officers in accordance with the Business Corporations Act (British Columbia) and the directors of the Issuer are required to govern themselves in respect thereof to the best of their ability in accordance with the obligations imposed upon them by law.

Certain of the Issuer’s directors may also be directors, officers or shareholders of other companies that are engaged in the business of acquiring, developing and exploiting natural resource properties.  Such associations may give rise to conflicts of interest from time to time.

2.2.10

Interests of Experts

No person or company, whose profession or business gives authority to a statement made by the person or company and who is named as having prepared or certified a part of this Filing Statement or as having prepared or certified a report or valuation described or included in this Filing Statement, holds any beneficial interest, directly or indirectly, in any property of the Issuer or of an associate or affiliate of the Issuer and no such person is expected to be elected, appointed or employed as a director, senior officer or employee of the Issuer or of an associate or affiliate of the Issuer and no such person is a promoter of the Issuer or an associate or affiliate of the Issuer.

2.2.11

Risk Factors

AN INVESTMENT IN SECURITIES OF THE ISSUER IS HIGHLY SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK AND SHOULD ONLY BE MADE BY INVESTORS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT.

Prior to making an investment decision, investors should consider the investment risks set forth below and those described elsewhere in this document, which are in addition to the usual risks associated with an investment in a business at an early stage of development.  The directors of the Issuer consider the risks set forth below to be the most significant to potential investors in the Issuer, but not all of the risks associated with an investment in securities of the Issuer.  If any of these risks materialize into actual events or circumstances or other possible additional risks and uncertainties of which the directors are currently unaware or which they consider not to be material in connection with the Issuer’s business, actually occur, the Issuer’s assets, liabilities, financial condition, results of operations (including future results of operations), business and business prospects, are likely to be materially and adversely affected.  In such circumstances, the price of the Issuer’s securities could decline and investors may lose all or part of their investment.  The risk factors, other than “The Change of Business May Not Be Completed”, assume completion of the Change of Business and the Financing.

The Change of Business May Not Be Completed

The Change of Business is subject to approval of the Shareholders of the Issuer and is also subject to final acceptance of the Exchange.  There can be no assurance that all of the necessary approvals will be obtained.  If the transactions contemplated by the Option Agreements are not completed for these reasons or for any other reasons, the Issuer will continue to search for other opportunities; however, the Issuer will have incurred significant costs associated with the failed implementation of the applicable Option Agreement.  Additionally, the Issuer may in its discretion, determine not to exercise any or all of the options contained in the Option Agreements.

Exploration, Development and Production Risks

An investment in the Issuer’s Common Shares is speculative due to the nature of the Issuer’s involvement in the evaluation, acquisition, exploration and, if warranted, development and production of minerals.

Mineral exploration involves a high degree of risk and there is no assurance that expenditures made on future exploration by the Issuer will result in new discoveries in commercial quantities.

While the Issuer, upon completion of the Change of Business, will have a limited number of specific identified exploration or development prospects, management will continue to evaluate prospects on an ongoing basis in a manner consistent with industry standards.  The long-term commercial success of the Issuer depends on its ability to fund, acquire, develop and commercially produce reserves.  No assurance can be given that the Issuer will be able to locate satisfactory properties for acquisition or participation.  If such acquisitions or participations are identified, the Issuer may determine that current markets, terms of acquisition and participation or pricing conditions make such acquisitions or participations uneconomic.  The Issuer has no earnings records, no reserves and no production resource properties.

Insurance

The Issuer’s involvement in the exploration for and development of resource properties may result in the Issuer becoming subject to liability for certain risks, in particular, unexpected or unusual geological operating conditions, including rock bursts, cave ins, fires, floods, earthquakes, pollution, blow-outs, property damage, personal injury or other hazards. Although the Issuer will obtain insurance in accordance with industry standards to address such risks, such insurance has limitations on liability that may not be sufficient to cover the full extent of such liabilities.  In addition, such risks may not, in all circumstances, be insurable or, in certain circumstances, the Issuer may elect not to obtain insurance to deal with specific risks due to the high premiums associated with such insurance or other reasons.  The payment of such uninsured liabilities would reduce the funds available to the Issuer.  The occurrence of a significant event that the Issuer is not fully insured against or the insolvency of the insurer or such event, could have a material adverse effect on the Issuer’s financial position, results of operations or prospects.

No assurance can be given that insurance to cover the risks to which the Issuer’s activities will be subject will be available at all or at economically feasible premiums.  Insurance against environmental risks (including potential for pollution or other hazards as a result of the disposal of waste products occurring from production) is not generally available to companies within the industry.  The payment of such liabilities would reduce the funds available to the Issuer.  Should the Issuer be unable to fund fully the cost of remedying an environmental problem, the Issuer might be required to suspend operations or enter into interim compliance measures pending completion of the required remedy.

Prices, Markets and Marketing of Natural Resources

In addition to establishing markets for its natural resources, the Issuer must also successfully market its natural resources to prospective buyers.  The marketability and price of natural resources which may be acquired or discovered by the Issuer will be affected by numerous factors beyond its control.

Government regulations including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of natural resources and environmental protection are all factors which may affect the marketability and price of natural resources.  The exact effect of these factors cannot be accurately predicted, however any one or a combination of these factors could result in the Issuer not receiving an adequate return for shareholders.

Substantial Capital Requirements and Liquidity

The Issuer anticipates that it will make substantial expenditures for the acquisition, exploration, development and production of natural resources in the future.  The Issuer may have limited ability to expend the capital necessary to undertake or complete its projects or to fulfill the Issuer’s obligations under any applicable agreements, including without limitation, the Option Agreements.  There can be no assurance that debt or equity financing or cash generated by operations will be available or sufficient to meet these requirements or for other corporate purposes or, if debt or equity financing is available, that it will be on terms acceptable to the Issuer.  Future activities may require the Issuer to alter its capitalization significantly.  The inability of the Issuer to access sufficient capital for its operations could have a material adverse effect on the Issuer’s financial condition, results of operations or prospects.

Competition

The Issuer will actively compete for acquisitions, leases, licences, options, concessions, claims, skilled industry personnel and other related interests with a substantial number of other companies, many of which have significantly greater financial resources than the Issuer.

The Issuer’s ability to successfully bid on and acquire additional property rights to participate in opportunities and to identify and enter into commercial arrangements with other parties will be dependent upon developing and maintaining close working relationships with its future industry partners and joint operators and its ability to select suitable properties and to consummate transactions in a highly competitive environment.

Environmental Risks

All phases of the natural resources business present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of international conventions and provincial and municipal laws and regulations.  Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emission of various substances produced in association with operations.  The legislation also requires that facility sites and mines be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities.  Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material.  Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs.  The discharge of tailings or other pollutants into the air, soil or water may give rise to liabilities to foreign governments and third parties and may require the Issuer to incur costs to remedy such discharge.  No assurance can be given that environmental laws will not result in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise adversely affect the Issuer’s financial condition, results of operations or prospects.

Companies engaged in the exploration and development of mineral properties generally experience increased costs and delays as a result of the need to comply with applicable laws, regulations and permits. The Issuer believes it is in substantial compliance with all material laws and regulations which currently apply to its activities.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.  Parties engaged in natural resource exploration and development activities may be required to compensate those suffering loss or damage by reason of its activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations and, in particular, environmental laws.

Amendments to current laws, regulations and permits governing operations and activities of natural resources companies or more stringent implementation thereof, could have a material adverse impact on the Issuer and cause increases in capital expenditures or production costs or reduction in levels of production at producing properties or require abandonment or delays in developments of new properties.

Resources

There can be no assurance that the Issuer’s future exploration and development efforts will result in the discovery and development of commercial accumulations of natural resources.

Regulatory Requirements

Natural resource activities may be affected in varying degrees by political and financial instability, inflation and haphazard changes in government regulations relating to this industry.  Any changes in regulations or shifts in political or financial conditions are beyond the Issuer’s control and may adversely affect the Issuer’s business.  Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, environmental legislation and safety.

Reliance on Operators and Key Employees

The success of the Issuer will be largely dependent upon the performance of its management and key employees.  The Issuer does not have any key man insurance policies and therefore there is a risk that the death or departure of any member of management or any key employee could have a material adverse effect on the Issuer.  In assessing the risk of an investment in the Issuer’s shares, potential investors should realize that they are relying on the experience, judgment, discretion, integrity and good faith of the management of the Issuer.  An investment in the Issuer’s Common Shares is suitable only for those investors who are willing to risk a loss of their entire investment and who can afford to lose their entire investment.

Permits and Licences

The operations of the Issuer will require licences and permits from various governmental authorities.  There can be no assurance that the Issuer will be able to obtain all necessary licences and permits that may be required to carry out exploration and development of its projects.

Title Matters

Although the title to the properties under the Option Agreements which the Issuer proposes to acquire have been reviewed by the Issuer and formal title opinions have been obtained by the Issuer, no assurances can be given that there are no title defects affecting such property.  The properties under the Option Agreements may be subject to prior unregistered liens, agreements or transfers, native land claims or other undetected title defects.  There is no guarantee that title to the properties under the Option Agreements will not be challenged or impugned.  The Issuer will satisfy itself, however, that evidence of title to the properties under the Option Agreements will be adequate and acceptable by prevailing industry standards.

Additional Funding Requirements

From time to time, the Issuer may require additional financing in order to carry out its acquisition, exploration, development and production activities.  Failure to obtain such financing on a timely basis could cause the Issuer to forfeit its interest in certain properties, miss certain acquisition opportunities and reduce or terminate its operations.  If the Issuer’s future revenues decrease as a result of lower commodity prices or otherwise, it will affect the Issuer’s ability to expend the necessary capital to replace its reserves or to maintain its production.  If the Issuer’s cash flow from operations is not sufficient to satisfy its capital expenditure requirements, there can be no assurance that additional debt or equity financing will be available to meet these requirements or be available on favourable terms.

Availability of Equipment and Access Restrictions

Natural resource exploration and development activities are dependent on the availability of drilling and related equipment in the particular areas where such activities will be conducted.  Demand for such limited equipment or access restrictions may affect the availability of such equipment to the Issuer and may delay exploration and development activities.

Conflict of Interest of Management

Certain of the Issuer’s directors and officers are also directors and officers of other natural resource companies.  Consequently, there exists the possibility for such directors and officers to be in a position of conflict.  Any decision made by any of such directors and officers relating to the Issuer will be made in accordance with their duties and obligations to deal fairly and in good faith with the Issuer and such other companies.

The Market Price of the Common Shares May Be Subject to Wide Price Fluctuations

The market price of the Common Shares of the Issuer may be subject to wide fluctuations in response to many factors, including variations in the operating results of the Issuer, divergence in financial results from analysts’ expectations, changes in earnings estimates by stock market analysts, changes in the business prospects for the Issuer, general economic conditions, changes in mineral reserve or resource estimates, results of exploration, changes in results of mining operations, legislative changes and other events and factors outside of the Issuer’s control.  In addition, stock markets from time to time have experienced extreme price and volume fluctuations, which, as well as general economic and political conditions, could adversely affect the market price for the Common Shares of the Issuer.

The Issuer is unable to predict whether substantial amounts of Common Shares will be sold in the open market.  Any sales of substantial amounts of Common Shares in the public market or the perception that such sales might occur, could materially and adversely affect the market price of the Common Shares of the Issuer.

ARTICLE 3
INFORMATION CONCERNING THE ISSUER

3.1

CORPORATE STRUCTURE

3.1.1

Name and Incorporation

The full corporate name of the Issuer is DORATO RESOURCES INC.

The address of the Issuer’s head office is:

Suite 507- 837 West Hastings Street
Vancouver, B.C.   V6C 3N6

Canada


3.2

GENERAL DEVELOPMENT OF THE BUSINESS

3.2.1

History

Dorato Resources Inc. (“Dorato”) is a British Columbia corporation incorporated on May 26, 1981 as Force Energy Ltd. On September 10, 1981 the Company changed its name to Force Resources Ltd. On December 1, 1994 the Company changed its name to Force Technologies Inc. and consolidated its common shares on a five old for one new basis. On October 1, 1997 the Company changed its name to Glassmaster Industries Inc. and split its common shares on a one old for two new basis. On April 24, 1998 the Company continued its corporate jurisdiction into the state of Wyoming, U.S.A. On August 14, 2000, the Company changed its name to Interlink Systems Inc. and consolidated its common shares on a two old for one new basis. On October 28, 2003, the Company changed its name to Quest Ventures Inc. and consolidated its common shares on a four old for one new basis. On  October 9, 1997 the Company incorporated its wholly owned subsidiary Glassmaster Industries Inc. (“Glassmaster”) in the State of Nevada, U.S.A. On January 15, 2001, the Company sold 100% of its interest in Glassmaster. On March 1, 2001 the Company incorporated another wholly owned subsidiary, Jackalope Audio Inc., under the Yukon Business Corporations Act. On March 31, 2005, the Company sold 100% of its interest in Jackalope Audio Inc. On April 24, 2006, the Company changed its name to Dorato Resources Inc. and consolidated its common shares on a two old shares for one new basis.

On August 21, 2006 the Company continued its corporate jurisdiction from the State of Wyoming into British Columbia. During the year ended January 31, 2005, the shareholders approved a change of the Company’s primary business focus from its Jackalope Audio Website to other business opportunities, including the acquisition, exploration and development of natural resource properties.

3.2.2

The Financing

The Issuer is proceeding with the Financing in conjunction with the Change of Business.  Reference is made to the heading “Section 1.2.1(c) The Financing”. A description of the number and type of securities being distributed and the terms and conditions relating thereto are as follows:

(a)

17,000,000 Common Shares are being offered by the Issuer at a subscription price of Cdn$0.60 per Common Share on a non-brokered basis for gross proceeds of Cdn.$10,200,000;

(b)

there is no other manner of financing being undertaken by or on behalf of the Issuer in connection with the Change of Business.

1.1

SELECTED CONSOLIDATED FINANCIAL INFORMATION AND MANAGEMENT’S DISCUSSION AND ANALYSIS

1.1.1

Selected Financial Information

The Company’s selected annual information for the three most recently completed financial years as at and for the years ending January 31st are as follows:

 

2007

$

2006

$

2005

$

Total revenue

Nil

Nil

Nil

Net loss

79,383

79,507

61,474

Loss) per common share – basic

0.03

0.07

0.05

Loss) per common share – diluted

   

Total assets

365,257

6,213

6,454

Total liabilities

6,719

216,154

125,726

Shareholder’s equity (deficit)

358,538

(209,941)

(119,272)


The Company’s selected unaudited financial information as at and for the three, six and nine months ended October 31, 2007, are as follows:

 

October 31, 2007

$

July 31, 2007

$

April 30, 2007

$

Cash and Cash equivalents

728,427

334,389

342,967

Total assets

1,012,180

340.750

348,424

Total liabilities

25,899

12,022

6,311

Shareholder’s equity

986,281

328,728

342,113


1.1.2

Management Discussion and Analysis

Liquidity and Capital Resources

Year Ended January 31, 2007

The Company had cash and cash equivalents of $361,726 as of January 31, 2007, compared to $1,451 at January 31, 2006, representing an increase of $360,275.  The Company had a working capital of $357,735 as of January 31, 2007, compared to a working capital deficiency of $211,891 as of January 31, 2006.  The increase in cash on hand and resultant increase in working capital was the result of a private placement of 2,200,000 units at a price of Cdn$0.225 per unit.

During the fiscal year ended January 31, 2007 the Company raised an aggregate of $420,561 from a private placement of 2,200,000 units at a price of $0.19 (Cdn$0.225) per unit.  The Company did not raise any funds during the fiscal year ended January 31, 2006

Nine Months Ended October 31, 2007

The Company had cash of $728,427 as of October 31, 2007, compared to $361,726 at January 31, 2007, representing an increase of $366,701.  The Company had a working capital of $712,583 as of October 31, 2007, compared to a working capital of $357,735 as of January 31, 2007.  The increase in cash on hand and resultant increase in working capital was acquired as a result of the exercise of 2,175,000 share purchase warrants and the subscription for an additional 25,000 common shares pursuant to the exercise of 25,000 share purchase warrants at a price of $0.25 (Cdn$0.30) per share during the quarter ended October 31, 2007.  

During the nine months ended October 31, 2007 the Company received an aggregate of $669,073 from the exercise of 2,200,000 share purchase warrants at a price of US$0.25 (Cdn$0.30) per share.  During the nine months ended October 31, 2006 the Company raised an aggregate of $420,561 from a private placement of 2,200,000 units at a price of Cdn$0.225 (US$0.1994) per unit.

Other than the proposed private placement of 17,000,000 common shares at a price of Cdn$0.60 per share the Company has no funding commitments or arrangements for additional financing at this time and there is no assurance that the Company will be able to obtain any additional financing on terms acceptable to it, if at all.  The quantity of funds to be raised and the terms of any equity financing that may be undertaken will be negotiated by management as opportunities to raise funds arise.  

Results of Operations

Year Ended January 31, 2007

The Company incurred a net loss of $79,383 for the fiscal year ended January 31, 2007, compared to a loss of $79,507 for the fiscal year ended January 31, 2006.  There was a nominal increase in operating expenses incurred during the fiscal year ended January 31, 2007 compared with the operating expenses incurred during the fiscal year ended January 31, 2006.  The general and administrative expenses incurred during fiscal 2007 primarily consisted of consulting fees of $26,411 (2006 - $36,489), professional fees of $21,611 (2006 - $15,713), rent of $12,171 (2006 - $11,447), filing fees of $8,714 (2006 - $6,894), transfer agent fees of $5,685 (2006 - $3,240), and office and general of $8,418 (2006 - $2,808).  The professional and consulting fees relate to services required in order to maintain financial reporting and public filing requirements.  There were no other significant changes in other general and administrative expenses.  In view of the Company’s lack of operations, its administrative expenses were nominal as the Company continued to strive to maintain minimum expenditures.  

Nine Months Ended October 31, 2007

The Company incurred a net loss of $110,926 for the nine months ended October 31, 2007, compared to a loss of $67,566 for the nine months ended October 31, 2006.  The operating expenses were relatively unchanged between the nine months ended October 31, 2007 and the nine months ended October 31, 2006.  The Company incurred consulting fees of $20,785 (2006 - $19,920), professional fees of $14,732 (2006 - $17,321), filing fees of $8,197 (2006 - $8,534), rent of $9,561 (2006 - $9,185), transfer agent fees of $3,244 (2006 - $5,128), office and general expenses of $1,310 (2006 - $7,846) and travel and entertainment costs of $4,728 (2006 - $Nil).  There were no other significant changes in other general and administrative expenses.  During the period the Company received interest income of $10,541 (2006 - $1,233) and wrote off exploration expenses of $58,085 (2006 - $Nil).  In view of its lack of operations, the Company’s administrative expenses were nominal as it continued to strive to maintain minimum expenditures.  

The Company does not maintain its own staff.  A management company, Harbour Pacific Capital Corp., controlled by one of the Company’s directors, performs an administrative service on our behalf and bills the Company a fee for this service.  The management company provides full management services including bookkeeping services.  

1.2

DESCRIPTION OF THE SECURITIES

The Issuer will be distributing Common Shares in connection with the Change of Business pursuant to the various earn-in requirements under the Option Agreements (reference is made to the heading “Section  Option Agreements”) and pursuant to the Financing.  The following is a summary of the material attributes and characteristics of the Common Shares in the capital of the Issuer.  The following summary does not purport to be complete and reference is made to the Articles of the Issuer as well as the Business Corporations Act (British Columbia).

(a)

Dividend Rights - Subject to any other shares of the Issuer ranking senior to the Common Shares from time to time with respect to the payment of dividends, holders of Common Shares shall be entitled to receive, if, as and when declared by the Board of Directors, such dividends as may be declared thereon by the Board of Directors.

(b)

Voting Rights - The holders of the Common Shares are entitled to receive notice of, attend and vote at any meeting of shareholders of the Issuer, except those meetings where only the holders of another class or series of shares are entitled to vote separately as a class or series.  

(c)

Rights Upon Dissolution or Winding-Up - In the event of the voluntary or involuntary liquidation, dissolution or winding-up of the Issuer, or any other distribution of its assets among its shareholders for the purpose of winding-up its affairs, holders of Common Shares shall be entitled, subject to the preferences accorded to any other shares of the Issuer ranking senior to the Common Shares from time to time with respect to payment on such a distribution, to share equally, share for share, in the remaining property of the Issuer.

(d)

Other Rights - The Common Shares do not carry any pre-emptive, subscription, conversion or exchange rights nor any redemption, retraction, purchase for cancellation or surrender, sinking or purchase fund provisions or provisions permitting or restricting the issuance of additional securities or any other material restrictions.  There are no provisions requiring a securityholder to contribute additional capital.

1.3

STOCK OPTION PLAN

(a)

Summary of Option Plan - The Issuer implemented a stock option plan (the “Option Plan”) on July 26, 2007.  The purpose of the Option Plan is to recognize contributions made by directors, officers and employees and to provide for an incentive for their continuing relationship with the Issuer.  Pursuant to the Option Plan, stock options may be granted up to a maximum of five years from the date of grant. The number of Common Shares that may be reserved for issuance to all optionees pursuant to stock options granted under the Option Plan shall be limited to a “rolling” 10%, pursuant to which the total number of Common Shares issuable under the Option Plan shall be fixed at 10% of the issued Common Shares outstanding at the time of any stock option grant, subject to the applicable rules and regulations of the Exchange.

In accordance with Exchange requirements: (i) the number of Common Shares reserved for issuance to any one person, within a 12 month period, will not exceed 5% of the Outstanding Issue (ii) the number of Common Shares which may be issued to insiders under the Option Plan will not exceed 10% of the issued Common Shares at the time of the granting of the options; (iii) the number of Common Shares which may be issued to any one insider and his or her associates under the Option Plan within a one year period will not exceed 5% of theOustanding Issue ; (iv) the number of Common Shares reserved for issuance to any one consultant, within a 12 month period, will not exceed 2% of the Outstanding Issue; and (v) grants of stock options to an employee, consultant or director conducting investor relations services may not exceed 2% of the Outstanding Issue at the time of granting.

Stock option agreements entered into under the Option Plan do not require any vesting of the stock options unless the optionee provides investor relations services to the Issuer, in which event the stock option agreement provides for vesting of the stock option over at least 12 months with one-quarter of the stock option vesting in three month intervals.

(b)

Subscription Price -

The Subscription Price per Common Share to be acquired on the exercise of an Option will be the Discounted Market Price per share for the Comon Shares on the Exchange on the last trading date on such exchange before the Effective Date of the Option.  

(c)

Termination Provisions – No Option may be exercised after:

(i)

the time at which the Optionee ceases to be a Director, or

(ii)

in the case of an Officer or Employee, 5:00 p.m. Pacific Standard Time on the last day on which the Officer or Employee worked for the Issuer or a Subsidiary

However:

(iii)

an Option that would otherwise cease to be exercisable by reason of the death of the Optionee at the particular time may be exercised by their personal representative, from time to time no later than the earlier of the Expiry Date of the Option and one day after the particular time; and

(iv)

an Option that would otherwise cease to be exercisable by reason that the particular time if the effective time that the Optionee has Retired or become Totally Disabled may be exercised by the Optionee, from time to time no later than the earlier of the Expiry Date of the Option and ninety days after the particular time or, if the Optionee is engaged in Investor Relations Activities, then thirty days after the particular time.

1.4

PRIOR SALES

(a)

Prior Sales – During the previous 12 months, the Issuer has sold an aggregate of 2,200,000 common shares upon exercise of 2,200,000 share purchase warrants at a price of $0.25 ($0.30 Cdn.) per share.  

(b)

Stock Exchange Price -. The following table sets forth the particulars of the trading of the Issuer’s Common Shares on the NEX for the periods indicated:

Time Period

High

Cdn$

Low

Cdn$

Volume

March 2008

2.10

1.50

72,813

February 2008

2.37

1.80

60,431

January 2008

2.40

1.75

253,618

December 2007

2.33

1.40

392,003

November  2007

2.00

1.29

513,962

October 2007

N/A

N/A

250

September 2007

0.85

0.67

52,118

August 2007

0.84

0.77

37,112

July 2007

0.93

0.76

8,796

June 2007

0.82

0.82

3,316

May 2007

1.00

0.82

20,450

Quarter Ended April 30, 2007

0.85

0.70

160,080

Quarter ended January 31, 2007

0.99

0.70

81,358

Quarter ended October 31, 2006

0.99

0.495

191,063

Quarter ended July 31, 2006

0.50

0.37

43,205

Quarter ended April 30, 2006

0.50

0.30

107,550

Quarter ended January 31, 2006

0.36

0.29

25,206

Quarter ended October 31, 2005

0.36

0.27

43,028


1.5

EXECUTIVE COMPENSATION

1.5.1

Executive Officers of the Issuer

Summary Compensation Tabe



 

Annual Compensation

Long Term Compensation

 

Name and Principal Position

Year

Salary

Bonus

Other Annual Compensation

Securities Under Options Granted

All Other
Compensation

Anton J. Drescher

President

2007

2006

2005

Nil

Nil

Nil

Nil

Nil

Nil

30,028

28,964

25,970

Nil

Nil

Nil

Nil

Nil

Nil

Donna M. Moroney

Corporate Secretary

2007

2006

2005

Nil

Nil

Nil

Nil

Nil

Nil

7,418

6,544

Nil

Nil

Nil

Nil

Nil

Nil

Nil


During the most recently completed fiscal year ended January 31, 2007, Dorato did not award or institute any LTIP in favour of its Names Executive Officers.

During the most recently completed fiscal year ended January 31, 2007, there were no Options or SARS granted to the Named Executive Officers.

During the most recently completed fiscal year ended January 31, 2007, no Options and/or SARS were exercised by the Named Executive Officers.

During the financial year ended January 31, 2007, Dorato did not reprice any of the stock options previously granted to the Named Executive Officers or directors who were not Named Executive Officers.

Dorato does not have a defined benefit or actuarial plan for the Named Executive Officers under which benefits are determined primarily by final compensation (or average final compensation) and years of service.

Securities Authorized For Issuance under Equity Compensation Plans

The following table sets forth information regarding the Plan in the aggregate as of April 3, 2008.

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans

Equity compensation plans approved by securityholders

Nil

N/A

Nil

Equity compensation plans not approved by securityholders

N/A

N/A

N/A

Total

N/A

N/A

N/A


1.5.2

Directors of the Issuer

None of the directors of the Issuer has received any cash compensation, directly or indirectly, for their services rendered during the most recently completed financial year of the Issuer.  The Issuer does not have any non-cash compensation plans for its Directors and it does not propose to pay or distribute any non-cash compensation during the current financial year.

1.5.3

Other Remuneration

During the last financial year there was no other remuneration paid or payable, directly or indirectly, by the Issuer pursuant to any existing plan or arrangement to its directors and its Named Executive Officer serving during or at the end of the last financial year.

With respect to any person named and their associates or affiliates, there is no indebtedness of the person, associate or affiliate to the Issuer or its subsidiaries that was outstanding nor any transaction or arrangement of the person, associate or affiliate with the Issuer or subsidiary, at any time since the commencement of the Issuer’s last financial year.

1.6

NON-ARM’S LENGTH PARTY TRANSACTIONS/ARM’S LENGTH TRANSACTIONS

(a)

Non-Arm’s Length Party Transactions - There were no acquisitions of assets or services or provision of assets or services in any transaction completed within 24 months before the date of the Filing Statement, or in any proposed transaction, where the Issuer has obtained or proposes to obtain such assets or services from (a) any director or officer of the Issuer; (b) a securityholder disclosed in the Filing Statement as a principal securityholder, either before or after giving effect to the Change of Business and/or the Financing; or (c) an Associate or Affiliate of any of the persons or companies referred to in paragraphs (a) or (b) above.

(b)

Arm’s Length Party Transactions - The proposed Change of Business as well as the Financing are Arm’s Length Transactions.

1.7

LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Issuer is a party or of which any of its property is the subject matter nor are any such proceedings known to the Issuer to be contemplated.

1.8

AUDITOR, TRANSFER AGENTS AND REGISTRARS

(a)

Auditor - The auditor of the Issuer is BDO Dunwoody LLP, Chartered Accountants, Suite 604, 750 West Pender Street, Vancouver, British Columbia, V6C 2T7.  

(b)

Transfer Agent and Registrar - The transfer agent and registrar of the Issuer's Common Shares is Pacific Corporate & Trust Company at its principal offices are in Vancouver, British Columbia.

1.9

MATERIAL CONTRACTS

The Option Agreements related to the acquisition of the five new properties as well as the agreements forming a part of the Financing are the only material contracts entered into by the Issuer, the particulars of which are set forth in this Filing Statement under the heading “ Section 1.2.1(b) Option Agreements”. These material contracts may be inspected during business hours at the offices of Blake, Cassels, & Graydon LLP in Vancouver.

ARTICLE 2
INFORMATION CONCERNING THE TARGET ASSETS UNDER THE OPTION AGREEMENTS

2.1

NARRATIVE DESCRIPTION OF THE TARGET ASSETS

2.1.1

General

Reference is made to the heading “Section 1.2.1(b) Option Agreements”, for information concerning the Option Agreements.  The material propertyof the Issuer will be the Cordillera del Condor Property. This project is more particularly described below.

2.1.2

Target Assets – Cordillera del Condor Property

The following information is with respect to the Cordillera del Condor Property, which is a property material to the Issuer:

A report entitled “Report (Revised) on the Cordillera del Condor Property Departamento de Amazonas Peru” by G.D. Belik, P. Geo., an independent qualified person, dated January 28, 2008 (the “Cordillera del Condor Report” or the “Technical Report”) was prepared for the Issuer in compliance with NI-43-101.  The following summary has been prepared with the consent of G.D. Belik (the “Author”)and in most cases is a direct extract of the disclosure contained in the Cordillera del Condor Report.  The Cordillera del Condor Report has been filed with certain Canadian securities regulatory authorities pursuant to NI-43-101 and will be available for review on SEDAR.

Source of Information and Data

The Technical Report is based on a thorough review of prior exploration results on the property, a review of government reports and maps and a general review of available information regarding the exploration history and nature of the deposits in the district and the results of current and past exploration activity in the general region.

The Author visted the project area on October 27, 2007. Nine character type samples were collected from some of the showings and alterations exposed at the El Tambo prospect and submitted to Acme Analytical Labs in Vancouver for analysis. Description of the samples and discussion of the results are included in the Technical Report.

The Author relied on information supplied by the Issuer concerning the status, ownership and location of the mineral titles comprising the property but has no independently verified or attempted to verify the accuracy, completeness or authenticity of the information and disclaims responsibility for such information.

A.

PROPERTY DESCRIPTION AND LOCATION

The Cordillera del Condor property is comprised of 68 mineral claims and mining concessions located in northern Peru.  The mineral titles form two large blocks adjacent to Ecuador and extend along the easterly to southerly-facing slopes of the Cordillera del Condor, a north-northeast trending range the summit of which forms the border between Peru and Ecuador.  The claim blocks are located about 7.5 kilometres apart and have a combined area of approximately 60,000 hectares.  The area is sparsely populated and covered by tropical rain forest.  The mean elevation of the area is about 1,200 metres above sea level.

Dorato Resources Inc. acquired the property through four option agreements with Peruvian nationals and a separate option agreement with Compania Minera Afrodita S.A., a private Peruvian Company.  

The concessions occur in two separate blocks located about 8.5 km apart. The northern block is about 34 km long and up to 10.5 km wide. The southern block is about 42 km long and up to 14 km wide. Title information is outlined in the following table.

Title Information


Concession

Name

Record No

Title Holder

Date

Issued

Gross

Area (ha)

Net Area

(ha)

Taxes

(US $)

LAHAINA 1

010257406

Carlos Armando Ballon Barraza

2006-06-12

1,000.00

803.3410

3,000.00

LAHAINA 2

010257506

Carlos Armando Ballon Barraza

2006-06-12

900.00

900.0000

2,700.00

LAHAINA 3

010257606

Carlos Armando Ballon Barraza

2006-06-12

900.00

900.0000

2,700.00

LAHAINA 4

010257706

Carlos Armando Ballon Barraza

2006-06-12

700.00

689.2444

2,100.00

LAHAINA 5

010257806

Carlos Armando Ballon Barraza

2006-06-12

800.00

800.0000

2,400.00

LAHAINA 6

010257906

Carlos Armando Ballon Barraza

2006-06-12

1,000.00

975.9268

3,000.00

LAHAINA 7

010258006

Carlos Armando Ballon Barraza

2006-06-12

1,000.00

1,000.0000

3,000.00

LAHAINA 8

010258106

Carlos Armando Ballon Barraza

2006-06-12

1,000.00

1,000.0000

3,000.00

LAHAINA 9

010258206

Carlos Armando Ballon Barraza

2006-06-12

1,000.00

1,000.0000

3,000.00

LAHAINA 10

010258306

Carlos Armando Ballon Barraza

2006-06-12

1,000.00

1,000.0000

3,000.00

LAHAINA 11

010258406

Carlos Armando Ballon Barraza

2006-06-12

900.00

900.0000

2,700.00

LAHAINA 12

010258506

Carlos Armando Ballon Barraza

2006-06-12

800.00

800.0000

2,400.00

LAHAINA 13

010258606

Carlos Armando Ballon Barraza

2006-06-12

900.00

900.0000

2,700.00

LAHAINA 14

010258706

Carlos Armando Ballon Barraza

2006-06-12

1,000.00

1,000.0000

3,000.00

LAHAINA 15

010258806

Carlos Armando Ballon Barraza

2006-06-12

1,000.00

1,000.0000

3,000.00

LAHAINA 16

010258906

Carlos Armando Ballon Barraza

2006-06-12

1,000.00

1,000.0000

3,000.00

LAHAINA 17

010259006

Carlos Armando Ballon Barraza

2006-06-12

800.00

800.0000

2,400.00

LAHAINA 18

010459106

Carlos Armando Ballon Barraza

2006-10-27

1,000.00

907.7881

3,000.00

LAHAINA 19

010459206

Carlos Armando Ballon Barraza

2006-10-27

1,000.00

922.4605

3,000.00

LAHAINA 20

010459306

Carlos Armando Ballon Barraza

2006-10-27

1,000.00

1,000.0000

3,000.00

LAHAINA 21

010459406

Carlos Armando Ballon Barraza

2006-10-27

200.00

200.0000

600.00

LAHAINA 22

010459506

Carlos Armando Ballon Barraza

2006-10-27

1,000.00

956.6783

3,000.00

LAHAINA 23

010459606

Carlos Armando Ballon Barraza

2006-10-27

800.00

800.0000

2,400.00

LAHAINA 24

010459706

Carlos Armando Ballon Barraza

2006-10-27

1,000.00

947.8885

3,000.00

LAHAINA 25

010459806

Carlos Armando Ballon Barraza

2006-10-27

1,000.00

973.4304

3,000.00

LAHAINA 26

0104599 06

Carlos Armando Ballon Barraza

2006-10-27

1,000.00

1,000.0000

3,000.00

LAHAINA 27

010460106

Carlos Armando Ballon Barraza

2006-10-27

1,000.00

1,000.0000

3,000.00

LAHAINA 28

010460006

Carlos Armando Ballon Barraza

2006-10-27

1,000.00

951.4360

3,000.00

MARAVILLA 1

010080907

Carlos Armando Ballon Barraza

2007-01-12

1,000.00

803.3410

3,000.00

MARAVILLA 2

010081007

Carlos Armando Ballon Barraza

2007-01-12

900.00

900.0000

2,700.00

MARAVILLA 3

010081107

Carlos Armando Ballon Barraza

2007-01-12

900.00

900.0000

2,700.00

MARAVILLA 4

010081207

Carlos Armando Ballon Barraza

2007-01-12

700.00

689.2444

2,100.00

MARAVILLA 5

010081307

Carlos Armando Ballon Barraza

2007-01-12

800.00

800.0000

2,400.00

MARAVILLA 6

010081407

Carlos Armando Ballon Barraza

2007-01-12

1,000.00

975.9268

3,000.00

MARAVILLA 7

010081507

Carlos Armando Ballon Barraza

2007-01-12

1,000.00

1,000.0000

3,000.00

MARAVILLA 8

010081607

Carlos Armando Ballon Barraza

2007-01-12

1,000.00

1,000.0000

3,000.00

MARAVILLA 9

010081707

Carlos Armando Ballon Barraza

2007-01-12

1,000.00

1,000.0000

3,000.00

MARAVILLA 10

010082007

Carlos Armando Ballon Barraza

2007-01-12

1,000.00

1,000.0000

3,000.00

MARAVILLA 11

010082207

Carlos Armando Ballon Barraza

2007-01-12

900.00

900.0000

2,700.00

MARAVILLA 12

010088007

Carlos Armando Ballon Barraza

2007-01-17

800.00

800.0000

2,400.00

MARAVILLA 13

010088107

Carlos Armando Ballon Barraza

2007-01-17

900.00

900.0000

2,700.00

MARAVILLA 14

010088207

Carlos Armando Ballon Barraza

2007-01-17

1,000.00

1,000.0000

3,000.00

MARAVILLA 15

010088307

Carlos Armando Ballon Barraza

2007-01-17

1,000.00

1,000.0000

3,000.00

MARAVILLA 16

010088407

Carlos Armando Ballon Barraza

2007-01-17

1,000.00

1,000.0000

3,000.00

MARAVILLA 17

010088507

Carlos Armando Ballon Barraza

2007-01-17

800.00

800.0000

2,400.00

MARAVILLA 18

010206207

Carlos Armando Ballon Barraza

2007-08-01

1,000.00

907.7881

3,000.00

APU

010211695

Compania Minera Afrodita S.A.

1995-01-02

8.75

8.7500

26.25

CAMPANA 1

010056393

Compania Minera Afrodita S.A.

1993-02-15

1,000.00

1,000.0000

3,000.00

CAMPANA 2

010056293

Compania Minera Afrodita S.A.

1993-02-15

900.00

900.0000

2,700.00

COMAINA 1

010056193

Compania Minera Afrodita S.A.

1993-02-15

1,000.00

1,000.0000

3,000.00

COMAINA 2

010056493

Compania Minera Afrodita S.A.

1993-02-15

1,000.00

1,000.0000

3,000.00

COMAINA 3

010064993

Compania Minera Afrodita S.A.

1993-03-30

1,000.00

1,000.0000

3,000.00

HITO

010064793

Compania Minera Afrodita S.A.

1993-03-30

100.00

100.0000

300.00

PAMINA

010173707

Natalia RodrIguez Chang

2007-03-08

1,000.00

1,000.0000

3,000.00

VICMARAMA 1

010456306

Victor Marino Alvaro Martinez

2006-10-27

400.00

400.0000

1,200.00

VICMARAMA 10

010454906

Victor Marino Alvaro Martinez

2006-10-27

1,000.00

1,000.0000

3,000.00

VICMARAMA 11

010454806

Victor Marino Alvaro Martinez

2006-10-27

900.00

900.0000

2,700.00

VICMARAMA 13

010455106

Victor Marino Alvaro Martinez

2006-10-27

900.00

808.8825

2,700.00

VICMARAMA 14

010456006

Victor Marino Alvaro Martinez

2006-10-27

800.00

674.6809

2,400.00

VICMARAMA 15

010456206

Victor Marino Alvaro Martinez

2006-10-27

1,000.00

1,000.0000

3,000.00

VICMARAMA 16

010455606

Victor Marino Alvaro Martinez

2006-10-27

1,000.00

967.0231

3,000.00

VICMARAMA 17

010460206

Victor Marino Alvaro Martinez

2006-10-27

1,000.00

1,000.0000

3,000.00

VICMARAMA 2

010455906

Victor Marino Alvaro Martinez

2006-10-27

900.00

815.0201

2,700.00

VICMARAMA 3

010455406

Victor Marino Alvaro Martinez

2006-10-27

1,000.00

1,000.0000

3,000.00

VICMARAMA 4

010455206

Victor Marino Alvaro Martinez

2006-10-27

800.00

800.0000

2,400.00

VICMARAMA 5

010455706

Victor Marino Alvaro Martinez

2006-10-27

800.00

792.4142

2,400.00

VICMARAMA 6

010455506

Victor Marino Alvaro Martinez

2006-10-27

1,000.00

1,000.0000

3,000.00

VICMARAMA 8

010456106

Victor Marino Alvaro Martinez

2006-10-27

1,000.00

1,000.0000

3,000.00

VICMARAMA 9

010455806

Victor Marino Alvaro Martinez

2006-10-27

1,000.00

1,000.0000

3,000.00

 

Total

61,908.75

60,671.2651

185,726.25


In Peru, mineral rights are acquired by application; a Mineral Claim is a formal request for a Mining Concession.  Claim boundaries are determined by UTM coordinates (PSA 56 datum); there is no requirement to physically mark the boundaries of the claim area.  Once granted, the Mining Concession provides the holder the right to explore and exploit mineral resources within the specified concession area.  All mining activities (except for work that is reconnaissance in nature) are carried on exclusively through Mining Concessions.

Most of the northern claim block (Lahaina 1-3, Lahina 17-20, Maravilla 1-4, Maravilla 12-15, Maravilla 17 and Vicmarama 13-17) overlaps the buffer zones of two Protected Natural Areas.  Approval (“favourable technical opinion”) is required from the Natural Resources Institute (INRENA) before a Mining Concession can be granted in these areas.  As soon as procedures are completed, Mining Concession titles should be granted to each and every Mineral Claim located outside the Protected Natural Area buffer zones.  Those claims located within the protected buffer zone will be subject to restrictions imposed by the Protected Natural Areas Law.

In Peru, ownership of a Mining Concession by a foreign entity within 50 kilometres of the national border is not allowed unless approved by Supreme Decree.

The annual tax on Mineral Concessions is currently US$3.00 per hectare.  Based on the present size of property, the annual tax obligation (assuming conversion of all claims to concessions) will be approximately US $184,000 per year.  Taxes have to be paid by June 1 of each year.

Prior to 1992 no exploration was permitted along the border regions of Peru. In 1992 the mining code was revised to permit mining in the frontier regions and extensive concessions were acquired in the Cordillera del Condor region along the border with Ecuador. In 1995, a border dispute broke out between Peru and Ecuador which was settled with the signing of the peace treaty in 1999. After resolution of the dispute, an approximate 10 km-wide tract of land running along the Peruvian side of the border was given protected status (Ichigkat Muja National Park), partly on ecological grounds and partly for security reasons. Based largely on the current exploration boom and the large number of new projects and important new discoveries that have emerged on the Ecuadorian side of the border but also partly because of the incursion of illegal miners across the border from Ecuador, the southern limit of the park was moved north in late 2006 to a natural divide located at approximate UTM coordinates 9597000N (PSA 56) in order to allow exploration companies access to prospective terrain on the Peruvian side of the border. Large tracts of ground (including those parcels optioned by Dorato) were subsequently staked along the border region. The concessions owned by Afrodita predate the border conflict and have remained in good standing since they were issued in 1993-1995.

To date, Dorato has obtained no exploration permits.  In Peru, approval is required when the proposed exploration may have a significant impact on the environment, people or historical sites.

The writer is not aware of any environmental liabilities to which the property is currently subject.  The area, however, is environmentally sensitive and there is a possibility that mine development or future exploration programs may be subject to restrictions or prohibited entirely.

B.

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

Access to the Property and Proximity to Population Centers

Although there is currently considerable mining and exploration activity on the Ecuadorian side of the border and a number of roads that service small towns and exploration camps come close to the border, there is still virtually no infrastructure on the Peruvian side except for a few small military outposts scattered through the region. The closest road to the central part of the Cordillera del Condor property from the Peruvian side is about 150 km to the south. Without direct road access exploration will be logistically challenging and expensive. Future mine development likely will require road access from the Ecuadorian side of the border.

There are essentially no support facilities along the border region adjacent to the Cordillera del Condor property. The nearest town with basic support facilities is Terra Heroica, located about 14 km to the west. The nearest major center with all service facilities is the city of Loja, Ecuador, located roughly 70 km to the west.

Topography, Elevation and Vegetation

The claim areas occur near the western edge of the Amazon basin and extend along the easterly- to southerly-facing slopes of the Cordillera del Condor, a north-northeast trending range the summit of which forms the border between Ecuador and Peru.

Vegetation is dense and typical of a tropical rain forest. Relief is moderate to steep over most of the property with numerous deeply incised streams and rivers with frequent narrow, steep canyons. Elevations range from slightly less than 600 meters to about 1800 meters above sea level.

Relevant Climate and Length of Operating Season

The climate is tropical with warm humid days being the norm. Rainfall is abundant, particularly during the rainy season between November and March.

C.

HISTORY

General

Historically, the Cordillera del Condor was one of the most important gold-bearing areas in Ecuador. Alluvial gold deposits were exploited by the Incas and later by the Spanish conquistadors and colonials for centuries. During the late 16th to early 17th century total gold production from the district reportedly exceeded 100,000 oz per year. There are numerous historical references to alluvial gold deposits on both sides of the border.

In modern times, the first significant discovery in the region occurred in 1981 when Ecuadorian prospectors discovered bonanza-grade gold mineralization in old Inca workings at Nambija near the town of Zamora. A stampede of miners ensued. Although accurate records were not kept, some accounts estimate that more than 1 million ounces of gold was recovered in less than 10 years by up to 10,000 miners using primitive mining methods.

With all of the prospective ground taken up at Nambija, an overflow of Ecuadorian prospectors continued moving eastward and found significant new base metal, silver and lode gold occurrences at Chinapintza, Biche, Pachicutza, El Hito, Santa Bárbara and elsewhere along the border region with Peru. These discoveries attracted the attention of foreign exploration companies who carried out exploration programs on the Ecuadorian side of the border (some supported or joint-ventured by government-owned Minera Condor) starting in the late 1980’s with Prominex U.K. and later others including TVX Gold, Noranda, Teck, RTZ, Billiton S.A., Corriente, Dynasty 9 Metals, Goldmarca, Valerie Gold, Lateegra Gold and Aurelian Resources. Currently there are a large number of projects under exploration and/or development. The recent announcement by Aurelian of a 43-101 compliant, initial resource estimate of 58.9 million tones grading 7.23 g/t gold (13.7 million ounces) at Fruta del Norte underscores the potential of the region.

Prior Ownership and Exploration

Very little exploration has been carried out on the Peruvian side of the border to date. With the changing of the mining law in 1992, Metales Y Finanzas, S.A. (Metalfin), a predecessor of Afrodita acquired a group of concessions adjacent to the Ecuador border between Chinapintza and El Hito and shortly after expanded their holdings to cover an area more than 150 km long along the border region. Metalfin carried out minor preliminary prospecting, mapping and geochemical sampling in the central part of the claim block (northern part of the current Afrodita concessions) in 1993 and early 1994, which is summarized in a report by Francisco Montecinos dated March, 1994. Montecinos describes small-scale gold mining that had been previously carried out on the property by Ecuadorian garimpeiros in the upper reaches of Comaina Creek near the small military outpost of El Tambo located near the Ecuador border.

The figure below illustrates exploration targets on the Afrodita claims:

  [exhibit993002.jpg]

The veins showings at El Tambo were mapped and sampled by Metalfin in 1993 and 1994. Seventeen main vein structures were identified and sampled in 1993 which returned gold values ranging from less than 1 gram to 45 g/t with an average grade of 10-11 g/t. Montecinos carried out further sampling in 1994 with similar results. Veining and alteration at El Tambo are exposed in a series of surface cuts and adits over an area about 500m x 600m in size located adjacent to the Ecuador border. The vein system appears to be open to the north and east. Individual veins are narrow (<0.1m-1.0m) and hosted by altered quartz porphyry and hydrothermal breccias.

Stockwork veining is locally evident. Veins consist of quartz with locally massive pyrite and varying amount of galena, sphalerite and chalcopyrite. The host rock is commonly pyritic and pervasively clay-altered with zones of strong clay-sericite-pyrite alteration adjacent to veins. The hydrothermal breccias, which appear to predate veining, are up to 30 meters wide and contain various types of rock fragments cemented by rock flour, quartz, sulphide and limonite.

Between January 22nd and April 20, 1994, Metalfin expanded upon the work of Montecinos, north and south of the El Tambo area. Work consisted of prospecting, panning and silt sampling (62 samples collected from 23 creeks). Prospecting identified six areas of significant veining and alteration. Silt sampling and panning identified five areas of highly anomalous gold in stream sediments.

No further work was carried out by Metalfin and during the border conflict the concession block was reduced to the original core area and at some point transferred to Afrodita. In 2003 Anglogold Exploraciones Peru S.A.C. (“Anglo”) optioned the property and carried out an initial exploration program between September, 2003 and March, 2004. Work consisted of detailed mapping and 10 sampling at El Tambo, 154.75 kms of cut grid (500m line spacing), grid and stream channel mapping, a biogeochemical survey (364 fern samples and 360 liana samples collected on a 500 x 500 meter sample grid), stream sediment sampling (387 samples) and rock sampling (323 samples).

Five principal gold anomalies were identified by the geochemical surveys (El Tambo, Casa Quemada, Conaima 4, El Conguime and Cobra 1). Mapping at El Tambo was genrally consistent with the earlier work by Metalfin and confirmed the presence of numerous polymetallic veins and tectonic-hydrothermal breccias in an east-west corridor approximately 600 meters long and 400 to 500 meters wide. The zone of veining and alteration coincides with a strong gold biogeochemical anomaly that extends off the survey grid area to the west. In total 76 samples were collected by Anglo representing vein, wall rock and Aureole type alteration/mineralization. Thirteen samples of vein material averaged 14.4 g/t Au and 261 g/t Ag. Twenty-six samples of wall rock averaged 1.2 g/t Au and 26 g/t Ag and thirty-seven halo samples averaged 0.1 g/t Au and 6.8 g/t Ag.

The Conaima 4 target appears to be intrusion related and occurs at the contact between granodiorite (Zamora Batholith) and Jurassic sandstone and limestone that is partly altered to garnet-scapolite skarn. There is an association with anomalous gold values in rock and stream sediments and to some extent with a biogeochemical Au/As anomaly. The main area of interest is about 1 km x 2 km in size.

The El Conguime target area occurs adjacent to a small porphyry stock which hosts significant stockwork Cu mineralization on the Ecuadorian side of the border (El Hito prospect). On the Peruvian side, Anglo identified a strong biogeochemical anomaly about 2 x 4 km in size that is supported by stream sediment gold geochemistry (many anomalies; two samples returned >1 ppm gold). The main lithologies that underlie the area are Jurassic sediments and volcanics. Pyrite is fairly ubiquitous in amounts up to 15%. In the eastern part of the area a series of barren silicified pyritic ledges and pyritic silica breccias form prominent ridges around the summit of El Conguime peak that appear to be part of an extensive high-level, silica cap zone.

The Cobra 1 target is centered about 2 km northeast of El Tambo and consists of a series of biogeochemical anomalies partly supported by stream and rock gold geochemistry (up to 1.321 ppm Au–rock sample 18292). The gold data in fern samples suggests the possibility of a major structural intersection. The potential target area is interpreted to be about 4 km long.

Casa Quemada is located 1.0 km southeast of El Tambo and is an extension of informal workings from the Ecuadorian side and is picked up by a series of pits and trenches centered at about  771000E, 95522500N. The showings appear to be similar to those at El Tambo and probably represent a southerly extension of the same mineralizing system.

After completion of the initial program Anglo geologists carried out a test pit program to evaluate the main geochemical target identified by the phase I program which was completed in mid to late 2004. In total, 574 rock pit samples were collected over the El Conguime, Cobra 1 and Casa Quemada. No follow-up was carried out at Conaima 4 because the concession was inadvertently allowed to lapse and was not recovered.

At El Conguime, extensive pitting was carried out east of the porphyry plug over a vertical range of 800 meters. Pitting exposed carbonate-altered diorite, hornfels and variable pyritized andesitic volcanics. Strong stream sediment gold anomalies were confirmed by panning but were thought to represent saprolitic enrichment. Only two samples returned >1 ppm gold; both were obtained from narrow, sulphide-rich veins. Overall, there are a few scattered isolated anomalous areas for Ag, As, Mo and Pb. Cu and Zn form larger more coherent anomalies.

At Cobra 1, pitting confirmed a series of north-south structure with isolated, elevated gold values, which correlate well with gold panning results. The area is underlain principally by altered (pyritequartz- clay) intrusive which locally has an oxidized silica-rich leached cap which locally carries visible gold (Line 21, 2750E). Gold mineralization appears to be largely controlled by discrete structures. Anomalous gold values are associated with anomalous As, Sb, Pb and Zn.

Test pitting at Casa Quemada exposed pyritic, clay-altered volcaniclastic rocks. Geochemically, the zone is defined by anomalous values in Au, Ag, As, Cu, Pb, and Zn. Exposed mineralization is similar to that at El Tambo.

Recommendations for a 1000-meter diamond drill program (8 holes) to evaluate the El Tambo mineralization at depth was included in the final report by Anglo but this work was never carried out and the option on the Afrodita property was dropped.

D.

GEOLOGICAL SETTING

The regional geological setting of Ecuador and northern Peru is shown in the figure below. This area is comprised of three main physiographic regions: Costa on the west, the Sierra (central Andes) and Oriente on the east. The Costa occurs west of the Andes along the coastal plains and is underlain by young, locally derived sediments with inliers of older accreted volcanic terrain. The Sierra includes two parallel mountain ranges; Cordillera Occidental on the west, which is mostly underlain by Cretaceous marine volcanics and sediments cut by young intrusives and Cordillera Real on the east, underlain by deformed metamorphic rocks. The Cordillera Occidental and Cordillera Real are separated by a high plateau region underlain by Tertiary to Recent volcanics.  

[exhibit993004.jpg]

The Cordillera del Condor property occurs along the eastern edge of the Cordillera del Condor uplift between approximate latitudes 3º 37' S & 4º 21' S. The geology is a compilation based on available government maps and recent work carried out by exploration companies in the area, which is made available on their web sites. The geology in the area of the Afrodita concessions is based largely on the work carried out by Anglo in 2003-2004 with the addition of some structural interpretation carried out by the Author.

The Southern claim block is underlain by a complex package of metamorphic, volcanic, sedimentary and intrusive rocks ranging in age from Precambrian to Lower Tertiary. A series of deformed Precambrian schists, phyllites and gneisses underlie a large area (+50 km²) in the southern part of the claim area in what is interpreted to be large fault-bounded block of preserved basement beneath a former (eroded) Mesozoic graben. A sliver of similar Precambrian basement is preserved in the southern part of the Afrodita concession block to the north where it is overlain by a thick section of Jurassic volcanic and sedimentary rocks preserved in a well-defined fault corridor (discussed below) that extends north through Aurelian Resources Fruta del Norte gold deposit and the Corriente copper belt. On the Afrodita concession, the Jurassic section is composed of a lower sedimentary sequence (Chapiza Formation) consisting of impure ferruginous sandstones, quartzitic sandstone (locally pyrite-rich), massive quartzite and limestone which is conformably overlain by interbedded andesitic tuffs, volcaniclastics and andesitic to basaltic flows of the Misahualli Formation. Limestones of the Chapiza Formation are locally skarnified.

Intrusive rocks of the Zamora Batholith underlie about 60% of the southern claim block. The batholith is comprised of I-type granitic rocks that include early more mafic varieties (hornblendebiotite granodiorites, diorites, and quartz diorites) and later, more differentiated felsic varieties (quartz monzonitic to granitic). Rb/Sr age dating indicates the main phase of intrusive activity occurred during the Middle Jurassic (170-190 Ma) with a later porphyry-related phase (Corriente intrusions) in the upper part of the Late Jurassic (144-150 Ma).

The Chinapintza area and northwest part of the Afrodita concession block are underlain by Cretaceous rhyolitic to dacitic tuffs and breccia intruded by synvolcanic quartz-feldspar porphyries. This intrusive-extrusive volcanic complex is exposed over an area of about 16 km² in a belt that is about 10 km long and 2 to 4 km wide. The volcanics and intrusives generally are pervasively altered (illite +/- sericite-quartz-pyrite). The core area contains numerous highgrade polymetallic Au-Ag veins and mineralized breccia pipes. K-Ar ages on micas from dykes indicate an age of 96 +/- 10 Ma. The emplacement of the Chinapintz porphyry intrusions appears to be associated with a reactivation of earlier faults during the period of back-arc extension in the region that occurred in the late Lower to Upper Cretaceous.

The geology of the northern claim block is poorly known. The only source of information is from large-scale regional government maps. The area is mapped as being mainly underlain by the Zamora Batholith which intrudes flat-lying carbonates and shales of the Triassic Pucará Group (part of the foreland basin) along the eastern margin of the claim area. Younger sandstones of the Cretaceous Hollin Formation unconformably overlie the older rock units in places.

The region is cut by numerous faults; there appear to be four main sets (N-NNE, ENE, WNW & NW). The dominant structural feature in the region is a north to north-northeast trending fault corridor, somewhat curvilinear in form, that has down-dropped and preserved remnants of the Jurassic volcanic-sedimentary sequence along a section that is about 60 km long and up to 8 km wide. This corridor is part an Early Mesozoic magmatic arc-rift system that has been active (reactivated) over a long period of time.

E.

EXPLORATION AND DRILLING

No exploration work has been carried out by Dorato Resources Inc. on the Cordillera del Condor property to date. There are no records of any prior drilling on the property. Anglo appears to have considered an eight-hole drill program at El Tambo but this work was never carried out.

In a news release dated March 27, 2007, Goldmarca Limited announced that it was mobilizing two drill rigs onto the Afrodita ground to initiate a 1,500 metre drill program at El Tambo pursuant to an option-to-purchase agreement between Goldmarca and Afrodita dated May 5, 2006.  There were no follow-up progress reports and it appears the program was never carried out.  Financial reports released by Goldmarca indicate that to the end of September, 2007, the company incurred expenditures totaling $346,290 on the property.  Approximately $35,000 is recorded as exploration expenditures (professional, consulting, geological, geophysical) with the balance reported principally as acquisition costs.  The precise nature or results of the work completed by Goldmarca have not been made public.

F.

MINERALIZATION

The southern and eastern parts of Dorato’s southern claim block (Lahaina 12-16, Lahaina 22-28, Maravilla 6-10, Vicmarama 1-6, Micmarama 8-11 and Pamina concessions) and the entire northern claim block are essentially virgin ground. Apart from coarse-scale regional government mapping programs, there is no documentation of any prior surveys or exploration work having been carried out in these areas.

Exploration work by Anglo on the Afrodita block established significant mineralization and/or alteration at El Tambo, Casa Quemada, Conaima 4, El Conguime and Cobra 1.

El Tambo and Casa Quemada:

El Tambo and Casa Camada are extensions of the Chinapintza mineralized belt across the border into Peru. The Chinapintza intrusive-extrusive complex underlies about 10 km² of the Afrodita concession area. At El Tambo veining and alteration are widespread over an area at least 500 x 600 meters in size. Soil and thick vegetation cover possible extensions of the zone to the northeast and south.

The veins at El Tambo are the same as those at Chinapintza and consist of quartz heavily impregnated with pyrite plus variable amounts of base metal sulphides. Most of the veins are less than 0.3 m but locally are up to 1.0 m wide. Stockwork veining and swarms of thin anastomosing veinlets often occur parallel to the main vein sets. Wall rock alteration consists of intense illitesericite- pyrite +/- quartz which grades outward to illite-chlorite. The dominant vein directions are NE and ESE with moderate to steep southerly dips. Zones of hydrothermal and tectonic breccia were mapped by Metalfin and Anglo but there are discrepancies regarding locations, number and sizes of the bodies. The Author examined one of the breccia bodies during the property visit. The breccia is pipe-like and exposed over an area about 40m x 20m. The breccia is heterolithic and contains well-rounded clasts of mainly quartzite and volcanics but also locally clasts of rounded vein-quartz and rounded massive sulphide (mainly pyrite). The breccia is dark grey (manganiferous), strongly pyritic (semimassive in places) and cut by epithermal quartz veins and veinlets although in general the overall vein density is low.

A strongly fractured, sheared and brecciated quartzite was mapped by Anglo along the southern edge of the El Tambo zone. Descriptions are rather vague but the zone reportedly is altered and mineralized. It is bounded by two faults, which trend ESE (subparallel to one of the main vein sets). The quartzite body is about 50m wide, 550m long and has not been closed off to the east.

Most of the veins were extensively sampled by Metalfin in 1993 and 1994 which returned gold values ranging from less than 1 gram to 45 g/T with an average grade of 10-11 g/t. In 2003 and 2004, Anglogold resampled some of the veins and analysed a broad suite of samples of various types of wall rock and peripheral, halo-type alteration and mineralization. The results of the Anglo sampling are presented in tables below.

El Tambo Vein Samples (Anglogold)


Sample

Au (ppb)

Ag (ppm)

Cu (ppm)

Pb (ppm)

Zn (ppm)

As (ppm)

Sb (ppm)

17593

9560

142

4970

10000

10000

880

44

17595

7960

157

1220

10000

10000

1640

18

17596

41670

149

1970

10000

10000

603

30

17598

49020

2172

10000

10000

10000

6220

37

18202

9100

126

777

10000

10000

880

58

18209

10540

54

1590

1590

320

294

5

18216

12290

201

5130

10000

10000

609

58

18218

34960

149

1130

10000

10000

910

108

18222

282

79

513

478

713

160

12

18223

2854

33

272

5900

138

233

32

15485

1562

39

2610

988

10000

320

6

15498

383

4

59

126

844

11

1

15802

6910

89

658

10000

10000

568

61

Average

14392

261

     


El Tambo Wall Rock Samples (Anglogold)


Sample

Au (ppb)

Ag (ppm)

Cu (ppm)

Pb (ppm)

Zn (ppm)

As (ppm)

Sb (ppm)

17591

502

20

2300

1370

814

131

5

17592

799

31

321

1650

1800

176

5

17594

311

16

195

1440

1730

154

9

17597

3027

69

2060

4980

10000

361

5

18203

414

6

91

3460

840

127

7

18204

189

34

556

1190

1900

257

6

18205

103

17

474

678

392

88

6

18206

106

5

66

459

38

68

6

18207

137

2

109

247

32

71

3

18208

113

1

61

408

99

38

3

18210

750

15

929

5460

4940

180

6

18211

999

24

109

167

30

58

6

18217

104

3

180

985

191

119

6

18219

3722

117

388

10000

10000

1130

48

18220

554

41

220

6600

10000

464

17

18221

7870

58

612

10000

10000

740

45

18224

3131

47

592

2570

3810

243

13

18226

6420

108

1310

10000

10000

389

57

15486

393

4

72

555

1710

50

1

15487

373

3

255

284

3180

15

2

15488

806

3

205

319

3160

25

2

15499

261

2

31

55

142

19

2

15801

128

19

73

2720

3300

62

13

15803

176

12

87

3670

2620

132

11

15837

252

5

145

5020

188

215

6

15838

163

15

406

1170

207

173

8

Average

1223

26

     


El Tambo Aureole Samples (Anglogold)


Sample

Au (ppb)

Ag (ppm)

Cu (ppm)

Pb(ppm)

Zn (ppm)

As (ppm)

Sb (ppm)

17581

206

4.6

141

668

33

68

 

17582

151

3.3

184

875

111

12

 

17583

189

2.3

134

327

40

27

 

17584

71

6.5

98

306

76

112

 

17585

203

38.4

576

474

9650

91

 

17586

51

2.1

80

99

36

26

 

17587

18

1.7

53

97

50

11

 

17588

24

2.6

83

115

93

19

 

17589

58

4.5

44

218

28

28

 

17590

33

4.3

39

101

23

23

 

17599

177

14.3

548

213

927

66

 

18201

22

4.8

121

883

165

75

 

18229

12

4.0

150

356

109

260

 

18230

55

1.0

92

831

33

86

 

15490

64

1.0

25

128

155

28

 

15491

83

1.5

29

92

119

61

 

15492

96

3.1

65

198

505

47

 

15493

37

0.7

17

24

572

17

 

15494

46

0.2

63

33

79

24

 

15495

86

0.7

93

55

358

5

 

15496

85

3.4

72

251

1170

134

 

14771

890

6.1

86

415

736

156

 

14772

38

3.0

68

133

81

58

 

14776

50

2.5

52

205

373

59

 

14777

53

11.9

330

118

177

118

 

15696

21

3.6

94

371

64

19

 

15697

70

11.5

1080

54

85

41

 

15698

33

8.9

199

101

176

57

 

15699

47

7.6

124

85

126

194

 

15804

77

26.8

743

142

218

70

 

15805

44

13.2

265

154

128

87

 

15806

152

18.1

672

144

238

320

 

15807

14

3.0

217

34

240

23

 

15808

63

8.6

224

715

117

84

 

15809

24

4.7

114

98

40

45

 

15839

64

20.4

1070

514

420

63

 

15840

162

2.0

94

584

2120

14

 

Average

96

6.9

     


Vein samples collected by Anglo averaged 14.4 g/t Au and 261 g/t Ag which correlate well with the results obtained by Metalfin. Vein mineralization contains significant base metals (Pb=Zn>Cu) and anomalous levels of As and Sb. Twenty-six samples of wall rock averaged 1.2 g/t Au and 26 g/t Ag and thirty-seven halo samples averaged 0.1 g/t Au and 6.8 g/t Ag.

The table below is a list of samples collected by Anglo from the quartzite breccia. Eleven samples were collected. All returned anomalous gold values ranging from 55 to 5930 ppb with an average value of 1380 ppb (1.38 g/t). Silver averages 17.9 ppm (17.9 g/t). There is a similar association with base metals and anomalous arsenic and to a lesser extent anomalous antimony.

El Tambo Quartzite Breccia Samples (Anglogold)


Sample

Au (ppb)

Ag (ppm)

Cu (ppm)

Pb (ppm)

Zn (ppm)

As (ppm)

Sb (ppm)

18212

345

10

404

5930

7610

86

14

18213

218

1

19

212

45

27

1

18214

228

5

38

149

265

38

1

18215

1054

4

136

167

46

674

5

15481

4766

61

1360

6460

7900

423

38

15482

956

36

111

1140

2340

131

4

15483

5930

66

1440

568

4350

60

7

15484

464

5

231

537

621

238

3

15489

1012

1

343

75

61

100

1

15497

156

4

348

87

106

34

2

14774

55

4

586

29

1180

36

2

Average

1380

17.9

     


The Author collected nine character-type samples at El Tambo during the property visit.  Two samples of vein mineralization (one oxidized, one unoxidized) assayed 4.8 and 4.2 g/t gold and 54.5 and 87.3 g/t Ag. Both vein samples contained anomalous levels of As and Sb. The unoxidized vein sample contained 1024 ppm Cu, >10000 ppm Pb and > 10000 ppm Zn which is consistent with the results obtained by Anglo. Samples of pyritic, manganiferous, hydrothermal breccia collected from two separate locations returned similar results (583/388 ppb Au, 12.1/13.8 ppm Ag, 160/151 ppm Cu, 3491/3811 ppm Pb and 9716/6014 ppm Zn). The remaining samples were grab samples of weak silicification and clay alteration peripheral to some of the veins; all returned low Au and Ag values.

Casa Quemada is located 1.0 km southeast of El Tambo and has a similar geological setting. A series of old pits and small hand trenches expose veins hosted by clay-altered and pyritized volcaniclastic rocks intruded by a small rhyodacite plug. Fourteen samples of vein and wall rock alteration collected from the showing area by Anglo returned anomalous gold values ranging from 30 ppb to +1000 ppb. Anglo tested the area north of the showings in 2004 with a single E-W line of test pits with negative results.

Conaima 4

The Conaima 4 target is located about 5 km ESE of El Tambo. The area of interest occurs at the contact between granodiorite of the Zamora Batholith and pyritized ferruginous sandstone and limestone (locally altered to garnet-scapolite skarn) of the Chapiza Formation. Thirteen float and bedrock samples collected by Anglo during their initial 2004 program returned anomalous values for Au, Ag, Cu, Pb, Zn, As, Sn and W (Table 6). There is a positive correlation between Au and Ag, Cu & As and to a lesser extent between Sn & W. There is no consistent pattern between Pb & Zn or Pb & Zn and the other elements. Anglo reported high concentrations of manganese in some of the skarn exposures. Anglo’s primary target model for the Conaima 4 area is an oxidized gold skarn similar to Nambija.

El Conguime:

The El Conguime target area occurs adjacent to the El Hito porphyry prospect. Work carried out by Anglo was directed mainly toward evaluating the area along the eastern flank of the El Hito porphyry system on the Peruvian side of the border. The area is underlain by Jurassic volcanics and sediments intruded by small porphyry stocks. The test pit program exposed carbonate-altered diorite, hornfels and variable pyritized andesitic volcanics with weak Cu-Zn mineralization. Only two samples returned >1 ppm gold which were obtained from narrow, sulphide-rich veins.

The work by Anglo has probably ruled out the potential for a near-surface porphyry Cu-Au target, however there is a potential for an Aurelian-type epithermal Au-Ag deposit at depth. In the eastern part of the area a series of barren silicified pyritic ledges and pyritic silica breccias form prominent ridges around the summit of El Conguime peak that appear to be part of an extensive high-level, silica cap zone. This silica cap zone appears to be similar to the high-level silica alteration zone overlying the FDN deposit. The same host rocks (Misahualli volcanics) underlie both areas with essentially the same structural setting (early Mesozoic extensional basins located along a major north-northeast trending fault corridor). A sample of angular silica breccia float collected by Anglo from the area has a geochemical signature (anomalous Au-Ag-As-Sb-Ba) typical of high-level epithermal systems.

Cobra 1:

The Cobra 1 target was originally identified by the Anglo biogeochemistry and stream sediment surveys which defined an anomalous trend more than 4 km long. A follow-up test-pit program (bedrock sampling below the lateritic soil cover) was carried out along seven east-west lines spaced at 500 m intervals (50 m stations). This coarse sample grid identified a series of quartz-sericite-illite-pyrite alteration zones associated with a series of en-echelon, north to northnortheast trending faults and complex shear zones that cut Mesozoic intrusives, volcanics and sediments over the length of the grid area. Many of the pits bottomed in breccias, gossan, pyritic silicified zones and silica-rich leached cap (with vg in pit L21, 2750E). Alteration zones vary from less than 50 m (single station) to more than 400 m in width. More than 40 of the pits returned anomalous gold values ranging from 30 ppb to more than 1000 ppb that correlate well with the observed alteration

G.

SAMPLING AND ANALYSIS

Sampling Method and Approach

Nine rock samples were collected by the Author at El Tambo and submitted for gold and multielement ICP analyses. Sample descriptions and results are provided in Appendices D & E of the Technical Report. Samples consisted of representative grab samples of veins, breccia and alteration areas. The primary objectives were to verify earlier results obtained by Anglo and Metalfin from the highgrade vein mineralization and evaluate the breccias and alteration areas away from the main vein zones for their potential for hosting bulk tonnage disseminated mineralization. In the writer’s opinion the sampling program achieved these objectives.

Sample Preparation, Analyses and Security

Care was taken to ensure the integrity and security of each sample. All of the samples were collected by the Author and placed in standard sample bags with security tags attached to each bag. The samples remained in the possession of the Author on the property and during their transit back to Canada. In Canada, the samples were shipped by Greyhound directly to Acme Analytical Laboratories in Vancouver.

Acme Labs has a quality assurance program that operates according to the International Standards Organization (IOS) guidelines. The laboratory employs a comprehensive quality control program covering both sample preparation and analysis with regular internal audits undertaken to ensure compliance with documentation procedures required by the IOS. Laboratory standards and blanks are run routinely by Acme Labs to ensure quality control and lack of contamination.

Gold and a 36-element package were determined by ICP-MS from a 15 g sample using an aqua regia digestion. The lower detection limit for gold is 0.5 ppb and the upper detection limit is 100 ppm.

Data Verification

All of the assay data was checked against field notes to ensure that there were no unusual inconsistencies between the reported results and field observations. The Author is confident in the adequacy of the sample collection, handling, security, preparation and analytical procedures that have been carried out.

H.

DEPOSIT TYPES

The Cordillera del Condor region contains four general deposit types, which are summarized below:

Aurelian-type epithermal gold-silver mineralization: Aurelian Resources has a large number of concession blocks located along the Ecuadorian side of the border which partly adjoin Dorato’s concessions to the west. The main Aurelian block extends north of Chinapintza and encompasses their two main projects, Fruta del Norte (FDN) and Bonza-Las Penas (BLP). On October 4, 2007, Aurelian announced a 43-101 compliant initial inferred resource estimate by Micron International Limited for FDN of 58.9 million tonnes at an average grade of 7.23 g/t gold and 11.8 g/t silver (13.7 million oz Au, 22.4 million oz Ag). Earlier (December, 2005), the company released a similar report placing the initial inferred resource estimate for BLP at 15,030,000 million tonnes @ 1.07 g/t gold and 11.6 g/t silver (517,000 ounces of gold and 5,605,500 ounces of silver). Advanced exploration is continuing on both projects. On November 29, 2007, Aurelian announced follow-up drill results for FDN which included intersects of 216.6 m grading 12.85 g/t gold from infill drilling on the main zone and 13.5 m grading 16.86 g/t gold in step-out drilling to the south. In addition to the two main gold projects, Aurelian has identified more than 30 gold targets and 12 high priority porphyry copper prospects in the district (Company web site).

FDN is a blind deposit discovered by Aurelian Resources in 2006 while drill testing a high-level silica alteration zone associated with anomalous As, Sb, Hg +/- Au. The deposit occurs beneath >200 m of sedimentary cover (Suarez Formation) and is largely hosted by Misahualli andesitic volcanics. The deposit occurs in the northeast margin of an Early Mesozoic extensional basin that is approximately 8km x 2km in size. Mineralization was contemporaneous with development of the basin with compelling evidence that the deposit formed both before and during the deposition of the overlying sedimentary cover (Sillitoe, Feb., 2007).

The FDN deposit is classified as an intermediate-sulphidation epithermal Au-Ag type. The main part of the deposit, is characterized by an intense zone of Mn-bearing stockwork veining and brecciation which contains multiple generations of cruciform quartz-calcite-rhodochrosite-adularia veins and veinlets with pyrite and marcasite and subordinate base metal sulphides in a zone up to 125 m wide and more than 400 m long. Alteration consists of proximal silicification within a broad illite alteration zone that diminishes outward to a propylitic alteration zone. The basal part of the Suarez Formation is pervasively silicified with locally well-preserved sinter deposits. Pyrite and marcasite are present in the silicified cap in amounts up to 30%.

Note: Mineral resources are not mineral reserves and do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. In addition, inferred resource estimates are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves.

Nambija gold skarns: More than 1.0 million ounces of high-grade gold mineralization (+30 g/t) was mined near the town of Zamora at Nambija over a period of about 10 years. Mining was carried out in a primitive fashion by 100’s of garimpeiro miners with no assays for grade control. Material was essentially selected by the ability to see or pan gold from rocks exposed at the face of the tunnels.

Mineralization at Nambija occurs in tectonic and intrusive breccias, veins and shear zones that cut a complex skarn/hornfels assemblage located within an Upper Triassic sedimentary-volcanic roof pendant (Piuntza Group) intruded by alkalic phases of the Zamora Batholith. Mining was focused on about 30 separate areas along a linear trend, which suggests a strong structural control. Mineralization consists of mainly coarse free gold with chalcopyrite, sphalerite, galena, specularite, barite, pyrite & arsenopyrite. Silver values are generally low (< 3 ppm). Alteration minerals include garnet, chlorite (retrograde), calcite, rhodochrosite, epidote, actinolite, Kspar, apatite, quartz and clay. Mining was carried out over a vertical range of about 400 meters.

Corriente Porphyry Belt: The Corriente porphyry belt contains four main porphyry deposits and a number prospects in a belt about 100 km long. Mirador and Mirador Norte, located in the southern part of the trend have a combined total resource estimated at about 890 million tonnes averaging 0.56% Cu and 0.16 g/t Au. San Carlos and Panantza, located about 40 km north of Mirador contain a combined total resource estimated at 1.063 billion tonnes @ 0.62% Cu.

The deposits are classic calc-alkaline varieties related to the emplacement of late-stage, granodiorite to monzogranitic phases of the Zamora Batholith. The deposits contain a potassic core (Kspar-biotite) variably overprinted by phyllic and advanced alteration that grades outward to a pyritic propylitic alteration halo. Copper grades of >0.2% are restricted to the potassic core.

Mineralization consists of pyrite>chalcopyrite stockwork mineralization with local thin layers of supergene chalcocite enrichment. The deposits contain appreciable molybdenum (60-250 ppm) and locally gold.

The deposits occur at major fault intersections within a north-trending fault corridor. This is the same fault corridor that extends through the FDN and BLP deposits and continues south through the Afrodita concession block.

El Hito and Santa Barbara are two significant porphyry systems located south of Chinapintza. The deposits have not been dated but are probably the same age as the Corriente porphyries. El Hito is situated on the Peruvian border about 5 km south of Chinapintza; the Afrodita concessions cover the eastern part of the system. At El Hito, weak copper mineralization occurs in a quartz diorite to granodiorite stock that has intruded Misahualli andesites. There are several phases of stockwork veining associated with a central sericite-pyrite-clay alteration zone that grades outward to a propylitic halo. Mineralization in the inner core assays 0.1-0.3% Cu with spot values of up to 0.9% Cu. The porphyry system is about 2 km in diameter. In 2000, Valerie Gold drill four core holes in the central part of the deposit on the Ecuadorian side which returned intersections up to 300 meters long grading about 0.3% Cu with minor gold.

Santa Barbara is a high-level Cu-Au porphyry-skarn deposit located about 4 km west of El Hito.  TVX Gold discovered the deposit in the mid to late 1990’s. The property was optioned to Valerie Gold (along with El Hito) in 1999 and later acquired by Goldmarca Resources. Mineralization is described as occurring in stockwork zones in altered porphyry and within skarn zones in a roof pendant of Misahualli volcanics. The deposit contains an inner phyllic-argillic-copper core with elevated levels of zinc and gold surrounded by a pyrite-propylite alteration halo. Results of trenching and drilling by Valerie Gold indicate a potential resources of >700,000 oz Au (21 million tonnes @ approximately 1 g/t Au, 0.12% Cu).

Chinapintza Epithermal Au-Ag-Zn-Pb-Cu Veins and Breccia Pipes: The Chinapintza area (also referred to as the Pachicutza district) is underlain by a intensely altered and mineralized dacitic to rhyolitic porphyries, breccia pipes and associated felsic volcanic tuffs and flows that cover an area of about 16 km² straddling the border with Peru. The subvolcanic intrusive complex was emplaced in sheared basement intrusives and schists along the western edge of a graben infilled with Lower Jurassic volcanics and sediments. The age of the complex is uncertain but limited potassium-argon age dating suggests an upper Lower to Middle Cretaceous age.

The main prospects include Santore, Tres Cemitos, Yaguarzingo, Chinapintz, Pangui and Viche which are centered on the small mining community of Chinapintza, Ecuador, located just across the border from Peru. At Chinapintza and Viche a cluster of breccia pipes have been identified (San José, Pangui, Buena Esperanza, Los Cuyes) which carry disseminated mineralization and are cut by quartz-sulphide veins. Vein swarms and stockwork zones are developed around the pipes over an area 2.5 x 1.0 km in size. Porous acid tuffs adjacent to and overlying the pipes are pervasively mineralized with disseminated to semimassive pyrite.

The veins appear to largely post-date the breccia pipes and generally are considerably higher grade. The veins consist of massive to semimassive pyrite with variable amounts of quartz, native gold, electrum and base metals (Zn>Cu>Pb). Veins vary from <20 cm to occasionally more than 2.0 m in width. Gold grades range from less than 5 grams to more than 60 grams per tonne with an overall average of about 15 g/t. Wall rock alteration is extensive and characterized by illitesericite +/- quartz with a peripheral halo of illite-chlorite.

The surficial oxidized portions of the veins and stockwork zones have been extensively mined by informales who are believed to have recovered between 10 and 80 g/t gold/tonne to a depth of 5 to 10 meters. There are currently estimated to be more than 200 small-scale, independent miners working the area, some of which are mining the deeper, unoxidized portions of the deposits.

The earliest systematic exploration work in the area by was carried out by Prominex U.K. (1980), followed by TVX Gold, Noranda and Teck among others and most recently by Dynasty Metals and Goldmarca Ltd. Dynasty’s has carried out extensive drilling on their Jerusalem property located near the western edge of the Chinapintza complex. Mineralization is hosted in a swarm of north to northwest-trending veins along the western edge of a subvolcanic porphyry stock. A recent 43-101 compliant report released by Dynasty places the combined measured, indicated and inferred resource for Jerusalem at 3,393,000 tonnes grading approximately 12.0 g/t Au (1.3 million ounces) and 95 g/t Ag (10.7 million ounces).

Goldmarca has a large block of ground east of Dynasty and has been evaluating some of the original prospects in and around Chinapintza. Goldmarca have placed the combined resource for various veins, the Los Cuyes breccia and San José breccia at approximately 4.5 million tonnes @ 2.9 g/t gold (420,000 oz).

I.

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

The property is at an early stage of exploration with no prior drilling.  A significant resource, if present, has yet to be established.

J.

INTERPRETATION AND CONCLUSIONS

Exploration work carried out by Anglo in 2003 and 2004 has identified a number of excellent exploration targets within the Afrodita concession block, none of which have been drill-tested to date. El Tambo and Casa Quemada are clearly extensions of the Chinapintza mineralized belt which hosts significant epithermal polymetallic vein and hydrothermal breccia deposits on the Ecuadorian side of the border including the Jerusalem project of Dynasty Metals. At El Tambo, mineralization occurs in a swarm of anastomosing vein sets, stockwork zones and hydrothermaltectonic breccias that are exposed over an area at least 500 x 600 meters in size. Veins appear to average about 10 to 11 g/t Au over widths of 10 to100 cm. The average silver grade is estimated to be at least 100 g/t and total base metals better than 2%.

The primary exploration target at El Tambo is high-grade vein mineralization but there is a significant potential for disseminated mineralization in the hydrothermal breccias, stockwork zones adjacent to veins and in the brecciated quartzite along the southern edge of the target area, which when combined with the higher-grade vein mineralization could produce a larger resource amenable to bulk mining. Due to a lack of continuous exposure in the area, the only practical way of evaluating this potential is by trenching or drilling.

El Conguime and Cobra 1 occur along a definite NNE trend which is interpreted to be a major fault zone. The primary target at El Conguime is an Aurelian-type epithermal Au-Ag deposit at depth below a high-level silica cap zone exposed along the eastern flank of El Conguime Peak. The only way of evaluating this target is by drilling.

The Cobra 1 target area is more than 4 km long and open along trend to the NNE. The target is defined by a series of sub-parallel faults associated with wide zones of hydrothermal alteration and anomalous gold geochemistry. The target type is an Aurelian-type deposit at or close to the present surface. The work carried out by Anglo was very coarse and preliminary in nature. Further work will be required in order to refine and prioritize targets prior to drilling.

Anglo was unable to carry out any follow-up work on the Conaime 4 target in 2004 because the concession had inadvertently been allowed to lapse. The concession area has been recovered and now forms part of the Afrodita concession block. Conaime 4 is a Nambija-type oxidized skarn target that occurs on interpreted parallel NNE-trending structure. Initial sampling by Anglo returned anomalous Au-Pb-Zn-W-Sn values in manganiferous skarn and ferruginous, carbonaceous sediments adjacent to the Zamora Batholith.

Very little is known about the other concession blocks (Lahaina, Maravilla, Vicmarama, Pamina). There has been no detailed mapping or documentation of any prior exploration in these areas. The south blocks appear to cover the projected southerly extension of the fault corridor. Remnants of Jurassic volcanics and sediments have been mapped in the area and a large block of Precambrian metamorphic rocks appears to represent a fault-bounded slice of basement preserved beneath a former (eroded) Mesozoic graben. Based on this apparent favourable structural setting, the southern block is considered by the Author to have an excellent exploration potential.

The northern block is underlain mainly by granitic rocks of the Zamora Batholith and is located some distance off of the main structural trend. The area is assigned a lower priority although an initial assessment of the area is warranted.

K.

WORK RECOMMENDATIONS

A two-phase exploration program estimate to cost US$4,460,000 is recommended for the Cordillera del Condor project which is in the opinion of the Author fully justified by the technical merits of the property.  Because of difficult terrain and difficult access, which will require the extensive use of helicopters during both phases of the recommended program, exploration costs will be significantly higher than would be expected in the road accessible areas in the same region.  In addition, due to a greater degree of uncertainty in the allowing for unforeseen costs and cost overruns, a 20% contingency allowance has been added to both phases of the program.

Phase I, estimated to cost US$2,354,000, consists of three parts:

1.

An initial helicopter-supported program of reconnaissance mapping, prospecting and stream sediment sampling to evaluate on a first-pass basis the Lahaina, Maravilla, Vicmarama and Pamina concessions.

2.

Detailed mapping and sampling on the El Conguime, Cobra 1 and Conaime 4 targets and detailed mapping and sampling of priority targets identified in other areas by the initial reconnaissance work.

3.

3D I.P./resistivity and ground magnetic surveys on El Tambo, El Conguime, Cobra 1, Conaime 4 and other targets of merit identified by the reconnaissance and follow-up work complted in stages 1 and 2.  The geophysical surveys will help refine and better define target areas prior to drilling (all of the deposit types in the district are associated with abundant sulphide and commonly contain abundant silica, e.g. FDN, which make I.P./resistivity a logical choice to evaluate target areas).

Phase II, which is contingent upon the results of Phase I, is a 6,000 metre initial diamond drill program estimated to cost US$2,106,000.  A minium 14 holes should be drilled to test the El Tambo, El Conguime, Conaima 4 and Cobra 1 targets with a contingent for an additional ten holes to test other targets developed during Phase I.  Drill hole priorities, hole locations and target depths would be determined after the completion of Phase I.

ARTICLE 1
INFORMATION CONCERNING THE RESULTING ISSUER

1.1

CORPORATE STRUCTURE

1.1.1

Name and Incorporation

The corporate name of the Resulting Issuer will remain Dorato Resources Inc. The head office and registered and records office will remain the same.

1.1.2

Intercorporate Relationships

The Resulting Issuer will have one subsidiary, Dorato Peru, S.A.C.

1.2

NARRATIVE DESCRIPTION OF THE BUSINESS

1.2.1

Stated Business Objectives

The intended business objective that the Resulting Issuer expects to accomplish, using the funds available as described in “Summary of Estimated Funds Available to the Resulting Issuer” is the acquisition and exploration of the Target Assets under the Option Agreements.

1.2.2

Milestones

In order to accomplish the business objectives described above, the following events must occur:

(a)

Complete the Change of Business and the Financing by April 30, 2008.

(b)

Complete the Phase I exploration program described under the heading “Target Assets – Cordillera del Condor Property”.

(c)

Plan and complete a Phase II exploration program for the Cordillera del Condor Property based on the results of the Phase I exploration program and take into account the cash available to the Resulting Issuer.

(d)

Complete cash payments and issue Common Shares under the Option Agreements as set forth under the heading “Section 1.2.1(b) Option Agreements”.

1.2.3

Exploration and Development for Resulting Issuer with Mineral Project

Reference is made to the heading “Target Assets – Cordillera del Condor Property” for information concerning the Phase I exploration program recommended for the property.

1.3

DESCRIPTION OF THE SECURITIES

After giving effect to the Change of Business and the Financing, the Resulting Issuer’s securities will be the same as set out under the heading “Issuer - Description of Securities”.

1.4

PRO FORMA CONSOLIDATED CAPITALIZATION

1.4.1

Pro Forma Consolidated Capitalization

Designation of Security

Amount Authorized

Amount Outstanding After Giving Effect To The Change of Business and the Financing (1)(2)(3)

   

Common Shares

100,000,000 Common Shares

27,943,187


Transaction

Amount Outstanding After Giving Effect To The Change of Business and the Financing

  

Issued Common Shares outstanding as at October 31, 2007

6,793,187

Issued under the Option Agreements as at the effective date of the Change of Business

4,150,000

Common Shares issued pursuant to the Financing

17,000,000

 

27,943,187

(1)

Pursuant to the Resulting Issuer's stock option plan, the total number of Common Shares issuable thereunder is fixed at 10% of the issued Common Shares outstanding at the time of any stock option grant, subject to the applicable rules and regulations of the Exchange.  The Resulting Issuer will have nil stock options outstanding.

(2)

The Resulting Issuer will issue those Common Shares described under the heading "Section 1.2.1(b) Option Agreements" if the Resulting Issuer seeks to continue to maintain any or all of the Option Agreements in full force and effect and/or to exercise any of the options thereunder.

(3)

17,000,000 Common Shares to be issued to the subscribers pursuant to the Financing.

Based on the Resulting Issuer’s pro-forma balance sheet, the Resulting Issuer’s deficit will be ($5,574,267).

1.4.2

Fully Diluted Share Capital

Designation of Security

Number

Percentage of Fully Diluted

Common Shares Outstanding as at October 31, 2007

6,793,187

24.31%

Common Shares to be issued pursuant to theNon-Brokered Private Placements

17,000,000

60.84%

Options to be granted upon closing of transaction

Nil

N/A

Securities issuable pursuant to the Option Agreements

4,150,000

14.85%

Total

27,943,187

100%


1.5

AVAILABLE FUNDS AND PRINCIPAL PURPOSES

1.5.1

Funds Available

As at February 29, 2008, the Issuer had working capital of $354,805.  On closing of the Financing, the Issuer will receive an additional $10,200,000.  The estimated funds available to the Issuer, after completion of the Change of Business, including the working capital of the Issuer, the proceeds from the Financing, net of expenses in connection with the Financing will be approximately $10,554,002. The principal purposes of those funds, after giving effect to the Change of Business to meet the financing conditions set forth in the Option Agreements.  

Reference is made to the heading “Target Assets – Cordillera del Condor Property” for disclosure concerning the Phase I exploration program on the Cordillera del Condor Property











Principal Use of Funds

Amount

Estimated expenses of the Change of Business and the Financing

$                 130,000

General and administrative expenses for the 18 months following closing of the Change of Business and the Financing

250,000

Recommended Phase I exploration program on Properties for 18 months following closing of the Change of Business and the Financing

2,354,000

Property payments due on closing of the Change of Business and the Financing

1,920,000

Unallocated working capital

5,900,002

Total

$           10,554,002


The Issuer intends to spend the funds available to it on the completion of the Change of Business as forth above.  There may be circumstances where, for sound business reasons, a reallocation of funds may be necessary.

1.5.2

Dividends and Dividend Policy

There are no restrictions that could prevent the Resulting Issuer from paying dividends.  The Resulting Issuer does not expect to have the ability to pay dividends in the near future.  If the Resulting Issuer generates earnings in the future, it expects that earnings will be retained to finance further growth of the Resulting Issuer.  The Resulting Issuer’s dividend policy will be for the directors of the Resulting Issuer to determine if and when dividends should be declared and paid based upon its financial position at the relevant time.  All of the Common Shares of the Resulting Issuer shall be entitled to an equal share in any dividends declared and paid.  No decision has been made to change the intended dividend policy of the Resulting Issuer.

1.6

PRINCIPAL SECURITYHOLDERS

To the knowledge of management of the Issuer, upon completion of the Change of Business and the Financing and the issuance of 17,000,000 Common Shares pursuant to the Financing and the issuance of 10,150,000 Common Shares under the Option Agreements as set forth under the heading “Section 1.2.1(b) Option Agreements”, no person will beneficially own, directly or indirectly, or exercise control or direction over more than 10% of the Common Shares of the Resulting Issuer, except as follows:

Name and Municipality of Residence

Number of Common Shares Owned

Percentage

Carlos Ballon Barraza

San Isidro, Peru

6,350,000

18.87%


1.7

DIRECTORS, OFFICERS AND PROMOTERS

1.7.1

Name, Address, Occupation and Security Holdings

The following are the names and municipalities of residence of each proposed director and officer of the Resulting Issuer, the positions and offices to be held with the Resulting Issuer, their respective principal occupations within the five preceding years and the number and percentage of Common Shares of the Resulting Issuer which will be held by each of them on completion of the Change of Business and the Financing.  Each director will hold office until the next annual meeting of the Resulting Issuer unless his office is earlier vacated in accordance with the Business Corporations Act (British Columbia) and the Notice of Articles and Articles of the Resulting Issuer.



Name and Residence of
Proposed Directors/Officers and
Present Offices Held

Principal Occupation and Period Serving as Director of Issuer

Number of
Common Shares

Percentage

Anton J. Drescher

C.E.O and Director

President and a director since 1993. Certified Management Accountant; President and director of Harbour Pacific Capital Corp. since 1998 and Westpoint Management Consultants Ltd since 1978.  .

1,784,221

6.39%

Donna M. Moroney

Corporate Secretary

Corporate Secretary and CFO since December 2004.  President and director of Affari Management Services Inc.

60,000

<1%

Gerhard Drescher

Director

Director since 2000.  President and director of Python Technologies Inc.

37,000

<1%

Rowland Perkins

Director

Director since January 2005.  President and a director of eBackup Inc.

37,000

<1%

Jeffrey Pontius

Proposed Director

Geologist; President and CEO of International Tower Hill Mines Ltd.

200,000

<1%


All of the directors and officers are ordinarily resident in Canada.

No proposed director of the Resulting Issuer is, or within the 10 years prior to the date of this Filing Statement, either:

(i)

has been a director or officer of any company that while that person was acting in that capacity:

(a)

was the subject of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days;

(b)

was subject to an event that resulted, after the director or executive officer ceased to be a director or executive officer, in the company being the subject of a cease trade or an order that denied the relevant company access to any exemption under securities legislation, for more than 30 consecutive days; or

(c)

or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

None of the directors have entered into a non-competition or non-disclosure agreement with the Resulting Issuer.

Assuming completion of the Change of the Business and the Financing, the directors and officers of the Resulting Issuer, as a group, will own, directly or indirectly, 2,118,221 Common Shares of the Resulting Issuer, representing approximately 7.58% of the total issued and outstanding Common Shares of the Resulting Issuer.

The proposed board committees of the Resulting Issuer and the proposed members of each committee are as follows:

I.

Audit Committee

The proposed members of the Audit Committee of the Resulting Issuer are Anton J. Drescher, Rowland Perkins and Gerhard J. Drescher.

1.7.2

Management

The following are the biographies of the proposed members of management:

Anton J. Drescher – Proposed Chief Executive Officer.  Mr. Drescher, 52 years of age, is a Certified Management Accountant.  As CEO, Mr. Drescher business functions will include raising capital, strategic planning, business development, operations, financial administration, accounting, liaison with auditors-accountants-lawyers-regulatory authorities-financial community/ shareholders; and preparation/payment/organization of our expenses/taxes/activities, and reporting to the Board of Directors.  He will be an independent contractor and will be devoting approximately 30% of his time on the business of the Issuer.  Mr. Drescher has been President and director of Harbour Pacific Capital Corp. since 1998 and President and director of Westpoint Management Consultants Ltd. since 1978.  He has also been President and a director of Trevali Resources Corp. since May 2007; Chief Financial Officer and a director of USA Video Interactive Corp. since 1994; a director of International Tower Hill Mines Ltd. since 1991; and President and a director of Ravencrest Resources Inc. since April 2007.  Mr. Drescher has not entered into a non-competition or non-disclosure agreement with the Issuer.

Donna M. Moroney- Proposed Corporate Secretary. Ms. Moroney, 47 years of age, is an independent contractor.  As Corporate Secretary, Ms. Moroney business functions will include attending and acting as the recording secretary of all meetings of the Board, shareholders and committees of the Board; entering or causing to be entered in records kept for that purpose minutes of all proceedings; as and when instructed, preparation and dissemination of all notices to shareholders, Directors, officers, auditors and members of committees of the Board; assist in preparation of Management Discussion & Analysis, and managing stock option plan..  She will be an independent contractor and will be devoting approximately 30% of her time on the business of the Issuer.  She has over 20 years of legal experience in corporate and regulatory compliance for both Canadian and US companies.  She has been a consultant to public companies assisting with regulatory compliance since 1992 and has been an instructor of corporate/securities law for paralegals.  Ms. Moroney acts as Corporate Secretary for a number of US and Canadian public companies, including Ravencrest Resources Inc. Trevali Resources Corp., Greenshield Explorations Limited and Anglo-Canadian Uranium Corp.  Ms. Moroney has not entered into a non-competition or non-disclosure agreement with the Issuer.

1.7.3

Penalties or Sanctions

During the ten years prior to the date of this Filing Statement, no proposed director, officer or promoter of the Resulting Issuer or a securityholder anticipated to hold sufficient number of securities of the Corporation to affect materially the control of the Resulting Issuer, has, to the knowledge of the Issuer, been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority relating to trading in securities, promotion or management of a publicly traded issuer, or theft or fraud or has entered into a settlement agreement with a securities regulatory authority, or to the knowledge of the Issuer, has been subject to any other penalties or sanctions imposed by a court or regulatory body, including a self-regulatory body, that would likely be considered important to a reasonable securityholder making a decision about the Resulting Issuer.

1.7.4

Personal Bankruptcies

During the 10 years prior the date of this Filing Statement, no director, officer or promoter of the Resulting Issuer, or a securityholder anticipated to hold sufficient securities of the Resulting Issuer to affect materially the control of the Resulting Issuer, or a personal holding company of any such persons has, to the knowledge of the Issuer, been declared bankrupt or made a voluntary assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or insolvency, or been subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of that individual.

1.7.5

Conflicts of Interest

Other than as disclosed elsewhere in this Filing Statement, there are no known existing or potential conflicts of interest among the Resulting Issuer and any of the proposed directors, officers or promoters of the Resulting Issuer, nor any associate or affiliate of the foregoing, which could reasonably be expected to affect a securityholder’s investment decision.

1.7.6

Other Reporting Issuer Experience

The following table sets out the proposed directors, officers and promoters of the Resulting Issuer that are, or have been within the last five years, directors, officers or promoters of other reporting issuers:








Name

Reporting Issuer Name

Name of Trading Market

Position

From

To

Anton J. Drescher

USA Video Interactive Corp.

Exchange

Corporate Secretary

and Director

June 1993

President

 

International Tower Hill Mines Ltd.

Exchange

Director

Oct. 1991

Present

 

Trevali Resources Corp.

CDN

President and Director

May 2007

Present

 

Ravencrest Resources Inc.

N/A

President and Director

April 2007

Present

 

Amanta Resources Ltd.

Exchange

Director

Apr. 1993

Aug. 2004

 

Landmark Minerals Inc.

Exchange

Director

Feb. 2003

July 2006

 

Waymar Resources Ltd.

Exchange

President and Director

June 2005

Jan. 2007

Donna M. Moroney

Ravencrest Resources Inc.

N/A

Corporate Secretary &CFO

July 2007

 
 

Greenshield Explorations Limited

NEX

Corporate Secretary &CFO

Aug. 2006

Present

 

Anglo-Canadian Uranium Corp.

Exchange

Corporate Secretary

May 2007

Present

 

International Tower Hill Mines Ltd.

Exchange

Corporate Secretary

May 1997

Sept. 2006

 

Waymar Resources ltd.

Exchange

Corporate Secretary

June 2005

May 2007

 

Landmark Minerals Inc.

Exchange

Corporate Secretary

Apr. 2005

Nov. 2005

 

Accelrate Power Systems Inc.

Exchange

Corporate Secretary

Nov. 2004

Dec. 2005

 

US Oil and Gas Resources Ltd.

Exchange

Corporate Secretary

Nov. 2003

Nov. 2006

Gerhard J. Drescher

Ravencrest Resources Inc.

N/A

Director

1995

April 2007

 

Landmark Minerals Inc.

Exchange

Director

June 2004

Dec. 2004

 

Amanta Resources Ltd.

Exchange

Director

Apr. 1994

Aug. 2004

 

International Tower Hill Mines Ltd.

Exchange

Director

May 2000

May 2005

Rowland Perkins

International Tower Hill Mines Ltd.

Exchange

Director

Oct. 1998

Present

 

USA Video Interactive Corp.

Exchange

Director

Jan 2005

Present

 

Waymar Resources Ltd.

Exchange

Director

June 2005

Present

Jeffrey Pontius

International Tower Hill Mines Ltd.

Exchange

President & Director

Sept. 2006

Present

 

Wealth Minerals Ltd.

Exchange

Director

Dec. 2006

Present

 

Skygold Ventures Ltd.

Exchange

Director

Nov. 2006

Present


1.8

EXECUTIVE COMPENSATION

1.8.1

Executive Compensation

No cash or stock option compensation for the executive officers of the Reporting Issuer has been determined as at the date of this Filing Statement.  However, the Reporting Issuer anticipates that, based on the Reporting Issuer’s activities over the next 12 months, total cash compensation for all of the named executive officers of the Reporting Issuer will not exceed $100,000 for the next 12 months.  The Reporting Issuer expects that the named executive officers of the Reporting Issuer will receive stock options under the Reporting Issuer’s stock option plan in accordance with Exchange guidelines.

No other compensation is expected to be paid to the Reporting Issuer’s executive officers in the next 12 months.

1.9

INDEBTEDNESS OF DIRECTORS AND OFFICERS

No individual who is a director or officer of the Issuer or is proposed to be a director or officer of the Resulting Issuer, and each other individual who at any time during the most recently completed financial year of the Issuer was, a director or officer of the Issuer, and each associate of such individual, has been indebted to the Issuer.

1.10

INVESTOR RELATIONS ARRANGEMENTS

There is no written or oral agreement or understanding that has been reached with any person to provide any promotional or investor relations services for the Resulting Issuer.

1.11

OPTIONS TO PURCHASE SECURITIES

1.11.1

Outstanding Stock Options

As at the date of this Filing Statement, there are no stock options to purchase securities of the Resulting Issuer that will be held upon completion of the Change of Business and the Financing by:

(a)

all proposed officers of the Resulting Issuer as a group and all proposed directors of the Resulting Issuer who are not also officers as a group;

(b)

any other employees of the Resulting Issuer as a group;

(c)

all consultants of the Resulting Issuer as a group; and

(d)

any other person or company, including any agent or underwriter.

1.11.2

Stock Option Plan

Reference is made to the heading “Issuer – Stock Option Plan”.  The Resulting Issuer will retain the Issuer’s stock option plan.

1.12

ESCROWED SECURITIES

To the knowledge of the Issuer as of the date of this Filing Statement, the following table sets forth the name and municipality of residence of the securityholder, the number of securities of each class of securities of the of the Resulting Issuer, anticipated to be held in escrow after giving effect to the Change of Business and the Financing, and the percentage that number represents of the outstanding securities of that class.

  

After Giving Effect to the Change of Business and the Financing

 

Name and Municipality of Residence of Securityholder

Designation
of Class

Number of Securities to be Held in Escrow

Percentage
of Class

Issue Date and Price Per Share at Issuance

Anton J. Drescher,

Burnaby, BC

Common Shares

1,245,221

4.46%

1,122,132 @ $0.225 on Sept. 28, 2006

50,000 @ $0.14 on Apr. 5, 2005

73,089 purchased prior to July 2003

Rowland Perkins,

Calgary, Alberta

Common Shares

25,000

<1%

12,500 @ $0.225 on Sept. 28, 2006

12,500 @ $0.30 on Sept. 27, 2007

Gerhard J. Drescher,

Delta, BC

Common Shares

25,000

<1%

12,500 @ $0.225 on Sept. 28, 2006

12,500 @ $0.30 on Aug. 23, 2007

Donna M. Moroney,

Vancouver, BC

Common Shares

45,000

<1%

25,000 @ $0.225 on Sept. 28, 2006

20,000 @ $0.30 on Aug. 28, 2007


In accordance with the Exchange Corporate Finance Policy 5.4, and pursuant to an escrow agreement to be entered into among each of the above noted insiders, directors, officers and the Resulting Issuer and based on the Resulting Issuer being an “emerging issuer”, the securities of each security holder will be escrowed securities pursuant to an 18-month escrow.  Twenty-five percent of the escrowed securities will be exempt from escrow effective on the receipt of notice confirming the listing of the approval of the Change of Business by the Exchange.  The balance of the escrowed securities will be released over 18 months in equal tranches at six month intervals from the date of the approval of the Change of Business by the Exchange, with 25% of the escrowed securities being released in each tranche.  The escrow release schedule is subject to acceleration in accordance with National Policy 46-201.

1.13

AUDITOR(S), TRANSFER AGENT(S) AND REGISTRAR(S)

BDO Dunwoody LLP, located at Suite 604, 750 West Pender Street Vancouver, B.C., V6C 2T7, will be the auditors of the Resulting Issuer.  Pacific Corporate & Trust Company at its principal offices in Vancouver, British Columbia will remain as the registrar and transfer agent of the Resulting Issuer’s Common Shares following completion of the Change of Business and the Financing.

ARTICLE 2
GENERAL MATTERS

2.1

SPONSORSHIP AND AGENT RELATIONSHIP

2.1.1

Sponsor

Canaccord Capital Corporation, Suite 2200, 609 Granville Street, Vancouver, B.C., V7Y 1H2, has agreed to act as Sponsor in regards Issuer’s Change of Business in accordance with Exchange policies.  

2.1.2

Relationships

Other than set out above, the Issuer has not entered into any agreement with any registrant to provide sponsorship or corporate finance services, either now or in the future.

2.2

EXPERTS

2.2.1

Opinions

There are no experts responsible for opinions referred to in this Filing Statement, other than the author of the Cordillera del Condor Report.

2.2.2

Interest of Experts

No person or company whose profession or business gives authority to a statement made by the person or company and who is named as having prepared or certified a part of this Filing Statement or as having prepared or certified a report or valuation described or included in this Filing Statement holds any beneficial interest, direct or indirect, in any property of the Resulting Issuer or of an associate or affiliate of the Resulting Issuer and no such person is expected to be elected, appointed or employed as a director, senior officer or employee of the Resulting Issuer or of an associate or affiliate of the Resulting Issuer and no such person is a promoter of the Resulting Issuer or an associate or affiliate of the Issuer or the Resulting Issuer.

2.2.3

Expertised Reports

Other than the Cordillera del Condor Report., there is no expertised report prepared to support the recommendation(s) of the Board of Directors of the Issuer.

2.3

OTHER MATERIAL FACTS

2.3.1

Other Material Facts

There are no material facts about the Issuer, the Resulting Issuer or the Change of Business and the Financing that are not disclosed under the preceding items and are necessary in order for the Filing Statement to contain full, true and plain disclosure of all material facts relating to the Issuer and the Resulting Issuer, assuming completion of the Change of Business and the Financing.

2.4

BOARD APPROVAL

2.4.1

Board Approval

The Board of Directors of the Issuer have approved this Filing Statement.










ARTICLE 3
FINANCIAL STATEMENTS


DORATO RESOURCES INC.

(A Development Stage Company)

REPORT AND FINANCIAL STATEMENTS

January 31, 2007 and 2006

(Stated in US Dollars)









A PARTNERSHIP OF INCORPORATED PROFESSIONALS

AMISANO HANSON

CHARTERED ACCOUNTANTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders,

Dorato Resources Inc.

(A Development Stage Company)

We have audited the accompanying balance sheets of Dorato Resources Inc. (A Development Stage Company) as at January 31, 2007 and 2006 and the related statements of operations, cash flows and stockholders’ equity (deficiency) for each of the years then ended and for the period from February 1, 1997 (Date of Inception of Development Stage) to January 31, 2007.  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.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit 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 financial statements referred to above present fairly, in all material respects, the financial position of Dorato Resources Inc. as at January 31, 2007 and 2006 and the results of its operations and its cash flows for each of the years then ended and for the period from February 1, 1997 (Date of Inception of Development Stage) to January 31, 2007 in conformity with accounting principles generally accepted in the United States of America.


Vancouver, Canada

“AMISANO HANSON”

March 27, 2007

Chartered Accountants



750 WEST PENDER STREET, SUITE 604

TELEPHONE:

604-689-0188

VANCOUVER CANADA

FACSIMILE:

604-689-9773

V6C 2T7

E-MAIL:

amisan@telus.net












DORATO RESOURCES INC.

(A Development Stage Company)

BALANCE SHEETS

January 31, 2007 and 2006

(Stated in US Dollars)


ASSETS

  
 

2007

2006

   

Current

  

Cash and cash equivalents

$   361,726

$    1,451

Amount receivable

1,055

1,820

Prepaid expenses

1,673

992

   
 

364,454

4,263

Equipment – Note 3

803

1,950

   
 

$   365,257

$    6,213

   

LIABILITIES

  
   

Current

  

Accounts payable and accrued liabilities – Note 6

$     6,719

$   16,240

Due to related parties – Note 6

-

193,399

Loans payable – Note 4

-

6,515

   
 

6,719

216,154

   

STOCKHOLDERS’ EQUITY (DEFICIENCY)

  
   

Capital stock – Notes 1, 4, 5 and 6

  

Authorized:

  

100,000,000 common shares without par value

  

Issued:

  

4,618,187 common shares (2006: 1,262,562 common shares)

5,853,686

5,212,211

Deficit accumulated during the development stages

(5,463,341)

(5,383,958)

Accumulated other comprehensive loss

(31,807)

(38,194)

   
 

358,538

(209,941)

   
 

$   365,257

$     6,213

Nature of Operations – Note 1


APPROVED BY THE DIRECTORS:

  
   
   

“Anton J. Drescher”

Director

 

“Rowland Perkins”

Director

Anton J. Drescher

  

Rowland Perkins

 


SEE ACCOMPANYING NOTES











DORATO RESOURCES INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

for the years ended January 31, 2007 and 2006 and

for the period February 1, 1997 (Date of Inception of Development Stage) to January 31, 2007

(Stated in US Dollars)


   

February 1, 1997

   

(Date of

   

Inception of

   

Development

   

Stage) to

   

January 31,

 

2007

2006

2007

    

General and administrative expenses

   

Amortization of equipment

$     1,147

$     1,350

$    15,825

Automobile expenses

-

-

1,672

Consulting fees – Note 6

26,411

36,849

392,764

Filing fees

8,714

6,894

52,975

Insurance

-

-

1,318

Management fees – Note 6

-

-

87,486

Office and general – Note 6

8,418

2,808

154,607

Printing

-

-

6,989

Professional fees – Note 6

21,611

15,713

250,679

Product marketing

-

-

46,315

Rent

12,171

11,447

123,791

Telephone

-

-

42,922

Transfer agent fees

5,685

3,240

35,048

Travel and entertainment

-

1,206

46,006

Website maintenance

-

-

51,311

    

Loss before non-operating items

(84,157)

(79,507)

(1,309,708)

    

Non-operating items

   

Gain on settlement of accounts payable

-

-

15,833

Equity share of loss from

 investment

-

-

(113,963)

Loss on write-down of investment and

 advances

-

-

(112,402)

Gain on sale of subsidiary

-

-

200

Interest income

4,774

-

8,354

Severance pay – Note 6

-

-

(50,000)

Loss on disposal of equipment

-

-

(4,318)

    
 

4,774

-

(256,296)

    

Loss from continuing operations

(79,383)

(79,507)

(1,566,004)


…/cont’d

SEE ACCOMPANYING NOTES











Continued

DORATO RESOURCES INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

for the years ended January 31, 2007 and 2006 and

for the period February 1, 1997 (Date of Inception of Development Stage) to January 31, 2007

(Stated in US Dollars)


   

February 1, 1997

   

(Date of

   

Inception of

   

Development

   

Stage) to

   

January 31,

 

2007

2006

2007

 



 

Loss from discontinued operations

-

-

(546,870)

    

Net loss for the period

(79,383)

(79,507)

(2,112,874)

    

Other comprehensive income (loss):

   

Foreign currency adjustments

6,387

(11,162)

(31,807)

    

Comprehensive loss

$  (72,996)

$  (90,669)

$  (2,144,681)

    

Basic loss per share

$     (0.03)

$     (0.07)

 
    

Weighted average number of shares outstanding

2,415,721

1,262,562

 


SEE ACCOMPANYING NOTES











DORATO RESOURCES INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

for the years ended January 31, 2007 and 2006 and

for the period February 1, 1997 (Date of Inception of Development Stage) to January 31, 2007

(Stated in US Dollars)


   

February 1, 1997

   

(Date of

   

Inception of

   

Development

   

Stage) to

   

January 31,

 

2007

2006

2007

    

Operating Activities

   

Net loss for the period from continuing operations

$   (79,383)

$   (79,507)

$  (1,566,004)

Items not involving cash:

   

Amortization of equipment

1,147

1,350

15,825

Foreign exchange

-

-

(12,106)

Loss on disposal of equipment

-

-

4,318

Gain on settlement of accounts payable

-

-

(15,833)

Equity share of loss (income) from investment

-

-

113,963

Gain on sale of subsidiary

-

-

(200)

Loss on write-down of investment and advances

-

-

112,402

Changes in continuing operations non-cash

 working capital balances consist of:

-

-

 

Amount receivable

765

376

(25,450)

Prepaid expenses

(681)

(94)

(4,823)

Accounts payable and accrued liabilities

(9,521)

(20,083)

32,123

Advances to subsidiary

-

-

(81,556)

    

Net cash used in operating activities

(87,673)

(97,958)

(1,427,341)

    

Investing Activities:

   

Acquisition of investment

-

-

(488,424)

Due from related parties

-

-

(645,299)

Proceeds on disposal of equipment

-

-

5,210

Proceeds on sale of subsidiary

-

-

200

Purchase of capital assets

-

-

(21,064)

Repayment of (increase in) advance receivable

-

-

1,124

Repayment of notes receivable

-

-

-

    

Net cash used in investing activities

-

-

(1,148,253)


…/cont’d

SEE ACCOMPANYING NOTES











Continued

DORATO RESOURCES INC.

 (A Development Stage Company)

STATEMENTS OF CASH FLOWS

for the years ended January 31, 2007 and 2006 and

for the period February 1, 1997 (Date of Inception of Development Stage) to January 31, 2007

(Stated in US Dollars)


   

February 1, 1997

   

(Date of

   

Inception of

   

Development

   

Stage) to

   

January 31,

 

2007

2006

2007

    

Financing Activities:

   

Common shares issued for cash

420,561

-

2,271,550

Due to related parties

21,000

110,068

291,877

Loans payable

-

443

6,515

    

Net cash provided by financing activities

441,561

110,511

2,569,942

    

Effect of foreign currency translation

6,387

(11,162)

(31,807)

    

Increase (decrease) in cash during the period from

 continuing operations

360,275

1,391

(37,459)

    

Cash flows from discontinued operations

-

-

395,272

    

Net increase in cash

360,275

1,391

357,813

    

Cash, beginning of the period

1,451

60

3,913

    

Cash and cash equivalents, end of the period

$  361,726

$   1,451

$  361,726

    

Cash and cash equivalents consist of:

   

Cash

$   17,455

$1,451

$   17,455

Term deposits

344,271

-

344,271

    
 

$  361,726

$1,451

$  361,726


Non-cash Transactions – Note 10

SEE ACCOMPANYING NOTES











DORATO RESOURCES INC.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIENCY)

for the period ended January 31, 1982 to January 31, 2007

(Stated in US Dollars)


    

Deficit

  
    

Accumulated

Accumulated

 
  

Common

 

During the

Other

 
 

Number

Stock

 

Development

Comprehensive

 
 

of Shares

Price

Amount

Stages

Income (loss)

Total

       

Issued on incorporation 1983

494

$  48.56

$   23,989

$  -

$  -

$  23,989

Escrow shares issued for resource property 1983

1,875

3.24

6,073

-

-

6,073

Issued for prospectus 1984

2,500

50.00

125,000

-

-

125,000

Issued for private placement 1987

1,140

181.03

206,464

-

-

206,464

Exercise of share purchase warrants 1987

1,000

75.42

75,420

-

-

75,420

Exercise of share purchase options 1987

237

138.77

32,959

-

-

32,959

Issued for settlement of debt 1987

554

90.51

50,142

-

-

50,142

Exercise of share purchase options 1988

282

162.50

45,905

-

-

45,905

Issued for settlement of debt 1988

264

772.77

204,011

-

-

204,011

Issued for private placement 1989

250

84.44

21,111

-

-

21,111

Exercise of share purchase options 1989

62

331.02

20,689

-

-

20,689

Issued for settlement of debt 1989

616

168.87

104,023

-

-

104,023

Exercise of share purchase warrants 1990

250

154.24

38,560

-

-

38,560

Issued for private placement 1990

50

171.38

8,569

-

-

8,569

Exercise of share purchase options 1990

478

336.09

160,650

-

-

160,650

Issued for settlement of debt 1990

328

548.81

180,009

-

-

180,009

Issued for private placement 1991

1,563

181.53

283,645

-

-

283,645

Exercise of share purchase options 1991

1,221

97.75

119,396

-

-

119,396

Issued for settlement of debt 1991

517

348.99

180,600

-

-

180,600

Exercise of share purchase options 1992

3,075

16.55

50,898

-

-

50,898

Exercise of share purchase options 1993

2,000

15.51

31,013

-

-

31,013

Issued for private placement 1993

5,000

15.51

77,531

-

-

77,531

Issued for settlement of debt 1993

2,454

31.01

76,082

-

-

76,082

Exercise of share purchase options 1994

2,425

15.51

37,603

-

-

37,603

Issued for private placement 1994

5,000

29.28

146,424

-

-

146,424

Exercise of share purchase warrants 1994

5,000

29.28

146,424

-

-

146,424

Issued for acquisition of subsidiary company 1994

11,250

14.64

164,727

-

-

164,727

Issued for settlement of debt 1994

2,488

29.29

72,848

-

-

72,848


…/cont’d

SEE ACCOMPANYING NOTES











Continued

DORATO RESOURCES INC.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIENCY)

for the period ended January 31, 1982 to January 31, 2007

(Stated in US Dollars)


    

Deficit

  
    

Accumulated

Accumulated

 
  

Common

 

During the

Other

 
 

Number

Stock

 

Development

Comprehensive

 
 

of Shares

Price

Amount

Stages

Income (loss)

Total

 







Issued for private placement 1995

2,500

29.14

72,854

-

-

72,854

Issued for private placement 1995

15,000

14.57

218,563

-

-

218,563

Exercise of share purchase warrants 1995

1,250

14.57

18,214

-

-

18,214

Exercise of share purchase warrants 1995

1,000

29.14

29,142

-

-

29,142

Exercise of share purchase warrants 1995

188

29.14

5,464

-

-

5,464

Exercise of share purchase warrants 1995

500

14.57

7,285

-

-

7,285

Issued for private placement 1996

6,563

14.48

95,014

-

-

95,014

Exercise of share purchase warrants 1996

1,875

18.10

33,934

-

-

33,934

Exercise of share purchase warrants 1996

1,313

36.20

47,507

-

-

47,507

Exercise of share purchase warrants 1997

6,563

14.45

94,806

-

-

94,806

Exercise of share purchase options 1997

8,250

5.78

47,674

-

-

47,674

Net loss from inception to January 31, 1997

-

 

-

(3,350,470)

-

(3,350,470)

Other comprehensive income from inception to

 January 31, 1997

-

 

-

 

3

3

       

Balance January 31, 1997

97,375

 

3,361,222

(3,350,470)

3

10,755

Issued for cash:

      

Private placement

25,000

11.49

287,294

 

-

287,294

Share purchase options

4,812

14.36

69,130

 

-

69,130

Share subdivision – 2 shares for 1 share

-

 

-

 

-

 

Issued for cash:

      

Private placement

15,625

11.49

179,559

 

-

179,559

Net loss for year

-


-

(574,492)

-

(574,492)

Other comprehensive loss for the year

-

 

-

-

(12,347)

(12,347)


…/cont’d

SEE ACCOMPANYING NOTES











Continued

DORATO RESOURCES INC.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIENCY)

for the period ended January 31, 1982 to January 31, 2007

(Stated in US Dollars)


    

Deficit

  
    

Accumulated

Accumulated

 
  

Common

 

During the

Other

 
 

Number

Stock

 

Development

Comprehensive

 
 

of Shares

Price

Amount

Stages

Income (loss)

Total

  


    

Balance January 31, 1998

142,812


3,897,205

(3,924,962)

(12,344)

(40,101)

Issued for cash:

 


    

Share purchase warrants

24,687

12.35

304,866

-

-

304,866

Share purchase warrants

6,250

10.74

67,114

-

-

67,114

Share purchase options

5,688

13.42

76,342

-

-

76,342

 

-


    

Net loss for year

-


-

(491,105)

-

(491,105)

Other comprehensive loss for the year

-


-

-

(15,396)

(15,396)

  


    

Balance January 31, 1999

179,437


4,345,527

(4,416,067)

(27,740)

(98,280)

Issued for cash

-


    

Share purchase warrants

9,688

12.43

120,451

-

-

120,451

Net loss for the year

-


-

(101,300)

-

(101,300)

Other comprehensive income for the year

-


-

-

2,484

2,484

  


    

Balance, January 31, 2000

189,125


4,465,978

(4,517,367)

(25,256)

(76,645)

Share consolidation – 1 share for 2 shares

 


-

-

-

-

Issued for cash:

 


    

Private placement

750,000

0.53

399,148

-

-

399,148

Share purchase warrants

3,125

0.53

1,663

-

-

1,663

Net loss for the year

-


-

(166,240)

-

(166,240)

Other comprehensive income for the year

-


-

-

8,357

8,357

  


    

Balance, January 31, 2001

942,250


4,866,789

(4,683,607)

(16,899)

166,283


…/cont’d






SEE ACCOMPANYING NOTES











Continued

DORATO RESOURCES INC.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIENCY)

for the period ended January 31, 1982 to January 31, 2007

(Stated in US Dollars)


    

Deficit

  
    

Accumulated

Accumulated

 
  

Common

 

During the

Other

 
 

Number

Stock

 

Development

Comprehensive

 
 

of Shares

Price

Amount

Stages

Income (loss)

Total

       

Issued for cash:

 


    

Private placement

125,000

2.00

247,316

-

-

247,316

Share purchase warrants

196,250

0.50

98,106

-

-

98,106

Escrow cancellation

(938)

 

-

-

-

-

Net loss for the year

-

 

-

(297,808)

-

(297,808)

Other comprehensive loss for the year

-

 

-

-

(5,878)

(5,878)

       

Balance January 31, 2002

1,262,562

 

5,212,211

(4,981,415)

(22,777)

208,019

Net loss for the year

-

 

-

(196,710)

-

(196,710)

Other comprehensive income for the year

-

 

-

-

3,535

3,535

       

Balance, January 31, 2003

1,262,562

 

5,212,211

(5,178,125)

(19,242)

14,844

Net loss for the year

-

 

-

(64,852)

-

(64,852)

Other comprehensive income for the year

-

 

-

-

(1,366)

(1,366)

       

Balance, January 31, 2004

1,262,562

 

5,212,211

(5,242,977)

(20,608)

(51,374)

Net loss for the year

-

 

-

(61,474)

-

(61,474)

Other comprehensive income for the year

-

 

-

-

(6,424)

(6,424)

       

Balance, January 31, 2005

1,262,562

 

5,212,211

(5,304,451)

(27,032)

(119,272)

Net loss for the year

-

 

-

(79,507)

-

(79,507)

Other comprehensive income for the year

-

 

-

-

(11,162)

(11,162)

       

Balance, January 31, 2006

1,262,562

 

5,212,211

(5,383,958)

(38,194)

(209,941)

Private placement

2,200,000

0.19

420,561

-

-

420,561

Debt settlements

1,155,625

0.19

220,914

-

-

220,914

Net loss for the year

-

 

-

(79,383)

-

(79,383)

Other comprehensive income for the year

-

 

-

-

6,387

6,387

       

Balance, January 31, 2007

4,618,187

 

$5,853,686

$(5,463,341)

$ (31,807)

$358,538


*

The number of shares issued and outstanding have been restated to give retroactive effect to various consolidations and a forward split of its share capital     (Note 1).

SEE ACCOMPANYING NOTES











DORATO RESOURCES INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

January 31, 2007 and 2006

(Stated in U.S. Dollars)

Note 1

Nature of Operations

Dorato Resources Inc. (the “Company”) is a public company in the development stage and is listed on the NEX Board of the TSX Venture Exchange.  During the year ended January 31, 2005, the shareholders approved a change of the Company’s primary business focus of developing its Jackalope Audio Website to other business opportunities, including the acquisition, exploration and development of natural resource properties.  Although the Company is actively seeking a resource property, no decision has been made to date.

Dorato Resources Inc.’s corporate jurisdiction is the Province of British Columbia.  The Company was incorporated in British Columbia, Canada on May 26, 1981 as Force Energy Ltd.  On September 10, 1981 the Company changed its name to Force Resources Ltd.  On December 1, 1994 the Company changed its name to Force Technologies Inc. and consolidated its common shares on a five old for one new basis.  On October 1, 1997 the Company changed its name to Glassmaster Industries Inc. and forward split its common shares on a one old for two new basis.  On April 24, 1998 the Company continued its corporate jurisdiction into the state of Wyoming, United States of America.  On January 19, 2000, the Company changed its name to Interlink Systems Inc. and consolidated its common shares on a ten old for one new basis.  On August 14, 2000, the Company changed its name to iQuest Networks Inc. and consolidated its common shares on a two old for one new basis.  On October 28, 2003, the Company changed its name to Quest Ventures Inc. and consolidated its common shares on a four old for one new basis.  On October 9, 1997 the Company incorporated its wholly-owned subsidiary Glassmaster Industries Inc. (“Glassmaster”) in the State of Nevada, United States of America.  On January 15, 2001, the Company sold 100% of its interest in Glassmaster.  On March 1, 2001, the Company incorporated a wholly-owned subsidiary, Jackalope Audio Inc, under the Yukon Business Corporations Act.  On March 31, 2005, the Company sold 100% of its interest in Jackalope Audio Inc.  On April 24, 2006, the Company changed its name to Dorato Resources Inc. and consolidated its common shares on two old shares for one new basis.

On August 21, 2006, the Company continued its corporate jurisdiction from the State of Wyoming into the Province of British Columbia.  As a result of the Company’s continuation of its incorporation from Wyoming into British Columbia and as it meets the criteria of a “foreign private issuer”, as defined under Rule 3b-4 of the United States Securities Exchange of 1934 (the “Exchange Act”), in lieu of filing in the United States of America as a domestic issuer under Section 13 or 15(d) the Exchange Act, the Company will now be filing as a foreign private issuer under Section 13 or 15(d) of the Exchange Act.  The Company files in Canada as a Securities and Exchange issuer in accordance with National Instrument 52-107, Part 4.











Dorato Resources Inc.

(A Development Stage Company)

Notes to the Financial Statements

January 31, 2007 and 2006

(Stated in US Dollars) – Page 2

Note 2

Summary of Significant Accounting Policies

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.  Actual results may differ from these estimates.

The financial statements, in management’s opinion, have been properly prepared within the framework of the significant accounting policies summarized below:

Development Stage Company

The Company is a development stage company as defined in Statement of Financial Accounting Standards (“FAS”) No. 7.  For the purpose of providing cumulative amounts for the statements of operations and cash flows, these amounts consider only those losses for the period from February 1, 1997 to January 31, 2007, the period in which the Company has undertaken a new development stage activity.

Cash Equivalents

Cash equivalents are highly liquid Canadian dollar investments in term deposits with a major financial institution that are readily convertible to cash with maturities of three months or less.

Equipment and Amortization

Equipment consists of office equipment and is recorded at cost.  The Company provides for amortization using the declining balance method at the rate of 20% per annum.

Impairment of Long-lived Assets

The Company reports the impairment of long-lived assets and certain intangibles in accordance with FAS No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets”.  Certain long-lived assets and identifiable intangibles held by the Company are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.  Accordingly, the impairment loss is recognised in the period it is determined.










Dorato Resources Inc.

(A Development Stage Company)

Notes to the Financial Statements

January 31, 2007 and 2006

(Stated in US Dollars) – Page 3

Note 2

Summary of Significant Accounting Policies – (cont’d)

Foreign Currency Translation

The Company translates amounts into the functional currency, Canadian dollars, and the reporting currency, United States dollars in accordance with FAS No. 52. “Foreign Currency Translation.”  At each balance sheet date, recorded balances that are denominated in a currency other than U.S. dollars are adjusted to reflect the current exchange rate which may give rise to a translation adjustment which is reported as a component of other comprehensive income in the equity section of the balance sheet.  

Monetary assets and liabilities are translated into Canadian dollars at the exchange rate in effect at the end of the year.  Non-monetary assets and liabilities are translated at the exchange rate prevailing when the assets were acquired or the liabilities assumed.  Revenues and expenses are translated at the rate approximating the rate of exchange on the transaction date.  All exchange gains and losses on transactions denominated in currencies other than the functional currency are included in the determination of net income (loss) for the period.

Website Maintenance

Website maintenance costs are expensed as incurred.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes pursuant to FAS No. 109 "Accounting for Income Taxes”.  Under the assets and liability method of FAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Basic Loss per Share

The Company reports basic loss per share in accordance with FAS No. 128,  “Earnings per Share”.  Basic loss per share is computed using the weighted average number of common shares outstanding during the years less shares subject to repurchase.  Diluted loss per share has not been provided as it would be antidilutive.  










Dorato Resources Inc.

(A Development Stage Company)

Notes to the Financial Statements

January 31, 2007 and 2006

(Stated in US Dollars) – Page 4

Note 2

Summary of Significant Accounting Policies – (cont’d)

Financial Instruments

The carrying value of cash and cash equivalents and accounts payable and accrued liabilities approximate fair value because of the short maturity of those instruments.  Due to related parties and loans payable also approximate fair value.  Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Comprehensive Loss

FAS No. 130 “Reporting Comprehensive Income” establishes guidelines for the reporting and display of comprehensive income and its components in financial statements.  Comprehensive loss includes foreign currency translation adjustments.  Upon adoption, all years presented were restated to show the reclassification of other comprehensive income from net loss.

Note 3

Equipment


  

2007

 
  

Accumulated

 
 

Cost

Amortization

Net

    

Office equipment

$12,606

$11,803

$803


  

2006

 
  

Accumulated

 
 

Cost

Amortization

Net

    

Office equipment

$12,606

$10,656

$1,950


Note 4

Loans Payable

During the year ended January 31, 2007, the Company settled loans payable totalling $6,515 by issuing 33,493 common shares at $0.19 (CDN$0.225) per share.

Note 5

Capital Stock – Notes 4 and 6

On September 26, 2006, the Company issued 2,200,000 units of $0.19 (CDN$0.225) per unit for total proceeds of $420,561.  Each unit consists of one common share and one share purchase warrant.  Each warrant entitles the holder the right to purchase one common share of the Company at $0.25 (CDN$0.30) per share. These warrants expire on September 27, 2007.











Dorato Resources Inc.

(A Development Stage Company)

Notes to the Financial Statements

January 31, 2007 and 2006

(Stated in US Dollars) – Page 5

Note 6

Related Party Transactions

The Company has incurred expenses paid to directors, former directors, officers, companies controlled by directors of the Company and companies with directors in common with the Company as follows:


   

February 1,

   

1997 (Date of

   

Inception of

   

Development

   

Stage) to

   

January 31,

 

2007

2006

2007

    

Consulting fees

$   26,411

$   25,936

$   345,297

Management fees

-

-

87,486

Office and general

-

-

5,387

Professional fees

9,876

3,028

50,679

Severance pay

-

-

50,000

    
 

$   36,287

$   28,964

$  538,849


Included in accounts payable at January 31, 2007 is $1,216 (2006:  $1,338) with respect to fees and expenses due to directors of the Company and companies controlled by directors of the Company.

Due to related parties consist of advances from a director of the Company.  These amounts are unsecured, non-interest bearing and have no specific terms for repayment.  During the year ended January 31, 2007, the Company settled this debt owing to a director of the Company totalling $214,399 by issuing 1,122,132 common shares at $0.19 (CDN$0.225) per share.

Note 7

Deferred Tax Assets

The following table summarizes the significant components of the Company’s deferred tax assets:


 

2007

2006

   

Deferred tax assets

  

Net operating loss carryforward

$   457,961

$   435,281

   

Gross deferred tax assets

$457,961

$435,281

Valuation allowance for deferred tax asset

(457,961)

(435,281)

   
 

$             -

$             -












Dorato Resources Inc.

(A Development Stage Company)

Notes to the Financial Statements

January 31, 2007 and 2006

(Stated in US Dollars) – Page 6

Note 7

Deferred Tax Assets – (cont’d)

The amount taken into income as deferred tax assets must reflect that portion of the income tax loss carryforwards, which is more likely-than-not to be realized from future operations.  The Company has chosen to provide an allowance of 100% against all available income tax loss carryforwards, regardless of their time of expiry, due to sustained losses from operations.  Management believes that it is more likely-than-not that the carryforwards will expire and will not be realized from future operations.

Note 8

Income Taxes

No provision for income taxes has been provided in these financial statements due to the net loss.  At January 31, 2007, the Company has net operating loss carryforwards, which expire commencing in 2019, totalling approximately $1,346,710 the potential tax benefit of which has not been recorded in the financial statements.

Note 9

New Accounting Standards

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FAS Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”.  The interpretation clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”.  Specifically, the pronouncement prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The interpretation also provides guidance on the related derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition of uncertain tax position.  The interpretation is effective for fiscal years beginning after December 15, 2006.  The adoption of FIN 48 is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows; however, the Company is still analyzing the effects of FIN 48.

In September 2006, the FASB issued FAS No. 157, “Fair Value Measurements”.  This Statement defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure related to the use of fair value measures in financial statements.  The Statement is to be effective for the Company’s financial statements issued in 2008; however, earlier application is encouraged.  The Company is currently evaluating the timing of adoption and the impact that adoption might have on its financial position or results of operations.











Dorato Resources Inc.

(A Development Stage Company)

Notes to the Financial Statements

January 31, 2007 and 2006

(Stated in US Dollars) – Page 7

Note 9

New Accounting Standards – (cont’d)

In September 2006, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 108 (“SAB 108”).  Due to diversity in practice among registrants, SAB 108 expressed SEC staff views regarding the process by which misstatements in financial statements are evaluated for purposes of determining whether financial statement restatement is necessary.  SAB 108 is effective for fiscal years ending after November 15, 2006, and early application is encouraged.  The Company does not believe SAB 108 will have a material impact on its financial position or results from operations.

In December 2006, the FASB issued FAS Staff Position (“FSP”) EITF 00-19-2, “Accounting for Registration Payment Arrangements”.  This FSP specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement should be separately recognized and measured in accordance with FAS No. 5, “Accounting for Contingencies”.  This FSP is effective immediately for registration payment arrangements and the financial instruments subject to those arrangements that re entered into or modified subsequent to December 31, 2006.  For registration payment arrangements and financial instruments subject to those arrangements that were entered into prior to December 31, 2006, the guidance in the FSP is effective January 1, 2006 for the Company.  The Company does not believe that this FSP will have a material impact on its financial position or results from operations.

On February 15, 2007, the FASB issued FAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities”.  This Statement establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities.  FAS No. 159 is effective for the Company’s financial statements issued in 2008.  The Company is currently evaluating the impact that the adoption of FAS No. 159 might have on its financial position or results of operations.

Note 10

Non-cash Transactions

Investing and financing activities that do not have a direct impact on current cash flows are excluded from the statements of cash flows:

a)

During the year ended January 31, 2007, the Company settled loans payable totalling $6,515 by issuing 33,493 common shares at $0.19 (CDN$0.225) per share (Note 4).

b)

During the year ended January 31, 2007, the Company settled the debt owing to a director of the Company totalling $214,399 by issuing 1,122,132 common shares at $0.19 (CDN$0.225) per share (Note 6).

These transactions were excluded from the statements of cash flows.


























DORATO RESOURCES INC.

(formerly Quest Ventures Inc.)

(A Development Stage Company)

REPORT AND FINANCIAL STATEMENTS

January 31, 2006 and 2005

(Stated in US Dollars)










A PARTNERSHIP OF INCORPORATED PROFESSIONALS

AMISANO HANSON

 

CHARTERED ACCOUNTANTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders,

Dorato Resources Inc.

(formerly Quest Ventures Inc.)

(A Development Stage Company)

We have audited the accompanying balance sheets of Dorato Resources Inc. (formerly Quest Ventures Inc.) (A Development Stage Company) as of January 31, 2006 and 2005 and the related statements of operations, cash flows and stockholders’ deficiency for each of the years then ended and for the period from inception of the development stage, February 1, 1997 to January 31, 2006.  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.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America).  Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit 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 financial statements referred to above present fairly, in all material respects, the financial position of Dorato Resources Inc. as of January 31, 2006 and 2005 and the results of its operations and its cash flows for each of the years then ended and for the period from inception of the development stage, February 1, 1997 to January 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company is in the development stage, and has no established source of revenue and is dependent on its ability to raise capital from stockholders or other sources to sustain operations.  These factors, along with other matters as set forth in Note 1, raise substantial doubt that the Company will be able to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


Vancouver, Canada

amisan@telus.net

March 22, 2006, except as to Note 1, which is as of April 24, 2006


Chartered Accountants

750 WEST PENDER STREET, SUITE 604

TELEPHONE:

604-689-0188

VANCOUVER CANADA

FACSIMILE:

604-689-9773

V6C 2T7

E-MAIL:

amisan@telus.net











DORATO RESOURCES INC.

(formerly Quest Ventures Inc.)

(A Development Stage Company)

BALANCE SHEETS

January 31, 2006 and 2005

(Stated in US Dollars)


ASSETS

2006

2005

   

Current

  

Cash

$       1,451

$            60

Amount receivable

1,820

2,196

Prepaid expenses

992

898

   
 

4,263

3,154

Equipment – Note 3

1,950

3,300

   
 

$       6,213

$       6,454

   

LIABILITIES

  
   

Current

  

Accounts payable and accrued liabilities – Note 6

$     16,240

$     36,323

Due to related parties – Note 6

193,399

83,331

Loans payable – Note 5

6,515

6,072

   
 

216,154

125,726

   

                                                           STOCKHOLDERS DEFICIENCY

  
    
 

Capital stock – Note 1

  
 

Authorized:

  
 

100,000,000 common shares without par value

  
 

Issued:

  
 

1,262,562 common shares (2005: 1,262,562 common shares)

5,212,211

5,212,211

 

Deficit accumulated during the development stages

(5,383,958)

 (5,304,451)

 

Accumulated other comprehensive loss

(38,194)

(27,032)

    
  

(209,941)

(119,272)

    
  

$       6,213

$       6,454

    

Nature and Continuance of Operations – Note 1

Subsequent Events – Note 10


APPROVED BY THE DIRECTORS:

  
   
   

Anton J. Drescher

Director

 

Rowland Perkins

Director

Anton J. Drescher

  

Rowland Perkins

 

SEE ACCOMPANYING NOTES










DORATO RESOURCES INC.

(formerly Quest Ventures Inc.)

(A Development Stage Company)

STATEMENTS OF OPERATIONS

for the years ended January 31, 2006 and 2005

and February 1, 1997 (Date of Inception of Development Stage) to January 31, 2006

(Stated in US Dollars)


   

February 1, 1997

   

(Date of

   

Inception of

   

Development

   

Stage) to

  

January 31,

 

2006

2005

2006

    

General and Administrative Expenses

   

Amortization of equipment

$       1,350

$       1,570

$      14,678

Automobile expenses

-

-

1,672

Consulting fees – Note 6

36,849

23,152

366,353

Filing fees

6,894

5,695

44,261

Insurance

-

-

1,318

Management fees – Note 6

-

-

87,486

Office and general – Note 6

2,808

2,933

146,189

Printing

-

-

6,989

Professional fees – Note 6

15,713

11,737

229,068

Product marketing

-

-

46,315

Rent

11,447

10,650

111,620

Telephone

-

-

42,922

Transfer agent fees

3,240

3,562

29,363

Travel and entertainment

1,206

998

46,006

Website maintenance

-

-

51,311

    

Loss before non-operating items

 (79,507)

 (60,297)

 (1,225,551)

    

Non-operating items

   

Gain on settlement of accounts payable

-

-

15,833

Equity share of loss from

 investment – Note 4

-

-

(113,963)

Loss on write-down of investment and

 advances – Note 4

-

(1,177)

(112,402)

Gain on sale of subsidiary

-

-

200

Interest income

-

-

3,580

Severance pay – Note 6

-

-

 (50,000)

Loss on disposal of equipment

-

-

 (4,318)

    
 

-

 (1,177)

 (261,070)

    

Loss from continuing operations

 (79,507)

 (61,474)

 (1,486,621)

    

…/Cont’d.

SEE ACCOMPANYING NOTES










Continued

DORATO RESOURCES INC.

 (formerly Quest Ventures Inc.)

(A Development Stage Company)

STATEMENTS OF OPERATIONS

for the years ended January 31, 2006 and 2005

and February 1, 1997 (Date of Inception of Development Stage) to January 31, 2006

(Stated in US Dollars)


   

February 1, 1997

   

(Date of

   

Inception of

   

Development

   

Stage) to

   

January 31,

 

2006

2005

2006

 



 

Loss from discontinued operations

-

-

 (546,870)

    

Net loss for the period

 (79,507)

 (61,474)

 (2,033,491)

    

Other comprehensive income (loss):

   

Foreign currency adjustments

 (11,162)

 (6,424)

 (38,194)

    

Comprehensive loss

$    (90,669)

$  (67,898)

$   (2,071,685)

    

Basic loss per share

$       (0.07)

$      (0.05)

 
    

Weighted average shares outstanding

1,262,562

1,262,562

 
    




SEE ACCOMPANYING NOTES












DORATO RESOURCES INC.

(formerly Quest Ventures Inc.)

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

for the years ended January 31, 2006 and 2005

and February 1, 1997 (Date of Inception of Development Stage) to January 31, 2006

(Stated in US Dollars)


   

February 1, 1997

   

(Date of

   

Inception of

   

Development

   

Stage) to

   

January 31,

 

2006

2005

2006

    

Cash flow used in operating activities

   

Net loss for the period from continuing operations

$    (79,507)

$   (61,474)

$   (1,486,621)

Items not involving cash:

   

Amortization of equipment

1,350

1,570

14,678

Foreign exchange

-

-

 (12,106)

Loss on disposal of equipment

-

-

4,318

Gain on settlement of accounts payable

-

-

 (15,833)

Equity share of loss (income) from investment

-

-

113,963

Gain on sale of subsidiary

-

-

 (200)

Loss on write-down of investment and advances

-

1,177

112,402

Changes in continuing operations non-cash

 working capital balances consist of:

   

Amount receivable

376

 (1,007)

 (26,215)

Due from related parties

-

-

 (645,299)

Prepaid expenses

 (94)

31

 (4,142)

Accounts payable

 (20,083)

20,668

41,644

Advances to subsidiary

-

-

 (81,556)

Due to related parties

110,068

42,906

270,877

    

Net cash provided by (used in) operating activities

12,110

3,871

 (1,714,090)

    

Cash flow provided by (used in) investing activities:

   

Acquisition of investment

-

-

 (488,424)

Proceeds on disposal of equipment

-

-

5,210

Proceeds on sale of subsidiary

-

-

200

Purchase of capital assets

-

-

 (21,064)

Repayment of (increase in) advance receivable

-

 (26)

1,124

Repayment of notes receivable

-

-

-

    

Net cash provided by (used in) investing activities

-

 (26)

 (502,954)

    

…/Cont’d





SEE ACCOMPANYING NOTES











Continued

DORATO RESOURCES INC.

 (formerly Quest Ventures Inc.)

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

for the years ended January 31, 2006 and 2005

and February 1, 1997 (Date of Inception of Development Stage) to January 31, 2006

(Stated in US Dollars)


   

February 1, 1997

   

(Date of

   

Inception of

   

Development

   

Stage) to

   

January 31,

 

2006

2005

2006

    

Cash flow provided by financing activities:

   

Common shares issued for cash

-

-

1,850,989

Loans payable

443

2,304

6,515

    

Net cash provided by financing activities

443

2,304

1,857,504

    

Effect of foreign currency translation

 (11,162)

 (6,424)

 (38,194)

    

Decrease in cash during the period from continuing

 operations

1,391

(275)

(397,734)

    

Cash flows from discontinued operations

-

-

395,272

    

Net decrease in cash

1,391

 (275)

 (2,462)

    

Cash, beginning of the period

60

335

3,913

    

Cash, end of the period

$    1,451

$       60

$      1,451

    

Non-cash Transaction – Note 9



SEE ACCOMPANYING NOTES












DORATO RESOURCES INC.

(formerly Quest Ventures Inc.)

(A Development Stage Company)

STATEMENT OF STOCKHOLDER’S EQUITY (DEFICIENCY)

for the period ended January 31, 1982 to January 31, 2006

(Stated in US Dollars)

    

Deficit

  
    

Accumulated

Accumulated

 
  

Common

 

During the

Other

 
 

Number

Stock

 

Development

Comprehensive

 
 

of Shares

Price

Amount

Stages

Income (loss)

Total

       

Issued on incorporation 1983

494

$    48.56

$    23,989

$       -

$        -

$   23,989

Escrow shares issued for resource property 1983

1,875

3.24

6,073

-

-

6,073

Issued for prospectus 1984

2,500

50.00

125,000

-

-

125,000

Issued for private placement 1987

1,140

181.03

206,464

-

-

206,464

Exercise of share purchase warrants 1987

1,000

75.42

75,420

-

-

75,420

Exercise of share purchase options 1987

237

138.77

32,959

-

-

32,959

Issued for settlement of debt 1987

554

90.51

50,142

-

-

50,142

Exercise of share purchase options 1988

282

162.50

45,905

-

-

45,905

Issued for settlement of debt 1988

264

772.77

204,011

-

-

204,011

Issued for private placement 1989

250

84.44

21,111

-

-

21,111

Exercise of share purchase options 1989

62

331.02

20,689

-

-

20,689

Issued for settlement of debt 1989

616

168.87

104,023

-

-

104,023

Exercise of share purchase warrants 1990

250

154.24

38,560

-

-

38,560

Issued for private placement 1990

50

171.38

8,569

-

-

8,569

Exercise of share purchase options 1990

478

336.09

160,650

-

-

160,650

Issued for settlement of debt 1990

328

548.81

180,009

-

-

180,009

Issued for private placement 1991

1,563

181.53

283,645

-

-

283,645

Exercise of share purchase options 1991

1,221

97.75

119,396

-

-

119,396

Issued for settlement of debt 1991

517

348.99

180,600

-

-

180,600

Exercise of share purchase options 1992

3,075

16.55

50,898

-

-

50,898

Exercise of share purchase options 1993

2,000

15.51

31,013

-

-

31,013

Issued for private placement 1993

5,000

15.51

77,531

-

-

77,531

Issued for settlement of debt 1993

2,454

31.01

76,082

-

-

76,082

Exercise of share purchase options 1994

2,425

15.51

37,603

-

-

37,603

Issued for private placement 1994

5,000

29.28

146,424

-

-

146,424

Exercise of share purchase warrants 1994

5,000

29.28

146,424

-

-

146,424

Issued for acquisition of subsidiary company 1994

11,250

14.64

164,727

-

-

164,727

Issued for settlement of debt 1994

2,488

29.29

72,848

-

-

72,848

       

…/Cont’d










SEE ACCOMPANYING NOTES










Continued

DORATO RESOURCES INC.

 (formerly Quest Ventures Inc.)

(A Development Stage Company)

STATEMENT OF STOCKHOLDER’S EQUITY (DEFICIENCY)

for the period ended January 31, 1982 to January 31, 2006

 (Stated in US Dollars)


    

Deficit

  
    

Accumulated

Accumulated

 
  

Common

 

During the

Other

 
 

Number

Stock

 

Development

Comprehensive

 
 

of Shares

Price

Amount

Stages

Income (loss)

Total

 







Issued for private placement 1995

2,500

29.14

72,854

-

-

72,854

Issued for private placement 1995

15,000

14.57

218,563

-

-

218,563

Exercise of share purchase warrants 1995

1,250

14.57

18,214

-

-

18,214

Exercise of share purchase warrants 1995

1,000

29.14

29,142

-

-

29,142

Exercise of share purchase warrants 1995

188

29.14

5,464