First Colombia Gold (FCGD) 10-Q 2008 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2008
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number:  000-51203

Amazon Goldsands Ltd.

(Exact name of registrant as specified in its charter)

Nevada	98-0425310
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

200 S. Virginia, 8th Floor, Reno, Nevada 89501

(Address of principal executive offices)

(775) 398-3005

(Registrant’s telephone number, including area code)

________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.ý Yes¨ No

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

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer   ¨  (Do not check if a smaller reporting company)	Smaller reporting company ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨    Yes     ý No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class	Outstanding at November 7, 2008
Common Stock, $0.00001 par value	4,191,159

	FORM 10-Q AMAZON GOLDSANDS LTD. SEPTEMBER 30, 2008 TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	13
Item 4T.	Controls and Procedures.	13
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	15
Item 1A.	Risk Factors.	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	15
Item 3.	Defaults Upon Senior Securities.	15
Item 4.	Submission of Matters to a Vote of Security Holders.	15
Item 5.	Other Information.	15
Item 6.	Exhibits.	15
Signatures
Exhibits
Certifications

- 2 - -

 PART I - FINANCIAL INFORMATION

Item 1.                           Financial Statements

Our unaudited consolidated financial statements included in this Form 10-Q are as follows:
F-1	Unaudited Consolidated Balance Sheet as of September 30, 2008.
F-2	Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2008 and 2007 and from inception on September 5, 1997 to September 30, 2008.
F-3	Unaudited Consolidated Statement of Changes in Stockholders' Equity from inception on September 5, 1997 to September 30, 2008.
F-4	Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2008 and 2007 and from inception on September 5, 1997 to September 30, 2008.
F-5	Notes to Unaudited Consolidated Financial Statements.

These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  Operating results for the interim period ended September 30, 2008 are not necessarily indicative of the results that can be expected for the full year.

- 3 - -

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

INTERIM CONSOLIDATED BALANCE SHEETS

(Unaudited – Prepared by Management)

	September 30,			December 31,
As at	2008			2007
	$			$
ASSETS
Current
Cash and cash equivalents		284,859			1,957,856
Exploration program advances		-			87,600
Taxes recoverable		2,465			19,226
Prepaid expenses and deposit		5,886			5,723
		293,210			2,070,415
Mineral property interests (Note 4(i))		625,000			-
Property and equipment, net of accumulated amortization
(Note 4(ii))		27,533			35,214
Website development cost, net of accumulated amortization
of $12,500 (December 31, 2007: $4,167)		27,500			5,833
Total Assets		973,243			2,111,453
LIABILITIES
Current
Accounts payable and accrued liabilities		30,985			647,414
Amounts due to related parties (Note 3)		-			54,365
Advances payable, non-interest bearing (4)		32,889
Total Liabilities		63,874			701,779
STOCKHOLDERS’ EQUITY
Common stock (Note 6)
Authorized: -5,000,000 common shares, $0.00001 par value
Issued and outstanding: -4,191,159 common shares  (December 31, 2007:  1,722,409 common shares)		42			17
Additional paid-in capital		11,694,408			14,314,965
Deferred stock based compensation (Note 6)		-			(725,796	)
(Deficit) accumulated during the exploration stage		(10,785,081	)		(12,179,512	)
Total Stockholders’ Equity		909,369			1,409,674
Total Liabilities and Stockholders’ Equity		973,243			2,111,453

NOTE 1 – INCORPORATION, NATURE AND CONTINUANCE OF OPERATIONS

NOTE 8 – COMMITMENTS

NOTE 11 – SUBSEQUENT EVENT

See accompanying Notes to the Consolidated Financial Statements

F - 1

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited – Prepared by Management)

											Cumulative
											From
											Inception on
											September 5,
			Fiscal quarter ended				Nine months ended				1997 to
			September 30,				September 30,				September 30,
			2008		2007		2008		2007		2008
GENERAL AND ADMINISTRATIVE EXPENSES		$		$		$		$		$
	Amortization – property and equipment		2,466		2,171		9,208		6,514		19,076
	Amortization – website development costs		3,333		833		8,333		2,500		12,500
	Bank charges		759		605		2,265		1,854		7,508
	Consulting and management fees (recovery) (Note 6)		142,803		1,468,634		(2,244,105)		4,159,527		4,365,353
	Foreign exchange (gain) loss		4,926		(4,639)		(2,878)		(4,698)		15,880
	Investor communication and promotion		81,786		78,405		161,986		237,318		467,906
	Office and administrative		2,603		6,324		34,365		17,166		109,547
	Professional fees		46,272		32,700		155,184		121,620		380,303
	Rent		2,737		3,583		15,807		11,661		39,417
	Telephone		544		6,747		17,257		26,158		52,383
	Transfer agent and filing fees		380		1,194		3,298		12,306		35,556
	Travel and accommodation		-		30,452		83,813		190,765		355,372
	Website maintenance		4,500		4,500		13,500		13,500		34,500
	Mineral property acquisition and exploration expenditures		(9,360)		130,132		351,170		1,360,184		5,013,692
			283,748		1,761,641		(1,390,797)		6,156,375		10,908,993
OTHER INCOME AND (EXPENSES)
	Forgiveness of debt		-		-		-		-		24,000
	Gain on sale of oil and gas property		-		-		-		-		10,745
	Interest income		803		28,022		9,148		61,905		102,199
	Recovery of expenses		-		-		-		-		4,982
	Write-down of incorporation cost		-		-		-		-		(12,500)
	Write-down of assets		(5,514)				(5,514)				(5,514)
NET (INCOME) LOSS		$	288,459	$	1,733,619	$	(1,394,431)	$	6,094,4700	$	10,785,081
Net income (loss) per share		$	(0.16)	$	(0.95)	$	0.80	$	$  (3.50)
Weighted average shares outstanding			1,799,855		1,819,909		1,740,037		1,742,028
See accompanying Notes to the Financial Statements

F - 2

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

(Unaudited – Prepared by Management)

       From Inception (September 5, 1997) to September 30, 2008:

	Common  Shares			Stock Amount			Additional Paid-in Capital			Deferred   Stock Based   Compensation		Deficit  Accumulated During The Exploration Stage			Total Stockholders’ Equity (Deficiency)
				$			$			$		$			$
Balance, September 5, 1997		-			-			-			-		-			-
Issuance of common shares for cash at $0.25 per share on September 28, 1997		4,000			1			999			-		-			1,000
Net loss for the period		-			-			-			-		(2,522	)		(2,522	)
Balance, September 30, 1997		4,000			1			999			-		(2,522	)		(1,522	)
Issuance of common shares on acquisition of oil and gas property in New Zealand at $25 per share on June 25, 1998		400			-			10,000			-		-			10,000
Issuance of common shares for cash at $0.25 per share on July 8, 1998		4,000			1			999			-		-			1,000
Net loss for the year		-			-			-			-		(1,246	)		(1,246	)
Balance, September 30, 1998		8,400			2			11,998			-		(3,768	)		8,232
Issuance of common shares for cash at $25 per share on November 20, 1998		4,000			1			99,999			-		-			100,000
Repurchase of common shares for cash at $0.25 per share on November 28, 1998		(4,000	)		(1	)		(999	)		-		-			(1,000	)
Net loss for the year		-			-			-			-		(9,569	)		(9,569	)
Balance, September 30, 1999		8,400			1			110,999			-		(13,337	)		97,663
Net loss for the year		-			-			-			-		(34,290	)		(34,290	)
Balance, September 30, 2000		8,400			1			110,999			-		(47,627	)		63,373

See accompanying Notes to the Consolidated Financial Statements

F - 3

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

(Unaudited – Prepared by Management)

       From Inception (September 5, 1997) to September 30, 2008:

	Common  Shares		Stock Amount		Additional Paid-in Capital		Deferred Stock Based Compensation		Deficit  Accumulated During The Exploration  Stage			Total Stockholders’ Equity (Deficiency)
			$		$		$		$			$
Balance, September 30, 2000 (carried forward)		8,400		1		110,999		-		(47,627	)		63,373
Net loss for the year		-		-		-		-		(14,296	)		(14,296	)
Balance, September 30, 2001		8,400		1		110,999		-		(61,923	)		49,077
Net income for the year		-		-		-		-		10,954			10,954
Balance, September 30, 2002		8,400		1		110,999		-		(50,969	)		60,031
Net income for the year		-		-		-		-		2,387			2,387
Balance, September 30, 2003		8,400		1		110,999		-		(48,582	)		62,418
Issuance of common shares for cash at $1.50 per share and services at $6 per share on April 2, 2004		8,476		1		62,699		-		-			62,700
Donated capital		-		-		5,000		-		-			5,000
Net loss for the year		-		-		-		-		(64,175	)		(64,175	)
Balance, September 30, 2004		16,876		1		178,699		-		(112,757	)		65,943
Donated capital		-		-		3,000		-		-			3,000
Net loss for the year		-		-		-		-		(7,750	)		(7,750	)
Balance, December 31, 2004		16,876		1		181,699		-		(120,507	)		61,193

See accompanying Notes to the Consolidated Financial Statements 

F - 4

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

(Unaudited – Prepared by Management)

       From Inception (September 5, 1997) to September 30, 2008:

	Common  Shares			Stock Amount			Additional Paid-in Capital			Deferred Stock Based Compensation			Deficit  Accumulated During The Exploration  Stage			Total Stockholders’ Equity (Deficiency)
				$			$			$			$			$
Balance, December 31, 2004 (carried forward)		16,876			1			181,699			-			(120,507	)		61,193
Repurchase of common stock for cash at $ 0.25 per share on March 3, 2005		(4,000	)		(1	)		(999	)		-			-			(1,000	)
Donated Capital		-			-			8,200			-			-			8,200
Net loss for year		-			-			-			-			(40,652	)		(40,652	)
Balance, December 31, 2005		12,876			1			188,892			-			(161,159	)		27,741
Issue of common stock for cash at $0.125 per share on April 7, 2006		1,200,000			12			149,988			-			-			150,000
Cancellation of shares on September 6, 2006		(8,467	)		(1	)		1			-			-			-
Issue of common stock on purchase of Finmetal Mining Oy at a deemed value of $25.60 per share on November 27, 2006		50,000			1			1,279,999			-			-			1,280,000
Stock grant issued as stock based compensation at a deemed value of $24.80 per share on November 30, 2006		97,500			1			2,417,999			(2,321,280	)		-			96,720
Issue of 254,500 common shares for cash at $10 per share and 25,450 common shares as a finder’s fee on December 7, 2006		279,950			3			2,544,997			-			-			2,545,000
Net loss for the year		-			-			-			-			(2,506,896	)		(2,506,896	)
Balance, December 31, 2006		1,631,859			17			6,581,883			(2,321,280	)		(2,668,055	)		1,592,565

See accompanying Notes to the Consolidated Financial Statements

F - 5

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

(Unaudited – Prepared by Management)

       From Inception (September 5, 1997) to September 30, 2008:

	Common  Shares			Stock Amount			Additional Paid-in Capital		Deferred Stock Based Compensation			Deficit Accumulated During The Exploration Stage			Total Stockholders’ Equity (Deficiency)
				$			$		$			$			$
Balance, December 31, 2006 (carried forward)		1,631,859			17			6,581,883		(2,321,280	)		(2,668,055	)		1,592,565
Issue of 121,800 common shares for cash at $25 per unit on April 17, 2007, net of finder’s fees of $312,896		121,800			1			2,732,128		-			-			2,732,129
Issue of 8,358 warrants as a  finder’s fee on April 17, 2007 pursuant to an unit offering		-			-			100,421		-			-			100,421
Stock grant issued as stock based compensation at a deemed value of $29 per share on April 17, 2007 (Note 6)		46,250			1			1,341,249		(1,341,250	)		-			-
Issue of 20,000 common shares as a finder’s fee for mineral interests at a deemed value of $26.80 on May 4, 2007 (Note 4(i))		20,000			1			535,999		-			-			536,000
Stock based compensation on granting of stock options and stock (Note 6)		-			-			3,023,282		2,936,734			-			5,960,016
Cancellation of  stock awards (Note  6)		(97,500	)		(1	)		1		-			-			-
Net loss for the year		-			-			-		-			(9,511,457	)		(9,511,457	)
Balance, December 31, 2007		1,722,409			18			14,314,964		(725,796	)		(12,179,512	)		1,409,674

See accompanying Notes to the Consolidated Financial Statements

F - 6

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

(Unaudited – Prepared by Management)

       From Inception (September 5, 1997) to September 30, 2008:

	Common  Shares			Stock Amount			Additional Paid-in Capital			Deferred Stock Based Compensation			Deficit Accumulated During The Exploration Stage			Total Stockholders’ Equity (Deficiency)
				$			$			$			$			$
Balance, December 31, 2007 (carried forward)		1,722,409			18			14,314,964			(725,796	)		(12,179,512	)		1,409,674
Stock based compensation on stock grants (Note 6)		-			-			-			725,796						725,796
Cancellation of  stock awards (Note 6)		(31,250	)		(1	)		1			-			-			-
Cancellation and expiration of stock options (Note 6)								(3,245,532	)								(3,245,532	)
Issuance of common shares on acquisition of mineral rights option in Peru at  $0.25 per share on September 24, 2008		2,500,000			25			624,975									625,000
Net income for the period		-			-			-			-			1,394,431			1,394,431
Balance, September 30, 2008		4,191,159			42			11,069,433			-			(10,785,081	)		905,369

See accompanying Notes to the Consolidated Financial Statements

F - 7

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

INTERIM  CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited – Prepared by Management)

							Cumulative from
	Nine			Nine			Inception (September 5, 1997)
	Months Ended			Months Ended			Through
	September 30,			September 30,			September 30,
	2008			2007			2008
	$			$			$
OPERATING ACTIVITIES:
Net income ( loss) from operations		1,394,431			(6,094,470	)		(10,785,081	)
Items not requiring cash outlay:
- Consulting fees		-			-			40,200
- Forgiveness of debt		-			-			(24,000	)
- Gain on sale of oil and gas property		-			-			(10,745	)
- Stock-based compensation		(2,519,736	)		3,901,103			3,587,000
- Amortization of equipment		9,208			6,514			19,076
- Amortization of website development cost		8,333			2,500			12,500
- Mineral property acquisition		-			536,000			1,816,000
- Write-down of assets		5,514			-			5,514
Cash provided by (used in) changes in operating
Assets and liabilities:
-  Taxes recoverable		16,761			1,379			(2,465	)
-  Exploration program advances		87,600			(217,868	)		-
-  Prepaid expenses and deposit		(163	)		53,236			(5,886	)
-  Accounts payable and accrued liabilities		(616,429	)		33,490			30,985
-  Advances from related parties		(54,365	)		(36,616	)		-
Net cash used in operating activities		(1,668,846	)		(1,814,730	)		(5,316,902	)
FINANCING ACTIVITIES:
Advances		32,889			-			32,889
Cost of repurchase of common stock		-			-			(1,000	)
Proceeds from issuance of common stock, net		-			2,832,550			5,641,250
Net cash provided by financing activities		32,889			2,832,550			5,673,139
INVESTING ACTIVITIES:
Proceeds from sale of oil and gas property		-			-			46,200
Oil and gas property acquisitions		-			-			(2,846	)
Oil and gas exploration		-			-			(22,609	)
Purchase of equipment		(7,040	)		(35,406	)		(52,123	)
Website development costs		(30,000	)		-			(40,000	)
Net cash provided used in investing activities		(37,040	)		(35,406	)		(71,378	)
INCREASE (DECREASE)  IN CASH AND CASH EQUIVALENTS		(1,672,997	)		982,414			284,859
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		1,957,856			1,648,814			-
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	284,859		$	2,631,228		$	284,859

See accompanying Notes to the Consolidated Financial Statement

F - 8

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

(An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited – Prepared by Management)

						Cumulative from
	Nine		Nine			Inception (September 5, 1997)
	Months Ended		Months Ended			Through
	September 30,		September 30,			September 30,
	2008		2007			2008
	$		$			$
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest expense		-		-			1,906
Foreign exchange (gain) loss		4,926		(4,639	)		15,880
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
Purchase of oil and gas property for consideration of 400 of the Company’s common shares at $25		-		-			10,000
Issuance of 8,476 common shares for services at $6.00 per share on April 2, 2004		-		-			50,000
Donated consulting services		-		-			16,200
On September 6, 2006, 8,467 shares were cancelled and returned to the un-issued share capital of the Company by a former director		-		-			(2	)
On November 27, 2006 the Company issued 50,000 shares at a deemed price of $25.60 per share pursuant to the equity acquisition of 100% of the issued common shares of FM OY		-		-			1,280,000
On November 30, 2006 the Company granted 97,500  restricted shares at a deemed price of $24.80 per share to officers of the company		-		-			2,418,000
On December 7, 2006, the Company issued 25,450 units at a deemed value of $10 per unit as a finder’s fee related to the private placement		-		-			254,500
On April 17, 2007 the Company issued 8,358 warrants exercisable on or before April 17, 2008 at an exercise price of $35		-		-			100,421
On May 4, 2007 the Company issued 20,000 common shares at a deemed price of $26.80 per share as a finders’ fee pursuant to the acquisition of mineral property interests		-		-			536,000
On September 26, 2008 the Company issued 2,500,000 common shares at a deemed price of $0.25 per share pursuant to the acquisition of mineral rights options		625,000		-			625,000

See accompanying Notes to the Consolidated Financial Statements

F - 9

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 1 – INCORPORATION, NATURE AND CONTINUANCE OF OPERATIONS

The Company was incorporated under the laws of the State of Nevada, U.S.A. as Gondwana Energy, Ltd. (“Gondwana”) on September 5, 1997.  The Company changed its name from Gondwana to FinMetal Mining  Ltd. on January 23, 2007.  On November 27, 2006, the Company completed the acquisition of 100% of the shares of Finmetal Mining OY (“FM OY”), a company incorporated under the laws of Finland.  On May 22, 2008 the Company changed its name from FinMetal Mining Ltd to Amazon Goldsands Ltd..  During the fiscal year ended December 31, 2006 the Company changed its operational focus from development of oil and gas properties, to acquisition of, exploration for and development of mineral properties.  On September 18, 2008 the Company entered into a Mineral Right Option Agreement, and focused on the acquisition and development on properties located in Peru. The Company is currently in the exploration stage.

The Company has incurred a net loss of $(10,785,081) for the period from inception on September 5, 1997 to September 30, 2008 and has no source of revenue.  The continuity of the Company’s future operations is dependent upon its ability to obtain financing and upon future acquisition, exploration and development of profitable operations from its mineral properties. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  The Company’s management intends to continue relying upon the issuance of equity securities to finance its operations and exploration and development activities, however there can be no assurance it will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved.  The likely outcome of these future events is indeterminable.The financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result should the Company cease to continue as a going concern.

In the opinion of the Company's management, all adjustments considered necessary for a fair presentation of these unaudited financial statements have been included and all such adjustments are of a normal recurring nature. Operating results for the nine-month period ended September 30, 2008 are not necessarily indicative of the results that can be expected for the year ended December 31, 2008.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and consolidation

The accounts of the Company and its wholly owned subsidiary, Finmetal Mining OY (“FM OY”), a company incorporated under the laws of Finland, has been consolidated effective the date of its acquisition on November 27, 2006.

These financial statements have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”).  All significant inter-company transactions have been eliminated on consolidation.

F - 10

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As at September 30, 2008, the Company has cash and cash equivalents in the amount of $268,314 (December 31, 2007:  $1,947,912) which are over the federally insured limit.  As at September 30, 2008, the Company has $Nil of cash equivalents (December 31, 2007: $Nil).

Website and Software Development Costs

The Company recognizes the costs incurred in the development of the Company’s website in accordance with EITF 00-2 “Accounting for Website Development Costs” and, with the provisions of AICPA Statement of Position No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”.  Accordingly, direct costs incurred during the application stage of development are capitalized and amortized over the estimated useful life of three years on a straight line basis.  Fees incurred for website hosting are expensed over the period of the benefit.  Costs of operating a website are expensed as incurred.  Amortization expense is a total of $8,333 for the nine months ended September 30, 2008 (2007: $2,500) and cumulatively $12,500.

Property and Equipment

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

Mineral Claim Payments and Exploration Expenditures

Mineral property exploration costs are charged to operations as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02 “Whether Mineral Rights are Tangible or Intangible Assets”.  The Company assesses the carrying costs for impairment under SFAS No. 144.   The Emerging Issues Task Force issued EITF 04-3 “Mining Assets: Impairment and Business Combinations”, which requires mining companies to consider cash flows related to the economic value of mining assets (including mineral properties and rights) beyond those assets’ proven and probable reserves, as well as anticipated market price fluctuations, when testing the mining assets for impairment in accordance with SFAS 144.  The Company is in its early stages of exploration and unable to allocate proven and probable reserves to its mineral property.  When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property will be capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

F - 11

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Environmental Costs

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

Comprehensive Income

In accordance with SFAS 130, “Reporting Comprehensive Income” (“SFAS 130”), comprehensive income consists of net income and other gains and losses affecting stockholder’s equity that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses when the Company has a functional currency other than U.S. dollars, and minimum pension liability. For the nine months ended September 30, 2008 and 2007 the Company’s financial statements include none of the additional elements that affect comprehensive income. Accordingly, net income and comprehensive income are identical.

Stock-Based Compensation

During the year, the Company adopted SFAS No. 123(revised), “Share-Based Payment”, to account for its stock options and similar equity instruments issued.  Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period.  Transactions in which goods or services are received from non-employees in exchange for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.SFAS 123(revised) requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.

Foreign Currency Translation

The Company’s functional currency is U.S. dollars.   Accordingly, foreign currency balances are translated into US dollars as follows:

Monetary assets and liabilities are translated at the year-end exchange rate.

Non-monetary assets are translated at the rate of exchange in effect at their acquisition, unless such assets are carried at market or nominal value, in which case they are translated at the year-end exchange rate.

Revenue and expense items are translated at the average exchange rate for the year.

Foreign exchange gains and losses in the year are included in operations.

F - 12

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Basic Net Income (Loss) per Share

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

Income taxes

The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.  In estimating future tax consequences, all expected future events other than enactment of changes in the tax laws or rates are considered.

Due to the uncertainty regarding the Company’s profitability, the future tax benefits of its losses have been fully reserved for and no net tax benefit has been recorded in the financial statements.

Assets retirement obligations

The Company has adopted SFAS No 143, Accounting for Assets Retirement Obligations, which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. SFAS No. 143 requires the Company to record a liability for the present value of the estimated site restoration costs with corresponding increase to the carrying amount of the related long-lived assets. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. As at September 30, 2008 and December 31, 2007, the Company does not have any asset retirement obligations.

Long-lived assets impairment

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

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

F - 13

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Accounting for Derivative Instruments and Hedging Activities

The Financial Accounting Standards Board (“FASB”) issued SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133 requires companies to recognize all derivatives contracts as either assets or liabilities in the balance sheet and to measure them at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) as a hedging instrument, the gain or loss is recognized in income in the period of change.

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

Use of Estimates

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

Financial Instruments

The Company’s financial instruments consist of cash, accounts payable and accrued liabilities and advances payable. The carrying value of these financial instruments approximates their fair value based on their liquidity or their short-term nature.

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

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This Statement replaces SFAS No. 141, Business Combinations. This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) will apply prospectively to business combinations for which the acquisition date is on or after Company’s fiscal year beginning November 1, 2009. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

F - 14

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Recent Accounting Pronouncements(cont’d…)

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements”. This Statement amends ARB 51 to establish accounting and reporting standards for the non-controlling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for the Company’s fiscal year beginning November 1, 2009. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133” (“FAS 161”). FAS 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. The guidance in FAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company is currently assessing the impact of FAS 161.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”.  SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles.  This statement shall be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “the Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”.  We do not expect this adoption will have a material impact on our financial statements.

F - 15

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 3 –DUE TO RELATED PARTIES

The amounts due to related parties of $nil as at September 30, 2008 (December 31, 2007: $54,365), are due to officers and directors of the Company or companies related to them, on account ofexpenses paid on behalf of the Company and services rendered.  They are non-interest bearing, unsecured and due on demand.

NOTE 4 – PROPERTY AND EQUIPMENT

(i)  Mineral Property:

The Temasek Properties

Effective September 18, 2008 the Company entered into a Mineral Right Option Agreement with Temasek Investments Inc. ("Temasek"), a company incorporated under the laws of Panama.  Pursuant to this Agreement, the Company acquired four separate options from Temasek, each providing for the acquisition of a twenty-five percent (25%) interest in certain mineral rights in Peru potentially resulting in the acquisition of 100% of the Mineral Rights.  The Mineral Rights are owned by Rio Santiago Minerales S.A.C. ("Rio Santiago").  Beardmore Holdings, Inc. ("Beardmore"), a wholly-owned subsidiary of Temasek, owns 999 shares of the 1,000 shares of Rio Santiago that are issued and outstanding.  Temasek owns the single remaining share of Rio Santiago.  The acquisition of each 25% interest in the Mineral Rights will occur through the transfer to the Company of 25% of the outstanding shares of Beardmore.

The Company may exercise the initial twenty-five percent (25%) option to acquire a 25% interest in the Mineral Rights after fulfilling the following conditions:

·   paying $250,000 (paid subsequent to September 30, 2008) to Temasek on the date the Agreement is executed;

·   issuing 2,500,000 shares (issued ) of common stock to Temasek within five (5) business days from the Effective Date; and

·   paying an additional $250,000 to Temasek within ninety (90) days of the Effective Date.

The Company may exercise the second twenty-five percent (25%) option resulting in the acquisition of a 50% interest in the Mineral Rights after fulfilling the following conditions within 6 months:

·   paying an additional $750,000 to Temasek, and

·   issuing 3,500,000 additional shares of our common stock to Temasek.

The Company may exercise the third twenty-five percent (25%) option resulting in the acquisition of a 75% interest in the Mineral Rights after fulfilling the following conditions within 12 months:

·   paying an additional $1,250,000 to Temasek, and

·   issuing 4,500,000 additional shares of our common stock to Temasek.

F - 16

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 4 – PROPERTY AND EQUIPMENT (cont’d…)

(i)  Mineral Property (cont’d…)

The Temasek Properties (cont’d…)

The Company may exercise the fourth twenty-five percent (25%) option resulting in the acquisition of a 100% interest in the Mineral Rights after fulfilling the following conditions within 18 months:

·   paying an additional $2,500,000 to Temasek, and

·   issuing 5,500,000 additional shares of our common stock to Temasek.

Upon the acquisition of a 100% interest in the Mineral Rights, Temasek will hold its single share of Rio Santiago in trust for the Company’s sole benefit and hold the share strictly in accordance with the Company’s instructions.

Upon the Company’s acquisition of a 100% interest in the Mineral Rights, Temasek is entitled to an annual 2.5% net returns royalty.  However, if the Company pays Temasek $2,000,000 within ninety (90) days of the acquisition of a 100% interest in the Mineral Rights, Temasek will only be entitled to an annual 1.5% net returns royalty.

If the Company exercise the second twenty-five percent (25%) option, resulting in the Company’s acquisition of a 50% interest in the Mineral Rights, and fails to acquire a 100% interest in the Mineral Rights, the Company and Temasek will form a joint venture in which the Company will be wholly responsible for developing a feasible mining project and all necessary facilities and Temasek shall retain a carried free interest in the mining rights.  If the Company does not develop a feasible mining project within three years , the Company will be responsible to pay Temasek an advance minimum mining royalty of $500,000 per year, which will be deducted from Temasek's net return royalty.

The Apofas Properties

Pursuant to an agreement dated January 22, 2007 the Company has the option to acquire a 100% interest in five mineral concessions, known as the Poronmannikko and Sarkiahonkangas projects, located in Finland. Under the terms of the agreement, the company has the right to acquire a 100% interest in two projects by making cash payments totalling €1,000,000. The initial payment of €150,000 is due on or before April 1, 2007 (paid), the 2nd payment of €150,000 is due on or before April 1, 2008 (extended by agreement to April 30, 2008), the 3rd payment of €300,000 is due on or before April 1, 2009 and the final payment of €400,000 is due on or before April 1, 2010.  Concurrent with ratification of the agreement on May 4, 2007, the Company issued 400,000 common shares as a finder’s fee. The mineral concessions are subject to a 2% gross proceeds royalty.  The agreement was signed with a company, which is controlled by the Company’s president. Management has determined not to proceed with the option to acquire these projects in fiscal 2008.

F - 17

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 4 – PROPERTY AND EQUIPMENT (cont’d…)

(i)  Mineral Property (cont’d…)

The Magnus Properties

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

On June 11, 2007, the Company entered into an Option Agreement with Magnus Minerals OY, pursuant to which the Company entered into a joint venture to explore the “Enonkoski area” in Finland primarily for nickel-copper-platinum group elements.

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

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

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

In fiscal 2008, the Company decided not to exercise the November 2008 option with respect to this Property.

F - 18

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 4 – PROPERTY AND EQUIPMENT (cont’d…)

(i)  Mineral Property (cont’d…)

The Magnus Properties (cont’d…)

Magnus Minerals Oy is a company in which the Company’s former president has an ownership interest.

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

(ii)  Property and Equipment:

As at September 30, 2008:	Cost $		Accumulated Amortization $		Net book Value $
Furniture, computer and office equipment		38,505		11,712		26,793
Computer software		5,928		5,188		740
		44,433		16,900		27,533

As at December 31, 2007:	Cost $		Accumulated Amortization $		Net book Value $
Furniture, computer and office equipment		38,291		6,041		32,250
Computer software		5,928		2,964		2,964
		44,219		9,005		35,214

NOTE 5 – ADVANCES PAYABLE

The Company received an advance from its former CEO in the amount of $32,889 during the quarter ended September 30, 2008 (2007 - $nil).  The advance is non-interest bearing, has no stated terms of repayment and is unsecured.

F - 19

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 6 – STOCKHOLDERS’ EQUITY

Common Stock

On May 22, 2008 the Company completed a one new for twenty old share reverse stock split.  The Company’s share transactions, including the weighted average number of common shares outstanding calculation for purposes of determining earnings per share, have been restated retroactively to reflect all of the above corporate capital transactions in these financial statements.

On November 30, 2006 the Company granted 97,500 restricted shares at a deemed price of $24.80 per share to officers of the company.  Fifty percent of these shares vest on January 1, 2008 and the balance on January 1, 2009.  On December 27, 2007 all 97,500 restricted shares were cancelled and returned to treasury.   Related stock based compensation in the amount of $2,321,780 was charged to operations during the year ended December 31, 2007. The deemed price was equal to the market price of the Company’s stock on the date of the transaction.

On April 17, 2007, the Company completed a private placement and issued 121,800 units at a price of $25 per share for total proceeds of $3,045,000.  Each unit consists of one share of common stock, par value $0.00001, and one-half warrant with each full warrant enabling the purchase of one share of common stock, exercisable for twelve months at the exercise price of $35, exercisable on or before April 17, 2008.  The Company also issued a cash finder’s fee of $212,450 and 8,358 warrants exercisable on or before April 17, 2008 at an exercise price of $35.

On April 17, 2007 the Company granted 37,500 restricted shares at a deemed price of $29 per share to officers, directors and consultants of the Company.  The deemed price is equal to the market price of the Company’s stock on the date of the transaction. On April 17, 2008, 30,000 restricted shares were cancelled and returned to treasury. Fifty percent of the remaining 7,500 shares vested on April 17, 2008 and the balance have since been deemed vested. Related stock based compensation in the amount of $705,365 was charged to operations during the nine months ended September 30, 2008.

On April 17, 2007 the Company granted 8,750 restricted shares at a deemed price of $3.60 per share to consultants of the Company. The deemed price is equal to the market price of the Company’s stock as of December 31, 2007.  On April 17, 2008, 1,250 restricted shares were cancelled and returned to treasury.  Fifty percent of these shares vested on April 17, 2008 and the balance have been deemed to have vested.  Related stock based compensation in the amount of $20,431 was charged to operations during the nine months ended September 30, 2008 based on a deemed price of $3.60 per share.

F - 20

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 6 – STOCKHOLDERS’ EQUITY (cont’d…)

Stock Options (cont’d…)

Stock Options

On April 17, 2007 the Company granted 167,500 incentive stock options to officers, directors and consultants of the Company to purchase common stock of the Company at a price of $25 per common share on or before April 17, 2017 and vesting as to one-quarter of the common shares under the stock option on April 17, 2007 and one-quarter every six months thereafter in accordance with the terms and conditions of the Company’s Stock Incentive Plan.  As December 31, 2007 167,500 stock options were outstanding. As at September 30, 2008 all stock options were cancelled or had expired.

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

All stock options and rights are to vest over a period determined by the Board of Directors and expire not more than ten years from the date granted.  Pursuant to the Plan, the maximum aggregate number of shares that may be issued for awards is 500,000 and the maximum aggregate number of shares that may be issued for incentive stock options is 500,000.

The weighted average fair value of the 165,000 options granted to officers and directors in 2007 was estimated at $24.80 per share using the Black-Scholes option-pricing model, using the following assumptions: risk-free interest rate of 4.11%, dividend yield of 0%, volatility of 120.85% and expected life of approximately 5 years. Related stock based compensation in the amount of $3,241,028  was credited to operations upon the forfeiture of stock options during the nine months ended September 30, 2008, and cumulatively $NIL was charged to operations from April 17, 2007 to September 30, 2008.

The weighted average fair value of the 2,500 options granted to a consultant in 2007 was estimated at $2.80 per share using the Black-Scholes option-pricing model, using the following assumptions: risk-free interest rate of 4.11%, dividend yield of 0%, volatility of 146.97% and expected life of approximately 5 years. Related stock based compensation in the amount of $4,504 was credited to operations upon the forfeiture of stock options during the nine months ended September 30, 2008 (2007: $Nil) and cumulatively $NIL was charged to operations from April 17, 2007 to September 30, 2008.

Although the assumptions used to record stock compensation expense reflect management’s best estimates, they involve inherent uncertainties based on market conditions generally outside of the control of the Company. If other assumptions were used, stock-based compensation expense could be significantly impacted. As stock options are exercised, the proceeds received on exercise are credited to stockholders’ equity.

F - 21

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 6 – STOCKHOLDERS’ EQUITY (cont’d…)

Warrants

On April 17, 2007, the Company completed a private placement and issued 121,800 units at a price of $25 per share for total proceeds of $3,045,000.  Each unit consists of one share of common stock, par value $0.00001, and one-half warrant with each full warrant enabling the purchase of one share of common stock, exercisable for twelve months at the exercise price of $35, exercisable on or before April 17, 2008. 60,900 full warrants remained as at December 31, 2007,all of which expired during the six months ended June 30, 2008.  The Company also issued a cash finder’s fee of $212,450 and 8,358 warrants at a deemed value of $100,421, exercisable on or before April 17, 2008 at an exercise price of $35.  8,358 full warrants remained outstanding as December 31, 2007, all of which expired during the six months ended June 30, 208. The weighted average fair value of the 8,358 warrants issued as a finder’s fee was estimated at $12 per share using the Black-Scholes option-pricing model, using the following assumptions: risk-free interest rate of 4.15%, dividend yield of 0%, volatility of 120.85% and expected life of approximately 1 year.

NOTE 7 – RELATED PARTY TRANSACTIONS

Related party transactions not disclosed elsewhere in these financial statements are as follows:

During the six months ended September 30, 2008  the Company:

·   paid $236,350 (2007: $258,424) for consulting and management fees and management salaries to current officers and directors of the Company

·   paid $25,486 (2007: $99,103) for consulting fees included in mineral property acquisition and exploration expenditures, to companies controlled by the Vice-President of Exploration and the President.

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

NOTE 8 – COMMITMENTS

·   The Company is committed for one year, commencing November 1, 2007, for monthly consulting services in the amount of $5,000 to a party who shall provide business development strategies and corporate marketing.

·   The Company committed for a one year period commencing January 1, 2008, to a consulting firm for monthly services in the amount of $1,500, for website maintenance.

·   The Company committed for two years, commencing April 1, 2008, for a monthly consulting services in the amount of $ 5,000 to a party who will provide management services in Europe.

·   The Company committed for one year, commencing June 1, 2008 for monthly consulting services in the amount of $ 10,000 to a party who will provide investor relations services.

F - 22

AMAZON GOLDSANDS LTD.

(formerly Finmetal Mining Ltd.)

 (An Exploration Stage Company)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Unaudited – Prepared by Management)

NOTE 9 – GEOGRAPHIC AREAS

Prior to the operations of acquisition and exploration of mineral properties, the Company’s areas of operations were primarily in Canada.  Since the commencement of acquisition and exploration of mineral properties, the Company’s principal operations have been in Finland.  As at September 30, 2008, the Company does not have any material assets outside of Canada except long-lived assets of $Nil (December 31, 2007: $3,940).

NOTE 10 - RECLASSIFICATIONS

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

NOTE 11 – SUBSEQUENT EVENT

Subsequent to September 30, 2008 the Company changed its authorized number of shares to 400,000,000 in aggregate, increased the authorized number of common shares from 5,000,000 to 200,000,000 and authorized the creation of 200,000,000 blank check preferred shares with a par value of $0.001.

__________

F - 23

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results ofOperations.

This Quarterly Report on Form 10-Q contains forward-looking statements regarding our capital needs, business plans and expectations. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Quarterly Report on Form 10-Q. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements.  We caution the reader that numerous important factors, including those factors discussed in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007, which are incorporated herein by reference, could affect our actual results and could cause our actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, Amazon Goldsands.  Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We file reports with the Securities and Exchange Commission (the “SEC” or “Commission”). You can also read and copy any materials we file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report on Form 10-Q.  Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

As used in this Quarterly Report, the terms “we,” “us,” “our,” and “Amazon” mean Amazon Goldsands Ltd. and our subsidiaries unless otherwise indicated.

Recent Changes in Our Capital Structure and Name Change

On May 22, 2008, our Board of Directors approved a one (1) – for - twenty (20) reverse stock split (the “Reverse Split”) of our common stock, par value $0.00001 per share (the “Common Stock”), together with a corresponding reduction from one hundred million (100,000,000) to five million (5,000,000) shares of our authorized shares of Common Stock.   The Reverse Split was duly approved by our board of directors without shareholder approval, in accordance with the authority conferred by Section 78.207 of the Nevada Revised Statutes.  The Reverse Split was effected by filing a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes with the Nevada Secretary of State.  The Reverse Split was effective at the close of business on June 6, 2008 and amended our Articles of Incorporation to decrease the authorized number of shares of our Common Stock from one

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hundred million (100,000,000) shares to five million (5,000,000) shares.  No fractional shares of our Common Stock were issued and shareholders who were entitled to a fractional post-split share received one whole share in lieu thereof.  All share and per share data in the consolidated financial statements and related notes of the Company have been adjusted to give retroactive effect to the Reverse Split and for the change in the number of authorized shares of Common Stock.

Also on May 22, 2008, we filed Articles of Merger with the Secretary of State of Nevada to effectuate a merger, whereby we would merge with our wholly-owned subsidiary, Amazon Goldsands Ltd., through a parent/subsidiary merger, with us as the surviving corporation.  This merger became effective on June 6, 2008 after the Reverse Stock Split.  Shareholder approval for this merger was not required under Section 92A.180.  At the effective time of this merger, our name was changed to “Amazon Goldsands Ltd.” and our Articles of Incorporation were amended to reflect this name change.

In connection with the Reverse Split and our name change, our Common Stock was assigned a new symbol for quotation on the Over-the-Counter Bulletin Board.  Commencing on June 9, 2008, our common stock was quoted on the Over-the-Counter Bulletin Board under the symbol “AZNG.”

On October 6, 2008, all of the members of our board of directors and the shareholders holding a majority of the voting power of the Company approved certain resolutions, including an amendment to our Articles of Incorporation to increase the aggregate number of our authorized shares of capital stock to four hundred million (400,000,000) shares and to create a series of blank check preferred stock, as follows:  (i) increase the number of authorized shares of Common Stock from five million (5,000,000) to two hundred million (200,000,000), and (ii) authorize the creation of two hundred million (200,000,000) shares of blank check preferred stock.  These actions were effective subsequent to the reporting period.

Overview

We were incorporated in the state of Nevada under the name Gondwana Energy, Ltd. on September 5, 1997, and previously operated under the name Finmetal Mining Ltd.  We are an exploration stage company engaged in the assessment, acquisition and exploration of mineral properties.  We were previously focused on the acquisition and development of our interests in the mineral rights on properties located in Finland.

In September 2008, we reorganized our operations and our current focus is on the acquisition and development of our interests in the mineral rights on properties located in Peru.  We no longer have any interest in any properties located in Finland and have allowed our options on these properties to lapse in order to pursue the development of our interests in the mineral rights on properties located in Peru.  Effective June 6, 2008, we merged with our wholly-owned subsidiary, Amazon Goldsands Ltd., pursuant to Articles of Merger that we filed with the Nevada Secretary of State.  We decided to change our name to "Amazon Goldsands Ltd." to better reflect our current focus on the acquisition and development of the mineral rights on properties located in South America.  We are an exploration-stage company and there is no assurance that commercially exploitable reserves of gold exists on any of our property interests.  In the event that commercially exploitable reserves of gold exist on any of our property interests, we cannot guarantee that we will make a profit.  If we cannot acquire or locate gold deposits, or if it is not economical to recover the gold deposits, our business and operations will be materially and adversely affected.  The disclosure that follows is a summary of each of the mineral property interests that we held during and subsequent to the reporting period, including those mineral rights interests we have decided not to pursue on properties located in Finland.

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The FinMetal Oy Properties

On November 27, 2006, we acquired our wholly owned subsidiary, FinMetal Oy, a corporation organized under the laws of Finland, on November 27, 2006.  We acquired all of the outstanding shares of FinMetal OY in consideration for the issuance to the shareholder of FinMetal OY of 50,000 of our shares of Common Stock and a payment of €211,482 in cash (including €11,482 representing transfer taxes).  At the time we acquired FinMetal OY, FinMetal OY owned the option, pursuant to an October 6, 2006 option agreement by and between FinMetal Oy and Magnus Minerals OY ("Magnus"), to acquire a 100% interest in certain mineral rights to four mineral properties located in Finland, and better known as the Petrovaara, Poskijärvi-Kokka, Rautavaara and Tainiovaara properties, along with all existing property data.  Under the original terms of the option agreement, FinMetal Oy would have earned the interest in such properties (i) by paying option payments of 1,000,000 euros in cash for each property interest (for a total of 4,000,000 euros with respect to all four properties) over a period of four years, to be paid annually at the beginning of each year, with respect to each property, as follows: 100,000 euros in the first year, 100,000 euros in the second year, 300,000 euros in the third year, and 500,000 euros in the fourth year, and (ii) by making a work commitment of 1,000,000 euros on each property (for a total work commitment of 4,000,000 euros), of which 25% must be conducted each year over a period of four years.  All properties were subject to a 2% net smelter royalty in favour of Magnus.

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

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

·   After the above-mentioned extension payment was paid and the second year option payment was paid with respect to the Rautavaara property, the due date of the first year work commitment of 250,000 euros with respect to such property would have been extended such that such work commitment would not be due until August 31, 2008.

·   The due date of the first year work commitment of 250,000 euros with respect to the Tainiovarra property would have been extended such that such work commitment would not be due until May 31, 2008.  We have also decided to allow this option to lapse.

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

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The Apofas Properties

On January 22, 2007, we entered into a letter agreement with Ab Apofas OY ("Apofas"), pursuant to which Apofas granted to us the sole and exclusive option to acquire, subject to a 2% gross proceeds royalty, a 100% undivided interest in and to five mineral property concession registration interest assets known as the Poronmannikko and Sarkiahonkangas gold prospects, which are located in northern Finland (collectively, the "Apofas Properties" and also known as the Oijarvi Gold Project).  Under the terms of our January 22, 2007 letter agreement with Apofas, and in order to exercise our option as to the Apofas Properties, subject to a 2% gross proceeds royalty, we were required to make the following non-refundable cash payments to Apofas totaling €1.0 million in the following manner: (i) the first payment of €150,000 was due on or before April 1, 2007 and this amount has been paid; (ii) the 2nd payment of €150,000 was due on or before April 1, 2008, and was subsequently extended by agreement to be paid by April 30, 2008; (iii) the 3rd payment of €300,000 was due on or before April 1, 2009; and (iv) the final payment of €400,000 was due on or before April 1, 2010.  We have decided to allow this option to lapse, so we have not made the second option payment or any subsequent option payments.

The Enonkoski Property

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

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

Under this option, we would be required to spend 50% or more of our work commitments, of approximately $5 million, and option payments, of approximately €1.5 million, before any earn-in would have been realized.  Once the 50% was reached, we would have a 25.5% interest in the Enonkoski Property and this interest would have increased proportional to the work commitments and option payments to the maximum of 51%, at which point both our and Magnus' interests would have been converted to working interests.  As indicated above, we intend to have our option on this property lapse and intend to focus our efforts on the development of our interests in the mineral rights on properties located in Peru, as described below.

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Peru Property

On September 18, 2008 (the "Effective Date"), we entered into a Mineral Right Option Agreement (the "Temasek Option Agreement") with Temasek Investments Inc. ("Temasek"), a company incorporated under the laws of Panama.  Pursuant to the Temasek Option Agreement, we acquired four separate options from Temasek, each providing for the acquisition of a 25% interest in certain mineral rights (the "Mineral Rights") in certain properties in Peru (the “Peru Property”) potentially resulting in our acquisition of 100% of the Mineral Rights.  The Mineral Rights are owned by Rio Santiago Minerales S.A.C. ("Rio Santiago").  Beardmore Holdings, Inc. ("Beardmore"), a wholly-owned subsidiary of Temasek, owns 999 shares of the 1,000 shares of Rio Santiago that are issued and outstanding.  Temasek owns the single remaining share of Rio Santiago.  The acquisition of each 25% interest in the Mineral Rights will occur through the transfer to us of 25% of the outstanding shares of Beardmore.

We may exercise the initial option to acquire a 25% interest in the Mineral Rights after fulfilling the following conditions:

·   Payment of $250,000 to Temasek on the date the Temasek Option Agreement is executed;

·   Issuance of 2,500,000 shares of Common Stock to Temasek within five business days from the Effective Date; and

·   Payment of an additional amount of $250,000 to Temasek within ninety days of the Effective Date.

To date, we have paid $250,000 to Temasek following the execution of the Temasek Option Agreement and issued 2,500,000 shares of Common Stock to Temasek on September 26, 2008, in accordance with the Temasek Option Agreement.

We may exercise the second 25% option, resulting in our acquisition of a 50% interest in the Mineral Rights, after fulfilling the following conditions within six months of the Effective Date:

·   Payment of an additional amount of $750,000 to Temasek, and

·   Issuance of 3,500,000 additional shares of Common Stock to Temasek.

We may exercise the third 25% option, resulting in our acquisition of a 75% interest in the Mineral Rights, after fulfilling the following conditions within twelve months of the Effective Date:

·   Payment of an additional amount $1,250,000 to Temasek, and

·   Issuance of 4,500,000 additional shares of Common Stock to Temasek.

We may exercise the fourth 25% option, resulting in our acquisition of a 100% interest in the Mineral Rights, after fulfilling the following conditions within eighteen months of the Effective Date:

·   Payment of an additional amount $2,500,000 to Temasek, and

·   Issuance of 5,500,000 additional shares of Common Stock to Temasek.

Upon our acquisition of a 100% interest in the Mineral Rights, Temasek will hold its single share of Rio Santiago in trust for our sole benefit and hold the share strictly in accordance with our instructions.

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Upon our acquisition of a 100% interest in the Mineral Rights, Temasek is entitled to an annual 2.5% net returns royalty.  However, if we pay Temasek $2,000,000 within ninety days of our acquisition of a 100% interest in the Mineral Rights, Temasek will only be entitled to an annual 1.5% net returns royalty.

If we exercise the second 25% option, resulting in our acquisition of a 50% interest in the Mineral Rights, and fail to acquire a 100% interest in the Mineral Rights, we and Temasek will form a joint venture in which we will be wholly responsible for developing a feasible mining project and all necessary facilities and Temasek shall retain a carried free interest in the mining rights.  If we do not develop a feasible mining project within three years of the Effective Date, we will be responsible to pay Temasek an advance minimum mining royalty of $500,000 per year, which will be deducted from Temasek's net return royalty.

If we do not fulfill the terms of the Temasek Option Agreement according to our business plan, then our ability to commence or continue operations could be materially limited.  In addition, we anticipate that substantially all of our assets will be put into commercializing our rights to the areas covered by our option agreements.  Accordingly, any adverse circumstances that affect the areas covered by our current and prospective option agreements and our rights thereto would affect us.  If any of these situations were to arise, we would need to consider alternatives, both in terms of our prospective operations and for the financing of our activities.

Management cannot provide assurance that we will ultimately achieve profitable operations or become cash-flow positive, or raise additional debt and/or equity capital.  If we are unable to raise additional capital in the near future, we will experience liquidity problems and management expects that we will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures.

We are also focusing on seeking additional mining opportunities, some of which may be mineral deposits that are fully defined and have already gone through the feasibility stage of development and are ready to produce.  In other cases, the mineral deposits we seek to acquire may have a significant amount of proven and probable resources with what we believe to be excellent potential for expansion. We may also seek to acquire other drill-ready exploration projects that contain little or no proven resources, as with the options we currently hold to acquire existing mining projects in Peru, but that are strategically positioned to offer what we perceive as exceptional potential at a comparatively minimal expense.

Due to the extensive and expensive development programs required to prove mineral resources and reserves, as is typical in the mining business, companies such as ours sometimes are able to acquire deposits at significant discounts of the known in-the-ground value of the gold, silver, or other minerals.   In the event that we do locate a commercially exploitable mineral deposits, we may determine that it is commercially advantageous to sell our property interests rather than enter into production of any commercially mineral deposits on the property ourselves.

Planned Exploration Program

We are currently developing our plan of exploration for the development of our interests in the mineral rights on properties located in Peru.

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Plan of Operations

Our plan of operations within the next twelve months is to develop and implement a planned exploration program on the Peru Property.  In particular, we plan to complete the following objectives within the time periods specified, subject to our obtaining the funding necessary:

·   Payment of an additional amount of $250,000 to Temasek on or about December 18, 2008;

·   Payment of an additional amount of $750,000 to Temasek on or about March 18, 2009; and

·   Payment of an additional amount of $1,250,000 to Temasek on or about September 18, 2009.

We anticipate spending approximately $50,000 in ongoing general and administrative expenses per month for the next twelve months, for a total anticipated expenditure of $600,000 over the next twelve months.  The general and administrative expenses for the year will consist primarily of professional fees for the audit and legal work relating to our regulatory filings throughout the year, as well as transfer agent fees and general office expenses.

Thus, we estimate that our expenditures over the next twelve months will be approximately $2,850,000.  As at September 30, 2008, we had cash and cash equivalents of $284,859 and working capital of $229,336.  As such, our ability to make our planned exploration expenditures and to pay for our general administrative expenses will be subject to us obtaining additional financing.

During the twelve-month period following the date of this report we anticipate that we will not generate any revenue.  Accordingly, we will be required to obtain additional financing in order to continue our plan of operations during and beyond the next twelve months.  We believe that debt financing will not be an alternative for funding additional phases of exploration as we do not have tangible assets to secure any debt financing.  We anticipate that additional funding will be in the form of equity financing from the sale of our common stock.  However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our complete exploration program.  In the absence of such financing, we will not be able to pursue our exploration program, we will be forced to abandon our mineral property interests and our business will fail.

Results of Operations

We have not generated any revenues from our operations in either of the past two fiscal years.

We incurred expenses in the amount of $283,748 for the three months ended September 30, 2008, compared to expenses of $1,761,641 for the same reporting period in the prior year.  We reported a credit balance of expenses in the amount of $1,390,797 for the nine months ended September 30, 2008, compared to expenses of $6,156,375 for the same reporting period in the prior year.  The decrease in reported expenses was attributable to stock-based compensation being credited to operations in the amount of $2,519,736 for the nine months ended September 30, 2008 as a result of the expiration and cancellation of stock options during the reporting period.  Thedecrease in reported expenses was also attributable a decrease in mineral property acquisition and exploration expenditures, which decreased to a credit of $9,360 for the three months ended September 30, 2008 from $130,132 for the three months ended September 30, 2007.  Mineral property acquisition and exploration expenditures for the nine months ended September 30, 2008 decreased to $351,170 from $1,360,184 for the for the nine months ended September 30, 2007.  The decrease in mineral property acquisition and exploration expenditures is attributable to management’s decision not to proceed with the exercise of option to acquire certain mineral property interests.

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We reported other expenses of $4,711 for the three months ended September 30, 2008 and other income of $28,022 for the three months ended September 30, 2007.  We reported other income of $3,634 for the nine months ended September 30, 2008 and other income of $61,905 for the nine months ended September 30, 2007.  Other income during the three and nine months ended September 30, 2008 and 2007 consisted solely of interest income.  Other expenses during the three and nine months ended September 30, 2008 and 2007 was attributable to the write-down of certain assets.

We had a net loss of $288,459 for the three months ended September 30, 2008 as compared to a net loss of $1,733,619 for the three months ended September 30, 2007.  We had net income of $1,394,431 for the nine months ended September 30, 2008 as compared to a net loss of $6,094,470 for the nine months ended September 30, 2007.  This increase was primarily attributable to stock-based compensation being credited to operations as a result of the expiration and cancellation of stock options during the reporting period.

Liquidity and Capital Resources

At September 30, 2008, we had cash and cash equivalents of $284,859, compared to $1,957,856 at December 31, 2007, and working capital of $229,336, compared to $1,368,636 at December 31, 2007.  We will require additional funds to pursue our planned exploration activities.  Our management believes that the current cash on hand is not sufficient to fund our continued operations at the current level for the next twelve months.  Additional capital will be required to effectively implement our planned exploration program.  It is uncertain whether we will be able to obtain financing when sought or obtain it on terms acceptable to us.  If we are unable to obtain additional financing, our ability to continue our operations will be impaired.  Any additional equity financing may involve substantial dilution to our then existing shareholders.

Cash Used in Operating Activities

Operating activities in the nine months ended September 30, 2008 and 2007 used cash of $1,668,846 and $1,814,730, respectively.

Cash Used in Investing Activities

In the nine months ended September 30, 2008, we used $37,040 in investing activities, as compared to $35,406 used in investing activities during the nine months ended September 30, 2007.  In the nine months ended September 30, 2008, we expended $7,040 for purchase of equipment and $30,000 for website development costs.

Cash from Financing Activities

As we have had no revenues since inception, we have financed our operations primarily by using existing capital reserves, obtaining debt financing and through private placements of our stock. Financing activities in the nine months ended September 30, 2008 provided cash of $32,889, all of which was from proceeds from advances of cash.  Financing activities in the nine months ended September 30, 2007 provided cash of $2,832,550, all of which was from proceeds from the issuance of common stock.

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Off Balance Sheet Arrangements

We do not have any off-balance sheet debt nor did we have any transactions, arrangements, obligations (including contingent obligations) or other relationships with any unconsolidated entities or other persons that may have material current or future effect on financial conditions, changes in the financial conditions, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenue or expenses.

Going Concern

We have incurred net losses for the period from inception on September 5, 1997 to September 30, 2008 of $10,785,081 and have no source of revenue.  The continuity of our future operations is dependent on our ability to obtain financing and upon future acquisition, exploration and development of profitable operations from our mineral properties.  These conditions raise substantial doubt about our ability to continue as a going concern.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis.  The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.  We believe that the following accounting policies fit this definition.

Mineral Claim Payments and Exploration Expenditures

Mineral property exploration costs are charged to operations as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02 "Whether Mineral Rights are Tangible or Intangible Assets".  We assess the carrying costs for impairment under SFAS No. 144. The Emerging Issues Task Force issued EITF 04-3 "Mining Assets: Impairment and Business Combinations", which requires mining companies to consider cash flows related to the economic value of mining assets (including mineral properties and rights) beyond those assets' proven and probable reserves, as well as anticipated market price fluctuations, when testing the mining assets for impairment in accordance with SFAS 144.  We are in the early stages of exploration and unable to allocate proven and probable reserves to our mineral property. In the absence of proven and probable reserves, acquisition costs to date are considered to be impaired and accordingly have been written off to operations.  When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property will be capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Stock-Based Compensation

During the year, we adopted SFAS No. 123(revised), "Share-Based Payment", to account for our stock options and similar equity instruments issued.  Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period.  Transactions in which goods or services are received from non-employees in exchange for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. SFAS 123(revised) requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.

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Foreign Currency Translation

Our functional currency is U.S. dollars.  Accordingly, foreign currency balances are translated into US dollars as follows:

·   Monetary assets and liabilities are translated at the year-end exchange rate;

·   Non-monetary assets are translated at the rate of exchange in effect at their acquisition, unless such assets are carried at market or nominal value, in which case they are translated at the year-end exchange rate;

·   Revenue and expense items are translated at the average exchange rate for the year; and

·   Foreign exchange gains and losses in the year are included in operations.

Item 3.      Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4T.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2008.  This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Mr. Hector Ponte, and our Chief Financial Officer, Mr. Carlos Stocker.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2008, our disclosure controls and procedures are effective.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the

SEC's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two

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or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal controls over financial reporting during the quarter ended September 30, 2008 that have materially affected or are reasonably likely to materially affect such controls.

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PART II – OTHER INFORMATION

Item 1.        Legal Proceedings

We are not a party to any pending legal proceeding.  We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of five percent or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A.      Risk Factors

Not Applicable.

Item 2.         Unregistered Sales of Equity Securities and Use of Proceeds

We did not issue any securities without registration under the Securities Act during the reporting period.

Item 3.        Defaults upon Senior Securities

None.

Item 4.       Submission of Matters to a Vote of Security Holders

No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended September 30, 2008.

Item 5.       Other Information

None.

Item 6.        Exhibits

See the Exhibit Index following the signatures page of this report, which is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Amazon Goldsands Ltd.
Date:	November 14, 2008
	By: /s/ Hector Ponte                                                                                      Hector Ponte Title:Chief Executive Officer and Director
Date:	November 14, 2008
	By: /s/ Carlos Stocker                                                                                      Carlos Stocker Title:Chief Financial Officer

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AMAZON GOLDSANDS LTD.

(the “Registrant”)

(Commission File No. 000-51203)

Exhibit Index

to

Quarterly Report on Form 10-Q

for the Quarter Ended September 30, 2008

Exhibit No.	Description	Incorporated Herein by Reference to	Filed Herewith
2.1	Articles of Merger	Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed May 27, 2008
2.2	Agreement and Plan of Merger	Exhibit 2.2 to the Registrant's Current Report on Form 8-K filed May 27, 2008
3.1	Certificate of Change pursuant to NRS 78.209	Exhibit 2.3 to the Registrant's Current Report on Form 8-K filed May 27, 2008
10.1	Stock Purchase Agreement between the Company and Peter Löfberg, dated November 2, 2006, relating to the acquisition of FinMetal OY	Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed November 30, 2006
10.2	Letter Agreement dated January 22, 2007 between the Company and AB Apofas OY	Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed January 26, 2007
10.3	Amendment No. 1 to Option Agreement between Company and Magnus Minerals Oy, dated December 28, 2007	Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed January 4, 2008
10.4	Mineral Property Option and Joint Venture Agreement between the Company and Magnus Minerals Oy, dated June 11, 2007	Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed June 13, 2007
10.5	Mineral Right Option Agreement between the Company and Temasek Investments Inc.	Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed September 22, 2008
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		X

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