Canyon Copper 10K 2008 Annual report

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

FORM 10-K

(Mark One)

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

For the fiscal year endedJune 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:000-33189

CANYON COPPER CORP.
(Exact name of registrant as specified in its charter)

NEVADA	88-0452792
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)


Suite 408 - 1199 West Pender Street
Vancouver, BC, Canada	V6E 2R1
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code	(604) 331-9326

Securities registered under Section 12(b) of the Exchange Act:	NONE.
Securities registered under Section 12(g) of the Exchange Act:	Common Stock, $0.00001 Par Value per Share

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (s229.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

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” and “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 [X]

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to
the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last
business day of the registrant’s most recently completed second fiscal quarter.$8,570,976 on the basis of the averageof
the bid and ask price of the registrant’s common stock on December 31, 2007.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:
76,981,399, as at September 22, 2008.

CANYON COPPER CORP.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2008

TABLE OF CONTENTS

		PAGE

PART I		3

ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	8
ITEM 2.	PROPERTIES	12
ITEM 3.	LEGAL PROCEEDINGS	21
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.	21

PART II		22

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	22
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	23
ITEM 8.	FINANCIAL STATEMENTS AND SUPLEMENTARY DATA	28
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	29
ITEM 9AT.	CONTROLS AND PROCEDURES.	29
ITEM 9B.	OTHER INFORMATION.	30

PART III		31

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	31
ITEM 11.	EXECUTIVE COMPENSATION.	35
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	37
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.	42
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES.	43
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES.	44

SIGNATURES		47

PART I

The information in this discussion contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding the Company's capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate,” "predict," "potential" or "continue," the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks described below, and, from time to time, in other reports the Company files with the United States Securities and Exchange Commission (the “SEC”). These factors may cause the Company's actual results to differ materially from any forward-looking statement. The Company disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements.

As used in this Annual Report, the terms “we,” “us,” “our,” “Canyon Copper,” and the “Company” refer to Canyon Copper Corp., unless otherwise indicated.

All dollar amounts in this Annual Report are expressed in U.S. dollars, unless otherwise indicated.

ITEM 1. BUSINESS.

Overview

We were incorporated on January 21, 2000 under the laws of the State of Nevada under the name “Aberdene Mines Limited”. We subsequently changed our name to “Canyon Copper Corp.” on August 8, 2006.

We are an exploration stage company engaged in the acquisition, exploration and development of mineral properties. We currently hold 100% title in two major claim blocks comprising a total of 1,332 mineral claims, covering approximately 27,440 acres in Mineral County, Nevada (the “New York Canyon Claims”). We also hold 21 patented mineral claims covering an area of approximately 420 acres, located within the vicinity of the New York Canyon Claims area. We collectively refer to the New York Canyon Claims and the patented mineral claims as the “New York Canyon Project.”

Recent Corporate Developments

Since our fiscal quarter ended March 31, 2008, we experienced the following significant corporate developments:

1.	On April 1, 2008, we entered into a loan agreement with Anthony Harvey, our Chief Executive Officer, Chairman and member of our Board of Directors, whereby Mr. Harvey loaned us $25,000. The loan is due on or before October 1, 2008 and incurs interest at a rate of 15% per annum, payable upon maturity.

2.	On May 8, 2008, we entered into a loan agreement with Mr. Harvey whereby Mr. Harvey loaned us CDN $25,000. The loan is due on or before November 8, 2008 and incurs interest at a rate of 15% per annum, payable on maturity.

3.	On May 9, 2008, we entered into amendments to our loan agreements with each of Anthony Harvey and Aton Select Fund Limited (“ASF”). Under the terms of the amendment agreements, ASF agreed to extend the term of its loan from March 20, 2008 to June 20, 2009 and Mr. Harvey agreed to extend the term of his loans from March 14, 2008 and April 25, 2008 to June 14, 2009 and July 25, 2009, respectively.

4.	On July 7, 2008, we entered into a loan agreement with Mr. Harvey whereby Mr. Harvey loaned us CDN $25,000. The loan is due on or before January 7, 2009 and incurs interest at a rate of 15% per annum, payable upon maturity.

On August 18, 2008, we completed a private placement to three investors of a total of 5,000,000 units at a price of $0.10 per unit for total proceeds of $500,000. Each unit consisted of one share of our common stock and one share purchase warrant, entitling the holder to purchase one additional share of our common stock at a price of $0.12 per share for a period ending August 17, 2010. This private placement was completed pursuant to the provisions of Regulation S promulgated under the Securities Act of 1933. We did not engage in a distribution of this offering in the United States. The investors represented that they were not US persons as defined in Regulation S, and have provided representations indicating that they were acquiring our securities for investment purposes only and not with a view towards distribution.

NEW YORK CANYON PROJECT

Property Option Agreement with Nevada Sunrise, LLC

Effective March 16, 2007, we acquired 100% title to the mineral claims underlying the New York Canyon Claims. The acquisition of title to the claims was completed pursuant to the terms of the Property Option Agreement (the “Property Option Agreement”) we entered into with Nevada Sunrise LLC (“Nevada Sunrise”), Robert Weicker, Sharon Weicker, Kurt Schendel, and Tami Schendel (collectively, the “Optionors”) on March 18, 2004.

Under the terms of the Property Option Agreement, we exercised our option to acquire the New York Canyon Claims by: (i) paying $460,000 to the Optionors; (ii) issuing 2,000,000 shares of our common stock to the Optionors; and (iii) incurring exploration expenditures of a minimum of $2,250,000 on the New York Canyon Claims.

The Optionors also retained a 2% net smelter returns royalty (the “Royalty”) over any future production. We have the option to reduce the Royalty to 1% by making a lump sum payment of $1,000,000 to the Optionors.

In accordance with the terms of the Property Option Agreement and upon our acquisition of the New York Canyon Claims, Nevada Sunrise assigned us its interest under two lease agreements. On October 9, 2004, Nevada Sunrise entered into a lease agreement with Tammy Gentry and Pat Hannigan pursuant to which it obtained a nine year lease over the Copper Queen #2 patented mineral claim. As a result of the assignment of this lease to us, we are required to pay $1,500 per quarter commencing on October 1, 2004. We have the option to acquire Copper Queen #2 by paying $50,000, of which the quarterly payments may be applied, to the lessors.

In addition, on January 1, 2005, Nevada Sunrise entered into a lease agreement with Clifford DeGraw and Richard Markiewicz pursuant to which it obtained a seven year lease over the Mildred and Copper Queen #1 patented mineral claim. As a result of the assignment of these leases to us, we are required to pay:

	(a)	$2,500 per quarter commencing on April 1, 2005 (which payments have been made);

	(b)	$3,500 per quarter commencing on April 1, 2006 (which payments have been made);

	(c)	$4,000 per quarter commencing on April 1, 2007 (which payments have been made);

	(d)	$5,000 per quarter commencing on April 1, 2008; and

	(e)	$7,500 per quarter commencing on April 1, 2009.

We also have the option to acquire the Mildred and Copper Queen #1 patented claims by paying $130,000, of which the quarterly payments may be applied, to the lessors.

Lease Agreement with Jaycor Mining Inc.

On July 21, 2004, we entered into a lease agreement (the “Lease Agreement”) with Jaycor Mining, Inc. (“Jaycor”). Under the terms of the Lease Agreement, we were granted rights to explore and, if proved feasible, develop 18 patented mineral claims held by Jaycor (the “Jaycor Claims”). These rights were granted as a

lease for an initial term of 15 years, and are renewable for a further 15 years. The claims cover a geographic area of approximately 361 acres, located within the vicinity of the New York Canyon Project area.

As consideration for the lease of the Jaycor Claims, we are required to pay Jaycor the following amounts prior to the commencement of any future production activities:

	(a)	$25,000 on execution of the Lease Agreement (which payments have been made);

	(b)	$1,000 monthly commencing on July 21, 2005, the first anniversary of the effective date of the Lease Agreement (which payments have been made);

	(c)	$2,000 monthly commencing on July 21, 2006, the second anniversary of the effective date of the Lease Agreement (which payments have been made);and

	(d)	$3,000 monthly commencing on July 21, 2007, the third anniversary of the effective date of the Lease Agreement, and continuing for as long as the Lease Agreement is in effect (collectively, the “Minimum Payments”)

In addition to the Minimum Payments, we issued 10,000 shares of its common stock in 2005 to Jaycor and a further 15,000 common shares in 2006 pursuant to the terms of the Lease Agreement. As of the date of this Annual Report, we have made all required Minimum Payments under the Lease Agreement and are in good standing under the Lease Agreement.

The Minimum Payments are considered to be minimum advance royalty payments. If the production commences in the future, of which there can be no assurance, the Minimum Payments would be credited against any actual future royalty payments. If actual royalties payable from production exceed $9,000 per quarter, the Minimum Payments would cease. If actual royalty payments are less than $9,000 quarterly, we would be required to pay the difference between the actual royalty payments and the Minimum Payments. We are also required to perform at least $100,000 of exploration work annually on the Jaycor Claims over a four-year period.

The Jaycor Claims under the Lease Agreement are subject to an overriding royalty deed granted to Kookaburra Resources Ltd. (“Kookaburra”) by Jaycor. Upon commencement of production, we are required to pay Kookaburra a net smelter returns royalty of 1.75%, up to a maximum of $2,000,000. In addition, we have also agreed to pay Jaycor a net smelter return royalty of 0.5% until such time as Kookaburra has been paid $2,000,000, at which time the royalty payable to Jaycor will then increase to 1.5% . The 1.5% rate payable is subject to a maximum of $2,000,000, at which time the ongoing royalty payment to Jaycor will be reduced to 0.5% for as long as the Lease Agreement is in effect.

The Jaycor Claims are located in Sections 32, 33 and 34 T8N; R35E MDBM in Mineral County, Nevada and are recorded as follows:

Name of Claim	Mineral Survey No.	US Patent #	County Land Parcel
Mayflower	38	10541	009-170-11
Wall Street	43	21509	009-170-09
Turk	44	21510	009-170-09
Footwall	3447	264845	009-170-03
Nora Higgins	3447	264845	009-170-02
Willie Higgins	3447	264845	009-170-02
Annex No. 1	3447	264845	009-170-03
Annex No. 2	3447	264845	009-170-03
Annex No. 3	3447	264845	009-170-03
Annex No. 4	3447	264845	009-170-03
Iron Gate	4444	806518	009-170-02
Velvet	4444	806518	009-170-02
Saddle	4444	806518	009-170-02
Vacation	4571	982162	009-170-12
Goodenough	4612	989401	009-170-02
Copper Butte	4612	989401	009-170-02
Copper Bar	4612	989401	009-170-02
Hecla	4612	989401	009-170-02

The holders of patented minerals claims generally retain all mineral and property rights, and the permitting procedures for both exploration and development can be streamlined and fast tracked.

PRODUCTS, MARKETS, DISTRIBUTION, SUPPLIERS, AND CUSTOMERS

We do not currently produce any products, metals, or minerals nor do we offer any products for sale. We are not party to any distribution arrangements, and have no principal customers or suppliers. We do not anticipate any changes in this status for at least the next 12 months, or until such time as there is a commercially viable mineral or metal deposits located on our mineral property.

COMPETITION

We are an exploration stage company. We compete with other mineral resource exploration and development companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration and development companies with whom we compete have greater financial and technical resources than us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact on our ability to finance further exploration and to achieve the financing necessary for us to develop our mineral properties.

MARKETS AND ECONOMICS

Although we compete with other junior exploration companies for financing, properties of merit, and subcontractors, there is no competition for the exploration or removal of mineralized material from the New York Canyon Project. Although there can be no assurance, large and well capitalized markets are readily available for all metals and precious metals throughout the world. A very sophisticated futures market for the pricing and delivery of future production also exists. At present there are no limitations with respect to the sale of metals or precious metals other than price. The price for metals is affected by a number of global factors, including economic strength and resultant demand for metals for production, fluctuating supplies, mining activities and production by others in the industry, and new and or reduced uses for subject metals.

DESCRIPTION OF MINING INDUSTRY

The mining industry is highly speculative and of a very high risk nature. As such, mining activities involve a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Few mining projects actually become operating mines.

The mining industry is subject to a number of factors, including intense industry competition, high susceptibility to economic conditions (such as price of metal, foreign currency exchange rates, and capital and operating costs), and political conditions (which could affect such things as import and export regulations, foreign ownership restrictions). Furthermore, the mining activities are subject to all hazards incidental to mineral exploration, development and production, as well as risk of damage from earthquakes, any of which could result in work stoppages, damage to or loss of property and equipment and possible environmental damage. Hazards such as unusual or unexpected geological formations and other conditions are also involved in mineral exploration and development.

GOVERNMENTAL CONTROLS AND APPROVALS

Exploration and development activities are all subject to stringent national, state and local regulations. All permits for exploration and testing must be obtained through the local Bureau of Land Management (“BLM”) offices of the Department of Interior in the State of Nevada. The granting of permits requires detailed

applications and filing of a bond to cover the reclamation of areas of exploration. From time to time, an archaeological clearance may need to be obtained prior to proceeding with any exploration programs.

We plan to secure all necessary permits for any future exploration. We must provide for all environmental concerns and ensure no discharge of water into any body of water regulated by environmental law or regulation. Indigenous and endangered species must only be subject to very minimal or nil disturbances. Restoration of the disturbed land will be completed according to applicable regulations and laws. All holes, pits and shafts will be sealed upon abandonment of the property. It is difficult to estimate the cost of compliance with the environmental laws since the full nature and extent of our proposed activities cannot be determined until we start our operations.

We have applied for and received permits from the BLM to conduct drilling activities on BLM administered lands within the New York Canyon Project. The BLM reference the property as case file NV N-79198. We are required to adhere to the stipulations of the permit, primarily to plug all drill holes as they are completed and to reclaim roads and drill sites when they are no longer necessary. Reclamation work is ongoing but not complete as the project remains active.

Our mining operation is regulated by Mine and Safety Health Administration (“MSHA”). MSHA inspectors periodically visit our project to monitor health and safety for the workers, and to inspect equipment and installations for code requirements. All of our workers have completed MSHA safety training and must take refresher courses annually when working on our project. A safety officer for the project is also on site.

Other regulatory requirements monitor the following:

	(a)	Explosives and explosives handling.
	(b)	Use and occupancy of site structures associated with mining.
	(c)	Hazardous materials and waste disposal.
	(d)	State Historic site preservation.
	(e)	Archaeological and paleontological finds associated with mining.

We believe that we are in compliance with all laws and plans to continue to comply with the laws in the future. We believe that compliance with the laws will not adversely affect its business operations. There is however no assurance that any change in government regulation in the future will not adversely affect our business operations.

Federal Claim Maintenance Fees

In order to maintain our New York Canyon Project claims each year we must pay a maintenance fee of $125 per claim to the Nevada State Office of the Bureau of Land Management and on November 1 of each year we must file an affidavit and Notice of Intent to Hold the claims in Mineral County. We have paid the required maintenance fees and filed the affidavits required in order to extend the claims to August 31, 2009.

Environmental Liability

The New York Canyon Project property has a history of exploration and development dating back to the early 1900’s. As such there are a series of prospect pits, exploration and mine shafts, road cuts and general mining debris scattered throughout the property. None of this is considered to be an environmental hazard; however, open mine workings are required to be fenced for public safety. Operators during the bulk of the exploration of the property during the 1960’s through 1990’s conducted their activities in compliance with BLM requirements. This work has been either reclaimed or accepted by the BLM. We are not responsible for existing disturbance from prior activities on the New York Canyon Project.

PATENTS AND TRADEMARKS

We do not own, either legally or beneficially, any patents or trademarks.

RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS

We have no plans to undertake any research and development activities in the foreseeable future, and have not incurred research and development expenditures to date.

EMPLOYEES

Aside from our officers and directors, we have one full-time employee at present.

ITEM 1A. RISK FACTORS.

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

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

Our current operating funds are inadequate to complete our planned exploration of the New York Canyon Project and our general and administrative expenses. Our business plan calls for significant expenses in connection with the exploration and development of those mineral claims. As a result, we will require additional financing to complete our exploration and development plans. We will also require additional financing if the costs of exploration are greater than anticipated and to sustain our business operations if we are not successful in earning revenues once exploration is complete. Obtaining additional financing would be subject to a number of factors, the known material factors being market prices for copper, investor acceptance of our mineral claims, and investor sentiment. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.

If we complete a financing through the sale of additional shares of our common stock, shareholders will experience dilution.

The most likely source of future financing presently available to us is through the issuance of our common stock. Any sale of share capital will result in dilution to existing shareholders. The only other anticipated alternative for the financing of further exploration would be the offering by us of an interest in our properties to be earned by another party or parties carrying out further exploration thereof, which is not presently contemplated.

In order to maintain our rights to the New York Canyon Project, we will be required to make annual filings with federal and state regulatory agencies and/or be required to complete assessment work on the New York Canyon Project.

In order to maintain our rights to the New York Canyon Project, we will be required to make annual filings with federal and state regulatory authorities. Currently the amount of these fees is nominal; however, these maintenance fees are subject to adjustment. In addition, we may be required by federal and/or state legislation or regulations to complete minimum annual amounts of mineral exploration work on the New York Canyon Project. A failure by us to meet the annual maintenance requirements under federal and state laws could cause our rights to the New York Canyon Project to lapse.

We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease exploration activities and if we do not obtain additional financing, our business will fail.

We were incorporated on January 21, 2000 and to date have been involved primarily in organizational activities, the acquisition of mineral claims and the exploration and development on these claims. We have no exploration history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:

-	our ability to locate a profitable mineral property; and

-	our ability to generate revenues.

Our plan of operation calls for significant expenses in connection with the exploration of the New York Canyon Project, which will require us to obtain additional financing. We recorded a net loss of $1,216,504for the year ended June 30, 2008 and have an accumulated deficit of $17,076,472 since inception. As at June 30, 2008 we had cash of $15,580 and for the next twelve months, management anticipates that the minimum cash requirements to fund our proposed exploration program and our continued operations will be $3,200,000. Accordingly we do not have sufficient funds to meet our planned expenditures over the next twelve months and will need to seek additional financing to meet our planned expenditures.

Obtaining additional financing would be subject to a number of factors, including the market prices for the mineral property and base and precious metals. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. Since our inception, we have used our common stock to raise money for our operations and for our property acquisitions. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation. For these reasons, our independent auditors believe there exists a substantial doubt about our ability to continue as a going concern.

Because we have not commenced business operations, we face a high risk of business failure.

We have not earned any revenues as of the date of this Annual Report. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.

We have no known mineral reserves and if we cannot find any, we will have to cease operations.

We have no mineral reserves. Mineral exploration is highly speculative. It involves many risks and is often non-productive. Even if we are able to find mineral reserves on our property our production capability is subject to further risks including:

-	Costs of bringing the property into production including exploration work, preparation of production feasibility studies, and construction of production facilities, all of which we have not budgeted for;
-	Availability and costs of financing;
-	Ongoing costs of production; and
-	Environmental compliance regulations and restraints.

The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of milling facilities and processing equipment near the New York Canyon Project and such other factors as government regulations, including regulations relating to allowable production, exporting of minerals, and environmental protection. If we do not find a mineral reserve or define a mineral inventory containing gold, silver, copper, zinc or iron or if we cannot explore the mineral reserve, either because we do not have the money to do it or because it will not be economically feasible to do it, we will have to cease operations and investors will lose their investment.

Because we anticipate our operating expenses will increase prior to our earning revenues, we may never achieve profitability.

Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from the exploration of our mineral claims and the production of minerals thereon, if any, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we may not be able to ever generate any operating revenues or achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages if and when we conduct mineral exploration activities.

The search for valuable minerals involves numerous hazards. As a result, if and when we conduct exploration activities we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.

If the price of base and precious metals declines, our financial condition and ability to obtain future financings will be impaired.

The price of base and precious metals is affected by numerous factors, all of which are beyond our control. Factors that tend to cause the price of base and precious metals to decrease include the following:

	(a)	Sales or leasing of base and precious metals by governments and central banks;

	(b)	A low rate of inflation and a strong US dollar;

	(c)	Speculative trading;

	(d)	Decreased demand for base and precious metals industrial, jewelry and investment uses;

	(e)	High supply of base and precious metals from production, disinvestment, scrap and hedging;

	(f)	Sales by base and precious metals producers and foreign transactions and other hedging transactions; and

	(g)	Devaluing local currencies (relative to base and precious metals price in US dollars) leading to lower production costs and higher production in certain major base and precious metals producing regions.

Our business is dependent on the price of base and precious metals. We have not undertaken hedging transactions in order to protect us from a decline in the price of base and precious metals. A decline in the price of base and precious metals may also decrease our ability to obtain future financings to fund our planned development and exploration programs.

Because we are an exploration stage company, our business has a high risk of failure.

As noted in the financial statements that are included with this Annual Report, we are an exploration stage company that has incurred net losses since inception, we have not attained profitable operations and we are dependent upon obtaining adequate financing to complete our exploration activities. These conditions, as indicated in our audit report on our Annual Report on Form 10-K, raise substantial doubt as to our ability to continue as a going concern. The success of our business operations will depend upon our ability to obtain further financing to complete our planned exploration program and to attain profitable operations. If we are not able to complete a successful exploration program and attain sustainable profitable operations, then our business will fail.

If we are unable to hire and retain key personnel, we may not be able to implement our business plan.

Our success is dependent upon the performance of key personnel working full-time in management, supervisory and administrative capacities or as consultants. This is particularly true in highly technical businesses such as mineral exploration. These individuals are in high demand and we may not be able to attract the personnel we need. The loss of the services of senior management or key personnel could have a material and adverse effect on us, our business and results of operations. Failure to hire key personnel when needed, or on acceptable terms, would have a significant negative effect on our business.

As we undertake exploration of our mineral claims, we will be subject to compliance with government regulation that may increase the anticipated cost of our exploration program.

There are several governmental regulations that materially restrict mineral exploration. We are required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws. If we enter the production phase, the cost of complying with permit and regulatory environment laws will be greater because the impact on the project area is greater. Permits and regulations will control all aspects of the production program if the project continues to that stage. Examples of regulatory requirements include:

	(a)	Water discharge will have to meet drinking water standards;

	(b)	Dust generation will have to be minimal or otherwise re-mediated;

	(c)	Dumping of material on the surface will have to be re-contoured and re-vegetated with natural vegetation;

	(d)	An assessment of all material to be left on the surface will need to be environmentally benign;

	(e)	Ground water will have to be monitored for any potential contaminants;

	(f)	The socio-economic impact of the project will have to be evaluated and if deemed negative, will have to be re-mediated; and

	(g)	There will have to be an impact report of the work on the local fauna and flora including a study of potentially endangered species.

There is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program. We will also have to sustain the cost of reclamation and environmental remediation for all exploration work undertaken. Both reclamation and environmental remediation refer to putting disturbed ground back as close to its original state as possible. Other potential pollution or damage must be cleaned-up and renewed along standard guidelines outlined in the usual permits. Reclamation is the process of bringing the land back to its natural state after completion of exploration activities. Environmental remediation refers to the physical activity of taking steps to remediate, or remedy, any environmental damage caused. The amount of these costs is not known at this time as we do not know the extent of the exploration program that will be undertaken beyond completion of the recommended work program. If remediation costs exceed our cash reserves we may be unable to complete our exploration program and have to abandon our operations.

If we become subject to increased environmental laws and regulation, our operating expenses may increase.

Our development and production operations are regulated by both US Federal and Nevada state environmental laws that relate to the protection of air and water quality, hazardous waste management and mine reclamation. These regulations will impose operating costs on us. If the regulatory environment for our operations changes in a manner that increases costs of compliance and reclamation, then our operating expenses would increase with the result that our financial condition and operating results could be adversely affected.

Because our stock is a penny stock, stockholders will be more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system.

Because our securities constitute "penny stocks" within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the quotation price of our common stock is less than $5.00 per share, the common stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

1.	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

2.	contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

3.	contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

4.	contains a toll-free telephone number for inquiries on disciplinary actions;

5.	defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

6.	contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

ITEM 2. PROPERTIES.

We currently do not own any real property.

We rent approximately 1,606 square feet of office space located at Suite 408 - 1199 West Pender Street, Vancouver, British Columbia, Canada from ESO Uranium Corp. at a cost of approximately $1,500 per month. This rental is on a month-to-month basis with no formal agreements.

NEW YORK CANYON PROJECT

We hold 100% title to our New York Canyon Claims, subject to certain royalties, and pursuant to various lease agreements, we were granted a seven year lease to explore and develop the Copper Queen #2 patented mineral claim, a nine year lease to explore and develop the Mildred and Copper Queen #1 patented mineral claims and a 15 year lease to explore and develop the Jaycor Claims.

Our New York Canyon Claims consist of two major claim blocks covering a total of 1,332 mineral claims, covering approximately 27,440 acres located in Mineral County, Nevada. We refer to the first block of claims as the "Copper Queen Claims,” and the second contiguous block of claims as the "Longshot Ridge Claims.” Further, we hold 21 patented mineral claims covering an area of approximately 420 acres, located within the vicinity of the New York Canyon Claims.

Figure 1 – New York Canyon Property

Location and Access, Climate, Local Resources, and Physiography

The New York Canyon Project is situated in southern Mineral County, Nevada. It is located 30 miles east of the county seat at Hawthorne and five miles east of the community of Luning, Nevada. Paved state highway US95 provides road access to Reno, Nevada 160 miles to the north and Las Vegas, NV 290 miles to the southeast.

Access to the property from Luning is by county maintained gravel surfaced roads and a network of unimproved gravel roads that extend throughout the property. The claims cover a portion of the western slope of the Gabbs Valley Range and extend westward into Soda Spring Valley. Elevations range from 4,600 feet in the valley bottom to over 7,000 feet at the crest of the Gabbs Valley Range. Relief is gentle to steep over the property and is moderate in the vicinity of the known mineralized zones.

The New York Canyon region is arid to semi-arid desert with temperatures to 95F in the summer and average temperatures of 25F in winter. Precipitation varies between two and 6 inches per year. Physical work could be conducted on the New York Canyon property year round.

Vegetation of the New York Canyon area is typical of central Nevada and consists of sagebrush and other desert plants on the lower slopes and valleys. Shadscale, white sage and greasewood occur with sagebrush on the drier slopes and hills. Sparse cover of pinion pine and juniper trees occurs at higher elevations on the property.

Depending on the ultimate extent of mineralization identified on the New York Canyon Project, the current claim base may be insufficient to support mining operations, tailings and waste storage and processing plants. Additional surface lands may be required for such operations. The existing infrastructure within the project area and the proximity to major centers such as Hawthorne and Reno are key factors in supporting mining operations.

Figure 2 – New York Canyon Property

History

The Santa Fe Silver Mine established this mining district in 1879 with silver production from silver deposits in the district. The discovery of significant copper deposits in 1893 superseded the silver mining operations in the area. The New York Canyon Project property has a long history of exploration, development and production dating back to 1875 when the copper oxide deposits were first discovered. Between 1906 and 1929, an estimated 8.9 million pounds of copper were recovered from 110,000 tons of ore at an average grade of 5.5% . Copper production exceeded 4,454 tons between 1906 and 1935. There was also significant silver production during this period when copper production reached its zenith.

Modern exploration began in 1964 when Banner Mining Company (“Banner”) drilled the Copper Queen and Champion mineral occurrences. During the mid-1960’s through to the late-1970’s, several mining companies explored the New York Canyon Project, primarily for the porphyry copper sulphide potential completing 124 holes totaling 106,000 feet. In the 1970's, Amax Inc., and later Conoco Inc. (“Conoco”), conducted significant exploration programs, completing 24 holes totaling 20,226 feet. A total of 15 holes were drilled to test the Long Shot Ridge occurrence. This historic drilling by Conoco, from 1977 to 1981, indicated 13.2 million tons of mineralized material with an average grade of 0.55% copper for the Longshot Ridge area and 142 million tons grading 0.35% and 0.015% molybdenum for the Copper Queen deposit. In 1979, Conoco conducted a preliminary metallurgical testing program for copper recovery using drill core. The Copper Queen deposit yielded average recoveries of 70% copper over the six day leach period. Acid consumptions varied with rock type: porphyry copper mineralized rock consumed 160 pounds sulphuric acid per ton while carbonate rich mineralized rock consumed 509 pounds of sulphuric acid (H2SO4) per ton. Copper oxide mineralized material provided recoveries ranging from 75.0% to 84.45% with acid consumption of 232 to 349 pounds H2SO4 per ton of ore.

Further exploration of the property was conducted between 1992 and 1997. Over this time, various joint venture partners primarily tested the Longshot Ridge and Copper Queen deposit areas with an additional 46 drill holes totaling 13,018 feet. In 1993, Peter Cowdery, PhD., P.Eng. of CORE Engineering and Associates conducted an estimate of the mineralized material at the Longshot Ridge copper oxide deposit for Kookaburra Resources Ltd. The CORE technical report indicated 17.7 million tons of mineralized material with an average grade of 0.55% copper using a 0.23% copper cutoff.

Prior to the acquisition of our interest in the New York Canyon Project, 129 drill holes totaling 93,858 feet of drilling had been completed on the property. Mountain States R & D International, Inc.’s simulated vat leach test on minus three-quarter inch copper mineralized material from Longshot Ridge indicated a 39.41% copper recovery with total acid consumption of 174.7 pounds per ton of mineralized material. The 1993 report states that at an average copper content of 0.57 percent, a ton of Long Shot Ridge mineralized material contains 11.4 pounds of copper.

General Geology

The New York Canyon Project lies within the central portion of the Walker Lane Structural Belt, a zone of northwest striking parallel and sub-parallel, right lateral strike slip faults in the western part of the Great Basin region. The Walker Lane structural belt developed in an intra-arc setting during the Cenozoic and extends for more than 400 miles through western Nevada and into northern California. Tertiary volcanism and related hydrothermal mineralization have been recognized throughout the length of this structural break. Significant mining districts are associated with the Walker Lane Belt and include Comstock, Goldfield, Rawhide, Tonopah-Hall, and Yerington.

The New York Canyon area consists mostly of a conformable sequence of marine sedimentary rocks of Triassic and Jurassic ages. These rocks are intruded by granitic rocks of Cretaceous age and locally covered by non-mineralized volcanic flows of Tertiary age and by Quaternary alluvium and colluvium in the valley bottoms. Structural displacement of mineralized host rocks at New York Canyon is generally associated with Walker Lane style structures that disrupt bedding and provide conduits for mineralized source fluids.

The oldest rocks are middle to late Triassic age Luning Formation, predominately dolomite, dolomitic limestone and limestone with subordinate shale, argillite and conglomerate. Regionally, the Luning Formation is thought to be more than 10,000 feet thick with thin to medium bedded carbonate rocks intercalated with siltstone in the lower 1,000-foot portion of the sequence, and massive to thick bedded carbonate rocks in the upper 4,000-foot portion of the sequence.

The late Triassic age Gabbs Formation conformably overlies the Luning Formation. The Gabbs Formation is comprised of three members and consists of a sequence of thin bedded fossiliferous limestone, argillaceous limestone and calcareous tuffaceous siltstone totaling 400 feet thick at the type locality in New York Canyon.

The Sunrise Formation of Jurassic age conformably overlies the Gabbs Formation. The Sunrise is comprised of five members and consists of a sequence of quartz latite porphyry flows near the base, thin bedded limestones, siltstones, silty limestone, tuffaceous siltstone, shale and claystone totaling about 600 to 800 feet thick at New York Canyon and as much as 1,200 feet thick in the Pilot Mountains to the southeast. The Sunrise Formation is distinguished from the Gabbs Formation primarily by fossil type.

Conformably overlying the Sunrise Formation is the Jurassic age Dunlap Formation, a 3,000 foot thick sequence of basal conglomerate, limestone, clastic sediment, and andesite and rhyolite flows. Intruding these formations are Jurassic to Cretaceous age multiphase domes, plugs, dikes and sills consisting primarily of diorite and granodiorite with areas of quartz monzonite, granite and other associated felsic rock types.

Tertiary age (mostly Oligocene and Miocene age) mafic to felsic volcanics, volcanoclastics, flows, tuffs, tuffaceous sediments, and continental sediments form capping units throughout the region in varying thickness to 8,000 feet. Quaternary rocks consist of various alluvial and lacustrine deposits forming basin fill deposits, with fanglomerates extending out as debris from the ranges. These units can be 200 feet or more thick.

Property Geology at New York Canyon

The upper New York Canyon area consists primarily of Luning Formation limestone with the small area of Longshot Ridge overlain by rocks of the Gabbs and Sunrise Formations. These sedimentary units are in turn intruded by felsic sills and dikes. In the Longshot Ridge area the Luning Formation (Lfm) consists of thick-bedded limestone and dolomite, typically gray to tan colored units, which are exposed in the hillsides below the main ridge.

The Gabbs Formation at Longshot Ridge originally consisted of very thin bedded to laminated limestone and silty limestone intercalated with siltstone and shale, all of which have been moderately to highly calc-silicate altered. Remnant bedding textures are locally evident. The three members of the formation consist of: G1, the lowest unit, a black, bioclastic limestone intercalated with siltstone, approximately 250 feet thick; G2, the middle unit, predominantly argillaceous limestone intercalated with calcareous and tuffaceous siltstone, approximately 200 feet thick consisting; and G3, the upper unit, predominantly argillaceous limestone intercalated with siltstone, 0 to 200 feet thick. The Luning-Gabbs contact at the base of the Gabbs Formation is clearly marked by a carbonaceous (black bioclastic) limestone.

The two lowest members of the Sunrise Formation (Sfm) at Longshot Ridge are also moderately skarn and calc-silicate altered. The five Sunrise members are: S1, the lowest unit, argillaceous limestone intercalated with siltstone and some quartz latite porphyry flows near the base, approximately 100 feet thick; S2, fossiliferous bedded limestone intercalated with siltstone and silty limestone, 50 feet thick; S3, shale and siltstone, 250 feet thick; S4, consists of 200 feet of silty limestone and limestone, 200 feet thick; and S5, the uppermost unit, claystone and limestone, 200 feet thick.

The Dunlap formation, mentioned in the regional description, is not present in the Longshot Ridge area. Further, only one of the various regional Tertiary age volcanic sequences is present along the northern flank of Longshot Ridge. The felsic intrusive rocks (Fi) of Longshot Ridge are primarily sills with some local dikes. These sills and dikes are typically only 5 to 20 feet thick but quite abundant. Rock types include granodiorite porphyry, porphyritic quartz monzonite, quartz monzonite porphyry and quartz-feldspar porphyry. The average bedding at Longshot ridge strikes N75°E and dips 35° south.The rocks have been severely faulted and folded with drag and overturned features common. The major faults are curvilinear with general trends toward the northeast and northwest. Although many of these faults are fairly high angle, they commonly change dip direction due to the change of strike of the structure. There are generally two sets of faults, one trending NE and the other trending NW, with some local faults that strike N and dip steeply E. For the most part, these appear to be normal faults with displacements ranging from 50 to 200 feet.

Deposit Types at New York Canyon Project

Mineralization within the New York Canyon Project consists principally of contact metasomatic copper skarn deposits, porphyry-type copper-molybdenum mineralization, and a combination or transition of these two types of mineralization. The property’s copper skarns may be almost entirely oxidized, as at Longshot Ridge, or consist of both oxide and sulphide skarns as at the Champion prospect, located midway between the Longshot Ridge and Copper Queen prospects. At Copper Queen, the mineralization consists of copper sulphide skarn and porphyry copper-molybdenum sulphide.

Contact metasomatic skarn (also known as tactite) typically occurs in carbonate sedimentary rocks adjacent to small to moderate sized intrusive rock bodies of intermediate composition, such as monzonite and granodiorite. Heat and fluids from the intrusion recrystallize and alter the carbonate rocks, converting limestone and limy sediments to higher temperature calc-silicate minerals such as garnet, epidote, diopside, tremolite and calcite. A variety of metalliferous deposits can be formed, including those that are copper-rich, iron-rich or tungsten-rich.

Copper skarns often occur transitional to porphyry-type copper deposits and are one of the world’s most abundant types of skarn deposits. Sizes range from small up to 100 million tons or more with grades averaging 1 to 2% Cu. Associated metallic minerals include chalcopyrite, bornite, magnetite, specularite, pyrite, pyrrhotite, sphalerite, and molybdenite. Examples of copper skarn deposits in the southwest US include Carr Fork (Utah), Santa Rita-Pinos Altos (New Mexico), Mason Valley-Copper Canyon (Nevada) and Mission-Pima (Arizona).

Porphyry-type copper-molybdenum deposits are closely associated with and related to moderate sized intrusive rock bodies of intermediate to felsic composition. Mineralization occurs as disseminated sulphides and as crosscutting stockwork quartz-sulphide veins within the intrusive and extending outward into the surrounding rocks. The intrusive bodies are commonly 0.5 to 2 kilometers or more across and their emplacement produces large volumes of altered and intensely fractured ground.

Porphyry-type deposits are classic large tonnage systems with large metal contents amenable to low cost bulk mining methods, and these deposits account for a major portion of the world’s copper and molybdenum production. Sizes range from 20 million to several billion tons with grades ranging from about 0.5% to 1.5% Cu. In the southwest US, one of the world’s best-endowed copper provinces, a typical porphyry copper deposit contains 447 million tons of 0.67% Cu. Examples from this region include Silver Bell, Yerington, Piedras Verdes and Sanchez.

Mineralization at New York Canyon Project

Mineralization at the New York Canyon Project consists of three principal copper prospects along a west-northwest structural trend: Copper Queen on the west, Champion in the center and Longshot Ridge on the east. The Copper Queen prospect has no exposed mineralization at the surface but contains copper sulfide skarn at depth and an incompletely confirmed copper-molybdenum sulphide porphyry system at greater depth. The Champion and Longshot Ridge prospects, however, have numerous widespread exposures of copper skarn mineralization, both in surface outcrop and abundant old mine workings. The majority of recent exploration efforts on the New York Canyon Project have focused on the extensive oxide copper skarn mineralization at Longshot Ridge. This mineralization is the subject of the current report.

The copper mineralization and associated alteration at Longshot Ridge are products of an extensive copper-rich skarn system formed in carbonaceous sediments of the Luning, Gabbs and Sunrise Formations. Small amounts of copper occur also in stockwork veinlets in felsic porphyry intrusive sills and dikes. The copper mineralization consists almost entirely of secondary copper minerals, principally malachite, azurite, chrysocolla and copper wad, in order of abundance. Additionally, some copper-rich limonite (goethite) has been reported. The oxide copper minerals apparently are the products of supergene weathering and oxidation of primary copper sulphide minerals present in the original skarn. Because limestones tend to buffer any solution carrying copper in the supergene environment, copper can be enriched as much as 300 to 400 percent by this supergene weathering process. Oxide copper deposits formed in a similar manner in many copper districts throughout the southwest US, have contributed substantially to the copper produced from the associated primary copper deposits in these districts.

About 90 percent of the Longshot Ridge mineralization is within the two upper units of the Gabbs Formation. Drilling reveals that the strongest, thickest and most continuous mineralization occurs in a NE-trending zone, 200 feet wide by 1300 feet long, which is crossed by two NW-trending structurally-controlled high grade zones, each about 100 feet wide and from 400 to 700 feet long.

Luning Formation – Dolomite and limestone units of the Luning Formation are altered with the skarn minerals serpentine, talc, garnet, magnetite and locally diopside. Serpentine and talc form sinuous veins along structures in the dolomite, a diagnostic feature of dolomite skarns. Due to the massive nature of the Luning, the skarn suite is confined mostly to small halos along high-angle structures; for this reason, the copper mineralization is limited in area but of moderately high grade. Additionally, the Luning contains small local zones of hematite and dolomite with jasperoid veins a few feet thick; these zones have fine-grained silica, hematite, goethite, limonite and copper oxides. Historically, all the higher-grade copper shipped from the New York Canyon area during World War I was from copper skarns in the Luning, not from the Gabbs.

Gabbs Formation – Copper mineralization in the Gabbs is much more widespread but lower grade than in the Luning. The vast majority of the copper mineralization at Longshot Ridge is in the two upper units of the Gabbs Formation, principally impure thin-bedded sandy limestone and siltstone. The limestone is extensively altered to a skarn mineral suite of garnet, diopside and magnetite; the siltstone is altered to hornfels. Due to the brittle nature of diopside, the diopside-rich skarns are more abundantly fractured and slightly rich in copper than the garnet-rich skarns. Typical Gabbs skarns are only 5 to 15 feet thick, but there are many of them.

The lowest Gabbs unit, a carbonaceous bioclastic limestone contains the boundary between marbleized limestone and calc-silica altered limestone (the so-called “marble line”) but it rarely contains skarn mineralization. It is cut by high-angle structures that were used as feeders for the plentiful skarns and hornfels which formed in the more reactive or permeable rocks of the two overlying Gabbs units. Granodiorite porphyry intrusions were later emplaced as dikes along the same structures and as sills in the permeable beds. The skarns are more commonly proximal to the sills.

Sunrise Formation – The two lowest sedimentary units of the Sunrise Formation, impure thin-bedded sandy limestone and siltstone, are altered to a skarn suite of garnet, diopside and magnetite in the limestone and to hornfels in the siltstone. As in the Gabbs, copper mineralization is widespread but relatively low grade. However the Sunrise skarns are relatively thick, on the order of 50 feet. The largest skarn bed is the Mayflower Mine, which was mined on a fairly large scale. It is capped by hornfels-altered sedimentary rocks

Current State of Exploration

We are continuing to pursue our exploration program on the New York Canyon Project. Due to insufficient financing, we did not carry out our exploration program during the year ended June 30, 2008. The current work program for New York Canyon Project comprises of drilling an initial 56 holes at Longshot Ridge to outline the mineralized zone followed by 14 drill holes at Copper Queen to test the mineralization at depth there. Geophysical surveys are intended to cover the main areas of interest to develop further drill targets. Drilling to date at the Longshot Ridge copper deposit has confirmed and expanded on the known extent of the copper oxide mineralization, which is exposed at surface and has been tested to depths up to 400 feet. With the exception of holes 06-13R and 06-14R, all drill holes completed in 2006 have indicated the consistent and wide spread nature of the copper mineralization at Longshot Ridge. The recent data is being incorporated into the overall New York Canyon Project database in order to develop a resource estimate of the copper content at Longshot Ridge.

Previous Exploration Work Completed on the New York Canyon Project

On October 18, 2006, we announced that nine new targets have been identified from the geophysical surveys completed on the New York Canyon Project. The 2006 geophysical survey program completed on the New York Canyon Project consisted of a ground magnetic survey, an induced polarization ("IP") survey, compilation and review of historic geophysical surveys and interpretation that identified additional target areas for further drilling. A 134 line kilometre ground magnetics survey was completed by Magee Geophysical Services LLC in March, 2006. Lines were oriented N15E, spaced 100 metres apart and extend from the western side of the Copper Queen zone six kilometres to the east to cover the Champion and Longshot Ridge zones. A 50.4 line kilometre dipole-dipole IP survey was completed on 17 grid lines by Zonge Geosciences Inc. Readings were taken at N=1 to 7 separations allowing an effective depth penetration of approximately 400 metres. The lines were generally spaced at 100 metres except over areas of low magnetic response where the spacing was increased to 200 or 400 metres. This IP survey provides expansive coverage over the key mineralized areas and was of sufficient density to permit 3D inversion imagery. Jim Wright of J.L. Wright Geophysics Inc. conducted the data processing, inversion and interpretation of the geophysical data.

In his report, Mr. Wright notes that the historic gravity data is important for constraining the western limits for exploration. Structures interpreted from the gravity indicate multiple stepped faults that down drop mineralized zones to the west. The magnetic survey outlines a number of possible intrusive centers, including those that are associated with the Champion, Copper Queen and Longshot Ridge mineralized zones. A substantial area measuring 1.9 km by 1.3 km correlates well with the mapped skarn and intrusive rocks at Longshot Ridge. Drilling to date on this zone has covered an approximate 450 metre by 600 metre area.

Mr. Wright notes that the mineralized zones and associated magnetic high areas are relative chargeability lows surrounded by very large chargeability high areas. Low resistivity has a direct correlation with all mineralized zones and active magnetic areas. Through his compilation and interpretation of the geophysical survey data, Mr. Wright developed target criteria based upon geophysical characteristics. Based on these selection criteria, nine target zones are identified that require follow up drill testing. The targets show consistent line to line correlation with structures or magnetic trends and are in areas that have not been previously drilled. Mr. Wright has recommended 14 drill holes totaling 5,320 metres to test these target zones. Our drilling has indicated that the mineralized systems have not as yet been thoroughly evaluated and substantial drilling is required to outline the extent of mineralization at Copper Queen, Champion and Longshot Ridge. The geophysical surveys provide further evidence that these three key mineralized zones may form part of the same system offset by basin and range structures and that there are additional targets that require further evaluation.

We contracted Leroy Kay Drilling of Yerington, Nevada to provide core drilling services at the New York Canyon Project in 2006. Mr. Kay has provided drilling services to us for the past two years and began core drilling operations at the New York Canyon Project in early May, 2006. Drill core is expected to allow thorough

geological modeling of both the Longshot Ridge Claims copper oxide skarn system and the Copper Queen Claims copper-molybdenum porphyry mineralized area. Core samples will be used for metallurgical testing in order to identify a beneficial copper extraction technique in the oxide mineralized zones. Equipment and crew were mobilized to the project site at the end of March, with drilling commencing April 3, 2006. Drilling, grid work, geophysical surveys and permitting were ongoing during April and continued to June, 2006.

In fiscal 2007, the following results were received by Canyon Copper from re-analyses conducted on all pulps generated from the 2006 drill program:

Hole ID	From(ft)	To(ft)	Length(ft)	Copper(%)
06-11R*	0	10	10	1.03
	55	95	40	0.26
	195	215	20	0.44
06-13R*	No Significant Results
06-14R*	No Significant Results
06-15R*	95	135	40	0.39
06-20R*	85	95	10	0.78
	125	140	15	0.43
06-21C*	10	125	115	0.54
including	105	125	20	1.03
06-22R*	0	25	25	0.39
	55	125	70	0.32
	295	310	15	0.90
06-23C*	0	45	45	0.35
	80	310	230	0.78
including	210	270	60	1.72
06-24R*	30	70	40	0.29
	95	165	70	0.41
06-25R*	70	180	110	0.47
including	120	150	30	0.96
	450	485	35	0.34
06-26C*	20	115	95	0.29
06-27R*	0	70	70	0.16
including	55	70	15	0.37
	290	330	40	0.23
06-28R*	0	185	185	0.53
including	35	85	50	1.08
06-29C*	10	45	35	0.28
06-30R*	0	50	50	0.23
	120	225	105	0.28
including	120	170	50	0.45
06-31R*	0	130	130	0.32
	190	380	190	0.87
including	285	375	90	1.06
06-32C*	65	148	83	0.66
including	110	148	38	1.09
06-33C*	10	200	190	0.52
including	60	95	35	0.84
	175	195	20	1.50

Notes
* Reverse Circulation holes are designated “R” and diamond drill core holes are designated “C”.

The analyses of total copper content reported were completed by ALS Chemex using their AA62 atomic absorption procedure. A thorough quality assurance/quality control protocol of certified standard reference materials, duplicates and blanks was conducted during the analytical process.

Core hole 06-23C returned an average of 0.78% copper over a 230 foot interval starting from 80 feet. Included in this interval is a 60 foot section that averaged 1.72% copper from 210 to 270 feet. An upper interval from surface to 45 feet intersected 0.35% copper. RC drill 06-11R was drilled vertically to a depth of 265 feet. As shown in the table above, three mineralized horizons were encountered starting from surface to a depth of 215 feet within skarn altered siltstone varying from 0.26% copper over 40 feet to 1.03% copper over 10 feet. Drill holes 06-13R and 06-14R were both drilled vertically to depths of 365 feet and 350 feet respectively. These holes are located in the south-western area of Longshot Ridge within variably skarn altered siltstone. These holes, spaced approximately 120 feet apart, did not return any significant copper mineralization and may define the near surface limit of mineralization in this direction.

Hole 06-15R, located in the south central area of Longshot Ridge, returned an average of 0.39% copper over a 35 foot interval from 95 to 130 feet. Hole 06-20R was drilled in the south central portion of Longshot Ridge. This vertical hole returned an average of 0.80% copper over a 10 foot interval from 85 to 95 feet from within skarn altered marble and a 15 foot interval from 125 feet that averaged 0.43% copper in altered siltstone. Core hole 06-21C is located in the northwest area of Longshot Ridge. This vertical drill hole returned 0.54% copper over a 115 foot interval starting at 10 feet, including 1.03% copper over 20 feet from 105 to 125 feet. Hole 06-22R is located in the central portion of Longshot Ridge and intersected three mineralized horizons as shown in the table above, including 0.90% copper over 15 feet starting at 295 feet. Hole 06-24R is located in the south central portion of the Longshot Ridge deposit and returned an average of 0.29% copper over 40 feet starting at 30 feet depth and a 70 foot interval averaging 0.41% copper starting at 95 feet.

Hole 06-25R was drilled from the same setup as 06-24R and oriented towards the northwest at a 60 degree angle to a depth of 600 feet. The hole returned 0.47% copper over a 110 foot interval starting at 70 feet, including a 30 foot interval from 120 feet that averaged 0.96% copper. A further 35 foot interval from 450 feet returned an average of 0.34% copper. Drill hole 06-26C is located in the north east portion of Longshot Ridge and was drilled vertically to a depth of 534 feet. Drilling intersected weak skarn alteration in siltstone and limestone of the Gabbs Formation overlying Luning Formation limestone. The hole intersected weak to moderate copper mineralization from the start of sampling at 20 feet to 115 feet and averaged 0.29% Cu over this 95 foot distance. Copper mineralization in nearby outcrop indicates that the mineralization extends from surface.

06-27R is located in the central west edge of the tested limit of Longshot Ridge and was drilled vertically to a depth of 335 feet. Mineralization is hosted within variable skarn alteration in siltstone and limestone. Sampling returned a 15 foot interval from 55 to 70 feet that averaged 0.37% Cu and a 40 foot interval further down the hole from 290 to 330 feet that averaged 0.23% Cu. 06-28R is located 300 feet northwest of 06-27R within a zone of strong skarn alteration of siltstone and limestone within the Gabbs Fm. The hole was drilled vertically to a depth of 345 feet and is the most westerly located hole drilled to date on Longshot Ridge. Surface workings indicate that mineralization extends at least 300 feet further west. Hole 06-28R returned a broad zone of copper mineralization extending from surface to 185 feet that averaged 0.53% Cu and included a strong zone of mineralization extending from 35 feet to 85 feet that averaged 1.08% Cu.

06-29C is located in the northern end of Longshot Ridge and was drilled vertically to a depth of 500 feet. The hole intersected the Luning Formation limestone unit that was non to weakly altered. An interval from the start of sampling at 10 feet to 45 feet averaged 0.28% Cu. 06-30R is located 260 feet southwest of 06-29C and was drilled vertically to a depth of 225 feet. Copper mineralization is hosted within calc-silicate and skarn altered limestone adjacent to quartz monzonite sills. An interval from surface to 50 feet averaged 0.23% Cu and a second interval from 120 to 225 feet averaged 0.28% Cu. The mineralization remains open to the north, west and at depth.

06-31R is located in the west central area of Longshot Ridge. The hole was angled to the northwest at a dip of 60⁰ to a depth of 545 feet. The hole intersected moderate skarn alteration within siltstone and limestone of the Gabbs Fm. Mineralization extends from surface to 380 feet with an upper 130 foot zone averaging 0.32% Cu and a lower 190 foot zone starting at 190 feet that averages 0.87% Cu. Included within this interval is a 90 foot zone extending from 285 feet that averages 1.06% Cu. 06-32C is located at the northern portion of

Longshot Ridge. The hole was drilled northwest across stratigraphy at an angle of 70⁰ to a depth of 284 feet. An 83 foot interval starting at 65 feet returned an average of 0.66% Cu.

06-33C is located in north central Longshot Ridge, approximately 350 feet south of 06-32C. The hole was drilled towards the northwest at an angle of 70^° to a depth of 345 feet. A 190 foot zone from the start of sampling at 10 feet to 200 feet averaged 0.52% Cu, with a 20 foot zone from 175 to 195 feet averaging 1.50% Cu.

Drilling to date at the Longshot Ridge copper deposit has confirmed and expanded on the known extent of the copper oxide mineralization, which is exposed at surface and has been tested to depths up to 400 feet. With the exception of holes 06-13R and 06-14R, all drill holes completed in 2006 have indicated the consistent and wide spread nature of the copper mineralization at Longshot Ridge. The recent data is being incorporated into the overall New York Canyon project database in order to develop a resource estimate of the copper content at Longshot Ridge.

ITEM 3. LEGAL PROCEEDINGS.

On May 25, 2005, the United States Securities and Exchange Commission (the “SEC”) issued a formal order of private investigation to Canyon Copper Corp. (formerly “Aberdene Mines Limited”). In connection with the investigation order, we received subpoenas from the SEC requesting the production of certain of our documents, relating to, among other things, our transactions with Langley Park, PLC and the principals of Langley Park, PLC, certain of our news releases and certain materials sent to our stockholders. Effective October 23, 2007, the SEC informed us that it completed its investigation and did not intend to seek any enforcement action against us.

On December 20, 2005, the British Columbia Securities Commission (the “BCSC”) issued a formal investigation order to Canyon Copper and certain of our former officers pursuant to the Securities Act of British Columbia in connection with certain news releases and materials sent to our stockholders in 2004. We are cooperating fully with the BCSC inquiry and have submitted all requested documents in connection with the investigation to date. Effective October 3, 2007, the BCSC informed us that it completed its investigation and did not intend to seek any enforcement action against us.

On January 29, 2007, we received a statement of claim filed in the Ontario Superior Court of Justice from a company claiming unpaid investor relations fees of $25,916 and requesting the balance of an alleged retainer of $84,000. Canyon Copper is vigorously disputing this claim and believes this action is without merit.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATEDSTOCKHOLDERMATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Quotations for our common stock are currently on the Over-The-Counter Bulletin Board (the “OTC Bulletin Board”) under the symbol “CYOO.” The high and the low bid prices for our shares for the last two fiscal years of actual trading, as quoted in the OTC Bulletin Board, as applicable, were:

QUARTER	HIGH ($)	LOW ($)
1^stQuarter 2007	0.60	0.28
2^ndQuarter 2007	0.34	0.21
3^rdQuarter 2007	0.355	0.24
4^thQuarter 2007	0.37	0.28
1^stQuarter 2008	0.32	0.15
2^ndQuarter 2008	0.30	0.11
3^rdQuarter 2008	0.24	0.13
4^thQuarter 2008	0.16	0.08

Quotations entered on the OTC Bulletin Board reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.

Holders of Our Common Stock

As of September 22, 2008, we had 77 registered stockholders holding 76,981,399 of our issued and outstanding common stock.

Dividends

There are no restrictions in our Articles of Incorporation or Bylaws that prevent us from declaring dividends. Our governing status, Chapter 78 of the Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

	1.	We would not be able to pay our debts as they become due in the usual course of business; or

	2.	Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

Recent Sales of Unregistered Securities

All unregistered sales of our equity securities made during the fiscal year ended June 30, 2008 have been previously reported in our Quarterly Reports on Form 10-Q or Form 10-QSB and our Current Reports on Form 8-K.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

PLAN OF OPERATION

Our plan of operation for the next twelve months is to continue our initial exploration activities of the New York Canyon Project in Nevada.

Our estimated expenses for the next twelve months are as follows:

ITEM AND ACTIVITY		12 Month Total
		Budget
LAND STATUS
2008 - 2009 unpatented claim maintenance fees	$	175,000
Monthly Payments – Patented Claims		45,000
PERMITTING
Road and drill site work		50,000
Archeological and biological surveys		20,000
Water quality monitoring		20,000
Drill Permitting & Bonding		100,000
Reclamation		20,000
DRILL PROGRAM
(includes assays & supervision)
Compile data for engineering evaluation		60,000
Drilling Reverse Circular		900,000
Drilling Core		600,000
METALLURGICAL PROGRAM
Investigation into acid costs, sites, transport, etc.		-
Preliminary metallurgical work		105,000
Preliminary alternative leach studies		150,000
ENGINEERING & REPORTING
Engineering Reports		20,000
Modeling, Scoping study		50,000
GEOPHYSICAL SURVEYS
Induced polarization		70,000
Airborne radiometric survey		65,000
GEOLOGICAL MAPPING AND INVESTIGATIONS
Mapping and sampling		50,000
Contingency 10%		250,000
Management fee 5%		125,000
GENERAL AND ADMINISTRATIVE EXPENSES
General and Administrative		325,000
TOTAL	$	3,200,000

Accordingly we do not have sufficient funds to meet our planned expenditures over the next twelve months and will need to seek additional financing to meet our planned expenditures.

We have not had revenues since inception. We are currently seeking to identify sources of additional financing. However, there is no assurance we will be successful in raising the necessary funding or on terms that are acceptable to us. Since inception, we have been dependent on investment capital and debt financing from third parties as our primary source of liquidity. We anticipate continuing to rely on equity sales of shares of our common stock and loans in order to continue to fund our business operations. Issuances of additional shares will result in further dilution of our existing shareholders. See “Future Financings,” below.

RESULTS OF OPERATIONS

Summary of Year End Results
		Year Ended June 30
							Percentage
		2008			2007		Increase / Decrease
Revenue	$	-		$	-		n/a
Operating Expenses		(1,193,792	)		(1,617,880	)	(26.2)%
Other Income (Expense)		(22,712	)		(559,398	)	(95.9)%
Net Income (Loss)	$	(1,216,504	)	$	(2,177,278	)	(44.1)%

Revenue

We have not earned any revenues to date and do not anticipate earning revenues until such time as we enter into commercial production of our mineral properties. There can be no assurance that we will be successful in discovering commercial quantities or that we can commercially produce metals or minerals. We are presently an exploration stage company engaged in the search for mineral reserves. We can provide no assurances that we will be able to discover any commercially exploitable levels of mineral resources on our property, or, even if such resources are discovered, that we will be able to enter into commercial production of our mineral property.

Expenses

The major components of our expenses for the year are outlined in the table below:

		Year Ended June 30
							Percentage
		2008			2007		Increase / Decrease
Operating expenses:
Depreciation	$	-		$	-		n/a
Foreign exchange loss (gain)		3,568			8,448		(57.8)%
General and administrative		911,796			638,380		42.8%
Impairment of mineral property costs		-			477,588		(100)%
Impairment loss on equipment		-			10,811		(100)%
Mineral exploration costs		278,428			482,653		(42.3)%
Sub-total	$	1,193,792		$	1,617,880		(26.2)%
Other expenses:
Accretion of discounts on convertible debt	$	142,954		$	235,633		(39.3)%
(Gain) Loss on change in fair values of		(101,685	)		(3,641	)	2,692.8%
beneficial conversion features
Interest expense		85,849			103,353		(16.9)%
Recovery of loss (impairment loss) on investment		(104,406	)		224,053		(146.6)%
securities
Sub-total	$	22,712		$	559,398		(95.9)%
Total Expenses	$	1,216,504		$	2,177,278		(44.1)%

We incurred operating expenses in the amount of $1,193,792 for the fiscal year ended June 30, 2008 as compared to $1,617,880 for the fiscal year ended June 30, 2007.

General and administration expenses consist of consulting fees, professional fees and stock based compensation. Our general and administration expenses increased during the year ended June 30, 2008 due to the fact that we recorded stock based compensation of $578,932. We also entered into management consultant agreements with our Chief Executive Officer and President. Under the terms of the management consultant agreements, we agreed to pay our Chief Executive Officer and our President a consulting fee of CDN $5,000 per month. We did not incur any consulting fees to our Chief Executive Officer and our President during the year ended June 30, 2007.

Mineral exploration costs consisted of mineral lease payments in connection with our New York Canyon Project. Our mineral exploration costs decreased during the year ended June 30, 2007 due to the fact that we did not conduct exploration work on the New York Canyon Project in fiscal 2008.

During the year ended June 30, 2008, we received proceeds of $104,406 from the dissolution of Langley Park. In fiscal 2007, we recognized an impairment loss of $224,503 on our 1,027,974 Langley Park shares.

We anticipate that the expenses will increase over the next twelve months due to our ongoing planned exploration activities on the New York Canyon Project.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital
							Percentage
		At June, 2008			At June 30, 2007		Increase / Decrease
Current Assets	$	26,015		$	50,324		(48.3)%
Current Liabilities		(1,404,372	)		(1,140,201	)	23.1%
Working Capital Surplus (Deficit)	$	(1,378,357	)	$	(1,089,877	)	26.5%

Cash Flows
		Year Ended			Year Ended
		June 30, 2008			June 30, 2007
Cash Flows used in Operating Activities	$	(368,821	)	$	(1,274,264	)
Cash Flows used in Investing Activities		-			(293,138	)
Cash Flows provided by Financing Activities		350,000			1,462,053
Net Increase (decrease) in Cash During Period	$	(18,821	)	$	(105,349	)

The increase in our working capital deficit from $1,089,877 as at June 30, 2007 to a working capital deficit of $1,378,357 as at June 30, 2008 was primarily a result of our inability to obtain sufficient financing to fund our planned mineral exploration program. During the year ended June 30, 2008 we raised $350,000 from debt and equity financings to fund our mineral lease payments and for general and administrative expenses.

On August 13, 2007, we completed the sale of 1,200,000 units to one investor for total proceeds of $300,000.

We also received the following loans from Mr. Harvey, our Chief Executive Officer and Chairman:

	(a)	a loan of $25,000, bearing interest at a rate of 15% per annum and due on or before October 1, 2008; and

	(b)	a loan of CDN $25,000, bearing interest at a rate of 15% per annum and due on or before November 8, 2008.

Subsequent to our year ended June 30, 2008, we received a loan of $25,000 CDN from Mr. Harvey. The loan bears interest at a rate of 15% per annum and is due on or before January 7, 2009. In addition, we also completed the sale of 5,000,000 Units for total proceeds of $500,000.

Future Financings

Our plan of operation calls for significant expenses in connection with the exploration of the New York Canyon Project and requires us to obtain additional financing. We recorded a net loss of $1,216,504 for the year ended June 30, 2008 and have an accumulated deficit of $17,076,472 since inception. As at June 30, 2008, we had cash of $15,580 and, for the next twelve months, management anticipates that the minimum cash requirements to fund our proposed exploration program and our continued operations will be $3,200,000. Accordingly, we do not have sufficient funds to meet our planned expenditures over the next twelve months and will need to seek additional financing to meet our planned expenditures. There is no assurance that we will be able to obtain additional financing in the future.

On March 29, 2007, we entered into an engagement letter with Union Securities Ltd. (“Union”) pursuant to which Union agreed to act as our sponsor in connection with a proposed listing of our common stock on a Canadian stock exchange and to act as our agent for a proposed equity offering of a minimum of $6,000,000 and a maximum of $12,000,000 in units to non-US residents pursuant to Regulation S. Each unit is expected to consist of one common share and one share purchase warrant to purchase an additional common share at a price to be determined for a period of 18 months from the closing of the offering. We have agreed to pay Union a sponsorship fee of $25,000 (which fee has been paid), a cash commission equal to 8% of the proceeds received from units sold and options to acquire additional shares of our common stock equal to 10% of the number of units sold. As a condition of the engagement letter, on or before the closing of the offering, we must provide Union with a copy of our final listing application and the conditional listing approval of the Canadian stock exchange.

On August 1, 2007, we approved an offering on a private placement basis of up to 2,000,000 units at a price of $0.25 per unit pursuant to Regulation S of the Securities Act. Each unit consists of one share of the Corporation’s common stock and one share purchase warrant, each warrant entitling the holder thereof to purchase an additional share of our common stock for a period of one year from the date of issuance at an exercise price of $0.30 per share. On August 15, 2007, we issued 1,200,000 units to one subscriber. The balance of the offering has not been closed and there is no assurance that the remaining units will be sold.

Obtaining additional financing is subject to a number of factors, including the market prices for the mineral property and copper and our proposed listing of our common stock on a Canadian stock exchange. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. Since our inception, we have used our common stock to raise money for our operations and for our property acquisitions. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation. For these reasons, our independent auditors believe there exists a substantial doubt about our ability to continue as a going concern.

OFF-BALANCE SHEET ARRANGEMENTS

None.

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described below, that are the most important to the portrayal of our current financial condition and results of operations.

Use of Estimates

The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. We regularly evaluate estimates and assumptions related to long-lived assets, derivative liabilities, asset retirement obligations, stock-based compensation and deferred income tax asset valuations. We base our estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially

and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Mineral Property Costs

We have been in the exploration stage since its inception on January 21, 2000, and have not yet realized any revenues from our planned operations. We are primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02, “Whether Mineral Rights Are Tangible or Intangible Assets.” We assess the carrying costs for impairment under SFAS 144, “Accounting for Impairment or Disposal of Long Lived Assets” at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are 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

We record stock based compensation in accordance with SFAS 123(R), “Share-Based Payments,” which requires the measurement and recognition of compensation expense, based on estimated fair values, for all share-based awards, made to employees and directors, including stock options.

SFAS 123(R) requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. We use the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by our stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.

All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

ITEM 8. FINANCIAL STATEMENTS AND SUPLEMENTARY DATA.

Index to Financial Statements

1.	Report of Independent Registered Public Accounting Firm:

2.	Audited Financial Statements for the year ended June 30, 2008, including:

	a.	Balance Sheets as at June 30, 2008 and 2007;

	b.	Statements of Operations for the years ended June 30, 2008 and 2007 and accumulated from inception to June 30, 2008;

	c.	Statements of Cash Flows for the years ended June 30, 2008 and 2007 and accumulated from inception to June 30, 2008;

	d.	Statement of Stockholders’ Equity (Deficit) for the period from inception to June 30, 2008; and

	e.	Notes to the Financial Statements.

Canyon Copper Corp.
(An Exploration Stage Company)

June 30, 2008

	Index

Report of Independent Registered Public Accounting Firm	F–1

Balance Sheets	F–2

Statements of Operations	F–3

Statements of Cash Flows	F–4

Statement of Stockholders’ Equity (Deficit)	F–5

Notes to the Financial Statements	F–9

Report of Independent Registered Public Accounting Firm

To the Stockholders and Directors
of Canyon Copper Corp.
(An Exploration Stage Company)

We have audited the accompanying balance sheets of Canyon Copper Corp. (An Exploration Stage Company) as of June 30, 2008 and 2007 and the related statements of operations, cash flows and stockholders’ equity (deficit) for the years then ended and accumulated for the period from January 21, 2000 (Date of Inception) to June 30, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Canyon Copper Corp. (An Exploration Stage Company), as of June 30, 2008 and 2007, and the results of its operations and its cash flows for the years then ended and accumulated for the period from January 21, 2000 (Date of Inception) to June 30, 2008, in conformity with generally accepted accounting principles used in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated any revenue, has a working capital deficit and has incurred significant operating losses since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MANNING ELLIOTT LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

September 26, 2008

F-1

Canyon Copper Corp.
(An Exploration Stage Company)
Balance Sheets
(Expressed in U.S. dollars)

	June 30,		June 30,
	2008		2007
	$		$
ASSETS

Current Assets

Cash	15,580		34,401
Prepaid expenses and deposits	10,435		15,923

Total Assets	26,015		50,324

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

Accounts payable (Notes 5(d) and (e))	376,835		222,153
Accrued liabilities (Note 4)	143,979		64,829
Due to related parties (Note 5)	145,046		108,957
Convertible debt, less unaccreted discount of $72,506 and
$63,958, respectively (Note 6)	647,495		703,061
Derivative liabilities (Note 6)	91,017		41,201

Total Current Liabilities	1,404,372		1,140,201

Convertible debt (Note 6)	49,092		-

Total Liabilities	1,453,464		1,140,201

Contingencies (Notes 1 and 10)

Stockholders’ Deficit

Preferred Stock
Authorized: 100,000,000 shares, par value $0.00001
Issued and outstanding: 500,000 shares	5		5

Common Stock
Authorized: 500,000,000 shares, par value $0.00001
Issued and outstanding: 71,981,399 shares
(June 30, 2007 - 70,781,399 shares)	720		708

Additional Paid-in Capital	15,648,298		14,769,378

Deficit Accumulated During the Exploration Stage	(17,076,472	)	(15,859,968	)

Total Stockholders’ Deficit	(1,427,449	)	(1,089,877	)

Total Liabilities and Stockholders’ Deficit	26,015		50,324

The Accompanying Notes are an Integral Part of These Financial Statements

F-2

Canyon Copper Corp.
(An Exploration Stage Company)
Statements of Operations
(Expressed in U.S. dollars)

	Accumulated from
	January 21, 2000		For the
	(Date of Inception)		Year Ended
	to June 30,		June 30,
	2008		2008		2007
	$		$		$

Revenue	–		–		–

Expenses

Depreciation	5,540		–		–
Foreign exchange loss (gain)	(14,796	)	3,568		8,448
General and administrative (Note 5)	8,382,308		911,796		638,380
Impairment of mineral property costs	2,759,130		–		477,588
Impairment of property and equipment	10,811		–		10,811
Mineral exploration costs	4,358,751		278,428		482,653

Total Operating Expenses	15,501,744		1,193,792		1,617,880

Operating Loss	(15,501,744	)	(1,193,792	)	(1,617,880	)

Other Income (Expense)

Accretion of discounts on convertible debt	(558,770	)	(142,954	)	(235,633	)
Gain on change in fair values of beneficial conversion features	105,326		101,685		3,641
Interest expense	(232,357	)	(85,849	)	(103,353	)
Loss on sale of investment securities	(411,430	)	–		–
Loss on settlement of debt	(2,871	)	–		–
Recovery of loss (impairment loss) on investment securities	(474,626	)	104,406		(224,053	)

Total Other Income (Expense)	(1,574,728	)	(22,712	)	(559,398	)

Net Loss	(17,076,472	)	(1,216,504	)	(2,177,278	)

Net Loss Per Share – Basic and Diluted			(0.02	)	(0.03	)

Weighted Average Shares Outstanding			71,834,000		66,913,000

The Accompanying Notes are an Integral Part of These Financial Statements

F-3

Canyon Copper Corp.
(An Exploration Stage Company)
Statements of Cash Flows
(Expressed in U.S. dollars)

	Accumulated from
	January 21, 2000		For the
	(Date of Inception)		Year Ended
	to June 30,		June 30,
	2008		2008		2007
	$		$		$
Operating Activities

Net loss	(17,076,472	)	(1,216,504	)	(2,177,278	)

Adjustments to reconcile net loss to net cash used in operating
activities:

Accretion of discounts on convertible debt	558,770		142,954		235,633
Amortization of deferred financing costs	27,475		–		27,475
Bad debt expense	3,000		–		3,000
Depreciation	5,540		–		–
Foreign exchange translation loss on debt	(23,039	)	2,656		–
Gain on change in fair values of beneficial conversion features	(105,326	)	(101,685	)	(3,641	)
Loss on sale of investment securities	411,430		–		–
Loss on settlement of related party debt	2,871		–		–
Impairment loss on investment securities	579,032		–		224,053
Impairment of mineral property costs	2,747,630		–		466,088
Impairment of property and equipment	10,811		–		10,811
Stock-based compensation	4,509,490		578,932		–

Changes in operating assets and liabilities:

Amount receivable	(3,000	)	–		–
Prepaid expenses and deposits	(10,435	)	5,488		10,439
Accounts payable and accrued liabilities	597,350		148,663		(152,500	)
Due to related parties	256,750		70,675		81,656

Net Cash Used in Operating Activities	(7,508,123	)	(368,821	)	(1,274,264	)

Investing Activities

Acquisition of mineral properties	(413,138	)	–		(293,138	)
Proceeds received on sale of investment securities	417,251		–		–
Purchase of property and equipment	(16,351	)	–		–

Net Cash Used in Investing Activities	(12,238	)	–		(293,138	)

Financing Activities

Advances from related parties	147,019		–		147,019
Proceeds from issuance of convertible debentures	1,684,655		–		500,000
Proceeds from issuance of notes and loans payable	423,788		50,000		373,790
Repayment of notes payable	(230,281	)	–		(230,281	)
Debt financing costs	(250,143	)	–		(27,475	)
Issuance of common stock	5,760,903		300,000		699,000

Net Cash Provided by Financing Activities	7,535,941		350,000		1,462,053

Increase (Decrease) in Cash	15,580		(18,821	)	(105,349	)

Cash – Beginning of Period	–		34,401		139,750

Cash – End of Period	15,580		15,580		34,401

Non-cash Investing and Financing Activities:
Preferred stock issued for investment securities	1,535,575		–		–
Investment securities used to pay the finder’s fee for the preferred stock
issuance	153,557		–		–
Common stock subscribed to settle debt	547,737		–		449,534
Common stock issued for mineral property lease	2,334,492		–		172,950

Supplemental Disclosures:
Interest paid	22,471		–		22,471
Income taxes paid	–		–		–

The Accompanying Notes are an Integral Part of These Financial Statements

F-4

Canyon Copper Corp.
(An Exploration Stage Company)
Statement of Stockholders’ Equity (Deficit)
From January 21, 2000 (Date of Inception) to June 30, 2008
(Expressed in U.S. dollars)

Deficit

Accumulated

Preferred Stock

Common Stock

Additional

Common

Other

During the

Par

Paid-in

Stock

Comprehensive

Exploration

Value

Capital

Subscribed

Loss

Stage

Total

Balance – January 21, 2000

(Date of Inception)

–

Issuance of stock for services

and payment of advances for

$0.002 per share

–

138,000,000

1,380

273,620

–

275,000

Net loss for the period

–

(290,820

)

(290,820

)

Balance – June 30, 2000

–

138,000,000

1,380

273,620

–

(290,820

)

(15,820

)

Net loss for the year

–

(11,766

)

(11,766

)

Balance – June 30, 2001

–

138,000,000

1,380

273,620

–

(302,586

)

(27,586

)

Issuance of stock for cash at

$0.0036 per share

–

20,534,814

205

74,196

–

74,401

Net loss for the year

–

(43,817

)

(43,817

)

Balance – June 30, 2002

–

158,534,814

1,585

347,816

–

(346,403

)

2,998

Net loss for the year

–

(17,713

)

(17,713

)

Balance – June 30, 2003

–

158,534,814

1,585

347,816

–

(364,116

)

(14,715

)

Cancellation of stock owned

by a director

–

(88,000,000

)

(880

)

880

–

Conversion of debentures

–

902,126

–

902,126

Issuance of stock for cash at

$1.50 per share

–

700,000

1,049,993

–

1,050,000

Stock issuance costs

–

(105,000

)

–

(105,000

)

Net loss for the year

–

(1,601,036

)

(1,601,036

)

Balance – June 30, 2004

–

71,234,814

712

1,293,689

902,126

–

(1,965,152

)

231,375

The Accompanying Notes are an Integral Part of These Financial Statements

F-5

Canyon Copper Corp.
(An Exploration Stage Company)
Statement of Stockholders’ Equity (Deficit)
From January 21, 2000 (Date of Inception) to June 30, 2008
(Expressed in U.S. dollars)

Deficit

Accumulated

Preferred Stock

Common Stock

Additional

Common

Other

During the

Par

Paid-in

Stock

Comprehensive

Exploration

Value

Capital

Subscribed

Loss

Stage

Total

Balance – June 30, 2004

–

71,234,814

712

1,293,689

902,126

–

(1,965,152

)

231,375

Issuance of stock for

consulting services

–

400,000

761,996

–

762,000

Cancellation of stock issued

for consulting services

–

(200,000

)

(727,998

)

–

(728,000

)

Issuance of stock pursuant to

the exercise of options

–

400,000

199,996

–

200,000

Issuance of stock pursuant to

conversion of debentures

–

549,405

902,120

(902,126

)

–

Issuance of stock pursuant to

mineral property option

agreements

–

1,410,000

1,876,486

–

1,876,500

Issuance of stock to settle

related party debt

–

197,633

73,122

–

73,124

Cancellation of stock owned

by the President of the

Company

–

(20,000,000

)

(200

)

200

–

Issuance of preferred stock

for investment securities

500,000

–

1,382,013

–

1,382,018

Unrealized loss on

investment securities

–

(437,712

)

–

(437,712

)

Fair value of stock options

granted

–

384,144

–

384,144

Intrinsic value of beneficial

conversion features

–

180,183

–

180,183

Net loss for the year

–

(4,025,401

)

(4,025,401

)

Balance – June 30, 2005

500,000

53,991,852

540

6,325,951

–

(437,712

)

(5,990,553

)

(101,769

)

The Accompanying Notes are an Integral Part of These Financial Statements

F-6

Canyon Copper Corp.
(An Exploration Stage Company)
Statement of Stockholders’ Equity (Deficit)
From January 21, 2000 (Date of Inception) to June 30, 2008
(Expressed in U.S. dollars)

Deficit

Accumulated

Preferred Stock

Common Stock

Additional

Common

Other

During the

Par

Paid-in

Stock

Comprehensive

Exploration

Value

Capital

Subscribed

Loss

Stage

Total

Balance – June 30, 2005

500,000

53,991,852

540

6,325,951

–

(437,712

)

(5,990,553

)

(101,769

)

Issuance of stock for cash at

$0.25 per share

–

5,000,000

1,249,950

–

1,250,000

Issuance of stock for cash at

$0.30 per share

–

1,500,000

449,985

–

450,000

Issuance of stock for geological

data at a fair value of $0.39 per

–

25,000

–

9,750

–

9,750

Issuance of stock to settle debt

at a fair value of $0.37 per

–

63,744

23,584

–

23,585

Issuance of stock for cash at

$0.40 per share

–

4,475,000

1,789,955

–

1,790,000

Share issuance costs

–

(222,668

)

–

(222,668

)

Issuance of stock pursuant to a

mineral property agreement

–

500,000

284,995

–

285,000

Fair value of stock options

granted

–

3,229,195

–

3,229,195

Issuance of stock pursuant to

the exercise of stock options

–

150,000

52,498

–

52,500

Unrealized loss on investment

securities recognized as an

impairment loss

–

437,712

–

437,712

Net loss for the year

–

(7,692,137

)

(7,692,137

)

Balance – June 30, 2006

500,000

65,705,596

658

13,193,195

–

(13,682,690

)

(488,832

)

Issuance of stock for cash at

$0.25 per share

–

2,596,000

648,974

–

649,000

Issuance of stock for cash at

$0.30 per share

–

166,667

49,998

50,000

Issuance of shares pursuant to

mineral property agreement

–

515,000

172,945

–

172,950

Issuance of shares to settle

debt

–

400,000

99,996

–

100,000

Issuance of shares to settle

related party debt

–

21,200

–

5,300

–

5,300

Issuance of shares to settle

convertible debentures

–

1,376,936

344,221

–

344,234

Intrinsic value of beneficial

conversion features

–

254,749

–

254,749

Net loss for the year

–

(2,177,278

)

(2,177,278

)

Balance – June 30, 2007

500,000

70,781,399

708

14,769,378

–

(15,859,968

)

(1,089,877

)

The Accompanying Notes are an Integral Part of These Financial Statements

F-7

Canyon Copper Corp.
(An Exploration Stage Company)
Statement of Stockholders’ Equity (Deficit)
From January 21, 2000 (Date of Inception) to June 30, 2008
(Expressed in U.S. dollars)

Deficit

Accumulated

Preferred Stock

Common Stock

Additional

Common

Other

During the

Par

Paid-in

Stock

Comprehensive

Exploration

Value

Capital

Subscribed

Loss

Stage

Total

Balance – June 30, 2007

500,000

70,781,399

708

14,769,378

–

(15,859,968

)

(1,089,877

)

Issuance of stock for cash at

$0.25 per share

–

1,200,000

299,988

–

300,000

Fair value of stock options

granted

–

578,932

–

578,932

Net loss for the year

–

(1,216,504

)

(1,216,504

)

Balance – June 30, 2008

500,000

71,981,399

720

15,648,298

–

(17,076,472

)

(1,427,449

)

The Accompanying Notes are an Integral Part of These Financial Statements

F-8

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

1.	Nature of Operations and Continuance of Business

	Canyon Copper Corp., (the “Company”), was incorporated in the State of Nevada, U.S.A. on January 21, 2000 under the name Aberdene Mines Limited. On August 7, 2006, the Company changed its name to Canyon Copper Corp. The Company is an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”), No. 7 “Accounting and Reporting by Development Stage Enterprises”. The Company’s principal business plan is to acquire, explore and develop mineral properties and ultimately seek earnings by exploiting mineral claims.

	The Company has been in the exploration stage since its formation in January 2000 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition, exploration and development of mineral properties. Upon location of a commercial mineable reserve, the Company will actively prepare the site for extraction and enter a development stage. At present, management devotes most of its activities to raise sufficient funds to further explore and develop its mineral properties. Planned principal activities have not yet begun. The ability of the Company to emerge from the exploration stage with respect to any planned principal business activity is dependent upon its successful efforts to raise additional equity financing and/or attain profitable mining operations. As at June 30, 2008, the Company has a working capital deficit of $1,378,357 and has accumulated losses of $17,076,472 since inception. The Company also has significant mineral property acquisition and exploration commitments. There is no guarantee that the Company will be able to complete any of the above objectives. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

	Management’s plan for the next twelve months is to continue initial exploration activities on the New York Canyon Project in Nevada. The agreements pursuant to which the Company acquired its interests in the New York Canyon Project provide for a series of cash payments, the issue of certain shares over certain time periods, and the expenditure of certain minimum amounts on the exploration of the properties or contribute its share of ongoing expenditures. If the Company fails to make such payments or expenditures in a timely fashion it may lose its interest in those properties. As at June 30, 2008, the Company had cash of $15,580 on hand, and for the next twelve months, management anticipates that the minimum cash requirements to fund its proposed exploration program and continued operations will be $3,200,000. Accordingly, the Company does not have sufficient funds to meet planned expenditures over the next twelve months, and will need to seek additional debt or equity financing to meet its planned expenditures. There is no assurance that the Company will be able to raise sufficient cash to fund its future exploration programs and operational expenditures.

2.	Summary of Significant Accounting Policies

	a)	Basis of Presentation

		These financial statements and related notes are prepared in conformity with accounting principles generally accepted in the United States and are expressed in U.S. dollars. The Company’s fiscal year-end is June 30.

	b)	Use of Estimates

		The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to long-lived assets, mineral property costs, derivative liabilities, asset retirement obligations, stock-based compensation, and deferred income tax asset valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

	c)	Cash and Cash Equivalents

		The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

F-9

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

2.	Summary of Significant Accounting Policies (continued)

	d)	Investment Securities

		The Company reports investments in debt and marketable equity securities at fair value based on quoted market prices or, if quoted prices are not available, discounted expected cash flows using market rates commensurate with credit quality and maturity of the investment. All investment securities are designated as available for sale with unrealized gains and losses included in stockholders' equity. Unrealized losses that are other than temporary are recognized in earnings. Realized gains and losses are accounted for on the specific identification method.

		The Company periodically reviews these investments for other-than-temporary declines in fair value based on the specific identification method and writes down investments to their fair value when an other-than- temporary decline has occurred. When determining whether a decline is other-than-temporary, the Company examines (i) the length of time and the extent to which the fair value of an investment has been lower than its carrying value: (ii) the financial condition and near-term prospects of the investee, including any specific events that may influence the operations of the investee such as changes in technology that may impair the earnings potential of the investee: and (iii) the Company’s intent and ability to retain its investment in the investee for a sufficient period of time to allow for any anticipated recovery in market value. The Company generally believes that an other-than-temporary decline has occurred when the fair value of the investment is below the carrying value for one year, absent of evidence to the contrary. During the year ended June 30, 2007, there was an other-than-temporary decline in the fair value of the Company’s sole investment security and the Company realized a loss of $224,053. During the year ended June 30, 2008, the Company received proceeds of $104,406 from the sale of the investment security previously written off.

	e)	Mineral Property Costs

		The Company has been in the exploration stage since its inception on January 21, 2000, and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred 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, “Accounting for Impairment or Disposal of Long Lived Assets” at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are 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)	Long-lived Assets

		In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

		Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

	g)	Asset Retirement Obligations

		The Company accounts for asset retirement obligations in accordance with the provisions of SFAS No. 143 “Accounting for Asset Retirement Obligations”. SFAS No. 143 requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets.

F-10

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

2.	Summary of Significant Accounting Policies (continued)

	h)	Foreign Currency Translation

		The Company’s functional and reporting currency is the United States dollar. Occasional transactions may occur in a foreign currency and management has adopted SFAS No. 52 “Foreign Currency Translation”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

	i)	Financial Instruments

		The fair values of financial instruments, which include cash, accounts payable, accrued liabilities, due to related parties, derivative liabilities, and convertible debt were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Company is not exposed to significant interest rate, currency exchange rate or credit risk arising from these financial instruments.

	j)	Income Taxes

		The Company accounts for income taxes using the asset and liability method in accordance with SFAS No. 109, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

	k)	Comprehensive Income

		SFAS No. 130, “Reporting Comprehensive Income,” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As at June 30, 2008 and 2007, the Company had no items that represent comprehensive income.

	l)	Earnings (Loss) Per Share

		The Company computes earnings (loss) per share in accordance with SFAS No. 128, "Earnings per Share" which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Shares underlying these securities totalled 9,775,000 as at June 30, 2008 (17,569,000 as at June 30, 2007).

	m)	Stock-based Compensation

		The Company records stock based compensation in accordance with SFAS 123(R), “Share-Based Payments,” which requires the measurement and recognition of compensation expense, based on estimated fair values, for all share-based awards, made to employees and directors, including stock options.

		SFAS 123(R) requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.

		All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

F-11

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

2.	Summary of Significant Accounting Policies (continued)

	n)	Recent Accounting Pronouncements

		In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk- management activities. SFAS No. 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s consolidated financial statements.

		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 to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is 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”. The adoption of this statement is not expected to have a material effect on the Company’s consolidated financial statements.

		In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASB Statement No. 133”. SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. 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. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

		In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations”. This statement replaces SFAS No.141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS No. 141 (revised 2007) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS No. 141 (revised 2007) also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

		In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements Liabilities –an Amendment of ARB No. 51”. This statement amends ARB 51 to establish accounting and reporting standards for the Noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

		In February 2007, FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities” applies to all entities with available-for- sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, “Fair Value Measurements”. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

F-12

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

2.	Summary of Significant Accounting Policies (continued)

	n)	Recent Accounting Pronouncements (continued)

		In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

		In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statements No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a two-step method of first evaluating whether a tax position has met a more likely than not recognition threshold and second, measuring that tax position to determine the amount of benefit to be recognized in the financial statements. FIN 48 provides guidance on the presentation of such positions within a classified statement of financial position as well as on derecognition, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of this statement did not have a material effect on Company's financial statements.

		In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". This statement requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in earnings or the amortization and impairment requirements of Statement No. 140. The subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value eliminates the necessity for entities that manage the risks inherent in servicing assets and servicing liabilities with derivatives to qualify for hedge accounting treatment and eliminates the characterization of declines in fair value as impairments or direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year beginning after September 15, 2006. The adoption of this statement did not have a material effect on Company's financial statements.

		In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140", to simplify and make more consistent the accounting for certain financial instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", to permit fair value re-measurement for any hybrid financial instrument with an embedded derivative that otherwise would require bifurcation, provided that the whole instrument is accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the Impairment or Disposal of Long-Lived Assets", to allow a qualifying special-purpose entity to hold a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS No. 155 applies to all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006, with earlier application allowed. The adoption of this statement did not have a material effect on Company's financial statements.

	o)	Reclassifications

		Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

3.	Mineral Properties

	a)	The Company owns a 100% interest, subject to a 2% net smelter royalty, in the New York Canyon Copper Project located in Mineral County, Nevada. The Company acquired its interest by making cash payments of $460,000, issuing 2,000,000 shares at a fair value of $1,495,000, and incurring $2,000,000 in exploration expenditures.

		In addition the Company was assigned two lease agreements in which the Company must make quarterly lease payments. On October 9, 2004, a lease agreement was entered into with Tammy Gentry and Pat Hannigan on the Copper Queen #2 patented claim located within the overall New York Canyon property. The term of the lease is nine years. As required by the lease agreement, there was an initial payment of $1,000, with quarterly payments of $1,500 commencing October 1, 2004. The Company also has the right to purchase the claim for $50,000 at any time during the term of the lease agreement and that all quarterly payment made shall be applied to the purchase price.

		On January 1, 2005, a lease agreement was entered into with Clifford DeGraw and Richard Markiewicz on the Mildred and Copper Queen #1 patented claims located within the overall New York Canyon property. The term of the lease is seven years. As required by the lease agreement, there was an initial payment of $2,500, with quarterly payments commencing April 1, 2005 and required so long as the lease agreement remains in effect as follows: $2,500 per quarter during the first year; $3,500 per quarter during the second year; $4,000 per quarter during the third year; $5,000 per quarter during the fourth year; and $7,500 per quarter thereafter. The Company also has the right to purchase the claims for $130,000 at any time during the term of the lease agreement and that all quarterly payments made shall be applied to the purchase price.

F-13

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

3.	Mineral Properties (continued)

	b)	On July 21, 2004, the Company entered into a fifteen-year renewable lease agreement, which gives the Company the right of exploration for and production of minerals in eighteen mineral claims owned by the lessor. The mineral claims are located within the area of the Company’s New York Canyon Copper Project. Under the terms of the agreement, the Company must make cash payments of $25,000 on execution of the agreement (paid). On the first anniversary of the execution of the agreement, the Company must make payments to the lessor of $1,000 per month, $2,000 per month after the second anniversary and $3,000 per month after the third anniversary for as long as the lease is in effect. In addition, at six and twenty-four months after the execution of the agreement the Company will give the lessor, respectively, 10,000 shares (issued at a fair value of $3,500 in fiscal 2005) and 15,000 shares (issued at a fair value of $7,950 in fiscal 2007) of the Company’s common stock. This agreement is subject to a Net Smelter Interest payable to two parties (1.75% Net Smelter Royalty (“NSR”) + 0.5% NSR). The 1.75% is terminated upon payments of $2,000,000; then the second party will retain 1.5% NSR which will revert to 0.5% after an additional $2,000,000 is paid.

4.	Accrued Liabilities

	June 30,	June 30,
	2008	2007
	$	$

Interest accrued on debt	135,370	48,980
Professional fees and other accruals	8,609	15,849

	143,979	64,829

5.	Related Party Transactions

	a)	As at June 30, 2008, the Company was indebted to the President of the Company for $34,364 (Cdn$35,000) (2007 - $Nil) of consulting fees. The amount due is non-interest bearing, unsecured and due on demand.

	b)	As at June 30, 2008, the Company was indebted to the Chief Executive Officer of the Company for $110,224 (2007 - $23,509), which consists of the following amounts:

		i)	$36,132 (Cdn$36,800) (2007 - $Nil) for consulting fees, which is non-interest bearing, unsecured and due on demand;

		ii)	$24,546 (Cdn$25,000) (2007 - $23,509) in advances for working capital purposes which bears interest at 15% per annum, is unsecured and due on demand;

		iii)	$24,546 (Cdn$25,000) (2007 - $Nil) in advances for working capital purposes which bears interest at 15% per annum, is secured by a promissory note, and is due on November 8, 2008; and

		iv)	$25,000 (2007 - $Nil) in advances for working capital purposes which bears interest at 15% per annum, is secured by a promissory note, and is due on October 1, 2008.

		Refer to Note 6(a) for convertible debt owing the Chief Executive Officer of the Company.

	c)	As at June 30, 2008, the Company was indebted to the Chief Financial Officer of the Company for $458 (2007 - $278) of general and administrative expenses. The amounts due are non-interest bearing, unsecured and due on demand.

	d)	As at June 30, 2008, $70,190 is owed to a former Vice President of Finance of the Company and is included in accounts payable. As at June 30, 2007, this amount was included in due to related parties. The amount due is non-interest bearing, unsecured and due on demand.

	e)	As at June 30, 2008, $9,980 is owed to a former Vice President of the Company and is included in accounts payable. As at June 30, 2007, $14,980 was included in due to related parties. The amount due is non- interest bearing, unsecured and due on demand.

	f)	During the year ended June 30, 2008, the Company incurred consulting fees of $36,413 (2007 - $nil), $34,787 (2007 - $nil), and $69,630 (2007 - $58,830) to the Chief Executive Officer of the Company, President of the Company, and Chief Financial Officer, respectively.

	g)	During the year ended June 30, 2007, the Company incurred consulting fees of $120,000 and $24,450 to the former Vice President of the Company, and the former President of the Company, respectively.

F-14

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

6.	Convertible Debt

	a)	On March 14, 2007, the Chief Executive Officer of the Company advanced $100,000 to the Company. On April 25, 2007, the Chief Executive Officer loaned the Company a further $49,092 (Cdn$50,000). This loan bears interest at a rate of 15% per annum, is unsecured and due on demand. On April 25, 2007, the Company secured these loans by issuing convertible notes. The notes were due on March 14, 2008 and April 25, 2008, respectively, and are convertible at $0.30 per unit with each unit to consist of one common share and one share purchase warrant exercisable at $0.35 per common share for a period of two years. In accordance with EITF 98-5 “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios”, (“EITF 98-5”) the Company recognized the intrinsic value of the embedded beneficial conversion feature of $43,707 as additional paid-in capital and an equivalent discount which was expensed over the term of the convertible loans. During the year ended June 30, 2008, the Company recorded accretion of $35,123, increasing the carrying value of the convertible loans to $149,092. On May 9, 2008, the maturity date on the notes was extended to June 14, 2009 and July 25, 2009, respectively. These modifications had no accounting impact.

	b)	On September 12, 2006, the Company entered into a convertible loan agreement with Aton Ventures Fund Ltd. (“Aton”) pursuant to which the Company received a loan of $250,000 from Aton. On September 11, 2006, the Company entered into a convertible loan agreement with Asset Protection Fund Ltd. (“APF”) pursuant to which the Company received a loan of $250,000 from APF. The Aton loan was to mature on December 12, 2006 and the APF loan was to mature on December 11, 2006. Both loans bear interest at 8% per annum and were convertible at the option of the lender at any time prior to maturity into shares of common stock at a price of $0.30 per share. In accordance with EITF 98-5, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $175,000 as additional paid-in capital and an equivalent discount which was being expensed over the term of the convertible loans.

		On November 27, 2006, the convertible loans were amended to modify the conversion privileges and the maturity date for the APF loan was extended to April 11, 2007 and the maturity date for the Aton loan was extended to April 12, 2007. The loans were convertible into units at the lesser of $0.30 per unit or the closing price of the Company’s shares on the business day preceding the date that the Company receives a notice of conversion. Each unit will consist of one share of common stock and one half of a share purchase warrant. Each whole share purchase warrant is exercisable at $0.40 per common share for a period of one year from the date of issuance. In accordance with EITF 05-7 “Accounting for Modifications to Conversion Options Embedded in Debt Instruments and Related Issues” and EITF 96-19 “Debtor’s Accounting for a Modification or Exchange of Debt Instruments”, (“EITF 96-19”) the Company deemed the terms of the amendment to be substantially different and treated the original convertible loans extinguished and exchanged for new convertible loans. The Company determined that the conversion feature of the convertible loans met the criteria of an embedded derivative and therefore the conversion features of the loans needed to be bifurcated and accounted for as a derivative. The Company recorded accretion of the discount of $148,077 up to November 27, 2006. On November 27, 2006, the Company recognized the difference of $44,843 between the fair value of the conversion feature before and after the amendment. The Company will adjust the carrying value of the conversion feature to its fair value at each reporting date.

		On April 11, 2007, the maturity date of the APF loan was extended to October 11, 2007 and on April 12, 2007 the maturity date of the Aton loan was extended to October 12, 2007. In accordance with EITF 06-6 “Debtor’s Accounting for a Modification or Exchange of (Convertible) Debt Instruments” (EITF 06-6”), the Company determined it should not apply extinguishment accounting as the fair value of the embedded conversion option was not greater than 10% of the carrying amount of the original debt instrument immediately prior to the modification. To October 12, 2007, the Company recorded accretion of the discount of $71,766 increasing the carrying value of the convertible loans to $500,000.

		On November 30, 2007, the maturity date of the APF loan was extended to January 11, 2009 and the maturity date of the Aton loan was extended to January 12, 2009. In accordance with EITF 06-6, the Company determined it should apply extinguishment accounting as the fair value of the embedded conversion option was greater than 10% of the carrying amount of the original debt instrument immediately prior to the modification. On November 30, 2007, the Company recognized a gain of $41,201 upon extinguishment of the modified debt. In addition, the Company recognized a discount of $151,502 and increased the derivative liability to $151,502. During the year ended June 30, 2008, the Company recorded accretion of the discount of $78,996 increasing the carrying value of the convertible loans to $427,494. The Company recorded a gain on the change in the fair values of the derivative liabilities of $60,484 during the year ended June 30, 2008, decreasing the fair value of the derivative liabilities to $91,017. The outstanding amounts under the loans may be repaid, in whole or in part, at any time at the option of Company without penalty. For as long as the loans remain outstanding the Company has agreed not to mortgage, pledge or otherwise encumber its interest in its minerals claims in the State of Nevada without the consent of its lenders. Proceeds of the loans are to be used for working capital purposes to fund the Company’s continued operations.

F-15

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

6.	Convertible Debt (continued)

	c)	On March 20, 2007, the Company received a loan of $120,000 from Aton Select Fund Limited. The loan bears interest at a rate of 15% per annum, was unsecured and due on demand. On April 25, 2007, the Company secured this loan by issuing a convertible note. The note is due on March 20, 2008 and is convertible at $0.30 per unit with each unit to consist of one common share and one share purchase warrant exercisable at $0.35 per common shares for a period of two years. In accordance with EITF 98-5, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $36,041 as additional paid-in capital and an equivalent discount which was expensed over the term of the convertible loan. During the year ended June 30, 2008, the Company recorded accretion of the discount of $36,041 increasing the carrying value of the convertible loan to $120,000. On May 9, 2008, the maturity date on the note was extended to June 20, 2009. This modification had no accounting impact.

7.	Common Stock

	For the year ended June 30, 2008:

	On August 15, 2007, the Company issued 1,200,000 units for proceeds of $300,000. Each unit consisted of one share of common stock and one share purchase warrant. Each share purchase warrant is exercisable at a price of $0.30 per common share for a period of two years from the date of issuance.

	For the year ended June 30, 2007:

	a)	On June 29, 2007, the Company issued 436,000 units at $0.25 per unit for proceeds of $109,000. Each unit consisted of one share of common stock and one share purchase warrant. Each share purchase warrant is exercisable at $0.30 per common share expiring one year from the date of issuance.

	b)	On June 29, 2007, the Company issued 1,376,936 shares of common stock and 1,376,936 share purchase warrants to settle $344,234 of outstanding principal and interest of debentures. The share purchase warrants are exercisable at a price of $0.30 per common share for a period of two years.

	c)	On June 1, 2007, the Company issued 400,000 units at a fair value $0.25 per unit to settle debt of $100,000. Each unit consisted of one share of common stock and one share purchase warrant. Each share purchase warrant is exercisable at a price of $0.30 per common share expiring one year from the date of issuance.

	d)	On April 30, 2007, the Company issued 21,200 units at a fair value $0.25 per unit to settle related party debt of $5,300. Each unit consisted of one share of common stock and one share purchase warrant. Each share purchase warrant is exercisable at a price of $0.30 per common share expiring one year from the date of issuance.

	e)	On March 15, 2007, the Company issued 500,000 shares of common stock at a fair value of $165,000 as a minimum advanced royalty payment pursuant to the terms of the mineral property agreement entered into on July 21, 2004. Refer to Note 3(b).

	f)	On February 28, 2007, the Company issued 166,667 units at $0.30 per unit for proceeds of $50,000. Each unit consisted of one share of common stock and one share purchase warrant. Each share purchase warrant is exercisable at a price of $0.30 per common share expiring one year from the date of issuance.

	For the year ended June 30, 2007:

	g)	On January 12, 2007, the Company issued 1,000,000 units $0.25 per unit for proceeds of $250,000. Each unit consisted of one share of common stock and one share purchase warrant. Each share purchase warrant is exercisable at a price of $0.30 per common share expiring one year from the date of issuance.

	h)	On December 15, 2006, the Company issued 1,160,000 units at $0.25 per unit for proceeds of $290,000. Each unit consisted of one share of common stock and one share purchase warrant. Each share purchase warrant is exercisable at a price of $0.30 per common share expiring one year from the date of issuance.

	i)	On July 21, 2006, the Company issued 15,000 shares of common stock at a fair value of $7,950 as a minimum advanced royalty payment pursuant to the terms of the mineral property agreement entered into on July 21, 2004. Refer to Note 3(b).

F-16

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

8.	Stock Options

	On December 3, 2007, the Company established a 2007 Stock Incentive Plan (the “2007 Plan”) to issue up to a maximum of 7,000,000 shares of common stock. The maximum aggregate number of shares of common stock that may be optioned and sold under the 2007 Plan will be increased effective the first day of each of the Company’s fiscal quarters commencing January 1, 2008, by an amount equal the lesser of (i) 10% of the total increase in the number of shares of common stock outstanding during the previous fiscal quarter, or (ii) a lesser number of shares of common stock as determined by the board of directors. The exercise price for consultants cannot be less than 85% of the fair market value of the common stock on the grant date. The exercise price for all others can not be less than 100% of the fair market value of the common stock on the grant date for incentive stock options and can not be less than 85% of the fair market value of the common stock on the grant date for non-qualified stock options. The Plan Administrator shall establish the option term or, if not so established, shall be ten years from the grant date. As at June 30, 2008, the Company had 3,325,000 stock options available for granting pursuant to the 2007 Plan.

	On April 5, 2006, the Company established a 2006 Stock Incentive Plan (the “2006 Plan”) to issue up to a maximum of 10,000,000 shares of common stock. The maximum aggregate number of shares of common stock that may be optioned and sold under the 2006 Plan will be increased effective the first day of each of the Company’s fiscal quarters commencing April 1, 2006, by an amount equal the lesser of (i) 15% of the total increase in the number of shares of common stock outstanding during the previous fiscal quarter, or (ii) a lesser number of shares of common stock as determined by the board of directors. The exercise price for consultants cannot be less than 75% of the fair market value of the common stock on the grant date. The exercise price for all others can not be less than 100% of the fair market value of the common stock on the grant date for incentive stock options and can not be less than 75% of the fair market value of the common stock on the grant date for non-qualified stock options. The Plan Administrator shall establish the option term or, if not so established, shall be ten years from the grant date. As at June 30, 2008, the Company had 2,423,750 stock options available for granting pursuant to the 2006 Plan.

	The Company’s 2004 Non-qualified Stock Option Plan (the “2004 Plan”) is intended to provide incentives to employees, directors and consultants by providing them with opportunities to purchase shares of our common stock. The 2004 Plan is effective as of June 17, 2004 and all stock options granted under the 2004 Plan must be granted within ten years from the date the 2004 Plan was adopted. The Company originally registered the 2004 Plan on June 17, 2004 pursuant to a registration statement on Form S-8. Effective April 6, 2005, the Company amended the 2004 Plan and increased the total of common shares reserved for issuance under the 2004 Plan from one million to a total of four million common shares. The Board of Directors is authorized to administer the 2004 Plan. In doing so, the Board of Directors may: (i) designate optionees; (ii) determine the terms and provisions of respective option agreements (which need not be identical) including, but not limited to, the number of shares to be covered by each option, provisions concerning the time or times when and the extent to which the options may be exercised, and the nature and duration of restrictions as to transferability or restrictions constituting substantial risk of forfeiture; (iii) accelerate the right of an optionee to exercise, in whole or in part, any previously granted option; (iv) interpret the provisions and supervise the administration of the 2004 Plan; (v) determine the fair market value of shares issuable under the 2004 Plan; (vi) designate the type of options to be granted to an optionee; and (vii) determine any other matter which is necessary or desirable for, or incidental to, the administration of the 2004 Plan. As at June 30, 2008, the Company had 2,500,000 stock options available for granting pursuant to the 2004 Plan.

	On December 3, 2007, the Company granted 2,875,000 stock options to officers, directors and consultants at an exercise price of $0.25 per share exercisable for a period of five years and recorded stock-based compensation of $471,171 as general and administrative expense.

	On December 10, 2007, the Company granted 300,000 stock options to a consultant at an exercise price of $0.25 per share exercisable for a period of five years and recorded stock-based compensation of $47,862 as general and administrative expense.

	On January 29, 2008, the Company granted 500,000 stock options to a director at an exercise price of $0.25 per share exercisable for a period of five years and recorded stock-based compensation of $59,899 as general and administrative expense.

F-17

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

8.	Stock Options (continued)

	A summary of the Company’s stock option activity is as follows:

			Weighted Average	Aggregate
	Number of		Exercise Price	Intrinsic Value
	Options		$	$
Outstanding, June 30, 2006	11,400,000		0.45
Exercised	(200,000	)	0.50
Forfeited	(2,500,000	)	0.38
Outstanding, June 30, 2007	8,700,000		0.47
Granted	3,675,000		0.25
Expired	(4,200,000	)	0.45
Cancelled	(4,000,000	)	0.50
Outstanding, June 30, 2008	4,175,000		0.26	–
Exercisable, June 30, 2008	4,175,000		0.26	–

As at June 30, 2008, the weighted average remaining contractual life of the outstanding stock options is 3.83 years.

As at June 30, 2008, the Company had no unvested options outstanding.

During the year ended June 30, 2008 and 2007, the Company recorded stock-based compensation of $578,932 and $Nil, respectively, as general and administrative expense.

The fair value for stock options granted was estimated at the date of grant using the Black-Scholes option-pricing model and the weighted average fair value of stock options granted during the years ended June 30, 2008 and 2007 were $0.16 and $Nil per share, respectively. The weighted average assumptions used are as follows:

	Years Ended
	June 30,	June 30,
	2008	2007

Expected dividend yield	0%	–
Risk-free interest rate	3.13%	–
Expected volatility	111%	–
Expected option life (in years)	4.65	–

9.	Share Purchase Warrants

	The following table summarizes the continuity of the Company’s share purchase warrants:

			Weighted
			Average
			Exercise
	Number of		Price
	Warrants		$

Balance, June 30, 2006	4,475,000		0.50

Issued	4,560,803		0.30

Balance, June 30, 2007	9,035,803		0.40

Issued	1,200,000		0.30
Expired	(8,869,136	)	0.40

Balance, June 30, 2008	1,366,667		0.31

F-18

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

9.	Share Purchase Warrants (continued)

	As at June 30, 2008, the following share purchase warrants were outstanding:

	Exercise
Number of	Price
Warrants	$	Expiry Date

166,667	0.40	August 28, 2008
1,200,000	0.30	August 15, 2009

1,366,667

10.	Legal Proceeding

	On January 23, 2007, Focused Investor Relations Marketing Inc. commenced an action in Ontario, Canada against the Company seeking payment in the amount of $84,000 pursuant to an oral agreement. The Company believes that this action is without merit and will defend its position vigorously.

11.	Income Taxes

	The Company has net operating losses carried forward of $5,685,958 available to offset taxable income in future years which expire beginning in fiscal 2020.

	The Company is subject to United States federal and state income taxes at an approximate rate of 35%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:

	June 30,		June 30,
	2008		2007
	$		$
Net loss before income taxes per financial statements	(1,216,504	)	(2,177,278	)
Income tax rate	35%		35%
Income tax recovery	425,776		762,047
Permanent differences	(217,071	)	(81,197	)
Change in valuation allowance	(208,705	)	(680,850	)
Provision for income taxes	–		–

The significant components of deferred income tax assets and liabilities at June 30, 2008 and 2007 are as follows:

	June 30,		June 30,
	2008		2007
	$		$

Mineral property costs	2,491,258		2,393,809
Net operating losses carried forward	1,990,085		1,878,829

Valuation allowance	(4,481,343	)	(4,272,638	)

Net deferred income tax asset	–		–

F-19

Canyon Copper Corp.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)

12.	Subsequent Events

	a)	On July 7, 2008, the CEO of the Company loaned the Company Cdn$25,000. The loan bears interest at a rate of 15% per annum, is secured by a promissory note, and is due on January 7, 2009.

	b)	On August 21, 2008, the Company completed a non-brokered private placement of 5,000,000 units at a price of $0.10 per unit. Each unit consisted of one share of common stock and one share purchase warrant with each warrant entitling the purchaser to acquire an additional share of common stock at a price of $0.12 per share for a period of two years.

F-20

ITEM 9. IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9AT. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2008 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.

Disclosure controls and procedures are those controls and 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.

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Annual Report on Form 10-K for the year ended June 30, 2008 fairly present our financial condition, results of operations and cash flows in all material respects.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

Insufficient Written Policies & Procedures:We have insufficient written policies and procedures for accounting and financial reporting.

Inadequate Financial Statement Closing Process:We have an inadequate financial statement closing process.

Audit Committee & Lack of Audit Committee Financial Expert:Our audit committee has deficiencies due to the fact that they do no meet on a frequent basis to approve significant events or transactions, and our audit committee does not have an audit committee financial expert.

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) prepare and implement sufficient written policies and checklists for financial reporting and closing processes and (4) may consider appointing outside directors and audit committee members in the future.

Management, including our Chief Executive Officer and the Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report.

Changes in internal control over financial reporting

As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the fiscal year ended June 30, 2008 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the effectiveness of controls and procedures

Our management, including our Chief Executive Officer and the Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Our executive officers and directors and their respective ages and titles are as follows:

NAME Of DIRECTOR / OFFICER	AGE	POSITION
Anthony Harvey	74	Director, Chairman and Chief Executive Officer
Benjamin Ainsworth	67	Director, President And Secretary
Kurt Bordian	40	Chief Financial Officer and Treasurer
Andrew Malim	65	Director
Bryan Wilson	58	Director
John Carlesso	44	Director
Milton Datsopoulos	68	Director

Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years:

Anthony Harvey(Director, Chairman, and Chief Executive Officer): On May 30, 2006, Mr. Anthony Harvey was appointed as our Chairman, Chief Executive Officer and as a member of our Board of Directors. Mr. Anthony Harvey has over 40 years of consulting experience on numerous mining projects internationally with capital costs ranging up to and exceeding $400 million. Mr. Harvey has spent 30 years working with Wright Engineers Ltd. – Fluor Daniels in various management positions, including Senior Project Manager, involved in the design and construction of 14 mines world wide on behalf of major mining corporations.

Mr. Harvey is presently the founder and board member of ARH Management Limited, which has provided management and consulting services to the resource industry. Also, Mr. Harvey was a director of Terra Energy Inc. (TTR-TSX.V) from August 2002 to May 2007, a petroleum and natural gas company based in Calgary, Alberta, and is currently chairman and a director of ESO Uranium Corp. (ESO-TSX.V), a uranium exploration company with properties located in Saskatchewan and Northeastern Ontario.

Mr. Harvey was a former founder, president and chairman of Azco Mining Inc. (AZCO-TSX/AMEX) from 1988 to 2000, former founder, chairman and director of Oremex Resources Inc. (ORM-TSX.V), and former chairman and director of Lakeshore Gold Corp. (LSG-TSX).

Benjamin Ainsworth(Director, President and Secretary): On May 30, 2006, Mr. Benjamin Ainsworth was appointed as our Secretary and a member of our Board of Directors. Since November 7, 2007, Mr. Ainsworth has served as our President.

Mr. Ainsworth is a senior geologist and mining consultant who has been involved in the mining industry for over thirty-five years. Mr. Ainsworth joined Placer Development in 1965 and held positions of Senior Geologist, Chief Geochemist, Exploration Manager – Eastern Canada, Exploration Manager – Chile, and President – Placer Chile, South America. Throughout the 1970’s, Mr. Ainsworth was involved in the design, budgeting and implementation of exploration programs that included large and small drill programs, geophysical surveys, geological mapping, geochemical surveys, and a full range of project evaluation studies.

Mr. Ainsworth is the principal, senior geologist and mining consultant of Ainsworth Jenkins Holdings Inc. The consulting firm has been responsible for concept, design and implementation of a number of exploration projects. Since November 1995, Mr. Ainsworth has been a director of BHR Buffalo Head Resources Ltd. (BHR.H-NEX). Mr. Ainsworth is also a director of several reporting companies including ESO Uranium Corp. (ESO-TSX.V), Columbia Yukon Explorations Inc. (CYU-TSX.V), Consolidated Venturex Holdings Ltd. (CVA-TSX.V), and Sultan Minerals Inc. (SUL-TSX.V) and Hathor Exploration Ltd. (HAT-TSX.V)

Mr. Ainsworth is a registered Professional Engineer in the Province of British Columbia and is a Canadian citizen by naturalization.

Kurt Bordian (Chief Financial Officer and Treasurer): Mr. Kurt Bordian was appointed as our Chief Financial Officer on January 6, 2006 and as our Treasurer on November 7, 2007. Mr. Bordian is responsible for our financial management functions. He has worked primarily in the mineral exploration and oil and gas industries over the past 10 years, and has held the position of controller with three public companies exploring and operating in the Solomon Islands, Ghana, Tunisia and Western Canada. Mr. Bordian is also active with other public entities as operations manager and corporate secretary.

From 1996 to 2000, Mr. Bordian held the position of controller for Leigh Resource Corp. located in Vancouver, British Columbia. From July 2000 to August 2001, Mr. Bordian was a controller for Insurance Replacement Centre of Vancouver, British Columbia. From September 2001 to October 2003, Mr. Bordian worked as a self-employed accountant. Since November 2003, Mr. Bordian has been a controller for Bishop Gold Inc. located in Vancouver, British Columbia. From November 2004 to January 2006, Mr. Bordian was a director for Legal Access Technologies Inc. From November 2004 to April 2005, Mr. Bordian was the Chief Financial Officer for Legal Access Technologies Inc. From July 2005 to March, 2007, Mr. Bordian was the Chief Financial Officer of Mexoro Minerals Ltd. from February 2007 to June 2007. Mr. Bordian was chief financial officer, corporate secretary and a director for Calypso Acquisition Corp. (CLP-TSX.V). Mr. Bordian has been Chief Financial Officer of ESO Uranium Corp. (ESO-TSX.V) since November 2006. Mr. Bordian was a director of Bordeaux Energy Inc. (BDO-TSX.V) from July 2006 to June 2007 and chief financial officer from July 2006 to September 2006. Mr. Bordian has been a director of Palo Duro Energy Inc. (PDE-TSX.V) since August, 2006 and former chief Financial officer from August, 2006 to September, 2006. Mr. Bordian has been President, CEO and director Magnate Ventures Inc. (MGV.H-NEX) since May, 2007. Mr. Bordian has been a director of Waymar Resources Ltd. (WYM-TSX.V). Mr. Bordian has been Chief Financial Officer, Secretary and director of Black Tusk Minerals Inc. (BKTK-OTCBB) since August 2005.

Mr. Bordian is a Certified General Accountant in Canada, and holds a Bachelor of Commerce (Honors) Degree from the University of Manitoba.

Andrew Malim (Director): On January 29, 2008, Mr. Malim was appointed a member of our Board of Directors.Mr. Malim has over thirty years experience dedicated to the financing and management of mining companies. Mr. Malim has a strong working knowledge of geology and geologic structures and has been associated with a number of significant gold mining discoveries in British Columbia, several copper properties in Africa, gold exploration in North and South America and diamond exploration in the USSR and Africa.

Mr. Malim’s personal and corporate achievements include being a full member of the International Stock Exchange London from 1966 to 1979; a founding member of the James Capel & Co mining team from 1968 to 1979; and a founder of the Lion Mining Group in 1981 which until 2004, acted as financier both as principal and agent to numerous mining companies and projects. Lion Resource Management Ltd, prior to being acquired by Arlington Securities Ltd. in 2004, managed the well-known ‘Midas’ gold mining funds.

Mr. Malim has held executive and non executive board positions on numerous North American and UK mining companies including, Azco Mining Inc; Blackdome Resources Ltd.; Delaware Resources Ltd.; Dragon Gold Resources Ltd. (OTCBB – DRGO); MFC- Mining Finance Corporation; Miramar Mining Corporation (TSX – MAE). Mr. Malim is currently a director of Kryso Resources Ltd. (AIM – KYS.L).

Mr. Malim has written regularly for journals on the subject of mining finance and has been a regular speaker at mining conferences including the World Economic Forum in Washington, D.C.

During 1984 to 1988, Lion’s work included research in smaller mining projects with a number of major mining company clients. In 1985, N M Rothschild Asset Management took a major stake with Lion Group in MFC Mining Finance Corporation Inc (MFC) to develop the Blackdome Mine in south British Columbia. This ex-Noranda project was high-grade and the feasibility study by Kilborn confirmed 1,000,000 tonnes of 30 g/t gold. This project was a technical and market success.

During 1985 to 1989, Lion was financier to the SNIP project via Delaware Resources Ltd. The SNIP was located in northern British Columbia. The SNIP was similar to the Blackdome in grade and tonnage and style of mineralization. The SNIP came into profitable production and closed around 1999.

Bryan Wilson (Director): Effective March 6, 2006, Bryan Wilson was appointed as a member of our Board of Directors. Mr. Wilson served as our President and Treasurer from May 30, 2006 to November 7, 2007.

Mr. Wilson has worked in the fields of mining exploration and development for 18 years and financial services for 12 years. He has filled various roles such as Project Geologist/Manager for Shell Canada; Consultant, Financial Advisor for Scotia McLeod; Mining Analyst for C.M. Oliver; and Corporate Finance Specialist for Dominick & Dominick and Thames Capital.

Within the mining industry, Mr. Wilson has acquired broad international exposure to a variety of mineral commodities and has worked throughout the world. In 1981, Shell Canada's East Kemptville Tin Mine which was discovered and developed under his supervision (50.0 million tonnes @ 0.23% Tin).

Mr. Wilson is currently the President, CEO and director of Ste. Genevieve Resources Ltd. (SGVL-CNQ, STGIF-OTCBB), a mining exploration and development company. Since September 1999, Mr. Wilson has acted as a director of Spider Resources Inc. (SPQ-TSX.V).

John Carlesso (Director): On February 22, 2006, Mr. John Carlesso was appointed as a member of our Board of Directors. Mr. Carlesso is a senior executive with over 15 years of international business and financial markets experience.

Mr. Carlesso is currently president of Apogee Minerals Ltd. (“Apogee”) (APE-TSX.V), a Canadian mining and exploration company developing advanced Silver-Zinc projects in South America. Apogee is focused on projects that offer significant exploration upside with the potential to be rapidly developed into producing assets. Apogee currently has a focus in the historic silver producing regions of Bolivia. Mr. Carlesso held the position of vice president, Corporate Development with Desert Sun Mining Corp., a gold mining and exploration company listed on the Toronto Stock Exchange and the American Stock Exchange. From August 2000 to September 2003, Mr. Carlesso was in Investor Relations and a director of Kasten Chase Applied Resources located in Mississauga, Ontario. Kasten Chase Applied Resources is in the business of data security. Previously, he provided capital markets, corporate finance, and strategic marketing advice to growth-oriented companies, both public and private, across a broad range of sectors. He has also held positions in the Institutional and Private Client divisions at some of Canada's largest investment dealers. Mr. Carlesso holds a Bachelor of Economics degree from the University of Western Ontario.

Milton Datsopoulos (Director): Mr. Datsopoulos joined our Board of Directors on July 1, 2004 and served as Chairman of the Board from April 12, 2005 to May 30, 2006. Mr. Datsopoulos is the founder of and partner in Datsopoulos, MacDonald, and Lind, P.C., a multi-disciplinary law firm located in Missoula, Montana which specializes in business, environmental, and transportation law with a U.S. and international clientele. He has served on and continues to serve as a Genutec board member and director of numerous business organizations including public and private companies, including Montana Rail Link, Leigh Resource Corporation, Montana World Trade Center, Criticare Systems Inc. (AMEX-CMD) and Healthrite Corporation.

Mr. Datsopoulos earned a bachelor's in Economics with high honors and a law degree with honors, both from the University of Montana. Mr. Datsopoulos and his partners have achieved the highest legal rating from the most recognized national publication that rates attorneys based upon evaluations by local attorneys and judges. He is a member of the State Bar of Montana, American Bar Association, Montana Trial Lawyers Association, and the Association of Trial Lawyers of America. Mr. Datsopoulos specializes in personal injury law, criminal law, medical malpractice and general litigation practice.

TERM OF OFFICE

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

COMMITTEES OF THE BOARD OF DIRECTORS

Audit Committee

Our audit committee currently consists of the following directors: Anthony Harvey, Milton Datsopolous and John Carlesso. The audit committee is responsible for:

(1)	selection and oversight of our independent accountant;
(2)	establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters;
(3)	establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters;
(4)	engaging outside advisors; and
(5)	funding for the outside auditory and any outside advisors engagement by the audit committee.

Our board of directors has adopted an Audit Committee Charter which provides appropriate guidance to Audit Committee members as to their duties.

Audit Committee Financial Expert

Our Board of Directors has determined that we do not presently have a director who meets the definition of an “audit committee financial expert.” We believe that the cost related to appointing a financial expert to our Board of Directors at this time is prohibitive.

Disclosure Committee and Charter

We have a disclosure committee and disclosure committee charter. The disclosure committee is comprised of all of our officers and directors. The purpose of the committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us, and the accuracy, completeness and timeliness of our financial reports.

CODE OF ETHICS

We adopted a Code of Ethics applicable to our Chief Executive Officer, Chief Financial Officer, Corporate Controller and certain other finance executives, which is a "code of ethics" as defined by applicable rules of the SEC. Our Code of Ethics was attached as an exhibit to our Annual Report on Form 10-KSB for the year ended June 30, 2003, filed with the SEC on August 26, 2003. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our chief executive officer, chief financial officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than 10% of a registered class of our securities (“Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by SEC regulations to furnish us with copies of all forms they file pursuant to Section 16(a). Based solely on our review of such reports received by the Company, other than as described below, no other reports were required for those persons, we believe that, during the year ended June 30, 2008, all Reporting Persons complied with all Section 16(a) filing requirements applicable to them.

The following persons have failed to file, on a timely basis, the identified reports required by Section 16(a) of the Securities Exchange Act of 1934:

Name and Principal Position	Number of Late Insider Reports	Transactions Not Timely Reported	Known Failures to File a Required Form
Anthony Harvey Director, Chairman and Chief Executive Officer	One	One	None
Benjamin Ainsworth Director And Secretary	One	One	One
Kurt Bordian Chief Financial Officer	One	One	None
Andrew Malim Director	Two	Two	Two
Bryan Wilson Director	One	One	One
John Carlesso Director	One	One	One
Milton Datsopoulos Director	One	One	One

ITEM 11. EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table sets forth the total compensation paid to or earned by our named executive officers, as that term is defined in Item 402(m)(2) of Regulation S-K as of our fiscal years ended June 30, 2008 and 2007:

Name & Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non- Equity Incentive Plan Compen- sation ($)	Non- qualified Deferred Compen- sation Earnings ($)	All Other Compen- sation ($)	Total ($)
Anthony Harvey, Director, Chairman and CEO⁽¹⁾	2008 2007	36,413 -	- -	- -	81,943 -	- -	- -	- -	118,356 -
Kurt Bordian, CFO and Treasurer⁽²⁾	2008 2007	69,630 58,830	- -	- -	81,943 -	- -	- -	- -	151,573 58,830
Benjamin Ainsworth, Director, President and Secretary⁽³⁾	2008 2007	34,787 -	- -	- -	81,943 -	- -	- -	- -	116,730 -
Mark A. Reynolds, Former Director and Former Vice- President, Finance⁽⁴⁾	2008 2007	- 120,000	- -	- -	- -	- -	- -	- -	- 120,000

Notes:
(1)	Mr. Harvey was appointed as our CEO, Chairman and as a member of our Board of Directors on May 30, 2006. Mr. Harvey is compensated for his services pursuant to a management consultant agreement dated December 1, 2007 among Canyon Copper, ARH Management Ltd. (“ARH”) and Mr. Harvey. The compensation provided in the table was paid to ARH effective December 1, 2007.
(2)	Mr. Bordian was appointed as our Chief Financial Officer on May 30, 2006.
(3)	Mr. Ainsworth was appointed as our President on November 7, 2007. Mr. Ainsworth is compensated for his services pursuant to a management consultant agreement dated December 1, 2007 among Canyon Copper, Ainsworth-Jenkins Holdings Inc. (“AJ Holdings”) and Mr. Ainsworth. The compensation provided in the table was paid to AJ Holdings effective December 1, 2007.
(4)	Mr. Reynolds served as our Vice-President, Finance from October 2, 2006 to September 11, 2007. Mr. Reynolds was paid a salary of $120,000 under the terms of the Consultant Agreement dated January 19, 2006 between Mr. Reynolds and the Company. Under the terms of a termination agreement dated September 25, 2007 between Mr. Reynolds and us, Mr. Reynolds agreed to waive his consulting fees from July 1, 2007 to September 11, 2007.

Outstanding Equity Awards At Fiscal Year-End

The following table provides information concerning unexercised options for each of our named executive officers, as that term is defined in Item 402(m)(2) of Regulation S-K as of our fiscal year ended June 30, 2008:

Name and Principal Position	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options	Option Exercise Price	Option Expiration Date
Anthony Harvey Director, Chairman and CEO	500,000 500,000	- -	- -	$0.30 $0.25	Apr 8, 2010 Dec 2, 2012
Kurt Bordian CFO and Treasurer	500,000	-	-	$0.25	Dec 2, 2012
Benjamin Ainsworth Director, President and Secretary	500,000	-	-	$0.25	Dec 2, 2012

Director Compensation

The following table sets forth the compensation paid to our directors for the fiscal year ended June 30, 2008.

Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Andrew Malim	-	-	-	59,899	-	-	59,899
Bryan Wilson	-	-	-	32,777	-	-	32,777
John Carlesso	-	-	-	32,777	-	-	32,777
Milton Datsopoulos	-	-	-	49,166	-	-	49,166

Employment Agreements

On December 1, 2007, we entered into a management consulting agreement with Anthony R. Harvey, our Chief Executive Officer, Chairman and a member of our Board of Directors, and ARH Management Ltd. (“ARH”). Under the terms of the agreement, ARH is to be paid a consulting fee of CDN $5,000 per month, in consideration of which ARH will provide the consulting services of Mr. Harvey to us. Mr. Harvey may be granted, subject to the approval of our Board, incentive stock options to purchase shares of our common stock in such amounts and at such times as the Board, in its absolute discretion, may from time to time determine. The term of the agreement is for a period expiring at the close of business on November 30, 2009, unless otherwise terminated pursuant to the terms of the agreement or extended by the Board.

On December 1, 2007, we entered into a management consulting agreement with Benjamin Ainsworth, our President, Secretary and a member of our Board of Directors, and Ainsworth-Jenkins Holdings Inc. (“AJ Holdings”). Under the terms of the agreement, AJ Holdings is to be paid a consulting fee of CDN $5,000 per month, in consideration of which AJ Holdings will provide the consulting services of Mr. Ainsworth to us. Mr. Ainsworth may be granted, subject to the approval of our Board, incentive stock options to purchase shares of the Company’s common stock in such amounts and at such times as the Board, in its absolute discretion, may from time to time determine. The term of the agreement is for a period expiring at the close of business on November 30, 2009, unless otherwise terminated pursuant to the terms of the agreement or extended by the Board.

We entered into a consulting agreement with Kurt Bordian dated January 6, 2006, to serve as our Chief Financial Officer. The terms of the agreement include $7,490 paid upon the execution of the agreement, $3,745 per month beginning on February 1, 2006, and the option to acquire up to 500,000 shares of common stock at an exercise price of $0.50 per share for two years. The agreement is for a term of one year. We will

also reimburse Mr. Bordian for all disbursements reasonably incurred by him for the purpose of providing the consulting services to us.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of September 22, 2008 by: (i) each of our directors and nominees, (ii) each of our named executive officers, and (iii) officers and directors as a group. Other than as described below, no person or group is known by us to beneficially own more than 5% of our outstanding shares of common stock. Unless otherwise indicated, the stockholders listed possess sole voting and investment power with respect to the shares shown.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership⁽¹⁾	Percentage of Common Stock⁽¹⁾
Directors and Officers
Common Stock	Anthony Harvey Director, Chairman and Chief Executive Officer	6,153,746 shares Direct⁽²⁾	7.8%
Common Stock	Benjamin Ainsworth Director, President and Secretary	550,000 shares Direct⁽³⁾	*
Common Stock	Kurt Bordian Chief Financial Officer and Treasurer	520,000 shares Direct⁽⁴⁾	*
Common Stock	Andrew Malim Director	500,000 shares Direct⁽⁵⁾	*
Common Stock	Bryan Wilson Director	316,000 shares Direct⁽⁶⁾	*
Common Stock	John Carlesso Director	1,200,000 shares Direct⁽⁷⁾	1.6%
Common Stock	Milton Datsopoulos Director	300,000 shares Direct⁽⁸⁾	*
Common Stock	All Officers and Directors as a Group (7 persons)	9,539,746 shares Direct	11.6%
5% Stockholders
Common Stock	Anthony Harvey Ste. 408 – 1199 West Pender Street Vancouver, BC, Canada V6E 2R1	6,153,746 shares Direct⁽²⁾	7.8%
Common Stock	Asset Protection Fund 3076 Sir Francis Drake’s Hwy Road Town, Tortola, BVI	11,066,666 shares Direct⁽⁹⁾	13.3%
Common Stock	Centrum Bank AG Kirchstrasse 3 9490 Vaduz Principality of Liechtenstein	5,400,000shares Direct	7.0%
Common Stock	DRS Investments Ltd. 2063 Indian Fort Dr. Surrey, BC, Canada V4A 3L7	6,250,000 shares Direct	8.0%

Notes
*	Less than 1%.
(1)	Applicable percentage of ownership is based on 76,981,399 shares of Common Stock outstanding as of September 22, 2008 together with securities exercisable or convertible into shares of Common Stock within 60 days of September 22, 2008 for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to securities exercisable or convertible into shares of Common Stock that are currently exercisable or exercisable within 60 days of September 22, 2008 are deemed to be beneficially owned by the

	person holding such options for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
(2)	The number of shares listed as beneficially owned by Mr. Harvey consists of: (i) 4,160,000 shares of Common Stock owned directly by Mr. Harvey, (ii) options to purchase 500,000 shares of Common Stock exercisable at $0.25 per share exercisable at $0.25 per share until December 2, 2012; (iii) options to purchase 500,00 0shares of common stock at $0.30 per share until April 2, 2010, and (iv) the conversion of $100,000 and CDN$50,000 into 993,746 shares of Common Stock.
(3)	The number of shares listed as beneficially owned by Mr. Ainsworth consists of: (i) 50,000 shares of Common Stock owned directly by Mr. Ainsworth, and (ii) options to purchase 500,000 shares of Common Stock exercisable at $0.25 per share exercisable at $0.25 per share until December 2, 2012.
(4)	The number of shares listed as beneficially owned by Mr. Bordian consists of: (i) 20,000 shares of common stock owned directly by Mr. Bordian, and (ii) options to purchase 500,000 shares of Common Stock exercisable at $0.25 per share until December 2, 2012.
(5)	The number of shares listed as beneficial owned by Mr. Malim consist of : options to purchase 500,000 shares of Common Stock exercisable at $0.25 per share until January 28, 2013.
(6)	The number of shares listed as beneficially owned by Mr. Wilson consists of (i) 116,000 shares of Common Stock and warrants to purchase 116,000 shares of Common Stock held by Rocknest Corp, of which Mr. Wilson is the sole shareholder, and (ii) options to purchase 200,000 shares of Common Stock exercisable at $0.25 per share until December 2, 2012.
(7)	The number of shares listed as beneficially owned by Mr. Carlesso consists of 1,000,000 shares of common stock held directly by Mr. Carlesso and options to purchase 200,000 shares of Common Stock exercisable at $0.25 per share until December 2, 2012.
(8)	The number of shares listed as beneficially owned by Mr. Datsopoulos consists of options to purchase 300,000 shares of Common Stock exercisable at $0.25 per share until December 2, 2012.
(9)	The number of shares listed as beneficially owned by Asset Protection Fund (“APF”) consist of: (i) 4,700,000 shares of Common Stock directly held by APF, (ii) warrants to purchase 4,700,000 shares of our common stock at a price of $0.12 until August 12, 2010, and (iii) the conversion of $250,000 into 1,666,666 shares of Common Stock.

CHANGE IN CONTROL

We are not aware of any arrangement that might result in a change of control.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information concerning all equity compensation plans previously approved by stockholders and all previous equity compensation plans not previously approved by stockholders, as of the most recently completed fiscal year.

EQUITY COMPENSATION PLAN INFORMATION AS AT JUNE 30, 2008
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity Compensation Plans approved by security holders	Nil	N/A	10,963,870
Equity Compensation Plans not approved by security holders	6,825,000	$0.26 per share	4,175,000
Total	6,825,000	$0.26 per share	15,138,870

2004 Non-Qualified Stock Option Plan

Our 2004 Non-qualified Stock Option Plan (the “2004 Plan”) is intended to provide incentives to our employees, directors and consultants by providing them with opportunities to purchase shares of our common stock. The 2004 Plan is effective as of June 17, 2004 and all stock options granted under the 2004 Plan must be granted within ten years from the date the 2004 Plan was adopted. We originally registered the 2004 Plan on June 17, 2004 pursuant to a registration statement on Form S-8. Effective April 6, 2005, we amended the 2004 Plan and increased the total of common shares reserved for issuance under the 2004 Plan from one million to a total of four million common shares.

Our Board of Directors is authorized to administer the 2004 Plan. In doing so, our Board of Directors may: (i) designate optionees; (ii) determine the terms and provisions of respective option agreements (which need not be identical) including, but not limited to, the number of shares to be covered by each option, provisions concerning the time or times when and the extent to which the options may be exercised, and the nature and duration of restrictions as to transferability or restrictions constituting substantial risk of forfeiture; (iii) accelerate the right of an optionee to exercise, in whole or in part, any previously granted option; (iv) interpret the provisions and supervise the administration of the 2004 Plan; (v) determine the fair market value of shares issuable under the 2004 Plan; (vi) designate the type of options to be granted to an optionee; and (vii) determine any other matter which is necessary or desirable for, or incidental to, the administration of the 2004 Plan.

2006 Stock Incentive Plan

On April 5, 2006, we established our 2006 Stock Incentive Plan (the “2006 Plan”). The purpose of the 2006 Plan is to enhance the long-term stockholder value of the Company by offering opportunities to our directors, officers, employees and eligible consultants and any entity that directly or indirectly is in control of or is controlled by the Company (a “Related Company”) to acquire and maintain stock ownership in the Company in order to give these persons the opportunity to participate in our growth and success, and to encourage them to remain in our service or a Related Company.

The 2006 Plan is administered by our Board of Directors or by a committee of two or more non-employee directors appointed by our Board of Directors (the "Plan Administrator"). Subject to the provisions of the 2006 Plan, the Plan Administrator has full and final authority to grant the awards of stock options and to determine the terms and conditions of the awards and the number of shares to be issued pursuant thereto. Options granted under the 2006 Plan may be either "incentive stock options," which qualify for special tax treatment under the Internal Revenue Code of 1986, as amended, (the "Code"), nonqualified stock options or restricted shares.

All of our employees and members of our Board of Directors are eligible to be granted options. Individuals who have rendered or are expected to render advisory or consulting services to us are also eligible to receive options. The maximum number of shares of our Common Stock with respect to which options or rights may be granted under the 2006 Plan to any participant is 10,423,750 shares with the number of authorized shares under the 2006 Plan increasing on the first day of each quarter beginning with the fiscal quarter commencing April 1, 2006 by the lesser of the following amounts: (1) 15% of the total increase in the number of shares of Common Stock outstanding during the previous fiscal quarter; or (2) a lesser number of shares of Common Stock as may be determined by the Board, subject to certain adjustments to prevent dilution.

The exact terms of the option granted are contained in an option agreement between us and the person to whom such option is granted. Eligible employees are not required to pay anything to receive options. The exercise price for incentive stock options must be no less than 75% of the fair market value of the Common Stock on the date of grant. The exercise price for nonqualified stock options is determined by the Plan Administrator in its sole and complete discretion. An option holder may exercise options from time to time, subject to vesting. Options will vest immediately upon death or disability of a participant and upon certain change of control events.

The Plan Administrator may amend the 2006 Plan at any time and in any manner, subject to the following: (1) no recipient of any award may, without his or her consent, be deprived thereof or of any of his or her rights thereunder or with respect thereto as a result of such amendment or termination; and (2) any outstanding

incentive stock option that is modified, extended, renewed, or otherwise altered must be treated in accordance with Section 424(h) of the Code.

The 2006 Plan terminates on April 5, 2016 unless sooner terminated by action of our Board of Directors. All awards granted under the 2006 Plan expire ten years from the date of grant, or such shorter period as is determined by the Plan Administrator. No option is exercisable by any person after such expiration. If an award expires, terminates or is canceled, the shares of our Common Stock not purchased thereunder may again be available for issuance under the 2006 Plan.

We have not yet filed a registration statement under the Securities Act of 1933 to register the shares of our Common Stock reserved for issuance under the 2006 Plan.

None of the following persons has any substantial or material interest, directly or indirectly, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the special meeting except for our current and future directors and executive officers inasmuch as they may be granted stock options or stock awards pursuant to our 2006 Plan:

1.	each person who has been one of our directors or executive officers at any time since the beginning of our last fiscal year;

2.	each nominee for election as one of our directors; or

3.	any affiliate or associate of any of the foregoing persons.

2007 Stock Incentive Plan

Effective December 3, 2007, our Board of Directors adopted our 2007 Stock Incentive Plan (the "2007 Plan"). The purpose of the 2007 Plan is to enhance the long-term stockholder value of the Company by offering opportunities to directors, officers, employees and eligible consultants of the Company (“Participants”) to acquire and maintain stock ownership in us in order to give these persons the opportunity to participate in our growth and success, and to encourage them to remain in the service of us.

The 2007 Plan authorizes the Board of Directors to grant stock options to the Optionees on the following terms:

1.	The number of common shares subject to issuance pursuant to outstanding options, in the aggregate, cannot exceed 7,000,000 shares (the “Initial Maximum Shares”). The Initial Maximum Shares will increase effective the first day of each of our fiscal quarters, beginning with the fiscal quarter commencing January 1, 2008 by an amount equal to the lesser of:

	(i)	10% of the total increase in the number of shares of common stock outstanding during the previous fiscal quarter, or

	(ii)	a lesser number of shares of common stock as may be determined by the Board.

2.	The Board may suspend, amend or terminate the 2007 Plan or any portion of the 2007 Plan at any time and in any way it deems advisable. However, certain amendments to the 2007 Plan may require stockholder approval, including amendments which increase the total number of shares available for issuance under the 2007 Plan.

3.	The exercise price of the options granted to Participants (as defined in the 2007 Plan) other than Consultant Participants (as defined in the 2007 Plan):

	(i)	cannot be less than the minimum exercise price that is at least 100% of the Fair Market Value of the common stock of the Company on the day of grant, and in the case of a participant who owns more than 10% of the total combined voting power of all classes of the our stock or of its parent or subsidiary corporations at least 110% of the Fair Market Vale of the common stock on the day of grant, and

(ii)

cannot be less than 85% of the Fair Market Value of our common stock on the day of grant with respect to Non-Qualified Stock Options.

4.	The exercise price of the options granted to Consultant Participants cannot be less than 85% of the Fair Market Value of the common stock on the day of grant.

5.	The options may be exercisable for a period of up to 10 years or until such time as set by the Board.

6.	The Board, in its sole discretion, may adjust the vesting schedule of an option held by a Participant who works less than full time as that term is defined by the Board or who takes a leave of absence approved by us.

7.	The options may be exercised by delivery to the Company of a written stock option exercise agreement or notice, in a form and in accordance with procedures established by the Board setting forth”

	(i)	The number of shares with respect to which the option is being exercised,

	(ii)	The restrictions imposed on the shares purchased under such exercise agreement, and

	(iii)	Such representations and agreements as may be required by the Board.

8.	An option may be exercised only for whole shares and may not be exercised for less than a reasonable number of shares at any one time, as determined by the Board.

9.	The exercise price for shares purchased under an option must be paid in full to the Company by the delivery of consideration equal to the product of the exercise price and the number of shares purchased, which must be paid before we issue the shares being purchased.

10.	The Board shall establish and set forth, in each instrument that evidences an option, whether the option shall continue to be exercisable, and the terms and conditions of such exercise. If the participant ceases to be employed by, or to provide services to, the Company or a related company, which provisions may be waived or modified by the Board at any time. If not so established in the instrument evidencing the option, the option shall be exercisable according to the following terms and conditions, which may be waived or modified by the Board at any time:

	(i)	Except as provided, any portion of an option that is not vested and exercisable on the date of employment termination (the “Employment Termination Date”) shall expire on such date.

	(ii)	Any portion that is vested and exercisable shall expire on the earliest to occur of

		(a)	If the participant’s employment termination date occurs by reason of retirement, resignation or for any other reasons other than cause, disability or death, the day which is one hundred eighty (180) days after such Employment Termination Date.

		(b)	If the participant’s employment termination date occurs by reason of disability or death, the day which is six (6) months after such Employment Termination Date, and

		(c)	The last day of the option term.

11.	Options granted pursuant to an Option Award are not transferable other than by will or inheritance or by applicable laws of descent and distribution, and during the Participant’s lifetime, such Option Awards may be exercised only by the Participant.

12.	The Board may permit or require a participant to satisfy all or part of his or her tax withholding obligations by:

	(i)	Paying cash to the Company.

	(ii)	Having the Company withhold from any cash amounts otherwise due or to become due from the Company to the participant,

	(iii)	Having the Company withhold a portion of any shares of common stock that would otherwise be issued to the participant having a value equal to the tax withholding obligations, or

	(iv)	Surrendering any shares of common stock that the participant previously acquired having a value equal to the tax withholding obligations.

The 2007 Plan does not permit stock options to be changed into stock appreciation rights.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

None of the following parties has, during the past two fiscal years, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us, other than as noted in this section:

	(i)	Any of our directors or executive officers;
	(ii)	Any person proposed as a nominee for election as a director;
	(iii)	Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
	(iv)	Any of our promoters; and
	(v)	Any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons.

As at June 30, 2008, we are indebted to Mr. Harvey, our CEO, Chairman and a member of our Board of Directors, in the principal amount of $223,184 for the following loans:

(a)	Loan of $24,546 (CDN$25,000), bearing interest at a rate of 15% per annum and due on demand.

(b)	Loans of $100,000 and $49,092 (CDN$50,000), bearing interest at a rate of 15% per annum and maturing on June 14, 2009 and July 25, 2009, respectively. Each of these loans is convertible into the option by Mr. Harvey at any time prior to maturity into units of Canyon Copper at a price of $0.30 per unit with each unit consisting of one share of our common stock and one share purchase warrant. Each warrant entitles Mr. Harvey to purchase an additional share of our common stock at a price of $0.35 per share for a period of two years from the date of issuance.

(c)	Loan of $25,000, bearing interest at a rate of 15% per annum and is due on or before October 1, 2008.

(d)	Loan of $24,546 (CDN$25,000), bearing interest at a rate of 15% per annum and is due on or before November 8, 2008.

We are also indebted to Mr. Harvey in the amount of $36,182 (CDN$36,800) for unpaid consulting fees. This amount is non-interest bearing, unsecured and due on demand.

As at June 30, 2008, we are indebted to Mr. Ainsworth, our President, Secretary and a member of Board of Directors, in the amount of $34,364 (CDN$35,000) for unpaid consulting fees. This amount is non-interest bearing, unsecured and due on demand.

As at June 30, 2008, we are indebted to our former Vice President, Finance in the amount of $70,190 for consulting fees. The amount is non-interest bearing, unsecured and due on demand.

On June 29, 2007, we issued 21,200 shares of our common stock to settle $5,300 owing to our former Chief Financial Officer.

Director Independence

Our common stock is listed on the OTC Bulletin Board inter-dealer quotation system, which does not have director independence requirements. For the purpose of determining director independence, we have applied

the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not considered independent if he or she is an executive officer or employee of the corporation. Our board of directors have determined that Andrew Malim, John Carlesso and Milton Datsopoulos are independent directors as defined under NASDAQ Rule 4200(a)(15). During the fiscal year ended June 2008, Mr. Carlesso and Mr. Datsopoulos served on the audit committee and the disclosure committee.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees

The aggregate fees billed for the two most recently completed fiscal years ended June 30, 2008 and June 30, 2007 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included our Quarterly Reports on Form 10-Q or Form 10-QSB and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

	Year Ended June 30, 2008	Year Ended June 30, 2007
Audit Fees	$40,705	$40,652
Audit Related Fees	-	$700
Tax Fees	-	-
All Other Fees	-	-
Total	$40,705	$41,352

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors

The policy of our Audit Committee is to pre-approve all audit and permissible non-audit services to be performed by our independent auditors during the fiscal year. Non-audit services that are prohibited to be provided by our independent auditors may not be pre-approved. In addition, prior to the granting of any pre-approval, our Audit Committee must be satisfied that the performance of the services in question will not compromise the independence of the independent auditors.

No services related toAudit-Related Fees,Tax Fees orAll Other Fees described above were approved by the Audit Committee pursuant to the waiver of pre-approval provisions set forth in the applicable rules of the SEC.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Exhibit	Description of Exhibit
Number

3.1	Amended and Restated Articles of Incorporation.⁽¹⁵⁾

3.2	Bylaws.⁽¹⁾

4.1	Specimen Stock Certificate.⁽¹⁵⁾

10.1	2004 Nonqualified Stock Option Plan.⁽⁴⁾

10.2	2006 Stock Incentive Plan dated April 5, 2006.⁽¹¹⁾

10.3	Convertible Preferred Stock Purchase Agreement dated July 29, 2004 between the Company and Langley Park Investments PLC.⁽⁵⁾

10.4	Debenture Purchase Agreement dated November 19, 2004 between the Company and Glenkirk International.⁽⁷⁾

10.5	Convertible, Callable, Subordinated Debenture dated November 19, 2004 between the Company and Glenkirk International.⁽⁷⁾

10.6	Property Option Agreement dated March 18, 2004 among the Company, Robert & Sharon Weicker, Kurt & Tami Schendel, and Nevada Sunrise LLC (New York Canyon Project).⁽³⁾

10.7	Lease Agreement dated July 21, 2004 between the Company and Jaycor Mining, Inc.⁽⁶⁾

10.8	Consulting Agreement dated April 5, 2005 between the Company and Anthony Harvey.⁽⁸⁾

10.9	Consulting Agreement dated August 5, 2005 between the Company and Chris Broili.⁽¹²⁾

10.10	Consulting Agreement dated August 10, 2005 between the Company and Mel Klohn.⁽¹²⁾

10.11	Consulting Agreement dated August 22, 2005 between the Company and Carlo Civelli.⁽¹²⁾

10.12	Consulting Agreement dated September 20, 2005 between the Company and Richard Dixon.⁽⁹⁾

10.13	Consulting Agreement dated September 20, 2005 between the Company and Richard Kehmeier.⁽⁹⁾

10.14	Consulting Agreement dated January 6, 2006 between the Company and Kurt Bordian.⁽¹⁰⁾

10.15	Consulting Agreement dated January 19, 2006 between the Company and Mark A. Reynolds.⁽⁹⁾

10.16	Consulting Agreement dated February 1, 2006 between the Company and Linda Erdman.⁽⁹⁾

10.17	Consulting Agreement dated February 1, 2006 between the Company and Geoffrey Goodall.⁽⁹⁾

10.18	Consulting Agreement dated February 1, 2006 between the Company and Robert Young.⁽¹²⁾

10.19	Debt Settlement Agreement dated November 8, 2005 between the Company and Cameron Reynolds.⁽¹²⁾

10.20	Mineral Processing Research Agreement dated March 22, 2006 among the Company, Nevada Sunrise, LLC and INTOR Resources Corporation.⁽¹²⁾

10.21	Loan Agreement dated September 12, 2006 between the Company and Aton Ventures Fund Ltd.⁽¹³⁾

10.22	Loan Agreement dated September 11, 2006 between the Company and Asset Protection Fund Ltd.⁽¹³⁾

10.23	Convertible Promissory Note dated September 12, 2006 between the Company and Aton Ventures Fund Ltd.⁽¹³⁾

10.24	Convertible Promissory Note dated September 11, 2006 between the Company and Asset Protection Fund Ltd.⁽¹³⁾

10.25	Promissory Note dated August 16, 2006 between the Company and Anthony Harvey.⁽¹⁴⁾

10.26	First Amendment Loan Agreement dated November 27, 2006 between the Company and Aton Ventures Fund Ltd.⁽¹⁷⁾

10.27	First Amendment to Loan Agreement dated November 27, 2006 between the Company and Asset Protection Fund Ltd.⁽¹⁷⁾

10.28	Convertible Promissory Note dated November 27, 2006 between the Company and Aton Ventures Fund Ltd.⁽¹⁷⁾

10.29	Convertible Promissory Note dated November 27, 2006 between the Company and Asset Protection Fund Ltd.⁽¹⁷⁾

10.30	Quitclaim Deed for the New York Canyon Project dated March 12, 2007.⁽¹⁸⁾

10.31	Sponsorship Agreement dated March 29, 2007 between the Company and Union Securities Ltd.⁽¹⁹⁾

10.32	Engagement Letter dated March 29, 2007 between the Company and Union Securities Ltd.⁽¹⁹⁾

10.33	Second Amendment to Loan Agreement dated April 12, 2007 between the Company and Aton Ventures Fund Ltd.⁽¹⁹⁾

10.34	Second Amendment to Loan Agreement dated April 11, 2007 between the Company and Asset Protection Fund Ltd.⁽¹⁹⁾

10.35	Loan Agreement dated April 25, 2007 between the Company and Aton Select Fund Limited.⁽¹⁹⁾

10.36	Loan Agreement dated April 25, 2007 between the Company and Anthony Harvey for the loan of CDN$50,000.⁽¹⁹⁾

10.37	Loan Agreement dated April 25, 2007 between the Company and Anthony Harvey for the loan of $100,000.⁽¹⁹⁾

10.38	Promissory Note dated April 25, 2007 between the Company and Aton Select Fund Limited.⁽¹⁹⁾

10.39	Promissory Note dated April 25, 2007 between the Company and Anthony Harvey for the loan of CDN$50,000.⁽¹⁹⁾

10.40	Promissory Note dated April 25, 2007 between the Company and Anthony Harvey for the loan of $100,000.⁽¹⁹⁾

10.41	Termination Agreement dated September 25, 2007 between the Company and Mark Reynolds.⁽²⁰⁾

10.42	Third Amendment to Loan Agreement dated November 30, 2007 between the Company and Aton Ventures Fund Ltd.⁽²¹⁾

10.43	Third Amendment to Loan Agreement dated November 30, 2007 between the Company and Asset Protection Fund Ltd.⁽²¹⁾

10.44	Convertible Promissory Note dated November 30, 2007 between the Company and Aton Ventures Fund Ltd.⁽²¹⁾

10.45	Convertible Promissory Note dated November 30, 2007 between the Company and Asset Protection Fund Ltd.⁽²¹⁾

10.46	Management Consulting Agreement dated December 1, 2007 between the Company, ARH Management Ltd. and Anthony Harvey.⁽²¹⁾

10.47	Management Consulting Agreement dated December 1, 2007 between the Company, Ainsworth-Jenkins Holdings Inc. and Benjamin Ainsworth.⁽²¹⁾

10.48	2007 Stock Incentive Plan.⁽²¹⁾

10.49	Form of Non-Qualified Stock Option Agreement between the Company and Directors and Officers.⁽²¹⁾

10.50	Loan Agreement dated April 1, 2008 between the Company and Anthony Harvey.⁽²²⁾

10.51	Promissory Note dated April 1, 2008 between the Company and Anthony Harvey.⁽²²⁾

10.52	Loan Agreement dated May 8, 2008 between the Company and Anthony Harvey.⁽²³⁾

10.53	Promissory Note dated May 8, 2008 between the Company and Anthony Harvey.⁽²³⁾

10.54	First Amendment to Loan Agreement dated May 9, 2008 between the Company and Aton Select Fund Limited.⁽²³⁾

10.55	Convertible Promissory Note dated May 9, 2008 between the Company and Aton Select Fund Limited.⁽²³⁾

10.56	First Amendment to Loan Agreement dated May 9, 2008 between the Company and Anthony Harvey for the loan of $100,000.⁽²³⁾

10.57	Convertible Promissory Note dated May 9, 2008 between the Company and Anthony Harvey for the loan of $100,000.⁽²³⁾

10.58	First Amendment to Loan Agreement dated May 9, 2008 between the Company and Anthony Harvey for the loan of CDN$50,000.⁽²³⁾

10.59	Convertible Promissory Note dated May 9, 2008 between the Company and Anthony Harvey for the loan of CDN$50,000.⁽²³⁾

14.1	Code of Ethics.⁽²⁾

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1	Audit Committee Charter.⁽²⁾

99.2	Disclosure Committee Charter.⁽²⁾

Notes:
(1)	Filed with the SEC as an exhibit to our Registration Statement on Form SB-2 originally filed on April 26, 2000.
(2)	Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on August 26, 2003.
(3)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on April 8, 2004.
(4)	Filed with the SEC as an exhibit to our Registration Statement on Form S-8 filed on June 17, 2004.
(5)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on August 20, 2004.
(6)	Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on October 8, 2004.
(7)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on February 22, 2005.
(8)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on May 23, 2005.
(9)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on February 7, 2006.
(10)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on February 16, 2006.
(11)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on April 10, 2006.
(12)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on May 22, 2006.
(13)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on September 15, 2006.
(14)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on September 7, 2006.
(15)	Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on October 13, 2006.
(16)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on November 20, 2006.
(17)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 13, 2006.
(18)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on March 26, 2007.
(19)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on May 21, 2007.
(20)	Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on September 28, 2007.
(21)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 6, 2007.
(22)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on April 7, 2008.
(23)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on May 15, 2008.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

CANYON COPPER CORP.

By:

          /s/ Anthony Harvey
          ANTHONY HARVEY
           Chairman and Chief Executive Officer
           Director
           (Principal Executive Officer)
           Date: September 29, 2008

By:

           /s/ Kurt Bordian
          KURT BORDIAN
           Chief Financial Officer
           (Principal Financial Officer)
           Date: September 29, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

	Chairman, Chief Executive Officer and
/s/ Anthony Harvey	Director	September 29, 2008
ANTHONY HARVEY	(Principal Executive Officer)


/s/ Benjamin Ainsworth	President, Treasurer and Director	September 29, 2008
BENJAMIN AINSWORTH

	Chief Financial Officer
/s/ Kurt Bordian	(Principal Financial Officer)	September 29, 2008
KURT BORDIAN


/s/ Bryan Wilson	Director	September 29, 2008
BRYAN WILSON


/s/ Andrew Malim	Director	September 29, 2008
ANDREW MALIM

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Canyon Copper (CNYC) Inactive 10-K2008 FY Annual report

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