Sino Silver 8-K/A Financial Statements and Exhibits

Exhibit 99.1

SINO-TOP RESOURCES & TECHNOLOGIES LTD.

(AN EXPLORATION STAGE COMPANY)

FINANCIAL STATEMENTS

PERIOD FROM MARCH 25, 2003 (INCEPTION) THROUGH DECEMBER 31, 2003,
YEAR ENDED DECEMBER 31, 2004, AND THE PERIOD FROM MARCH 25, 2003
(INCEPTION) THROUGH DECEMBER 31, 2004

SINO-TOP RESOURCES & TECHONOLOGIES LTD.

(AN EXPLORATION STAGE COMPANY)

PERIOD FROM MARCH 25, 2003 (INCEPTION) THROUGH DECEMBER 31, 2003,
YEAR ENDED DECEMBER 31, 2004, AND THE PERIOD FROM MARCH 25,2003
(INCEPTION) THROUGH DECEMBER 31, 2004

TABLE OF CONTENTS

	Page
Report of Independent Registered Public Accounting Firm		1
Financial Statements
Balance Sheet		2
Statements of Operations		3
Statements of Cash Flows		4
Notes to Financial Statements		5

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of
Sino-Top Resources & Technologies, Ltd.

We have audited the accompanying balance sheet of Sino-Top Resources & Technologies, Ltd. (an exploration stage company) (the “Company”) as of December 31, 2004, and the related statements of operations and cash flows for the period from March 25, 2003 (inception) through December 31, 2003, for the year ended December 31, 2004 and for the period from March 25, 2003 (inception) through December 31, 2004. 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2004, and the results of its operations and its cash flows for the period from March 25, 2003 through December 31, 2003, for the year ended December 31, 2004 and for the period from March 25, 2003 (inception) through December 31, 2004, in conformity with accounting principles generally accepted in the United States.

GHP Horwath, P.C.
Denver, Colorado
June 13, 2005

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SINO-TOP RESOURCES & TECHNOLOGIES LTD.
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 2004

	Notes		RMB			US $
Assets
Current assets
Cash				111,001			13,406
Accounts receivable, net of allowance of RMB 417,000				399,500			48,249
Other				8,363			1,010
Total current assets				518,864			62,665
Property and equipment		3		269,944			32,602
Total Assets				788,808			95,267
Liabilities and Shareholders’ Equity
Current liabilities
Trade and other payables		4		149,161			18,015
Loan payable to former shareholder		5		194,900			23,539
Income taxes payable		6		141,174			17,050
Total current liabilities				485,235			58,604
Commitments		10
Shareholders’ equity
Paid in capital		7		1,000,000			120,773
Deficit accumulated during the exploration stage				(696,427	)		(84,110	)
Total shareholders’ equity				303,573			36,663
Total Liabilities and Shareholders’ Equity				788,808			95,267

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

2

SINO-TOP RESOURCES & TECHNOLOGIES LTD.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM MARCH 25, 2003 (INCEPTION) TO DECEMBER 31, 2003,
YEAR ENDED DECEMBER 31, 2004, AND FOR THE PERIOD FROM
MARCH 25, 2003 (INCEPTION) THROUGH DECEMBER 31, 2004

										Cumulative during the
										exploration stage
	2003			2004			2004
	RMB			RMB			US$			RMB			US$
Revenues
Silver sales		—			—			—			—			—
License sales		—			540,000			65,217			540,000			65,217
Prospecting services		—			1,064,560			128,570			1,064,560			128,570
Other		37,581			—			—			37,581			4,539
Total revenues		37,581			1,604,560			193,787			1,642,141			198,326
Costs and expenses
Exploration		357,874			815,850			98,532			1,173,724			141,754
Administration		289,866			672,392			81,207			962,258			116,215
Depreciation		11,800			49,612			5,992			61,412			7,417
Total costs and expenses		659,540			1,537,854			185,731			2,197,394			265,386
(Loss) earnings before income taxes		(621,959	)		66,706			8,056			(555,253	)		(67,060	)
Income taxes		—			141,174			17,050			141,174			17,050
Net loss		(621,959	)		(74,468	)		(8,994	)		(696,427	)		(84,110	)

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

3

SINO-TOP RESOURCES & TECHNOLOGIES LTD.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM MARCH 25, 2003 (INCEPTION) THROUGH DECEMBER 31, 2003,
YEAR ENDED DECEMBER 31, 2004, AND FOR THE PERIOD FROM
MARCH 25, 2003 (INCEPTION) THROUGH DECEMBER 31, 2004

										Cumulative during the
										exploration stage
	2003			2004			2004
	RMB			RMB			US$			RMB			US$
Operating activities:
Net loss		(621,959	)		(74,468	)		(8,994	)		(696,427	)		(84,110	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation		11,800			49,612			5,992			61,412			7,417
Changes in operating assets and liabilities Increase in accounts receivable		—			(399,500	)		(48,249	)		(399,500	)		(48,249	)
Increase in other		(119	)		(8,244	)		(995	)		(8,363	)		(1,010	)
Increase in trade and other payables		32,066			117,095			14,142			149,161			18,015
Increase in income taxes payables		—			141,174			17,050			141,174			17,050
Net cash used in operating activities		(578,212	)		(174,331	)		(21,054	)		(752,543	)		(90,887	)
Investing activities:
Purchase of property and equipment		(121,436	)		(209,920	)		(25,353	)		(331,356	)		(40,019	)
Net cash used in investing activities		(121,436	)		(209,220	)		(25,353	)		(331,356	)		(40,019	)
Financing activities:
Loan payable to former shareholder		—			194,900			23,539			194,900			23,539
Capital contribution from shareholders		1,000,000			—			—			1,000,000			120,773
Net cash provided by financing activities		1,000,000			194,900			23,539			1,194,900			144,312
Net increase (decrease) in cash and cash equivalents		300,352			(189,351	)		(22,868	)		111,001			13,406
Cash and cash equivalents at beginning of period		—			300,352			36,274			—			—
Cash and cash equivalents at end of period		300,352			111,001			13,406			111,001			13,406

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

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SINO-TOP RESOURCES & TECHNOLOGIES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS

Note 1	Nature of Operations
	Sino-Top Resources & Technologies Ltd., (“SinoTop” or “the Company”) is a People’s Republic of China (“PRC”) limited liability company, incorporated on March 25, 2003. The Company was formed to pursue silver mine exploration and development opportunities under various licenses obtained from the PRC authorities. The Company has not earned revenues from its planned principal operations. Accordingly, the Company is considered an Exploration Stage Enterprise as set forth in Statement of Financial Accounting Standards, “SFAS” No. 7, “Accounting and Reporting by Development Stage Enterprises” and “Industry Guide 7” of the Securities and Exchange Commission’s Guides for the Preparation of Registration Statements. At December 31, 2004, the Company owns exploration licenses for eleven properties in the Erbaohuo Silver District of the Inner Mongolia Region of Northern China and also has options to acquire mining rights for these properties. Seven of these licenses are held by nominees of the Company on the Company’s behalf.
Note 2	Summary of Significant Accounting Policies

(a)	Cash and cash equivalents
	The Group considers all highly liquid investments and cash deposits with financial institutions with original maturities of three months or less to be cash equivalents.
(b)	Use of estimates
	The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates.
(c)	Property and equipment
	Property and equipment are stated at cost. Expenditures for routine repairs and maintenance are expensed as incurred.
	Depreciation is calculated on the straight-line basis to write off the cost less estimated residual value of each asset over their estimated useful lives. Estimated useful lives are as follows:

Office equipment	5 years
Vehicles	5 years
Exploration equipment	5 years

Management assesses the carrying values of its long-lived assets for impairment when circumstances warrant such a review. Generally, long-lived assets are considered impaired if the estimated fair value is less than the assets’ carrying values. If an impairment is indicated, the loss is measured based on the amounts by which the carrying values of the assets exceed their fair values.

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Note 2 Summary of Significant Accounting Policies – cont’d

(d)	Revenue recognition
	The Company has not earned revenues from its planned principal operations. Revenues incidental to planned principal operations have been recognized as follows:

• Revenues from the provision of mine exploration services are recognized when the services are performed.

• Revenues from the sale of mine exploration rights are recognized at the date the licenses underlying the rights are transferred.

(e)	Income taxes
	The Company accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes”. Under this method, deferred income taxes are recognized for the estimated tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts and each year-end based on enacted tax laws and statutory rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized when, in management’s opinion, it is more likely than not that some portion of the deferred tax assets will not be realized. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities.
(f)	Foreign currency translation
	The functional currency of substantially all the operations of the Company is Renminbi (“RMB”), the national currency of the PRC.
	The financial statements are stated in Renminbi. The translation of amounts from RMB into US$ is included solely for the convenience of the reader and has been made at the rate of exchange quoted by the People’s Bank of China on December 31, 2004 of US$1.00 = RMB 8.28. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on December 31, 2004 or at any other date.
(g)	Recently issued accounting pronouncements:

i.

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (R) Share Based Payment which addresses the accounting for share-based payment transactions. SFAS No. 123 (R) eliminates the ability to account for share-based compensation transactions using Accounting Principles Board Opinion (“APB”) No. 25, and generally requires instead that such transactions be accounted and recognized in the statement of income based on their fair value. SFAS No. 123 (R) will be effective for public companies that file as small business issuers as of the first interim or annual reporting period that begins after December 15, 2005. SFAS No. 123(R) offers the Company alternative methods of adopting this standard. Management does not believe that the adoption of SFAS No. 123 (R) will have an impact on the Company’s financial position or results of operations as it does not have any share-based compensation transactions.

ii.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity, which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 requires that a company classify a financial instrument that is within its scope, which may have previously been reported as equity, as a liability (or an asset in some circumstances). This statement does not affect the classification or measurement of convertible bonds, puttable stock, or other outstanding shares that are conditionally redeemable. For financial instruments that are mandatory redeemable on fixed dates for amounts that are either fixed or are determined by reference to an interest rate index, currency index, or another external index, the classification, measurement, and

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disclosure provisions of this statement are effective for fiscal periods beginning after December 15, 2004. For all other financial instruments that are mandatory redeemable, the classification, measurement and disclosure provisions of SFAS No. 150 have been deferred indefinitely pending further FASB action. The effective dates disclosed for SFAS No. 150 pertain to non-SEC registrants. Management does not believe that the adoption of SFAS No. 150 will have an impact on the Company’s financial position or results of operations.

Note 3	Property and Equipment
	At December 31, 2004, property and equipment consisted of:

	RMB		US$
At cost:
Office equipment		85,730		10,354
Vehicle		91,176		11,012
Exploration equipment		154,450		18,653
Accumulated depreciation		331,356		40,019
		61,412		7,417
		269,944		32,602

Note 4	Trade and Other Payables
	At December 31, 2004, trade and other payables consisted of:

	RMB		US$
Trade payables		6,622		800
Other payables		142,539		17,215
Total		149,161		18,015

Note 5	Loan Payable to Former Shareholder
	Loan payable to former shareholder consists of advances from Geologic Mining Exploring Company, a subsidiary of SinoTop Industry Company, Ltd, (“Industry”), the former minority shareholder of the Company. The loan is unsecured, non-interest bearing and was repaid in January 2005.
Note 6	Income Taxes
	Income (losses) before taxes are taxable in the PRC. The reconciliation of the U.S. federal income tax rate of 34% to income tax expense is as follows:

										Cumulative during
										the exploration stage
	2003			2004			2004
	RMB			RMB			US$			RMB			US$
Computed expected income tax (benefit) expense		(211,466	)		22,680			2,739			(188,786	)		(22,800	)
US GAAP and PRC GAAP temporary differences		86,746			122,772			14,828			209,518			25,304
Differences in foreign tax rates		3,668			(4,278	)		(517	)		(610	)		(74	)
Loss not available for carryforward		121,052			—			—			121,052			14,620
Income tax expense		—			141,174			17,050			141,174			17,050

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Deferred tax assets at December 31, 2004 are as follows:

	RMB			US$
Temporary differences between US GAAP and PRC GAAP		122,722			14,821
Less: valuation allowance		(122,722	)		(14,821	)
		—			—

Note 7	Paid in Capital
	Paid in capital consists of the following:

	Registered
	Capital
	RMB		US$
Capital contributed, March 25, 2003		1,000,000		120,773
Balance, December 31, 2004		1,000,000		120,773

Note 8	Financial Instruments
	The carrying value of cash, accounts receivable, accounts payable, income taxes payable and loan payable to former shareholder approximates their fair value due to the short maturity of these instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
Note 9	Concentrations and Credit Risk
	The Company extends credit to its customers and performs ongoing credit evaluations and generally does not require collateral. The Company maintains reserves for potential credit losses based on its aging analysis.
	For the year ended December 31, 2004, 64% of revenues from prospecting services were generated from 3 customers, and 85% of revenues from the license sales were generated from the same 3 customers. These 3 customers accounted for 97% of total revenues as follows:

Customers	%
A	61
B	19
C	17

Note 10	Commitments
	In March 2003, the Company entered into an agreement with Industry to lease office space in Hebei Province. The agreement provided that there would be no rent due if the Company employed five Industry personnel. In December 2004 this agreement was terminated as no Industry personnel had been hired. The Company paid Industry RMB 15,000 for rent for 2003 and 2004 upon termination of this agreement.
	In January 2005, the Company signed a new lease agreement with Industry for the year ending December 31, 2005. The agreement provides for rent of RMB 5,000 per month and includes a renewal option.

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Note 11 Subsequent Events

(a)

In January 2005, the Company formed a joint venture with Sino Silver Corp., (“Sino Silver”) a US publicly traded company. The Company will contribute to the joint venture all exploratory and licensing rights. Sino Silver will contribute a total of $1,000,000 to be used in the exploration in return for a 60% equity interest in Sino Top. In accordance with the agreements, the Company contributed all of its exploratory and licensing rights and $500,000 was paid by Sino Silver at closing on April 1, 2005. The balance of Sino Silver’s contribution to the joint venture is to be paid in installments over a two-year period.

(b)

In January 2005, the Company borrowed RMB 540,000 from Industry of which RMB 300,000 was repaid in February 2005. The loan bears interest at 4.35%.

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