Evolving Gold 20-F 2007 FY Annual report (foreign)

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

FORM 20-F

[   ]REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

FOR THE FISCAL YEAR ENDED MARCH 31, 2007

OR

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

OR

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

For the transition period from  _______________ to  _______________

Commission File Number: 000-50953

EVOLVING GOLD CORP.
(Exact name of Registrant as specified in its charter)

CANADA
(Jurisdiction of incorporation or organization)

725 – 666 Burrard Street
Vancouver, British Columbia, Canada V6C 2X8
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:NONE.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

COMMON SHARES WITHOUT PAR VALUE
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:NONE

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

28,127,811 common shares as of March 31, 2007

Indicate by check mark if the Registrant is a well known seasoned issuer as defined in Rule 405 of the Securities Act.

YES [   ]    NO [X]

If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

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 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 whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [   ]     Accelerated filer [   ]       Non-accelerated filer [X]

Indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 [X] I       tem 18 [ ]

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES [   ]     NO [X]

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EVOLVING GOLD CORP.

FORM 20-F ANNUAL REPORT

TABLE OF CONTENTS

		Page
Glossary		4
Part I
Item 1.	Identity of Directors, Senior Management and Advisors	10
Item 2.	Offer Statistics and Expected Timetable	10
Item 3.	Key Information	10
Item 4.	Information on the Company	15
Item 4A.	Unresolved Staff Comments	30
Item 5.	Operating and Financial Review and Prospects	30
Item 6.	Directors, Senior Management, and Employees	34
Item 7.	Major Shareholders and Related Party Transactions	41
Item 8.	Financial Information	43
Item 9.	The Offer and Listing	43
Item 10.	Additional Information	45
Item 11.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 12.	Description of Securities Other Than Equity Securities	53
Part II
Item 13.	Defaults, Dividend Arrearages and Delinquencies	53
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	53
Item 15.	Controls and Procedures	53
Item 16.	Reserved	54
Item 16A.	Audit Committee Financial Expert	54
Item 16B.	Code of Ethics	54
Item 16C.	Principal Accountant Fees and Services	54
Item 16D.	Exemptions from the Listing Standards for Audit Committee	55
Item 16E.	Purchases of Equity Securities by the Company and Affiliated Purchasers	55
Part III
Item 17.	Financial Statements	55
Item 18.	Financial Statements	55
Item 19.	Exhibits	55

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GLOSSARY

Term	Definition
2004 Plan	Stock option plan of the Company dated September 28, 2004
2007 Plan	Stock option plan of the Company dated March 14, 2007, presented to shareholders at September 21, 2007 meeting for approval.
adularia	A mineral, potassium feldspar
Ag	Silver
AHL	AHL Holdings Ltd.
anorthosite	A plagioclase-rich intrusive rock
arsenopyrite	A mineral composed of arsenic, iron and sulphur
As	Arsenic
Au	Gold
Award Date	The date of the grant of a stock option in the Company
Bi	Bismuth
BLM	Bureau of Land Management, US Department of the Interior
brecciated	A rock consisting of angular fragments
CBCA	Canada Business Corporations Act
chalcopyrite	A mineral composed of copper, iron and sulphur
CNQ	Canadian Quotation and Trading System
Code	Internal Revenue Code of 1986, as amended
Company	Evolving Gold Corp.
Crone Geophysics	Crone Geophysics and Exploration Limited Company
CSAMT	“Controlled Source Audio Magnetic Tellurics”, a geophysical method used in mineral exploration
Cu	Copper
Dighem V	A geophysical technique used for surveying
Eligible Person	Any individual that is eligible to be granted stock options under the Plan
EM	Electromagnetic
Evolving Gold	Evolving Gold Corp.

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Term	Definition
fracture fillings	A fracture in rock mass filled with another material
galena	A mineral composed of lead and sulphur
Geocore	Geocore Exploration Inc.
gneiss	A banded or foliated metamorphic rock, usually of the same composition as granite
Golden Arc	Golden Arc Mining & Refining Inc., a Nevada Corporation
Golden Arc Claims	The unpatented mining claims under option from Golden Arc
Golden Sands	Golden Sands Exploration Inc.
GOR	Gross productions
gossan	An exposed, oxidized portion of a mineral vein, especially a rust-coloured outcrop of iron
	ore
Hg	Mercury
induced polarization	A geophysical method used in mineral exploration
IRS	Internal Revenue Service
Malone Property	A property located in Lordsburg, New Mexico, U.S.A.
Malone Property Agreement	The agreement dated April 17, 2006 pursuant to which the Company entered into a quitclaim deed and royalty agreement with Newmont North America Exploration Ltd and was granted a 100% interest in exchange for payment of US$ 10,000 (paid) and an additional US$10,000 payable in one year and is subject to a royalty of 2% of net smelter returns.
Mineral Property Agreement	The agreement dated June 10, 2003 made between Zimtu and Jody Dahrouge, an unrelated individual, pursuant to which Mr. Dahrouge retained a 1% NSR royalty on minerals other than diamonds and 1% GOR on diamonds from the Murray Property
Mineral Reserve	Economically mineable part of a Measured or Indicated Resource demonstrated by at least a comprehensive study of the viability of a mineral property that has advanced to a stage where the mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, has been established, and where an effective method of mineral processing has been determined.
	Probable (Indicated) Reserves. Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.
	Proven (Measured) Reserves. Reserves for which: (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.

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Term	Definition
Mineral Resource	Concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge.
	The SEC’s Industry Guide 7 – “Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations” does not define or recognize resources. As used in this Annual Report, “resources” are as defined in Canadian NI 43-101-“Standards of Disclosure for Mineral Projects .
	Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Resource has a lower level of confidence than that applied to an Indicated Resource. An Indicated Resource has a higher level of confidence than an Inferred Resource but has a lower level of confidence than a Measured Resource.
	Inferred Resource. That part of the Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
	Indicated Resource. That part of the Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
	Measured Resource. That part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
NSR	Net smelter returns
open space fillings	Minerals filling an open space in the earth or a rock mass.
OTCBB	Over-The-Counter Bulletin Board Quotation System
Part XIII Tax	Canadian withholding tax
Pb	Lead
PFIC	Passive foreign investment company

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Term	Definition
Pulse EM survey	A time domain tool that uses large transmitting loops and a high power transmitter for surveying
pyrite, pyrrhotite	A mineral composed of iron and sulphur
QEF	Qualified electing fund
quartz	A mineral composed of silica and oxygen
Sante Fe	Sante Fe Pacific Mining Inc.
Sb	Antimony
SFAS 123	Statement of Financial Accounting Standards No. 123 “Accounting for Stock-Based Compensation”
SFAS 145	Statement of Financial Accounting Standards no. 145 “Rescission of FASB Statements No.4, 44, and 64, Amendment of FASB Statement No. 13 and Technical Corrections”
silica	A element, occasionally used to refer to the mineral, quartz
stockworks	A pattern of closely spaced fractures in rock, commonly filled with minerals of economic value
Tax Act	Income Tax Act(Canada)
Treaty	The Canada-U.S. Income Tax Convention (1980) as amended by the Protocols signed on June 14, 1983, March 28, 1984, March 17, 1995 and July 29, 1997
troctolitic	A mafic igneous rock
TSX-V	TSX Venture Exchange
U.S. Holder	A holder of common shares of the Company resident in the United States of America
U.S. Taxpayer	An individual who is a citizen or resident of the United States of America or a domestic corporation in the United States
Underlying Option	The option and royalty agreement dated March 22, 2004, made between AHL and Golden
Agreement	Arc
Veining	A fracture filled with a mineral usually of economic value
VLF-EM survey	Very low frequency electromagnetic survey
Winnemucca Mountain Property	A property consisting of 266 mining claims located in Humboldt County, Nevada
Winnemucca Option	The option granted to the Company with respect to the Winnemucca Mountain Property under the Winnemucca Option and Royalty Agreement

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Term	Definition
Winnemucca Option and Royalty Agreement	The agreement dated December 3, 2004 made among the Company, Golden and AHL, as amended on January 7, 2005, February 25, 2005, April 21, 2005, January 26, 2006, April 27, 2006, June 16, 2006 and as amended and restated on July 7, 2006 and April 11, 2007 pursuant to which the Company was granted an option to acquire a 100% interest in the Winnemucca Mountain Property subject to 2% NSR royalty
Zimtu	International Zimtu Technologies Inc., a related public company
Zn	Zinc

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CAUTIONARY NOTE TO U.S. INVESTORS
CONCERNING ESTIMATES OF INFERRED RESOURCES

This Annual Report uses the term “inferred resources”. We advise U.S. investors that while this term is recognized and required by Canadian regulations, the SEC does not recognize it. Inferred resources have a great amount of uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases.U.S. investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains “forward-looking statements” within the meaning of federal securities laws. You can identify these statements by forward-looking words such an “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will,” and “would” or similar words. Forward-looking statements are not guarantees of future performance and involve substantial risks and uncertainties. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. We believe that it is important to communicate our future expectations to our shareholders. However, there may be events in the future that we are not able to predict accurately or control. Therefore, these statements should not be regarded as a representation by us that any of our objectives or plans will be achieved or that any of our operating expectations will be realized. Our revenues and results of operations are difficult to forecast and could differ materially from those projected in the forward-looking statements contained in this Annual Report.

The factors listed below in the section captioned “Risk Factors,” as well as any cautionary language in this Annual Report, provide examples of risks, uncertainties, and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should be aware that the occurrence of the events described in these risk factors and elsewhere in this Annual Report could have a material adverse effect on our business, results of operations and financial position. We undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events after the date hereof, or to reflect the occurrence of unanticipated events.

__________________________________

Unless the context otherwise requires in this Annual Report, all references to “Evolving Gold”, the “Company”, “we”, “us”, and “our” refer to Evolving Gold Corp. and its subsidiaries. All dollar amounts set forth in this Annual Report are in Canadian dollars, except where otherwise indicated.

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PART I

ITEM 1. Identity of Directors, Senior Management and Advisors

Not Applicable.

ITEM 2. Offer Statistics and Expected Timetable.

Not Applicable.

ITEM 3. KEY INFORMATION.

3.A. Selected Financial Data

The following selected financial data is derived from the audited financial statements of the Company for the last four fiscal years ended March 31, 2007 and should be read together with the sections of this Annual Report entitled, “Information on the Company” and “Operating and Financial Review and Prospects”. The financial statements are presented in Canadian dollars and have been prepared in accordance with generally accepted accounting principles in Canada (“CDN GAAP”). Note 11 to the financial statements provides a summary of the differences between Canadian GAAP and U.S. GAAP.

Table No. 1
Selected Financial Data
(CDN$ in 000, except per share data)
					Year Ended March 31
		2007			2006			2005			2004
CANADIAN GAAP
Revenue		Nil			Nil			Nil			Nil
Net Loss for the Year	$	(831	)	$	(591	)	$	(402	)	$	(152	)
Basic and Diluted Loss Per Share	$	(0.07	)	$	(0.07	)	$	(0.07	)		N/A)
Dividends Per Share		Nil			Nil			Nil			Nil
Weighted Avg. Shares (000)		11,582			8,505			5,601			0.1
Period-end Shares (000)		12,530			10,269			7,350			0.1
Working Capital	$	(177	)	$	121		$	(144	)	$	127
Mineral Properties	$	1,114		$	737		$	216		$	27
Long-Term Debt		Nil			Nil			Nil			Nil
Capital Stock	$	2,408		$	1,714		$	499		$	0.1
Shareholders’ Equity (Deficit)	$	959		$	859		$	72		$	154
Total Assets	$	1,248		$	966		$	223		$	170
US GAAP
Net Loss	$	(1,365	)	$	(1,112	)	$	(591	)	$	(179	)
Loss Per Share	$	(0.12	)	$	(0.13	)	$	(0.11	)		N/A
Mineral Properties		Nil			Nil			Nil			Nil
Shareholders’ Equity	$	(144	)	$	122		$	(144	)	$	127
Total Assets	$	145		$	229		$	7		$	143

(1)	Cumulative Net Loss since incorporation through March 31, 2007 under US GAAP was $3,078,908.
(2)	Under US GAAP, options granted to non-employees as compensation for services provided are fair valued as an expense recorded.
(3)	Under US GAAP, all costs related to exploration stage properties are expensed in the period incurred.

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Exchange Rates

The following tables set forth: (i) the average exchange rate for the financial period-end indicated and (ii) the high and low for each month during the previous six months, each based on the noon rate of exchange as reported by the Bank of Canada for conversion of Canadian dollars into U.S. dollars.

Table No. 2
Exchange Rates

March 31, 2007	March 31, 2006	March 31, 2005	March 31, 2004
0.8674	0.8376	0.7818	0.7631

	September 2007	August 2007	July 2007	June 2007	May 2007	April 2007
High	1.0564	0.9525	0.9641	0.9452	0.9347	0.9036
Low	0.9931	0.9298	0.9358	0.9320	0.8981	0.8633

On October 12, 2007, the rate of exchange for the U.S. dollar was U.S.$1.00 = Cdn.$1.0268.

3.B. Capitalization and Indebtedness

Not Applicable.

3.C. Reasons For The Offer And Use Of Proceeds

Not Applicable

3.D. Risk Factors

Before making an investment decision, you should carefully consider the risks and uncertainties described below as well as the other information contained and incorporated by reference in this Annual Report. These risks and uncertainties are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. If any of such risks actually occur, our business, prospects, financial condition, cash flows and operating results could be materially harmed.

Risks Related to the Company

Cumulative unsuccessful exploration efforts by Evolving Gold personnel could result in the company having to cease operations.

The expenditures to be made by Evolving Gold in the exploration of its properties as described herein may not result in discoveries of mineralized material in commercial quantities. Most exploration projects do not result in the discovery of commercially mineable ore deposits and this occurrence could ultimately result in Evolving Gold having to cease operations.

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Evolving Gold has no reserves on the properties in which it has an interest and if reserves are not defined the company would have to cease operations.

The properties in which Evolving Gold has an interest or the concessions in which Evolving Gold has the right to earn an interest are in the exploratory stage only and are without a known body of ore. If Evolving Gold does not ultimately find a body of ore, it would have to cease operations.

Evolving Gold has minimal positive cash flow and no recent history of significant earnings and is dependent upon public and private distributions of equity to obtain capital in order to sustain operations. Public distributions of capital result in dilution to existing shareholders.

None of the Company’s properties have advanced to the commercial production stage and the Company has no history of earnings or positive cash flow from operations. The cumulative net loss since the Company’s inception under U.S. GAAP is $3,078,908. The Company does not know if it will ever generate material revenue from mining operations or if it will ever achieve self-sustaining commercial mining operations. Historically, the only source of funds available to the Company has been through the sale of its common shares. Any future additional equity financing would cause dilution to current stockholders. Management has no current plans to enter into any debt obligations and plans to meet all capital requirements through the issuance of the Company’s capital stock.

Evolving Gold currently has 2,750,000 share purchase options outstanding and 27,385,675 share purchase warrants outstanding. If all of the share purchase options and share purchase warrants were exercised, the number of common shares issued and outstanding would increase from 42,867,311 to 73,003,986 .

The risks associated with penny stock classification could affect the marketability of the common stock of Evolving Gold and shareholders could find it difficult to sell their stock.

The Company’s stock is subject to “penny stock” rules as defined in 1934 Securities and Exchange Act rule 3a51-1. The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. The Company’s common shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities. Penny stocks generally are equity securities with a price of less than U.S. $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 system).

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such 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 agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the Company’s common shares in the United States and shareholders may find it more difficult to sell their shares.

Evolving Gold is dependent on key personnel and the absence of any of these individuals could result in the Company having to cease operations.

While engaged in the business of exploiting mineral properties, the nature of Evolving Gold’s business, its ability to continue its exploration of potential exploration projects, and to build a competitive edge in the marketplace,

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depends, in large part, on its ability to attract and maintain qualified key management personnel. Competition for such personnel is intense and the Company may not be able to attract and retain such personnel. Evolving Gold’s growth will depend, on the efforts of its Senior Management, particularly its President, Dr. Lawrence Dick; and its Chief Executive Officer, Robert Bick. We do not carry key person insurance on senior management and other personnel.

Evolving Gold’s directors may have a conflict of interest with the company as such directors or senior management also serve on boards of companies in the same industry as the Company.

Directors of the Company also serve as directors of other similar companies involved in natural resource development. Accordingly, it may occur that properties will be offered to both the Company and such other companies. Furthermore, those other companies may participate in the same properties as those in which the Company has an interest. As a result, there may be situations which involve a conflict of interest. In that event, the directors would not be entitled to vote at meetings of directors which evoke any such conflict. The directors will attempt to avoid dealing with such other companies in situations where conflicts might arise and will at all times use their best efforts to act in the best interests of the Company. If the directors fail to do so, however, there could be material adverse consequences to the Company, its business and results of operations.

Dilution through employee/director/consultant options could adversely affect Evolving Gold’s stockholders.

Because the success of Evolving Gold is highly dependent upon its respective employees, the Company has granted to some or all of its key employees, Directors and consultants options to purchase common shares as non-cash incentives. To the extent that significant numbers of such options may be granted and exercised, the interests of the other stockholders of the Company may be diluted. There are currently 2,750,000 share purchase options outstanding, which, if exercised, would result in an additional 2,750,000 common shares being issued and outstanding. (For a breakdown of dilution, refer to the risk factor entitled: “Evolving Gold Has Minimal Positive Cash Flow and No Recent History of Significant Earnings and Is Dependent upon Public and Private Distributions of Equity to Obtain Capital in Order to Sustain Operations. Public distributions of capital result in dilution to existing shareholders”)

U.S. Investors may not be able to enforce their civil liabilities against us or our directors, controlling persons and officers.

It may be difficult to bring and enforce suits against Evolving Gold. The Company is a corporation incorporated in Canada under the CBCA. A majority of the Company’s directors must be residents of Canada, and all or substantial portions of their assets are located outside of the United States, predominately in Canada. As a result, it may be difficult for U.S. holders of our common shares to affect service of process on these persons within the United States or to realize in the United States upon judgments rendered against them. In addition, a shareholder should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or other laws of the United States.

However, U.S. laws would generally be enforced by a Canadian court provided that those laws are not contrary to Canadian public policy, are not foreign penal laws or laws that deal with taxation or the taking of property by a foreign government and provided that they are in compliance with applicable Canadian legislation regarding the limitation of actions. Also, a Canadian court would generally recognize a judgment obtained in a U.S. Court except, for example:

a) where the U.S. court where the judgment was rendered had no jurisdiction according to applicable Canadian law;

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b) the judgment was subject to ordinary remedy (appeal, judicial review and any other judicial proceeding which renders the judgment not final, conclusive or enforceable under the laws of the applicable state) or not final, conclusive or enforceable under the laws of the applicable state;

c) the judgment was obtained by fraud or in any manner contrary to natural justice or rendered in contravention of fundamental principles of procedure;

d) a dispute between the same parties, based on the same subject matter has given rise to a judgment rendered in a Canadian court or has been decided in a third country and the judgment meets the necessary conditions for recognition in a Canadian court;

e) the outcome of the judgment of the U.S. court was inconsistent with Canadian public policy;

f) the judgment enforces obligations arising from foreign penal laws or laws that deal with taxation or the taking of property by a foreign government; or

g) there has not been compliance with applicable Canadian law dealing with the limitation of actions.

As a “foreign private issuer”, Evolving Gold is exempt from the Section 14 proxy rules and Section 16 of the 1934 Securities Act may result in shareholders having less complete and timely data.

The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result in shareholders having less complete and timely data. The exemption from Section 16 rules regarding sales of common shares by insiders may result in shareholders having less data. This data includes:

1. Insider trading data disclosed on Canadian regulatory websites is different.

2. U.S. companies have specified content and filing requirements regarding disclosures to shareholders for the annual meeting and Canadian regulations specify a modestly different content.

3. Canadian interim financial statements are not necessarily prepared according to U.S. GAAP.

4. The filing deadlines for foreign private issuers are different than for U.S. issuers.

Evolving Gold’s possible foreign investment company status has consequences for U.S. Investors.

Potential investors who are U.S. taxpayers should be aware that the Company could be considered a passive foreign investment company (“PFIC”) for U.S. tax purposes for the fiscal year ended March 31, 2007. If the Company is a PFIC for any year during a U.S. taxpayer’s holding period, then such U.S. taxpayer generally will be required to treat any so-called “excess distribution” received on its common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distribution or gain, unless the taxpayer makes a qualified electing fund (“QEF”) election or a mark-to-market election with respect to the shares of the Company. In certain circumstances, the sum of the tax and the interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the taxpayer. A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of the Company’s net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders. A U.S. taxpayer who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer’s tax basis therein. See also Item 10E “United States Tax Consequences.”

Risks Related to the Industry

Operating hazards and risks associated with the mining industry could result in Evolving Gold having to cease operations.

Resource exploration activities generally involve a high degree of risk. Hazards such as unusual or unexpected formations and other conditions are involved. Operations in which the Company has a direct or indirect interest will

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be subject to all the hazards and risks normally incidental to exploration for precious and base metals, any of which could result in work stoppages, damage to or destruction of exploration facilities, damage to life and property, environmental damage and legal liability for any or all damage. Evolving Gold may become subject to liability for cave-ins and other hazards for which it cannot insure or against which it may elect not to insure where premium costs are disproportionate to the Company’s perception of the relevant risks. The payment of such insurance premiums and of such liabilities would reduce the funds available for exploration activities and could force Evolving Gold to cease operations.

The amount of capital necessary to meet all environmental regulations associated with the exploration programs of the Company could be in an amount great enough to force Evolving Gold to cease operations.

The current and anticipated future operations of the Company, including further exploration activities require permits from various Federal and Provincial governmental authorities in Canada and the United States. (Evolving Gold has the required permissions to enable it to engage in exploration work consisting of rock sampling and geophysical mapping.) Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, mine safety and other matters. Unfavourable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on the Company and cause increases in capital expenditures which could result in a cessation of operations by the Company.

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

Large increases in capital expenditures resulting from any of the above factors could force Evolving Gold to cease operations.

Mineral prices may not support corporate profit for Evolving Gold.

The resource exploration industry is intensely competitive and even if commercial quantities of mineral resources are found (which is not guaranteed), a profitable market may not exist for the sale. If a profitable market does not exist, Evolving Gold may have to cease operations.

ITEM 4. INFORMATION ON THE COMPANY

4.A. History of the Company

General

The Company was incorporated under the CBCA on June 19, 2003 as 6109527 Canada Ltd. On September 30, 2003, the Company changed its name to Evolving Gold Corp. The Company’s registered office is located at 1500 – 1055 West Georgia Street, PO Box 11117, Vancouver, British Columbia, Canada, V6E 4N7. The Company’s principal place of business is located at 725 - 666 Burrard Street, Vancouver, British Columbia, V6C 2X8, its telephone number is (604) 685-6375 and its facsimile number is (604) 669-2960. The Company’s website address iswww.evolvinggold.com and its e-mail address isinfo@evolvinggold.com. The Company became a reporting issuer in the Provinces of Alberta, British Columbia and Ontario on May 14, 2004. On June 14, 2004, the Company officially began trading on the Canadian Trading and Quotation System Inc. (the “CNQ”) under stock symbol “GOLD”. On July 28, 2005, the Company began trading on the NASD.OTCBB exchange in the United States under the stock symbol “EVOGF”. During the 2007 fiscal year the Company applied to list its shares on the Canadian TSX Venture Exchange and effective June 13, 2007 began trading on this exchange under the symbol “EVG.” The

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Company continues to be listed for trading on the OTCBB exchange and ceased to be listed for trading on the CNQ exchange. Effective August 13, 2007 the Company was also listed on the Frankfurt Stock Exchange under the symbol “EV7”.

Evolving Gold Corp. is a Canadian-based precious mineral exploration company engaged in the acquisition and exploration of natural resource properties. Currently its focus is on projects in Southwestern United States, particularly Nevada with an additional property located in New Mexico, United States of America. The Company continues to emphasize the exploration of properties where management believes there is potential for the discovery of high grade deposits.

Even if the Company completes its exploration programs on its properties and is successful in identifying mineral deposits, a substantial amount of capital over the next 3 years, will still have to be spent on each deposit on further drilling and engineering studies before management will know that the Company has a commercially viable mineral deposit on each of the properties. No assurance can be provided that commercially viable mineral deposits will be located on any of the Company’s properties.

Past Property Interests

Murray Property

On July 22, 2003, the Company entered into the Murray Property Option Agreement with International Zimtu Technologies Inc., pursuant to which the Company was granted an option to acquire a 70% undivided interest in the Murray property. At the date of the Murray Property Option Agreement the Company was a wholly owned subsidiary of Zimtu which currently now owns less than 3% of the outstanding shares of the Company. The property consists of one mineral claim totaling 2,965 acres and is located 78 kilometres northeast of Yellowknife, Northwest Territories.

The Company terminated its option on the Murray Property in 2007.

Voisey Bay Labrador Property

On May 4, 2005 the Company entered into an option agreement with Geocore Exploration Inc. whereby they had the right to earn up to an 80% interest in two blocks, comprising 192 claims, in Geocore’s Voisey’s Bay area property located in Labrador. A first option for the purchase of a 60% interest was purchased for cash of $ 35,000 and the obligation to incur $ 200,000 in exploration expenditures by October 31, 2006 with cumulative exploration costs of $ 500,000 incurred by October 31, 2007. During the 2007 fiscal year the Company terminated this option agreement and accordingly wrote-off $80,170 in expenditures related to this property.

Current Property Interests

Winnemucca Property

Pursuant to an option agreement dated December 3, 2004 and amended January 7, 2005, February 25, 2005, April 21, 2005, January 26, 2006, April 27, 2006, June 16, 2006 and July 7, 2006, with Golden Sands Exploration Inc. and its subsidiary company AHL Holdings Ltd., the company was granted the right to acquire a 100% interest in unpatented mining claims, located in Humboldt County, Nevada. In addition the Company has staked additional unpatented mining claims.

Pursuant to an earn-in agreement between the Company and Meridian Gold Inc. (subsequently assigned to Meridian Minerals Corp. dated July 31, 2006, the Company agreed to grant Meridian an earn-in to acquire, directly or indirectly, an undivided 70% interest in Evolving’s option to purchase 100% of the right, title and interest in the Winnemucca Claims.

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Malone Property

On April 17, 2006 the Company entered into a quitclaim deed and royalty agreement with Newmont North America Exploration Limited whereby the Company was granted all rights, title, estate and interest in unpatented mineral claims located in Lordsburg, New Mexico, United States of America in exchange for payment of US$ 10,000 (paid) and an additional US$ 10,000 payable in one year (paid subsequent to March 31, 2007). The agreement is subject to a royalty of 2% of net smelter returns.

Siesta Property

The Company has acquired, by staking, 638 claims covering 4,400 hectares on the west flank of the Slumbering Hills in Humboldt County.

Alpha Butte Property

The Company has acquired, by staking, 279 claims covering 2,200 hectares.

Fisher Canyon Property

The Company has acquired, by staking,179 unpatented lode mining claims covering 1,100 hectares.

Battle Mountain Property

The Company has acquired, by staking, approximately 1,959 claims (38,000 acres) of open land north of the town of Battle Mountain, Nevada.

Rattlesnake Hills Property

The Company has entered into a letter of intent with Golden Predator Mines (US) Inc. for the acquisition of Golden Predator’s mining options on a 100% undivided interest in the Rattlesnake Hills Property, located in Natrona County, Wyoming.

For more information on the Company’s current properties of interest, please refer to Item 4.B. “Business Overview” and Item 4.D. “Property, Plants and Equipment” below.

Capital Expenditures

During the year ended March 31, 2007, the Company paid US$10,000 for advance royalty payments with respect to the Winnemucca property option and US$10,000 in compliance with the terms of the Malone property quit claim deed and royalty agreement. Evolving also issued common shares with an imputed value of $184,000 with respect to the Winnemucca property option, incurred $767,588 in deferred exploration expenses relating to its various property options and paid legal costs of $83,939 which were recorded as part of resource property acquisition cost. Reclamation deposits of $18,982 and office furnishings and equipment totaling $23,106 were also acquired during the year.

During the year ended March 31, 2006, the Company paid $35,000 in compliance with the terms of the Voisey Bay property option. Evolving also issued common shares with an imputed value of $244,000 and paid cash of US$ 50,000 on account of the Winnemucca property option as well as paying US$10,000 for advance royalty payments payable pursuant to the terms of this option agreement. The Company also incurred $173,466 in geological consulting, staking and recording and field expenses related to its various property options and paid legal costs of $39,596 which were recorded as part of the resource property acquisition cost.

During the year ended March 31, 2005, the Company purchased the Winnemucca property option for $133,046 and spent $48,477 on deferred exploration costs relating to a review of the geological data and additional staking and

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recording costs for additional claims. They also incurred $7,617 of deferred exploration costs with respect to extending the claim deadline date and preparation for a site visit with respect to the Murray property.

Material Effects of Government Regulations

The current and anticipated future operations of the Company, including further exploration activities, require permits from various Canadian Federal and Provincial governmental authorities. Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, well safety and other matters. Unfavourable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on the Company and cause increases in capital expenditures which could result in a cessation of operations by the Company. The Company has had no material costs related to compliance and/or permits in recent years, and anticipates no material costs in the next year.

4.B. Business Overview

The Company’s principal business since its incorporation has been the acquisition and exploration of natural resource properties with the goal of placing into production any properties warranting such. Currently its focus is on projects in Southwestern United States, particularly Nevada with an additional property located in New Mexico, United States of America. The Company continues to emphasize the development of properties where management believes there is potential for the discovery of high grade deposits (Figure 1). The Malone property in New Mexico is considered to be at an early stage of exploration. The Winnemucca Mountain property in Nevada is at the intermediate stage of exploration. Six additional Nevada properties have recently been acquired, by staking, along known, gold-mineralized trends and the Company has recently signed a letter of intent with respect to acquiring a property option in Wyoming, United States. The Company has had no revenue since inception.

Figure 1: Properties Location Map

Winnemucca Property

Effective December 3, 2004 and subsequently amended January 7, 2005, February 25, 2005, April 21, 2005, January 26, 2006, April 27, 2006, June 16, 2006, July 7, 2006 and April 11, 2007 the Company entered into an option agreement with Golden Sands Exploration Inc. and its subsidiary company AHL Holdings Ltd. to acquire unpatented mineral claims in Humboldt County, Nevada. Subsequent to this acquisition the Company also staked additional

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adjoining unpatented mining claims. The property, which has excellent road access, encompasses 560 hectares in Humboldt County’s high desert region, home of the Battle Mountain Mining District and the Carlin Trend. In order to earn its interest, the Company must spend US$4,000,000 on exploration prior to December 31, 2008 including at least US$ 200,000 on Golden Arc claims by December 31, 2006. As of December 31, 2006, the Company spent US $500,000 on exploration on this project, however, only approximately US $151,000 of this US $500,000 is attributable to the Golden Arc claims specifically. The Company is presently negotiating an extension with respect to the Golden Arc commitments. In addition the Company must pay US$90,000 to the vendors (US$50,000 has now been paid in cash and US$40,000 has been paid by the issue of shares for debt) and issue 1,800,000 shares of Evolving to the vendor at various times on or before December 31, 2007 (1,300,000 shares have now been issued). The Company must also prepare, pay for and deliver a pre-feasibility study by June 30, 2009. The property is subject to a 2% net smelter royalty. The NSR is divided between two parties as to the respective mineral claims held by each party. With respect to the Golden Arc unpatented mineral claims, the Company may purchase the NSR for US $1,000,000 per 1% or an aggregate of US $2,000,000. No agreement exists for such purchase of NSR on the remaining mineral claims. The property is also subject to advance royalty payments of US$20,000 (paid), and US$20,000 due by December 3, 2007. On each successive December 3rd advance royalty payments of US$20,000 per year will continue until production from the claims commences and continues uninterrupted for twelve consecutive months. These advance royalty payments will be deducted from the NSR payments otherwise needed. A finder’s fee of 100,000 shares was also paid by the Company in connection with this property transaction

On April 10, 2007, the Company paid US$10,000 to extend certain terms of the agreement. The parties are currently negotiating further amendments to the agreements.

Earn In Agreement with Meridian Gold Inc. -In September, 2005 the Company signed a letter of intent with Meridian Gold Inc. regarding an option by Meridian Gold Inc. to acquire, directly or indirectly, an undivided 70% interest in 100% of Evolving’s Winnemucca property option. An earn-in agreement was subsequently signed on July 31, 2006 to formalize this arrangement under which Meridian Gold Inc. has assigned their interest to Meridian Minerals Corp. (“Meridian”). Under the terms of the agreement, Meridian can earn a 70% interest in the property by making a total contribution of US$500,000 in staged cash payments to Evolving by December 31, 2008 (US$ 160,000 has been received to date), investing a minimum of US$500,000 in exploration expenditures before December 31, 2006 (CDN$412,019 has been paid to March 31, 2007) and incurring total exploration expenditures of US$4,000,000 by December 31, 2008. The Company is currently in the process of extending the exploration expenditure deadline due to unforeseen drilling program delays. In addition Meridian must deliver a pre-feasibility report on the property before June 30, 2009. Upon completion of the required payments and expenditures, the Company intends to establish a joint venture with Meridian with respect to the claims on the property.

Technical Report -In February 2007 a NI 43-101 technical geological report prepared by Chris Osterman, P. Geol. as the qualified person and dated as at October 29, 2006 on the Winnemucca Mountain property was filed on SEDAR.

Malone Property

On April 17, 2006 the Company entered into a quitclaim deed and royalty agreement with Newmont North America Exploration Limited whereby the Company was granted all rights, title, estate and interest in unpatented mineral claims located in Lordsburg, New Mexico, United States of America in exchange for payment of US$20,000 (paid). The agreement is subject to a royalty of 2% of net smelter returns. The Company has incurred deferred exploration costs of $191,253 on this property during the year ended March 31, 2007 which includes $93,955 for geophysical and geological studies, $64,324 for geological consulting, $13,192 for permits, licenses and fees and $19,782 for field and other expenses.

Technical Report -A technical geological NI 43-101 report dated February 20, 2007 on the Malone property was filed on SEDAR in March 2007. The report was prepared by Gerald E. Ray, Ph.D. as the qualified person and dated as at February 20, 2007 and later amended as at May 23, 2007 and filed on SEDAR on June 1, 2007.

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SiestaProperty

The Company’s interest in the Siesta group is comprised of 638 claims situated in the Slumbering Hills area of Humboldt County. The Company intends to conduct a systematic geophysical survey of this claim group, and is planning a concurrent geochemical survey with the objective of defining drill targets by the fall of 2007.

Fisher Canyon Property

Evolving Gold’s interest in the Fisher Canyon property consists of 179 unpatented lode mining claims staked by Evolving Gold covering approximately 1,100 hectares. The Company plans to conduct geochemical and geophysical surveys on the property.

Alpha Butte Property

The Company’s interest in Alpha Butte consists of 279 staked claims covering 2,200 hectares. The Company intends to perform surface mapping and sampling also with the objective of defining drill targets over the next several months.

Battle Mountain Property

The Company acquired by staking, approximately 38,000 acres of open land near the town of Battle Mountain, Nevada. Evolving Gold is developing a drill program to determine where cover is indeed acceptably thin and to determine the location of favorable host rocks.

4.C. Organizational Structure

The Company has one active wholly-owned subsidiary, Evolving Gold Corp., incorporated pursuant to the laws of the State of Nevada.

4.D. Property, Plant and Equipment

Office Space

The Company subleases its office space pursuant to the terms of a written lease agreement at 725 – 666 Burrard Street, Vancouver, British Columbia, Canada V6C 2X8. The lease expires in April 30, 2012 and calls for monthly payments of $4,394 plus an applicable portion of operating costs

The Winnemucca Mountain Property

The Winnemucca Mountain Property is without known reserves and the work being done by the Company is exploratory in nature. The Company’s interest in the Winnemucca Mountain Property also stems from previous exploration work described below.

Acquisition of Interest

On December 3, 2004, the Company entered into the Winnemucca Option and Royalty Agreement pursuant to which the Company was granted the Winnemucca Option to acquire a 100% interest in 62 unpatented mining claims (subsequently increased to 266 unpatented mining claims as discussed further below) located in Humboldt County, Nevada. In order to exercise the Winnemucca Option, the Company must incur exploration expenditures of US$4,000,000, make aggregate cash payments to Golden Sands of US$80,000 (paid) and issue and deliver 1,800,000 shares (1,300,000 have been issued) in the capital of the Company as follows:

(a)	Cash Payments
		US$30,000 on or before January 7, 2005 (paid);
		US$40,000 on or before March 31, 2005 (paid);
		US$10,000 pursuant to an extension agreement (paid);

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(b)	Share Issuances
		Issue 100,000 shares in the name of Golden Arc and deliver to Golden Sands on signing the agreement (issued);
		Issue 200,000 shares to Golden Sands on or before December 15, 2004 (issued);
		Issue 200,000 shares to Golden Sands on or before February 25, 2005 (issued);
		Issue 400,000 shares to Golden Sands on or before August 31, 2005 (issued);
		Issue and deliver 400,000 shares to Golden Sands on or before August 31, 2006 (issued);
		Issue and deliver 500,000 shares to Golden Sands on or before December 31, 2007;
(c)	Exploration Expenditures
		Incur exploration expenditures of US$500,000 on or before December 31, 2006, including a commitment to incur US$200,000 on the Golden Arc Claims. Total 2006 exploration expenditures are approximately $560,000. The amount spent on the Golden Arc claims are approximately $151,000. The extension of the exploration commitment amounts for the Golden Arc claims for 2006 are currently under negotiation;
		Cumulative exploration expenditures of US$2,000,000 on or before December 31, 2007;
		Cumulative exploration expenditures of US$4,000,000 on or before December 31, 2008.

A finder’s fee of 100,000 common shares in the capital of the Company was issued in connection with the acquisition of the Winnemucca Mountain Property in December 2004.

Under the Winnemucca Option and Royalty Agreement, any unpatented or patented mining claims located within three miles of the subject claims acquired or located would, at the option of the other parties, form part of the subject claims. Since entering into the Winnemucca Option and Royalty Agreement, 204 additional claims have been staked by AHL and the Company with the result that there are now 266 unpatented subject claims in total.

The Winnemucca Mountain Property is subject to a 2% NSR royalty. The Company has the right to purchase the royalty relating to the Golden Arc Claims listed in the table below and any other unpatented mining claims which may become subject to the option and royalty agreement between AHL and Golden Arc for US$1,000,000 for each of the two percentage royalty points. The Company is required to pay, in addition to the mentioned option payments, advance royalty payments of US$10,000 by March 16, 2006 (paid), US$10,000 by December 3, 2006 (paid), the second anniversary of the Winnemucca Option and Royalty Agreement and US$20,000 by December 3, 2007, the third anniversary of the Winnemucca Option and Royalty Agreement and each successive anniversary until production commences at which time the obligation to pay advance royalty payments will terminate. The total of the advance royalty payments is to be deducted from the total amount of NSR royalty payable under the Winnemucca Option and Royalty Agreement. The Company is also required to pay various costs relating to the amending of the option agreement as well as for a pre-feasibility study which is to be delivered to Golden Arc by June 30, 2009.

In September, 2005 the Company signed a letter of intent with Meridian Gold Inc. regarding an option by Meridian Gold Inc. to acquire, directly or indirectly, an undivided 70% interest in 100% of Evolving’s Winnemucca property option. An earn-in agreement was subsequently signed on July 31, 2006 to formalize this arrangement under which Meridian Gold Inc. has assigned their interest to Meridian Minerals Corp. Under the terms of the agreement, Meridian can earn a 70% interest in the property by making a total contribution of US$500,000 in staged cash payments to Evolving by December 31, 2008 (US$ 160,000 has been received to date), investing a minimum of US$500,000 in exploration expenditures before December 31, 2006 (CDN$412,019 has been paid to March 31, 2007) and incurring total exploration expenditures of US$4,000,000 by December 31, 2008. The Company is currently in the process of extending the exploration expenditure deadline due to unforeseen drilling program delays.

Mineral Claims

The Winnemucca Mountain Property consists of 266 unsurveyed contiguous mining claims covering approximately 2,115 hectares on Lands administered by the Bureau of Land Management, US Department of the Interior. In order to maintain the mineral claims comprising the Winnemucca Mountain Property in good standing, the Company must pay to the BLM a maintenance fee of US$125 per mineral claim prior to September 1, 2008 and, in each successive year, the Company must pay the County in which the mining claims are located (the Humboldt County) a yearly fee

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prior to November 1 and file a form called a “Notice of Intent to Hold”. If the Company fails to duly pay such fees and file such form, then the mining claims will lapse and the Company will lose all interest that it has in these mining claims.

Location, Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Winnemucca Mountain Property is located in north-western Nevada, approximately 6 kilometres northwest of the municipality of Winnemucca. The property is within the Winnemucca Mountain Mining District of Humboldt County. The claims are situated on certain sections of the west flank of the Winnemucca Mountain (Figure 2).

The Winnemucca Mountain Property is accessible from State Route 49, a graded gravel road from Winnemucca to Jungo. The claims that comprise the Winnemucca Mountain Property lie in an irregular, northerly trending block along the western flanks of Winnemucca Mountain. The mountain slopes are generally moderate along the west side of the claims, steepening on the east and in drainages. Pediment and alluvium cover is extensive, particularly in the western, or lower, part of the property where a classic bajada is developed. Within the claims, elevations range from approximately 1435 metres in the southwest corner to nearly 2000 metres in the east. The area is devoid of trees, and vegetation consists of sagebrush and sparse grass. The climate in southern Humboldt County is arid with annual rainfall averaging 20 cm (8 inches; Winnemucca Chamber of Commerce Website) and snowfall of 38 cm (16 inches; Nevada Climate Summaries Website). The area is characterized by hot summers and short, cold winters.

History and Previous Work

Gold and silver were first discovered in the Winnemucca Mining District in 1863 and several smelters were constructed along the Humboldt River during the 1860’s. In late 1988, Santa Fe Pacific Mining, Inc. (now Newmont Mining Corporation) (“Santa Fe”) entered into a joint venture with Arctic Precious Metals Inc. with respect to the Winnemucca Mountain Property and became operator. Previous exploration work performed by Santa Fe focused on the pediment-covered Swordfish Zone. Between 1988 and 1990, Santa Fe conducted geological mapping, rock sampling, trenching, CSAMT, induced polarization geophysical surveys, collected 286 auger hole bedrock samples and completed a total of 18,260 metres (52,470.8 feet) in 73 reverse circulation drill holes. In 1994, Anvil Resources Ltd. acquired the Winnemucca Mountain Property, became project operator and performed internal compilation work, prepared a topographic base map and collected surface samples to confirm previous gold tenors. An induced polarization (IP) survey conducted in 1996 confirmed that resistivity highs correlated well with known mineralized areas and delineated two new target zones. There has been no record of exploration work since 1996.

Present Condition and Current State of Exploration

The Winnemucca Mountain Property is undeveloped and does not contain any open-pit or underground mines. There is no plant or equipment located on the property. No reserves have been identified on the mineral claims that comprise the Winnemucca Mountain Property.

Mineralization

The Winnemucca Mountain Property and surrounding area has had a long history of mineral exploration. As a result, gold occurrences and targets have been identified at several areas within the current property boundaries. Types of gold-bearing occurrences identified to date on the Winnemucca Mountain Property are: quartz stockworks in hornfelsed intrusive contact zones, quartz veins, volcanic breccias, and quartz-calcite veins. The most intensively explored sector of the property to date is called the Swordfish zone.

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Figure 2: Winnemucca Property Location Map

Gold mineralization at the Swordfish Zone occurs within a northeast-trending, low sulfide, quartz-adularia vein-type and brecciated system. Santa Fe completed 73 reverse circulation drill holes, nearly all of which were focused on the Swordfish Zone. Near the end of Santa Fe’s tenure on the Winnemucca Mountain Property, gold mineralization was found approximately 500 metres northeast of the Swordfish Zone, at what is now called the SF Extension Zone. This intercept has never been followed up by further drilling, and has been interpreted by the Company to indicate that the Swordfish Zone may be much more extensive than previously indicated, and that higher gold grades may occur in structurally-controlled zones northeast of Swordfish. The SF Extension, and beyond to the northeast, is a high-priority drill target for the Company.

In addition to the Swordfish and SF Extension areas, additional exploration targets have been identified and are comprised of multiple outcropping vein-style occurrences reported to carry anomalous gold values that have yet to be explored in detail.

Planned Work Program by the Company

In February 2007 a NI 43-101 technical geological report prepared by Chris Osterman, P. Geol. as the qualified person and dated as at October 29, 2006 on the Winnemucca Mountain property was filed on SEDAR.

The Company and Meridian plan to focus future exploration on the Swordfish Extension Zone within the Winnemucca Mountain vein system based on their preliminary review of the database constructed from data generated from previous exploration programs on the property. During the 2007 fiscal year Meridian completed 12 reverse circulation drill holes with ten of the twelve holes intersecting the epithermal vein system and it is expected that drilling will be continued as drill rigs become available. Under the terms of the Earn-In Agreement Meridian will manage the exploration at Winnemucca Mountain while they complete their earn-in requirements. Field work will consist of surface geological mapping, geochemical rock chip sampling, geophysical surveying of newly-interpreted target trends and drilling of the higher priority targets. As at June 30, 2007, the Company had incurred exploration costs of $619,109 on this property comprised of $243,408 for drilling, $98,698 for geological consulting and other database review work, $61,078 in permits and fees, $112,035 in staking and recording costs and $103,888

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in assays and other field expenses. These costs were offset by Meridian’s contribution pursuant to the earn-in agreement which totalled $412,019 for the same period.

The Malone Property

On April 17, 2006 the Company entered into a quitclaim deed and royalty agreement with Newmont North America Exploration Limited whereby the Company was granted all rights, title, estate and interest in unpatented mineral claims located in Lordsburg, New Mexico, United States of America in exchange for payment of US$20,000 (paid). The agreement is subject to a royalty of 2% of net smelter returns. The Company has incurred deferred exploration costs of $191,253 on this property during the year ended March 31, 2007 which includes $93,955 for geophysical and geological studies, $64,324 for geological consulting, $13,192 for permits, licenses and fees and $19,782 for field and other expenses.

Mineral Claims and Location

The Malone property in south-west New Mexico (Figure 3) is wholly owned by the Company’s subsidiary. It consists of 80 MAL claims that were staked in the February 2005 (Figure 4). The claims cover a partial rectangular area that is approximately 4 km long north to south and 1.7 km wide east to west.

The property lies in Grant County of New Mexico (Figure 3) in Sections 17-20, and 29 and 30, in T20S and R16W. It is situated approximately 17 miles northeast of Lordsburg township, New Mexico, and is easily accessible from State Highway No. 90 which connects Lordsburg and Silver City. At UTM 731915-3597835, approximately 17 miles from Lordsburg, access is made by turning north-north-west onto the Mill Canyon Road (dirt road No. 859). A drive of approximately 3 miles reaches the southern claim boundary.

Figure 3: Location of the Malone claim block in SW New Mexico

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Access, Climate, and Infrastructure

The district surrounding the Malone property has a basin and range topography characterized by wide, flat, alluvial-covered semi-desert plains that alternate with elongate stretches of rocky hills and escarpments. The semi-desert vegetation is sparse, and there is no difficulty for foot access. Elevations on the claims range from 1,700 metres up to 2,000 metres. The topography is dominated by the north to south trending Brock Ridge whose highest point (Mill Hill) reaches 2,000 metres.

The claims lie in an arid, semi desert part of New Mexico that has a low annual rainfall. The summers are hot and dry with temperatures exceeding 25 degrees Celsius. Winters are also dry and temperatures can reach down to freezing.

Figure 4: The Malone claims, SW New Mexico.

History and Previous Work

Early work at Malone may have taken place in the 1890’s. There are a number of prospect pits and adits in the southern part of the property, all of which are inaccessible. One adit labeled the Paracutin lode suggests that more recent work, possibly in the 1940’s or 1950’s may have taken place, but there is no record of this work.

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Additionally, at least three drillhole collars were noted during the Company’s initial reconnaissance of the property. Results of that drilling are not known.

In 2005, Newmont Gold Corporation staked the MAL 1-80 claims with the concept that mineralization in the granite may be related to an alkali gold system. Q. Hennigh and J.T Ray, Newmont geologists, collected 232 samples which were analyzed for gold, silver, and trace elements.

Present Condition and Current State of Exploration

During 2005, the Company undertook property-scale geological mapping and geochemical sampling of the Malone property. Subsequently, Dr. G. E. Ray was contracted to prepare an NI 43-101 compliant report, including a recommended program for follow-up exploration.

Property Geology

Regionally, the Malone claims lie in a zone of northerly to north-west trending Basin and Range structures that lie off the south-east flank of the Colorado Plateau. Extensional faulting and rifting during Tertiary time was accompanied by continental volcanism dominated by rhyolite tuffs and flows, with lesser amounts of andesite.

The exposed geology on the property includes a package of northerly striking and easterly dipping Tertiary age volcaniclastics and flows. This package overlies a highly leucocratic Pre-Cambrian granitoid basement. The nature of the volcanic-granite contact is uncertain, but the Dr. Ray believes it represents a steep easterly dipping fault that was related to recurrent down-dropping along the western margin of a graben structure.

The Tertiary rhyodacitic volcaniclastics outcrop extensively along the north-north-west trending Brock Ridge escarpment but the older granitoids are only seen in a relatively narrow belt at lower elevation immediately west of the ridge. The Pre-Cambrian basement includes several generations of intrusive granitic rocks that range from fine to extremely coarse grained and pegmatitic. Many are cut by several sets of brittle planar structures, some of which contain quartz-feldspar ± pyrite veins up to 2 metres thick. Locally the hosting granitoids are extensively and pervasively overprinted and bleached by clay-sericite ± silica ± pyrite alteration, as well as being stained or coated by Fe and Mn oxides. Extensive zones of quartz vein stockworks also cut the granites.

The following types of basement granitic rocks occur on the claims:

Type 1: An early generation of coarse to very coarse grained massive and quartz-rich leuco-granite that ranges from weakly to strongly feldspar porphyritic.

Type 2: A fine to coarse grained quartz-rich granite-microgranite that is commonly bleached and which tends to be less feldspar porphyritic than the Type 1 rock. In many cases the Type 1 and 2 granites are separated by a fault which may contain gold-bearing quartz veins.

In addition, dikes of aplite, dacite-microgranite and K spar rich pegmatite occur in the basement rocks on the claim. Structures on the property are dominated by brittle faulting and block tilting, as evident from the easterly dip of the younger Tertiary volcanics. No small scale folds were noted and all the igneous rocks are unfoliated. The brittle faults are probably related to the regional extension that accompanied the formation of the grabens and half-grabens, as well as the extrusive volcanism. The claims are believed to overlie the fault-zone boundary of one graben, and the 35 to 55 degree easterly dip of the volcanics shows that most of the graben-related movement in this area involved east-side down-dropping accompanied by easterly tilting.

Plotted rose diagrams of the planar structures show the following:

(1) The major brittle faults (up to 3 meters thick) are generally steep to sub-vertical (60 to 90 degrees). Several sets are present, the most common of which has an average strike azimuth of 115 degrees

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	(east-south-east to west-north-west). Less common sets strike east to west (azimuth 095 degrees) and north to north-north-east.
(2)	Sets of thin, closely spaced hair-line fractures occur where the granitic rocks have undergone brittle shattering.
(3)	There are several sets of planar structures containing veins and dikes of either fine-grained granitic aplite or very coarse grained K-spar-rich pegmatites. One set strikes east-south-east, similar to an important set of major fault.

The nature of the volcanic-granite contact and the age of the gold-silver mineralization are unknown. However, Dr. Ray believes that the volcanic-granitic contact represents a graben-related fault zone that has controlled the gold-bearing quartz veins. The following geological and structural history is suggested:

(1)	Unconformable deposition of the Tertiary volcanics on a peneplaned granitic basement, possibly coeval with incipient development of graben structures.
(2)	Continued down-drop movement along a steeply east-dipping structure that formed the western margin of a graben; movement resulted in easterly tilting of the volcanics accompanied by fault- controlled mesothermal and epithermal mineralization that extended up into both the granites and younger volcanics.
(3)	Continued graben down-dropping east of the structure resulted in the mineralized granites to the west being juxtaposed against unaltered volcanics further east. Subsequent erosion has exposed the granite-hosted mesothermal mineralization, while east of the main structure the epithermal portion of the system may exist at depth in the volcanics.

If this model is correct it suggests the following:

(i)	The main granite-volcanic structure(s) is steep east-dipping.
(ii)	The Malone gold-silver mineralization is not related to the granite intrusions but is instead controlled by splay and cross-faults related to an extensional graben structure. It may post-date the Tertiary volcanics, but is more likely to have been coeval with the volcanism.
(iii)	The volcanic rocks east of the structure could host epithermal mineralization, although this may be too deep to be economically viable. However, other granite-hosted mineralized structures may be present in the alluvium-covered western part of the claims, and some exploration should be done over this area.

Mineralization

The Malone gold-silver mineralization is mainly hosted by planar quartz veins and irregular quartz stockworks and stringer zones. In addition, some of the wide areas of fracturing with silicification and disseminated pyrite represent good bulk tonnage targets, although to date little methodical work has been done.

Assay chemistry suggests the gold is free although nothing is known about the size of the gold grains, or whether they are spatially associated with mineral crystals such as pyrite or quartz. Positive gold-silver correlations suggest some of the silver is held in the lattice of the gold grains, and it is also possible that some electrum is present. It is not known whether some gold is chemically locked in the lattices of pyrite or any other sulfides, and some of the granite-bearing pyritic zones should be systematically tested for precious metals. Generally the precious metals are not associated with significant base metals. Sporadic trace chalcopyrite is reported, and assays suggest the local presence of some sphalerite and galen.

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Previous sampling work done by a third party on the Malone claims show maximum values of 17.7 ppm Au and 695 ppm Ag, indicating the presence of high grade Bonanza-type mineralization. In addition, assays up to 1320 ppm Cu, 148 ppm As, 112 ppm Bi, 0.87 ppm Hg, 672 ppm Mo, 62 ppm Sb, 1.08% Pb and 1.59% Zn were present. The silver:gold ratios for the 178 samples average 39.1. Binary plots show there is a good to moderate positive correlation between Au:Ag, Au:As, Au:Pb, Au:Cu and Au:Sb. However, there appears to be no significant correlation between Au:Hg, Au:Bi and Au:Zn.

Consulting geologist Dr. G.E. Ray, working on behalf of the Company, collected 23 additional samples. This work included taking 13 chip samples, each 8 feet in length, around the margins of an open pit located at UTM 732296-3604138. This pit exposes the structural contact between Type 1 and Type 2 granites, and the contact is occupied by one or more mineralized quartz veins as well as some adjacent silica flooding and quartz stockworks. The assay results from the open pit demonstrate that not only is the narrow zone of fracturing and veining enriched in precious metals, but the stockwork-veined Type 1 granite adjacent to the zone is enriched also with values up to 0.095 oz/t Au and 10 oz/t Ag. This indicates that other stockwork zones on the property should be tested for their bulk tonnage potential.

Planned Work Program by the Company

A technical geological NI 43-101 report dated February 20, 2007 on the Malone property was filed on SEDAR in March 2007. The report was prepared by Gerald E. Ray, Ph.D. as the qualified person and dated as at February 20, 2007 and later amended as at May 23, 2007 and filed on SEDAR on June 1, 2007.

At the Malone property, consultant Dr. G.E.Ray has outlined a success-contingent exploration program which the Company intends to carry out. Dr. Ray’s conclusions are that at Malone, Pre-Cambrian granitic rocks host Au-Ag-bearing mesothermal and possibly deep-level epithermal quartz veins, stockworks and stringer zones. Assays from over 200 samples indicate the presence of some high grade Bonanza-type precious metal mineralization, as well as the possibility of bulk tonnage targets in the stockwork zones. The Au-Ag mineralization is generally not associated with very high quantities of base metals or other pathfinder elements such as Bi, As, Sb or Hg. The granite-hosted quartz veins, which reach up to 2 meters in width, are probably controlled by a steep easterly dipping structural zone related to Tertiary-age extensional movements related to graben down-dropping. Many of the larger veins preferentially occur along the structural contact between two different generations of granite (Type 1 and Type 2). Mapping the distribution of these two granite types may be useful in the discovery of more veins and stockwork zones.

Dr. Ray recommended further exploration for the following reasons:

(i)	There has been widespread past near surface small-scale mining via shallow pits and short tunnels/adits although little is known about this work.
(ii)	Recent grab and chip sampling indicates the local presence of high Au and Ag values in the quartz veins and in some quartz stockwork zones.
(iii)	To his knowledge, there has been no modern exploration conducted on the property.

The recommended exploration involves:

(a)	Further geochemical sampling, including rock, grid-soil and creek silt sampling. Emphasis should be directed to searching for both high grade veins and lower grade bulk tonnage deposits.
(b)	Some suitable geophysical methods could be used under areas of alluvial cover to detect vein structures.
(c)	Areas with favourable geology and geochemistry should be drilled.

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Fisher Canyon

At Fisher Canyon, prospective gold-bearing sedimentary rocks have recently been found over a broad area. The geology of these rocks displays striking similarities to other such deposits throughout the state. Two of the main showings on the property show no evidence of past drilling.The Company is not aware of any previous operators on this property. The Company staked 179 unpatented lode mining claims in late-March, 2007 covering about 2,700 acres of BLM maintained land with federal minerals. It is anticipated that geologic work will make the project drill ready by late summer, 2007. This property is located 20 miles East of Lovelock and can be accessed by vehicles 12 months of the year.

Siesta

The Company’s interest in the Siesta group is comprised of 638 claims situated in the Slumbering Hills area of Humboldt County. Evolving has signed a contract with Zonge Geosciences, Inc. to begin a systematic geophysical survey of this claim group, and is planning a concurrent geochemical survey with the objective of defining drill targets by late summer, 2007. The Company is not aware of any previous operators on this property. This property is located 25 miles Northwest of the Winnemuca property and is and can be accessed by vehicles 11 months of the year.

Alpha Butte Properties

With respect to its interest in Alpha Butte, Evolving has staked 279 claims covering approximately 2,200 hectares. The Company intends to perform surface mapping and sampling also with the objective of defining drill targets over the next several months. There is evidence on this property of drilling within the past 40 years, however, the area has not experienced exploration in recent times.The Company is not aware of the results of any previous operators on this property. This property is located 15 miles West of the Winnemuca Property and can be accessed by vehicles 12 months of the year.

Battle Mountain Property

Evolving Gold has staked approximately 1959 claims (38,000 acres) of open land north of the town of Battle Mountain, Nevada. Subsequent to year end, $341,007 in staking and recording costs have been incurred for this property.

For years, exploration geologists have debated the relationship between the prolific north-northwest trending Carlin Trend, host to over 100 million oz Au (Gold) and the northeast-trending Getchell Trend, host to over 30 million oz Au. The region lying at their projected intersection is largely covered with volcanic rocks thought by many geologists to be thick and prohibitive to exploration.

A new geologic model proposed by Evolving Gold based on geophysical data and recognition of certain styles of faulting suggests that much of this area is actually shallowly buried and that the same rocks that host ore on the Carlin and Getchell trends are perhaps nearly outcropping in places under a veneer of cover.

This model suggests that there may be about as much ground that is shallowly buried as is presently exposed along these trends, a discovery that would quickly revolutionize exploration in what is considered a well-hit area. This is the “next generation” of gold target, and the time is right to take the leap and test what could become an entirely new play.

Evolving Gold is developing a drill program to determine where cover is indeed acceptably thin and the location of favorable host rocks are located.

Additional Technical Information

The Company has filed atwww.sedar.com a number of in-depth technical reports on the various properties discussed above, which are available free of charge to investors seeking additional information of a technical nature.

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Compliance with Government Regulation

The Company will be required to conduct all mineral exploration activities on the Winnemucca Mountain Property in accordance with the Bureau of Land Management of the United States Department of the Interior. No permits will be required to be obtained in connection with the completion of stage one of the planned exploration program on the Winnemucca Mountain Property. The Company will be required to obtain a permit prior to the initiation of the second stage of the recommended exploration program as this stage will involve drilling on the Winnemuca and Malone properties. A plan of operation would be required to be submitted to the BLM in connection with each of the permit applications. It is estimated that it would take approximately 3-6 weeks to obtain the required permit at an estimated cost of approximately US$50. The Company will also have to provide a reclamation bond in the order of US$10,000 to US$20,000 before drilling may be commenced.

To date, payments have been made to the BLM and to the applicable counties to maintain the Company’s claims in good standing.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion for the fiscal years ended March 31, 2007 and 2006 should be read in conjunction with the financial statements of the Company and the notes thereto and the section of this Annual Report entitled “Information on the Company.”

Over the next 12 months, the Company plans to continue with the exploration of its properties and proceed with the recommended work programs outlined in its technical reports.

5.A. Results of Operations

Year ended March 31, 2007 compared to year ended March 31, 2006

During the year ended March 31, 2007, the Company reported a net loss of $831,278 ($0.07 loss per share) compared to a loss of $590,779 reported for the fiscal year ended March 31, 2006. The Company did not generate any revenue during either of the reporting periods. The net loss for 2007 is primarily due to stock-based compensation, a write-down of exploration expenditures and an increase in advertising and travel. Stock-based compensation of $136,675 was recorded for the year ended March 31, 2007 versus $224,925 for the 2006 fiscal year. The Company recorded a write-down of mineral property exploration expenditures amounting to $120,290 for 2007 and $44,038 for the year ended March 31, 2006. Advertising and travel of $93,618 was incurred for the year ended March 31, 2007 compared to $109,473 for the previous year as more tradeshows were attended, additional stock market publications were subscribed to and service agreements were negotiated with an investor relations specialists. Major expense items in 2007 also included management fees of $145,059, consulting of $90,600, and legal of $91,469 which all increased over the 2006 fiscal year as a direct reflection of the increase in activity related to property option, private placement and stock option and other agreements prepared or amended during the year.

5.B. Liquidity and Capital Resources

Source of Funds

The Company’s primary source of funds since incorporation has been through the issuance of common shares. As at March 31, 2007, the company had cash of $65,942 and a working capital deficiency of ($177,676). Accordingly, the Company will require additional funds to pursue its plan of operations over the next twelve months. There can be no assurance that we will obtain any additional financing in the amounts required or on terms favorable to us. If we are unable to obtain additional financing, we may have to abandon our business activities and plan of operations.

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Fiscal Year Ended March 31, 2007

Since incorporation in June 2003, the Company’s capital resources have been limited. The Company has had to rely upon the sale of equity securities for the cash required for capital acquisitions, exploration and development, and administration, among other things.

The Company will to require additional funds to meet its obligations under the Malone Property Option Agreement, the Winnemucca Option and Royalty Agreement and as a result, will have to continue to rely on equity and debt financing during such period. Subsequent to March 31, 2007, the Company completed private placements for gross proceeds of $9,220,750 there can be no assurance that financing, whether debt or equity, will always be available to the Company in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms satisfactory to the Company. In order to maintain the Winnemucca Option and Royalty Agreement in good standing the Company must expend a total of US$4,000,000 on the Winnemucca Mountain Property over a period of three years, and deliver a pre-feasibility study by June 30, 2009.

The Company is presently contemplating the material capital expenditures required under the definitive agreement that will result from the Rattlesnake Hills Property Letter of Intent. If the Letter of Intent is formalized by a definitive agreement, the Company could potentially need to expend an estimated total of US$5,000,000 on the Rattlesnake Hills Property in order to maintain the option in good standing.

The Company’s aggregate operating, investing and financing activities for the year ended March 31, 2007 resulted in a cash decrease of $157,011. As at March 31, 2007, the Company’s cash balance was recorded as $65,942 and the Company had a working capital deficiency of $177,676. The Company has not as yet put into commercial production any of its mineral properties and as such has no operating revenues. Accordingly, the Company is dependent on the equity markets as its sole source of operating working capital. The Company’s capital resources are largely determined by the strength of the junior resource markets and by the status of the Company’s projects in relation to these markets, and its ability to compete for the investor support of its projects. The Company will continue to require funds to meet its obligations under its property option agreements and as a result, will have to continue to rely on equity and debt financing during such period. There can be no assurance that financing, whether debt or equity, will always be available to the Company in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms satisfactory to the Company.

The Company has signed three employment agreements with directors or companies controlled by directors of the Company whereby the Company will pay fixed monthly management fees of $7,500, $6,500 and $5,000 respectively. These employment agreements have a term of two years and are expected to expire on January 31, 2009.

Effective March 14, 2007 the Company is also committed to a one year consulting agreement whereby fees will be paid based on services provided to a maximum of US$8,250 per month. The Company has also hired a consultant at the rate of $3,000 per month commencing February 21, 2007. On September 1, 2007 we issued 50,000 options to this consultant as part of an agreement pursuant to which he will continue to provide his services to us for twelve additional months at the rate of $5,000 per month.

The Company has also signed an office lease expiring April 30, 2012 which calls for monthly payments of $4,394 . Operating costs are subject to change but are currently $3,217 per month. The total estimated commitment over the term of the lease, based on the current amount of operating costs is $91,329.

Recent Financings

Subsequent to year end, in April 2007, the Company completed a non-brokered private placement of 2,350,000 units at $0.25 per unit resulting in proceeds of $587,500. Each unit was comprised of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase one common share of the Company at a price of $0.35 per share until April 19, 2009. Finder’s fees of 55,000 units were issued with respect to this issue.

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Also in April, 2007, the Company completed a brokered private placement of 12,053,000 units at $0.25 per unit resulting in net proceeds of $2,931,291. The agent for this private placement elected to receive their commission of 8% of gross proceeds in cash of $36,500 together with 818,000 units. Each unit was comprised of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase one common share of the Company at a price of $0.35 per share until April 26, 2009. The agent also received 1,205,300 compensation options which entitle the agent to purchase that number of units at $0.30 per unit for two years.

In May 2007 the Company received exchange approval to change the exercise price of 432,742 warrants issued in May 2005 from $0.82 to $0.35 per share. Also in May, 2007 321,969 of these warrants were exercised for proceeds of $112,689 and the remaining 110,773 warrants expired.

In August 2007 the Company completed a non-brokered private placement of 14,050,000 units at $0.40 per unit for proceeds of $5,620,000. Each unit consisted of one common share and one-half of a share purchase warrant. Each whole warrant entitles the holder thereof to purchase one additional share of the Company at a price of $0.60 per share for a two year period from the date of issue. The Company paid a finders fee of 10% of the proceeds in cash and 7% in warrants, which are exercisable at $0.65 per warrant over a two year period from the date of issue.

Financial Condition and Cash Flows

The Company had a working capital deficiency of $177,676 and cash of $65,942 as at March 31, 2007 and working capital of $2,021,836 and cash of $2,275,380 as at June 30, 2007. The 2007 fiscal year working capital deficiency reflects receipt of $610,201 (net of share issue expense) from a private placement, the exercise of warrants and share subscriptions received, and offset by working capital required for administrative costs, deferred exploration expenses and property option payments.

Significant Changes To Accounting Policy During The Year

New U.S. Accounting Pronouncements

In February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments – an Amendment of FASB Statements No. 133 and 140”. Among other things, SFAS No. 155 permits the election of fair value remeasurement for certain hybrid financial instruments that would otherwise require bifurcation under Statement 133, Accounting for Derivative Instruments and Hedging Activities. These hybrid financial instruments would include both assets and liabilities SFAS No. 155 is effective for fiscal years beginning after September 15, 2006. The Company has not yet completed its evaluation of the potential impact, if any, that the adoption of SFAS 155 will have on its consolidated financial statements.

The SEC has issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 provides guidance on how prior year misstatements should be considered when quantifying misstatements in the current year financial statements. SAB 108 requires misstatements to be quantified using both a balance sheet and an income statement approach and evaluate whether either approach results in an error that is material. SAB 108 is effective for fiscal years ending after November 15, 2006. Upon initial application, SAB 108 permits a one-time cumulative effect adjustment to beginning retained earnings. The Company’s adoption of SAB 108 had no impact on the periods presented.

The FASB has issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The provisions of FIN 48 are to be applied to all tax positions upon initial adoption, with the cumulative effect adjustment reported as an adjustment to the opening balance of retained earnings. The Company has not yet completed its evaluation of the potential impact, if any, that the adoption of FIN 48 will have on its consolidated financial statements.

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The FASB has issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value under other accounting pronouncements that permit or require measurements, changes the methods used to measure fair value and expands disclosures about fair value measurements. In particular, disclosures are required to provide information on the extent to which fair value is used to measure assets and liabilities; the inputs used to develop measurements; and the effect of certain of the measurements on earnings (or changes in net assets). SFAS 157 is effective for fiscal years beginning after November 15, 2007. The Company has not yet completed its evaluation of the potential impact, if any, that the adoption of SFAS 157 will have on the consolidated financial statements.

The FASB has issued SFASNo. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”) was issued in February 2007. The statement permits entities to choose to measure many financial instruments and certain other items at fair value, providing the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without the need to apply hedge accounting provisions. SFAS 159 is effective for fiscal years beginning after November 15, 2007 with earlier adoption permitted.

The Company has not yet determined the effect of future implementation of these new standards on its consolidated financial statements.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principle generally accepted in Canada. Differences from United States accounting principles are disclosed in Note 16 in the Notes to the Consolidated Financial Statements in Item 17 of this Annual Report on Form 20-F. Some accounting policies have a significant impact on the amount reported in these financial statements. A summary of those significant accounting policies can be found in the Summary of Significant Accounting Policies in our consolidated financial statements. Note that our preparation of this Annual Report on Form 20-F requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates. We believe as explained below that our most critical accounting policies cover the following areas: resource properties, long-term investments and stock-based compensation.

5.C. Research and Development

Not applicable.

5.D. Trend Information

Some of the factors in mineral market fluctuations include the pricing and demand, producing costs and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of minerals, and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital to be profitable or viable.

5.E. Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

5.F. Tabular disclosure of contractual obligations

Not Applicable.

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ITEM 6. DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES

6.A. Directors and Senior Management

The following table sets forth information as at the date of this annual report relating to the directors and senior officers of the Company.

Table No. 3
Directors and Senior Management

Position with the Corporation and Province and Country of Residence	Occupation, Business or Employment(1)	Age	Period as a Director of the Corporation
Lawrence A. Dick President and Director West Vancouver, B.C. CANADA	Professional Geologist; President and Director of the Corporation. President and a Director of Confederation Minerals Ltd.; Director of General Minerals Corp.	57	Since June 19, 2003
Robert Bick Chief Executive Officer and Director Vancouver, B.C. CANADA	President of Click It Marketing Inc. (formerly called “Fruits of the Earth Importers Limited”) since 1995; Self- employed Management Consultant from 1999 to 2006; Co-founder and partner, Thinkx Intellectual Capital Inc. from 2004 to 2005.	60	Since February l, 2007
Donald Gee Chief Financial Officer and Director Burnaby, B.C. CANADA	Chartered Accountant, Chief Financial Officer of the Corporation, Director of the Corporation, Yankee Hat Minerals Ltd., Journey Resources Inc., CMC Metals Ltd., Eagle Hill Exploration Corp., and Acero-Martin Exploration Inc.	57	Since February 1, 2007
Gildar (Gilles) Arseneau Director Vancouver, B.C., CANADA	Geologist; Manager Geology, Wardrop Engineering Ltd. since April 2006; Manager Geology, TSX Venture Exchange, from February 2002 to April 2006; Senior Geologist, RPA Consulting Ltd. from September 1996 to October 2002.	51	Since February l, 2007
William Majcher Director Vancouver, B.C., CANADA	Managing Director, Baron International Limited, part of the Baron Group (a HK based merchant bank) since August l, 2007; RCMP Officer from July 19, 1985 to August 15, 2007.	45	Since September 21, 2007

Lawrence Dick (President and Director):Dr. Dick is a Professional Geologist who received a B.Sc. (Hons.) from the University of British Columbia in 1973 and a Ph.D. in Economic Geology from Queen’s University in 1979. He also serves as the Vice President of Exploration and a Director of Continuum Resources Ltd., an unrelated public

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company. He has been in those capacities with Continuum Resources Ltd. since 2002. During 2001 and 2002 he was a self employed geological consultant. He has been a Director of General Minerals Corp., an unrelated public company, since 1994 and he served as the Executive Vice President of General Minerals Corp. from August, 1995 until January 2001. From 1980 to 1984 Dr. Dick served as the Manager of Exploration for Chevron Minerals Ltd. based in Santiago, Chile.

Robert F. Bick, MusBac. (CEO and Director):Robert F. Bick is an integral part of Canadian business legend –Bick’s Pickles. As an entrepreneur, Mr. Bick founded a children’s clothing company and raised $25,000,000 in venture capital while president of a software start-up. As a marketer, Mr. Bick worked directly with national Shell companies around the world to launch Formula Shell and to develop exclusive, innovative pump promotions. Mr. Bick has wide-ranging experience as a management consultant and is co-founder of thinkX Intellectual Capital Inc.

Quinton Hennigh, M.Sc., Ph.D, (Vice President, Exploration and Chief Geologist): Through his career, Mr. Hennigh has made significant contributions to Newmont Mining, Newcrest Mining and Homestake Mining. He has experience working throughout North America, in Europe, Australia, Asia and South America. He possesses the invaluable ability to balance the pragmatics of business with bold innovation. Over the past fifteen years, Quinton has established an enviable reputation for timely and efficient completion of exploration programs under his supervision and maintains a network of industry colleagues who are committed to maintaining ongoing business relationships with him at Evolving Gold.

Donald Gee, B.Sc. (Geology), Lic. Acct., C.A. (CFO and Director)Mr. Gee has over 28 years experience in private and public company financing, corporate/capital structuring and management. His network of relationships with retail brokers, fund managers and individual investors adds to the Company’s financing effectiveness. Don has served as a Director and key executive of several public companies. His recent past positions were Chief Financial Officer for a TSE listed gaming company and financial advisor to a national aerospace company. He is presently President and CEO of TSX listed Acero-Martin Exploration Inc. Mr. Gee is a member of the Chartered Accountants of British Columbia, Canadian Institute of Chartered Accountants and the Canadian Institute of Mining and Metallurgy.

Gilles J. Arseneau, Ph.D., P.Geo (Director) Mr. Arseneau has over 25 years in mineral exploration working as a consultant and senior geologist for major and junior mining companies with experience in gold, base metal, uranium and bauxite deposits in Canada, United States and South America. He has particular expertise in resource modeling and mineral property valuations. Most recently he was Manager – Geologist with the TSX Venture Exchange where he was responsible for the review of NI 43-101 technical reports. He is presently Manager of Geology at Wardrop Engineering Inc.

William Majcher, (Director):Mr. Majcher is Managing Director for Baron International Limited (a member of the Baron Group which is a Hong Kong based merchant bank), a fully licensed and registered investment bank, asset manager and a member of the board for the Hong Kong Stock Exchange. He is also a director of Disaster Preparedness System Inc., a Nevada corporation that is currently finalizing filings with the SEC for a listing on the OTCBB and he is the Executive Director of China Investment Fund Company Limited, a reporting company listed on the Hong Kong Stock Exchange. He is also a Director of Baron Total Absolute Return Fund, a hedge fund managed in Hong Kong.

Chris Osterman, Ph.D., P.Geo (Consulting Geologist):Mr. Osterman has years of experience in the mining and exploration industry on several continents. Starting as a mining engineer at the San Manuel mine in Arizona, he received a M.S. in Geological Engineering from the University of Arizona and a Ph.D. in Geology from the Colorado School of Mines. He has spent over three years in the search for epithermal gold and silver deposits in the western Sierra Madres and for porphyry copper deposits in Sonora, Mexico. His experience includes gold, nickel and copper mining and exploration in Southern Africa, silver exploration in Bolivia and porphyry copper exploration in Chile, Peru and Mongolia.

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The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company. The Senior Management serves at the pleasure of the Board of Directors.

No Director and/or Senior Management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or Senior Management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanour involving a security or any aspect of the securities business or of theft or of any felony.

There are no family relationships between any two or more Directors or Senior Management. There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.

6.B. Compensation

Total compensation accrued or paid to all directors and senior officers of the Company during the year ended March 31, 2007 was $145,059. The following table sets forth options granted to the Company’s senior officers in the fiscal year ended March 31, 2007.

In this section “Named Executive Officer” means each Chief Executive Officer, each Chief Financial Officer and each of the three most highly compensated executive officers, other than each Chief Executive Officer and Chief Financial Officer, who were serving as executive officers at the end of the most recently completed fiscal year and whose total salary and bonus exceeds $150,000.

Table No. 4
Compensation paid to the Named Executive Officers during the Company’s
three most recently completed financial years is as set out below:

NAMED EXECUTIVE OFFICERS Name and Principal Position	Year	Annual Compensation			Long Term Compensation			All Other Compensation ($)
		Salary ($)	Bonus ($)	Other Annual Compen- sation ($)	Awards		Payouts
					Securities Under Options Granted (#)	Shares or Units Subject to Resale Restrictions ($)	LTIP Payouts ($)
Lawrence A. Dick(1) President and Former Chief Executive Officer	2007 2006 2005	45,449 2,675 Nil	Nil Nil Nil	Nil 15,000(5) Nil	80,000 Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Robert Bick(2) Chief Executive Officer	2007	22,000	Nil	15,000(6)	Nil	Nil	Nil	Nil
Warren M. McIntyre(3) Former Chief Financial Officer	2007 2006 2005	22,500 7,500 49,500	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Donald Gee(4) Chief Financial Officer	2007	10,000	Nil	15,000(7)	Nil	Nil	Nil	Nil

Notes:

(1)	Mr. Dick resigned as Chief Executive Officer on February l, 2007.
(2)	Mr. Bick was appointed as Chief Executive Officer on February l, 2007.
(3)	Mr. McIntyre resigned as Chief Financial Officer on February l, 2007.
(4)	Mr. Gee was appointed as Chief Financial Officer on February l, 2007.
(5)	These funds represent a signing bonus.
(6)	These funds represent a signing bonus pursuant to Management Services Agreements entered into on February l, 2007 between the Corporation, Click It Marketing Inc. (“ClickIt”) and Mr. Bick. Mr. Bick is the President of ClickIt.
(7)	These funds represent a signing bonus pursuant to Management Services Agreements entered into on February l, 2007 between the Corporation, Cantech Capital Corporation (“Cantech”) and Mr. Gee. Mr. Gee is the President of Cantech.

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Long-Term Incentive Plan Awards

Long term incentive plan awards (“LTIP”) means “a plan providing compensation intended to motivate performance over a period greater than one financial year. LTIPs do not include option or stock appreciation rights plans or plans for compensation through shares or units that are subject to restrictions on resale. The Company did not award any LTIPs to any Named Executive Officer during the most recently completed financial year.

Options

The share options granted to the Named Executive Officers during the financial year ended March 31, 2007 were as follows:

Table No. 5
Option Grants During the Most Recently Completed Financial Year

NAMED EXECUTIVE OFFICERS	Securities Under Options Granted (#)	% of Total Options Granted to Employees in Financial Year	Exercise or Base Price ($/Security)	Market Value of Securities Underlying Options on the Date of Grant ($/Security)	Expiration Date
Lawrence A. Dick	80,000	33%	$0.36	$0.30	April 7, 2011

Notes:

(1)	These options were granted on April 7, 2006.
(2)	Following the year end of the Company options to purchase an aggregate of 1,450,000 Shares at an exercise price of $0.42 per Share were granted to directors of the Corporation (200,000 to Mr. Dick, 400,000 to Mr. Gee and 500,000 to Mr. Bick). These options expire on May 2, 2012.

No share options were exercised by the Named Executive Officers during the financial year ended March 31, 2007. The value of the unexercised in-the-money options at the financial year March 31, 2007 was nil.

No share options were repriced on behalf of the Named Executive Officers during the financial year ended March 31, 2007.

Subsequent to fiscal year end, on May 3, 2007 the following directors were granted options to purchase Shares pursuant to the Corporation’s share option plan.

Table No. 6
Stock Option Grants Subsequent to Fiscal Year End

Name of Director	Securities Under Options Granted (#)	Exercise or Base Price ($/Security)	Market Value of Securities Underlying Options on the Date of Grant ($/Security)	Expiration Date
Lawrence A. Dick	200,000	$0.42	$0.30	May 2, 2012
Paul Cowley(1)	50,000	$0.42	$0.30	May 2, 2012
Robert Bick	500,000	$0.42	$0.30	May 2, 2012
Donald Gee	400,000	$0.42	$0.30	May 2, 2012
Gildar (Gilles) Arseneau	350,000	$0.42	$0.30	May 2, 2012

⁽¹⁾Mr. Cowley was not nominated to be re-elected as a director at the Company’s annual general meeting on September 21, 2007.

No Stock Options were exercised during the year ended March 31, 2007 by senior management or directors.

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Change of Control Remuneration. The Company had no plans or arrangements in respect of remuneration received or that may be received by Executive Officers of the Company in Fiscal 2007 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$60,000 per Senior Management.

Other Compensation. No Senior Management/Director received “other compensation” in excess of the lesser of US$25,000 or 10% of such officer’s cash compensation, and all Senior Management/Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation.

Bonus/Profit Sharing/Non-Cash Compensation. Except for the Company’s stock option plan, the Company had no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to the Company’s Directors or Senior Management.

Pension/Retirement Benefits. No funds were set aside or accrued by the Company during Fiscal 2007 to provide pension, retirement or similar benefits for Directors or Senior Management.

Termination of Employment, Change in Responsibilities and Employment Contracts

During 2007 the Company continued to build a strong team of highly experienced geo-science and financial professionals. In February 2007, Mr. Robert Bick became Evolving’s new Chief Executive Officer replacing Dr. Lawrence A. Dick who assumed the duties of President and Chief Operations Officer and Mr. Donald Gee B.Sc. (Geology), C.A. became the Company’s new Chief Financial Officer. In May, 2007 Dr. Quinton Hennigh, M. Sc., Ph.D. was named as the new Vice-President of Exploration replacing Dr. Chris Osterman who will remain as Evolving’s Consulting Geologist.

On February l, 2007, the Corporation entered into a management services agreement with Lawrence Dick for a term of two years. During the term of the above management services agreement, the Corporation’s management will nominate Lawrence A. Dick for election as a director of the Corporation. The management fee payable to Mr. Dick shall be $6,500 per month, together with goods and services taxes and any and all other taxes payable by law. Mr. Dick shall be entitled to a signing bonus of $15,000 payable in cash and entitlement to participate in the Corporation’s share option plan or any successors thereto. The Corporation may terminate this agreement before its expiry date for cause which constitutes just cause for termination at law and only if the Corporation gives written notice to Mr. Dick specifying in detail the act or acts which the Corporation alleges would constitute just cause for termination of the employment of Mr. Dick at law if Mr. Dick were an employee of the Corporation and upon the death of Mr. Dick, without notice.

On February l, 2007, the Corporation entered into a management services agreement with the Corporation, Click It Marketing Inc. (“ClickIt”) and Mr. Bick for a term of two years. Mr. Bick is the President of ClickIt. During the term of the above management services agreement, the Corporation’s management will nominate Robert Bick for election as a director of the Corporation. The management fee payable to Mr. Bick shall be $7,500 per month, together with goods and services taxes and any and all other taxes payable by law. Mr. Bick shall be entitled to a signing bonus of $15,000 payable in cash and entitlement to participate in the Corporation’s share option plan or any successors thereto. The Corporation may terminate this agreement before its expiry date for cause which constitutes just cause for termination at law and only if the Corporation gives written notice to Mr. Bick specifying in detail the act or acts which the Corporation alleges would constitute just cause for termination of the employment of Mr. Bick at law if Mr. Bick were an employee of the Corporation and upon the death of Mr. Bick, without notice.

On February l, 2007 the Corporation entered into a management services agreement with the Corporation, Cantech Capital Corporation (“Cantech”) and Mr. Gee for a term of two years. Mr. Gee is the President of Cantech. During the term of the above management services agreement, the Corporation’s management will nominate Donald Gee for election as a director of the Corporation. The management fee payable to Mr. Gee shall be $5,000 per month, together with goods and services taxes and any and all other taxes payable by law. Mr. Gee shall be entitled to a

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signing bonus of $15,000 payable in cash and entitlement to participate in the Corporation’s share option plan or any successors thereto. The Corporation may terminate this agreement before its expiry date for cause which constitutes just cause for termination at law and only if the Corporation gives written notice to Mr. Gee specifying in detail the act or acts which the Corporation alleges would constitute just cause for termination of the employment of Mr. Gee at law if Mr. Gee were an employee of the Corporation and upon the death of Mr. Gee, without notice.

6.C. Board Practices

The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company. The Senior Management serves at the pleasure of the Board of Directors.

The Company has an Audit Committee, which advises the Board of Directors with respect to the engagement of the independent auditors of the Company and reviews the scope and results of the Company’s audits with the independent auditors, the Company’s internal accounting controls, and the professional services furnished by the independent auditors to the Company. The current members of the Audit Committee are: William Majcher , Donald Gee and Gilles Arseneau. The Audit Committee met four times during fiscal 2007.

6.D. Employees

The Company has 2 employees, excluding Senior Management, and has utilized independent contractors, who perform work on the Company’s properties.

6.E. Share Ownership

As at the date of this Annual Report, there were 42,867,311 Shares issued and outstanding, each carrying the right to one vote. No group of shareholders has the right to elect a specified number of directors, nor are there cumulative or similar voting rights attached to the Shares.

To the knowledge of the directors and executive officers of the Company, the only persons or corporations that beneficially owned, directly or indirectly, or exercised control or direction over, Shares carrying more than 10% of the voting rights attached to all outstanding Shares of the Corporation as at the date of this Annual Report are set forth in the following table:

Table No. 7
Corporations Carrying More Than 10% of Outstanding Shares

Shareholder Name	Number of Shares Held	Percentage of Issued Shares
Pinetree Resource Partnership	5,000,000	11.66%
Passport Materials Master Fund, LP	4,900,000	11.43%

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The following table sets forth, to the Company’s knowledge, as at the date of this Annual Report, information relating to shares of the Company held by directors and officers of the Company and persons owning more than 10% of the Company’s outstanding shares:

Table No. 8
Shareholdings of Directors and Senior Management

			Number of	Exercise	Expiry Date
		Percent of	Options	Price
	Number of Common	Shares	and
Name of Beneficial Owner	Shares	Outstanding	Warrants
			80,000	$0.36	April 7, 2011
Lawrence A. Dick	944,640	*	200,000	$0.42	May 2, 2012
			200,000(1)	$0.35	April 19, 2009
			500,000	$0.42	May 2, 2012
Robert F. Bick	188,000	*	188,000(2)	$0.35	April 19, 2009
			400,000(3)	$0.42	May 2, 2012
Donald Gee	Nil	Nil	200,000(4)	$0.35	April 19, 2009
Gildar (Gilles) Arseneau	Nil	Nil	350,000	$0.42	May 2, 2012
William Majcher	Nil	Nil	200,000	$0.40	September 21, 2012
Total	1,132,640	*

* Less than 1%.

(1)	Warrants to purchase 200,000 Shares at $0.35 expiring on April 19, 2009.
(2)	Warrants to purchase 188,000 Shares at an exercise price of $0.35 per Share expiring on April 19, 2009.
(3)	200,000 of these 400,000 options are owned by Mr. Gee’s spouse.
(4)	Warrants to purchase 200,000 Shares at $0.35 per Share expiring on April 19, 2009.

Stock Options

The shareholders of the Company originally approved the2004 Plan in September 2004 wherein 10% of the issued and outstanding Shares were reserved for issuance. In March 2007 the directors proposed that the Company terminate its existing share compensation arrangements and adopt the2007 Plan to comply with the policies of the TSX-V, this proposal was accepted by the shareholders at the Company’s annual general meeting on September 21, 2007. The 2007 Plan also uses a “rolling” number of shares. Under the 2007 Plan, a maximum of 10% of the issued and outstanding Shares of the Company at the time an option is granted, less any outstanding options, will be reserved for issuance as options to be granted at the discretion of the Company’s Board to eligible optionees (the “Optionees”). In other words, while the 2007 Plan is in effect, there can never be more than 10% of the Company’s issued and outstanding Shares reserved for issuance under the 2007 Plan at any point in time. Currently, the Company has 42,867,311 Shares issued and outstanding and options to purchase 2,750,000 Shares have been granted and are outstanding. Options granted under the 2004 Plan will be rolled into and be deemed to be granted under the 2007 Plan. It is the responsibility of the Company’s Board to ensure that the provisions of the 2007 Plan are adhered to. This type of plan is called a “rolling’ plan.

The Corporation is of the view that the 2007 Plan permits the Company to attract and maintain the services of executives, employees and other service providers with other companies in the industry. Directors have the authority to amend the 2007 Plan to reduce, but not increase the benefits to its participants if in their discretion it is necessary or advisable in order to obtain any necessary regulatory approvals

The 2007 Plan requires TSX-V approval.

Eligible Optionees

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Under the policies of the TSX-V, to be eligible for the issuance of a stock option under the 2007 Plan an Optionee must either be a director, officer, employee, consultant or an employee of a company providing management or other services to the Company or a subsidiary at the time the option is granted.

Options may be granted only to an individual or to a non-individual that is wholly owned by individuals eligible for an option grant. If the option is granted to a non-individual, it must provide the TSX-V with an undertaking that it will not permit any transfer of its securities, nor issue further securities, to any individual or other entity as long as the option remains in effect, without the consent of the TSX-V.

Material Terms of the Plan

The following is a summary of the material terms of the 2007 Plan:

(a) all options granted under the 2007 Plan are non-assignable, non-transferable and exercisable for a period of up to 5 years (10 years if the Company becomes a Tier 1 issuer on the TSX-V);
(b) for stock options granted to employees or service providers (inclusive of management company employees), the Company must ensure that the proposed Optionee is a bona fide employee or service provider (inclusive of management company employees), as the case may be, of the Company or any subsidiary;
(c) if an Optionee ceases to be employed by the Company (other than as a result of termination with cause) or ceases to act as a director or officer of the Company or a subsidiary of the Company, any option held by such Optionee may be exercised within 90 days after the date of such Optionee ceases to be employed or act as an officer or director (30 days if the Optionee is engaged in Investor Relations Activities and the Company is a Tier 2 issuer);
(d) the minimum exercise price of an option granted under the 2007 Plan must not be less than the Discounted Market Price (as defined in the policies of the TSX-V);
(e) no Optionee can be granted an option or options to purchase more than 5% of the outstanding listed shares of the Company in any one year period; and
(f) Options granted under the 2004 Plan will be deemed to have been granted under the 2007 Plan and will be subject to the terms and conditions of the 2007 Plan.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A. Major Shareholders

For holdings by major shareholders, see Item 6.E and Table No. 7. The Company’s major shareholders do not have different voting rights. As at the date of this Annual Report, there were 42,867,311 common shares outstanding held by 36 “holders of record” resident in Canada holding 15,850,001 common shares, 3 “holders of record” resident in the USA holding 400,000 common shares and 8 “holders of record” resident in other countries holding 2,132,500 common shares.

7.B. Related Party Transactions

To the knowledge of management of the Company, no informed person (a director, officer or holder of 10% or more of the Shares) or nominee for election as a director of the Company or any associate or affiliate of any informed person or proposed director had any interest in any transaction which has materially affected or would materially affect the Company or any of its subsidiaries during the period beginning April 1, 2006 up to the date hereof, or has any interest in any material transaction in the current year other than as set out herein or in the audited year end financial statements of the Company.

For the Years Ended March 31, 2007 and 2006

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During the year ended March 31, 2007, the Company issued 260,000 common shares to directors of the Company, pursuant to the exercise of warrants at an exercise price of $0.25 per share for proceeds of $65,000. Deferred exploration costs, promotion and advertising, rent and consulting fees for the year ended March 31, 2007 include $122,398 (2006: $107,505), $15,713 (2006: $2,442), $3,000 (2006: $9,000) and $184,659 (2006: $47,675) respectively, charged by directors and a significant shareholder of the Company. As at that date accounts payable and accrued liabilities include $101,950 owing to related parties.

In February, 2007, the Company signed three employment agreements with directors or companies controlled by directors of the Company whereby the Company will pay fixed monthly management fees of $7,500, $6,500 and $5,000 respectively. See “Item 6.B” for a description of each of these agreements.

During the years ended March 31, 2007, 2006 and 2005 the Company incurred charges to significant shareholders, directors and former directors of the Company as follows:

		Year ended March 31,
		2007		2006		2005
Consulting	$	39,600	$	40,396	$	-
Management fees		145,059		7,279		70,000
Promotion and advertising		15,713		2,442		450
Rent and administration fees		3,000		9,000		4,050
Deferred exploration costs
- geological consulting		110,573		25,000		-
- staking cost and recording		11,825		82,505		-
	$	325,770	$	166,622	$	74,500

These transactions were measured by the exchange amount, which is agreed upon by the transacting parties.

Prepaid expenses include $11,360 (2006: Nil) derived from payments to directors.

Accounts payable and accrued liabilities include $101,950 (2006: $64,257) due to significant shareholders, directors and former directors of the Company.

April 1, 2007 to Present

Subsequent to fiscal year end, in April 2007 the Corporation completed a non-brokered private placement of 2,350,000 units at $0.25 per unit resulting in proceeds of $587,500 of which $100,000 is included in share subscriptions as at March 31, 2007. Each unit was comprised of one Share and one share purchase warrant. Each warrant will entitle the holder to purchase one Share of the Corporation at a price of $0.35 per Share until April 19, 2009. Lawrence A. Dick, a director and officer of the Corporation participated in this private placement for 200,000 units. Donald Gee, a director and officer of the Corporation participated in this private placement for 200,000 units. Robert Bick, a director and officer of the Corporation participated in this private placement for 188,000 units.

Additionally, on September 21, 2007 the Company’s board of directors approved management bonuses totalling $350,000.

Accounting Fees

The Company paid accounting fees of $17,808 and $18,730 to Amisano Hanson during Fiscal 2006 and Fiscal 2007 (to date), respectively. These accounting fees consisted of auditing the Company’s annual financial statements.

Shareholder Loans

None.

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7.C. Interests of Experts and Counsel

Not Applicable.

ITEM 8. FINANCIAL INFORMATION

8.A. Consolidated Statements and Other Financial Information

The Company’s financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the financial statements.

The financial statements as required under Item 17 are attached hereto and found immediately following the text of this Annual Report. The audit reports of Amisano Hanson, Independent Chartered Accountants, are included herein immediately preceding the financial statements.

Legal Proceedings

The Directors and the management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation. The Directors and the management of the Company know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.

8.B. Significant Changes

Other than as described in this document, there have been no significant changes since the financial statements contained herein.

ITEM 9. THE OFFER AND LISTING

9.A. Common Share Trading Information

The Company’s common shares trade on the TSX Venture Exchange, under the symbol “EVG”. The Company began listing on the TSX-V on June 13, 2007. Further, the Company’s common shares began trading on the Over-The-Counter Bulletin Board Quotation System under the symbol “EVOGF” on July 26, 2005 and the Frankfurt Stock Exchange on August 13, 2007 under the symbol “EV7.”

The Company’s common shares traded on the CNQ in Toronto, Ontario, Canada from June 14, 2004 until the Company graduated to the TSX-V on June 13, 2007.

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The following table sets forth the high and low sales prices on the CNQ, TSX-V and OTCBB for the periods indicated.

Table No. 9
Common Shares Trading Activity

	TSX-V Canadian Dollars		OTCBB U.S. Dollars		CNQ Canadian Dollars
	High	Low	High	Low	High	Low
Monthly
September 2007	0.40	0.33	0.42	0.30
August 2007	0.56	0.30	0.54	0.30
July 2007	0.55	0.37	0.51	0.37
June 2007	0.44	0.35	0.46	0.32	0.47	0.35
May 2007			0.46	0.34	0.48	0.34
April 2007			0.38	0.16	0.44	0.25
Quarterly
June 30, 2007	0.44	0.35	0.46	0.16	0.48	0.25
March 31, 2007			0.26	0.18	0.28	0.20
December 31, 2006			0.34	0.17	0.36	0.17
September 30, 2006			0.42	0.20	0.45	0.20
June 30, 2006			0.51	0.30	0.57	0.30
March 31, 2006			0.35	0.22	0.42	0.25
December 31, 2005			0.55	0.22	0.65	0.29
Yearly
March 31, 2007			0.51	0.17	0.57	0.17
March 31, 2006			0.71	0.22	1.05	0.25
March 31, 2005					0.60	0.14
March 31, 2004

Common Share Description

Registrar/Common Shares Outstanding/Shareholders

The Company has an authorized capital of an unlimited number of common shares without par value. As the date of this annual report a total of 42,867,311 shares were issued and outstanding. All shares are initially issued and registered in the name of the shareholder or its nominee. There are no restrictions on the transferability of the shares imposed by the Company’s contacting documents. The registrar and transfer agent for the common shares is Pacific Corporate Trust of Canada located at 2^nd Floor, 510 Burrard Street, Vancouver, BC V6C 3B9.

Common Share Description

All of the authorized common shares of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets.

Holders of common shares are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders. Holders of common shares are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefore.

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Upon liquidation, dissolution or winding up of the Company, holders of common shares are entitled to receivepro rata the assets of Company, if any, remaining after payments of all debts and liabilities.

No shares have been issued subject to call or assessment. There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.

Provisions as to the modification, amendment or variation of such shareholder rights or provisions are contained in the CBCA. Unless the CBCA, the Company’s Articles or Articles of Incorporation otherwise provide, any action to be taken by a resolution of the shareholders may be taken by an ordinary resolution, being approval by a vote of a majority of the votes cast in respect of the matter at the shareholders’ meeting.

There are no restrictions on the repurchase or redemption of common shares of the Company while there is any arrearage in the payment of dividends or sinking fund instalments.

Stock Options

Refer to Item 6.E for information relating to the Company’s stock options.

Share Purchase Warrants

At the date of this annual report there were 27,386,675 share purchase warrants outstanding entitling the holders thereof the right to purchase one common share for each warrant held:

Table No. 10
Share Purchase Warrants Outstanding

Number of Shares	Exercise Price	Expiry Date
1,464,000	$0.40	Jan 18, 2008
1,600,000	$0.40	Sept 7, 2008
55,000	$0.35	April 19, 2009
2,350,000	$0.35	April 24, 2009
12,871,000	$0.35	April 26, 2009
1,205,300	$0.30	April 26, 2009
816,375	$0.65	July 25, 2009
7,025,000	$0.60	July 25, 2009
27,386,675

9.C. Stock Exchanges Identified

The common shares of the Company trade on the TSX-V, the OTCBB and the Frankfurt Stock Exchange. Refer to Item 9.A.

ITEM 10. ADDITIONAL INFORMATION

10.A. Share Capital

Not applicable.

10.B. Memorandum and Articles of Association

The Company has unlimited common shares without par value authorized. As of the date of this annual report there were 42,867,311 common shares issued and outstanding.

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The Company was incorporated on June 19, 2003 under the CBCA. There are no restrictions on the business that the Company may carry on in the Articles of Incorporation.

A director of the Company is not allowed to vote on a proposal, arrangement, contract or transaction in which the director is materially interested. A director who is, in any way, directly or indirectly, interested in a material contract or proposed material contract with the Company shall disclose the nature and extent of his interest at a meeting of the directors in accordance with the provisions of the CBCA. A director shall not vote in respect of any such contract unless the contract is:

(a)	one primarily relating to the director’s remuneration as a director, officer, employee or agent of the Company or an affiliate;
(b)	one for indemnity or insurance of the director; or
(c)	one with an affiliate.

Article 7 of the Company’s bylaws address the borrowing powers of the directors. The borrowing powers are summarized as follows:

The Directors may, from time to time on behalf of the Company:

(a)	borrow money in such manner and amount, on such security from such sources and upon such terms and conditions as they think fit;
(b)	issue bonds or other debt instruments outright or as security for any liability or obligation for either the Company or any other person;
(c)	mortgage any part or the whole of any property or assets of the Company;

There are no age limit requirements pertaining to the retirement or non-retirement of directors and a director need not be a shareholder of the Company. The rights, preferences and restrictions attaching to each class of the Company’s shares are as follows:

Common Shares

All of the authorized shares of common stock of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets. Holders of common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders. Holders of common stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefore.

Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receivepro rata the assets of Company, if any, remaining after payments of all debts and liabilities. No shares have been issued subject to call or assessment. There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.

The Company may by ordinary resolution filed with the Registrar amend its Memorandum to increase the authorized capital of the Company by:

(a)	creating shares with par value or shares without par value
(b)	increasing the number of shares with par value or without par value
(c)	increasing the par value of a class of shares with par value, if no shares of that class are issued.

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The Company may by special resolution alter its Memorandum to subdivide, consolidate or change the designation of any or all of its shares in such manner and with such consents of members holding a class of shares as the Company Act provides.

The Company may alter its Memorandum or Articles:

(a)	by special resolution, to create, define and attach special rights and restrictions to any shares, and
(b)	by special resolution to vary or abrogate any special rights and restrictions attached to any shares

But no right attached to any issued shares shall be prejudiced or interfered with unless all members holding shares of each class whose right is so affected has given consent in writing, or unless a resolution consenting is passed by three-fourths of such holders at a separate class meeting of the holders.

There are no provisions discriminating against any existing or prospective holder of securities as a result of such shareholder owning a substantial number of shares.

The conditions governing the manner in which annual meetings and special meetings of shareholders are convoked, including conditions of admission are described in Articles 39 and 40 of the Company’s bylaws. These conditions are summarized as follows:

Annual Meeting. An annual meeting shall be held once in every calendar year at such time and place as determined by the Directors, but not more than 15 months after the holding of the last preceding annual meeting.

Special Meetings. The Board, the Chairman of the Board, the Managing Director or the President may convene a special meeting whenever they see fit. Others who wish to convene a meeting may requisition to do so through the process provided under the Corporations Act.

Every member who is present in person shall have one vote and every member shall have one vote for which he is the registered holder either in person or by proxy. A member holding more than one share in respect of which he is entitled to vote shall be entitled to a proxy holder, or one or more alternate proxy holders to attend, act and vote for him.

There are no limitations on the rights to own securities.

There are no provisions of the Company’s articles of association, charter or bylaws that would have an effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company.

10.C. Material Contracts

(a)	Meridian Earn-in Agreement between the Company and Meridian dated July 31, 2006. Please refer to Item 4.A. for a summary of this agreement.
(b)	Amended and Restated Option and Royalty Agreement among the Company, Golden Sands and AHL dated July 7, 2006 and as amended on April 11, 2007. Please refer to Item 4.A. for a summary of this agreement. A copy of the April 11, 2007 amending agreement is filed as an exhibit to this Annual Report.
(c)	Malone Property Agreement between the Company and Newmont North America Exploration Ltd., dated April 17, 2006. Please refer to Item 4.A. for a summary of this agreement.

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(d)

Investor Relations Agreement between the Company and Renmark Financial Communications Inc. (“Renmark”) dated June 15, 2007. Under this agreement, Renmark is to provide investor relations services, in exchange for which the Company has agreed to pay a monthly retainer of $5,000. This agreement is for a term of one year. A copy of this agreement is filed as an exhibit to this Annual Report.

(e)

Corporate Advisory Agreement between the Company and Excelsior Communications Incorporated (“Excelsior”) dated September 1, 2007. Under the agreement, Excelsior is to provide investor relations services, in exchange for which the Company has granted to Excelsior options to acquire common shares of the Company, exercisable for a period of five years at a price of $0.35, paid to Excelsior a $6,500 advance and y agreed to pay to Excelsior a monthly retainer of $6,500. This agreement is for a term of one year. A copy of this agreement is filed as an exhibit to this Annual Report.

10.D. Exchange Controls

Canada has no system of exchange controls. There are no exchange restrictions on borrowings from foreign countries or on the remittance of dividends, interest, royalties and similar payments, management fees, loan repayments, settlement of trade debts, or the repatriation of capital. TheInvestment Canada Act (the “ICA”) enacted on June 20, 1985, as amended by the Canada-United States Free Trade Agreement Implementation Act (Canada), requires the notification and, in certain cases, advance review and approval by the Government of Canada of the acquisition by a “non-Canadian” of “control” of a “Canadian business,” all as defined in the ICA. For the purposes of the ICA, “control” can be acquired through the acquisition of all or substantially all of the assets used in carrying on the Canadian business, or the direct or indirect acquisition of interests in an entity that carries on a Canadian business or which controls the entity, which carries on the Canadian business. Under the ICA, control of a corporation is deemed to be acquired through the acquisition of a majority of the voting shares of a corporation, and is presumed to be acquired where one third or more, but less than a majority, of the voting shares of a corporation are acquired, unless it can be established that the corporation is not controlled in fact by the acquirer through the ownership of voting shares. Other rules apply with respect to the acquisition of non-corporate entities.

To the best of the registrant’s knowledge, there are no governmental laws, decrees or regulations in Canada relating to restriction on the import/export of capital, or which affect the remittance of interest, dividends, or other payments to non-resident holders of the Company’s common stock. Any such remittance to United States’ residents, however, is subject to a 15% withholding tax pursuant to Articles X, Xl, and XII of the reciprocal Canada-United States Income Tax Convention. Except for the ICA, there are no limitations under the laws of Canada, the Province of British Columbia, or in the Charter or any other constituent documents of the registrant on the rights of foreigners to hold and/or vote the shares of the registrant. The provisions of the ICA provide legislative guidelines for screening and evaluating new foreign investment in Canada. The purpose of the legislation is to:

(a)	encourage investment in Canada that contributes to economic growth and employment; and
(b)	provide for the review of significant investments in Canada by non-Canadians to ensure such benefit to Canada.

All investments that meet the following criteria are subject to a review:

(a)	direct acquisition of control of an existing Canadian business with assets of $5 million dollars or more by a non-WTO investor;
(b)	indirect acquisition of an existing Canadian business with assets of $50 million dollars or more by a non-WTO investor;

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(c)	indirect acquisition of control of an existing Canadian business with assets of $5 million dollars or more where the assets of the Canadian business being acquired exceed 50% of the total assets involved in the worldwide transaction; and
(d)	direct acquisition of control of an existing Canadian business with assets of $281 million dollars or more by a WTO investor.

The foregoing assumes the Company will not engage in the production of uranium or own an interest in a producing uranium property in Canada, or provide any financial service or transportation service or is a cultural business, as the rules under the ICA governing those businesses are different. In addition, the foregoing discussion of Canadian taxation and foreign investment and United States taxation is of a general and summary nature only and is not intended to be, nor should it be considered to be, legal or tax advice to any particular shareholder. Accordingly, prospective investors should consult their own tax advisors as to the tax consequences of receiving dividends from the Company or disposing of their Common Stock.

10.E. Taxation

Certain Canadian Federal Income Tax Information for United States Residents

The following summarizes the principal Canadian federal income tax considerations generally applicable to the holding and disposition of Common Shares of the Company by a holder (a) who, for the purposes of the Income Tax Act (Canada) (the “Tax Act”), is not resident in or deemed to be resident in Canada, deals at arm’s length with the Company, holds the Common Shares as capital property and does not use or hold the Common Shares in the course of carrying on, or otherwise in connection with, a business in Canada, and (b) who, for the purposes of the Canada0United States Income Tax Convention (the “Treaty”), is a resident of the United States, has never been a resident of Canada, has not held or used (and does not hold or use) Common Shares in connection with a permanent establishment or fixed base in Canada, and who otherwise qualifies for the full benefits of the Treaty. Holders who meet all such criteria in clauses (a) and (b) are referred to herein as a “U.S. Holder” or “U.S. Holders”, and this summary only addresses such U.S. Holders. The summary does not deal with special situations, such as particular circumstances of traders or dealers, limited liability companies, tax-exempt entities, insurers, financial institutions (including those to which the mark-to-market provisions of the Tax Act apply), or otherwise.

This summary is based on the current provisions of the Tax Act and the regulations thereunder, all proposed amendments to the Tax Act and regulations publicly announced by the Minister of Finance (Canada) to the date hereof, the current provisions of the Treaty and the current administrative practices of the Canada Revenue Agency. It has been assumed that all currently proposed amendments will be enacted as proposed and that there will be no other relevant change in any governing law, the Treaty or administrative policy, although no assurance can be given in these respects. This summary does not take into account provincial, U.S. or other foreign income tax considerations, which may differ significantly from those discussed herein. The summary also assumes that the Company will be treated as a resident of Canada for purposes of the Tax Act.

This summary is not exhaustive of all possible Canadian income tax consequences. It is not intended as legal or tax advice to any particular holder of Common Shares and should not be so construed. The tax consequences to any particular holder of Common Shares will vary according to the status of that holder as an individual, trust, corporation or member of a partnership, the jurisdictions in which that holder is subject to taxation and, generally, according to that holder’s particular circumstances.Each holder should consult the holder’s own tax advisor with respect to the income tax consequences applicable to the holder’s own particular circumstances.

Dividends

Dividends paid or deemed to be paid or credited by the Company to a U.S. Holder are subject to Canadian withholding tax. Under the Treaty, the rate of withholding tax on dividends paid to a U.S. Holder is generally limited to 15% of the gross dividend (or 5% in the case of corporate shareholders owning at least 10% of the Company’s voting shares).

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Disposition

A US Holder is subject to tax under the Tax Act in respect of a capital gain realized on the sale or other disposition of a Common Share only if the US Holder holds the Common Share as “taxable Canadian property” for purposes of the Tax Act and is not entitled to relief under the Treaty.

In general, provided the Common Shares are listed on a prescribed exchange in Canada at the relevant time (maintaining the current TSX-V listing would be sufficient for this purpose), Common Shares will not be “taxable Canadian property” unless (i) at any time during the 60 month period ending at the time of disposition, the US Holder and/or persons and entities not dealing at arm’s length with the US Holder owned 25% or more of the issued shares of any class or series of the capital stock of the Company, or (ii) the US Holder’s Common Shares were acquired in certain types of tax-deferred exchanges in consideration for property that was itself “taxable Canadian property”.

Furthermore, even if Common Shares are so held as “taxable Canadian property”, relief under the Treaty is generally available if and provided that the value of the Common Shares is not derived principally from real property situated in Canada at the relevant time. US Holders claiming Treaty relief should do so by filing a Canadian income tax return for the relevant taxation year, and should consult with their own advisors in this regard.

Investors are advised to consult their tax advisors with respect to the tax implications of acquiring, holding or disposing of Common Shares and the application of any applicable income tax treaty.

United States Federal Income Tax Consequences

The following is a general discussion of all material United States federal income tax consequences, under current law, generally applicable to a U.S. Holder (as hereinafter defined) of common shares of the Company. This discussion does not address individual consequences to persons subject to special provisions of federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences. (See “Canadian Federal Income Tax Considerations above”).

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, published Internal Revenue Service (“IRS”) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time. This discussion does not consider the potential effects, both adverse and beneficial, of any recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time. This discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advise to any holder or prospective holder of common shares of the Company and no opinion or representation with respect to the United States federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares of the Company are urged to consult their own tax advisors about the federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Company.

As used herein, a “U.S. Holder” means a holder of common shares of the Company who is a citizen or individual resident of the United States, a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof or a trust whose income is taxable in the United States irrespective of source. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to specific provisions of federal income tax law, such as tax-exempt organizations, qualified retirement plans, individual retirement accounts and other tax-deferred accounts, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals, persons or entities that have a “functional currency” other than the U.S. dollar, shareholders who hold common shares as part of a straddle, hedging or a conversion transaction, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services. This summary is limited to U.S. Holders who own common shares as capital assets. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire common shares.

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for United States federal income tax purposes the gross amount of such distributions equal to the U.S. dollar value of such dividends on the date of receipt (based on the exchange rate on such date) to the extent that the Company has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder’s federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder’s federal taxable income by those who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below). To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holder’s adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a corporation.

In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not recognize that gain, to the extent that there are no expenses associated with the transaction that meet the requirement for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of income.

Dividends paid on the common shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a “foreign personal holding company” or a “passive foreign investment company,” as defined below) if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Company. The availability of this deduction is subject to several complex limitations which are beyond the scope of this discussion.

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Under current temporary Treasury Regulations, dividends paid on the Company’s common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends paid, and the proceeds of a sale of the Company’s common shares, in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 28% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign sources income bears to his or its worldwide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. In addition, this limitation is calculated separately with respect to specific classes of income such as “passive income,” “high withholding tax interest,” “financial services income,” “shipping income,” and certain other classifications of income. Dividends distributed by the Company will generally constitute “passive income” or, in the case of certain U.S. Holders, “financial services income” for these purposes. The availability of the foreign tax credit and the application of the limitations on the credit are fact specific, and U.S. Holders of common shares of the Company should consult their own tax advisors regarding their individual circumstances.

A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholder’s tax basis in the common shares of the Company. Preferential tax rates apply to long-term capital gains of U.S. Holders who are individuals, estates or trusts. This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder, which will be long-term capital gain or loss if the common shares of the Company are held for more than one year. Deductions for net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders that are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

In the following circumstances, the above sections of this discussion may not describe the United States federal income tax consequences resulting from the holding and disposition of common shares:

A U.S. Holder who holds stock in a foreign corporation during any year in which such corporation qualifies as a passive foreign investment company ("PFIC") is subject to U.S. federal income taxation of that foreign corporation under one of two alternative tax methods at the election of each such U.S. Holder.

Section 1297 of the Code defines a PFIC as a foreign (non-U.S.) corporation, if for any taxable year, either (i) 75% or more of its gross income is "passive income," which includes but is not limited to interest, dividends and certain rents and royalties or (ii) the average percentage, by value (or, if the company is a controlled foreign corporation or makes an election, adjusted tax basis), of its assets that produce or are held for the production of "passive income" is 50% or more. The Company believes that it is presently a PFIC.

As a PFIC, each U. S. Holder’s income or gain with respect to a disposition or deemed disposition of the Company’s shares or a distribution payable on such shares will generally be subject to tax at the highest marginal rates applicable to ordinary income and certain interest charges discussed below, unless the U.S. Holder has timely made a “qualified electing fund” election or a “mark-to-market” election for those shares. A U.S. Holder who elects in a timely manner to treat the Company as a Qualified Electing Fund ("QEF"), as defined in the Code, (an "Electing U.S. Holder") will be subject, under Section 1293 of the Code, to current federal income tax for any taxable year in which the Company's qualifies as a PFIC on his pro-rata share of the Company's (i) "net capital gain" (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain to the Electing U.S. Holder and (ii) "ordinary earnings" (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Holder, in each case, for the U.S. Holder's taxable year in which (or with which) the Company taxable year ends, regardless of whether such amounts are actually distributed. A U.S. Holder's tax basis in the common shares will be increased by such amount that is included in income but not distributed.

A QEF election also allows the Electing U.S. Holder to (i) generally treat any gain realized on the disposition of his common shares (or deemed to be realized on the pledge of his common shares) as capital gain; (ii) treat his share of the Company's net capital gain, if any, as long-term capital gain instead of ordinary income, and (iii) either avoid interest charges resulting from PFIC status altogether (see discussion of interest charge below), or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of the Company's annual realized net capital gain and ordinary earnings subject, however, to an interest charge. If the Electing U.S. Holder is not a corporation, such an interest charge would be treated as nondeductible "personal interest."

The procedure a U.S. Holder must comply with in making a timely QEF election will depend on whether the year of the election is the first year in the U.S. Holder's holding period in which the Company is a PFIC. If the U.S. Holder makes a QEF election in such first year, (sometimes referred to as a "Pedigreed QEF Election"), then the U.S. Holder may make the QEF election by simply filing the appropriate documents at the time the U.S. Holder files its tax return for such first year. If, however, the Company qualified as a PFIC in a prior year, then in addition to filing documents, the U.S. Holder may also elect to recognize as an "excess distribution" (i) under the rules of Section 1291 (discussed below), any gain that he would otherwise recognize if the U.S. Holder sold his stock on the application date or (ii) if the Company is a controlled foreign corporation ("CFC"), the Holder's pro rata share of the corporation's earnings and profits. (But see "Elimination of Overlap Between Subpart F Rules and PFIC Provisions"). Either the deemed sale election or the deemed dividend election will result in the U.S. Holder being deemed to have made a timely QEF election.

With respect to a situation in which a Pedigreed QEF election is made, if the Company no longer qualifies as a PFIC in a subsequent year, normal Code rules and not the PFIC rules will apply.

If a U.S. Holder has not made a QEF Election at any time (a "Non-electing U.S. Holder"), then special taxation rules under Section 1291 of the Code will apply to (i) gains realized on the disposition (or deemed to be realized by reason of a pledge) of his common shares and (ii) certain "excess distributions", as specially defined, by the Company.

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A Non-electing U.S. Holder generally would be required to pro-rate all gains realized on the disposition of his common shares and all excess distributions over the entire holding period for the common shares. All gains or excess distributions allocated to prior years of the U.S. Holder (other than years prior to the first taxable year of the Company during such U.S. Holder's holding period and beginning after January 1, 1987 for which it was a PFIC) would be taxed at the highest marginal tax rate for each such prior year applicable to ordinary income. The Non-electing U.S. Holder also would be liable for interest on the foregoing tax liability for each such prior year calculated as if such liability had been due with respect to each such prior year. A Non-electing, non-corporate U.S. Holder must treat this interest charge as "personal interest" which, as discussed above, is wholly non-deductible. The balance of the gain or the excess distribution will be treated as ordinary income in the year of the disposition or distribution, and no interest charge will be incurred with respect to such balance.

If the Company is a PFIC for any taxable year during which a Non-electing U.S. Holder holds common shares, then the Company will continue to be treated as a PFIC with respect to such common shares, even if it is no longer by definition a PFIC. A Non-electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders) as if such common shares had been sold on the last day of the last taxable year for which it was a PFIC.

Under Section 1291(f) of the Code, the Department of the Treasury has issued proposed regulations that would treat as taxable certain transfers of PFIC stock by Non-electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death.

If a U.S. Holder makes a QEF Election that is not a Pedigreed Election (i.e., it is made after the first year during which the Company is a PFIC and the U.S. Holder holds shares of the Company) (a "Non-Pedigreed Election"), the QEF rules apply prospectively but do not apply to years prior to the year in which the QEF first becomes effective. U.S. Holders are encouraged to consult their tax advisors regarding the specific consequences of making a Non-Pedigreed QEF Election.

Certain special, generally adverse, rules will apply with respect to the common shares while the Company is a PFIC whether or not it is treated as a QEF. For example under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such stock.

Mark-to-Market Election for PFIC Stock

A U.S. Holder of a PFIC may make a mark-to-market election with respect to the stock of the PFIC if such stock is marketable as defined below. This provision is designed to provide a current inclusion provision for persons that are Non-Electing Holders. Under the election, any excess of the fair market value of the PFIC stock at the close of the tax year over the Holder's adjusted basis in the stock is included in the Holder's income. The Holder may deduct any excess of the adjusted basis of the PFIC stock over its fair market value at the close of the tax year. However, deductions are limited to the net mark-to-market gains on the stock that the Holder included in income in prior tax years, or so called "unreversed inclusions."

For purposes of the election, PFIC stock is marketable if it is regularly traded on (1) a national securities exchange that is registered with the Securities and Exchange Commission (“SEC”), (2) the national market system established under Section 11A of the Securities Exchange Act of 1934, or (3) an exchange or market that the IRS determines has rules sufficient to ensure that the market price represents legitimate and sound fair market value.

A Holder's adjusted basis of PFIC stock is increased by the income recognized under the mark-to-market election and decreased by the deductions allowed under the election. If a U.S. Holder owns PFIC stock indirectly through a foreign entity, the basis adjustments apply to the basis of the PFIC stock in the hands of the foreign entity for the purpose of applying the PFIC rules to the tax treatment of the U.S. owner. Similar basis adjustments are made to the basis of the property through which the U.S. persons hold the PFIC stock.

Income recognized under the mark-to-market election and gain on the sale of PFIC stock with respect to which an election is made is treated as ordinary income. Deductions allowed under the election and loss on the sale of PFIC with respect to which an election is made, to the extent that the amount of loss does not exceed the net mark-to-market gains previously included, are treated as ordinary losses. The U.S. or foreign source of any income or losses is determined as if the amount were a gain or loss from the sale of stock in the PFIC.

If PFIC stock is owned by a controlled foreign corporation (“CFC”), the CFC is treated as a U.S. person that may make the mark-to-market election. Amounts includable in the CFC's income under the election are treated as foreign personal holding company income, and deductions are allocable to foreign personal holding company income. A CFC is a foreign corporation in which more than 50% of the voting power of all classes of stock or the total value of the stock is owned, directly or indirectly, by U.S. Holders, each of whom own 10% or more of the total combined voting power.

The above provisions apply to tax years of U.S. persons beginning after December 31, 1997, and to tax years of foreign corporations ending with or within such tax years of U.S. persons.

The rules of Code Section 1291 applicable to nonqualified funds generally do not apply to a U.S. Holder for tax years for which a mark-to-market election is in effect. If Code Section 1291 is applied and a mark-to-market election was in effect for any prior tax year, the U.S. Holder's holding period for the PFIC stock is treated as beginning immediately after the last tax year of the election. However, if a taxpayer makes a mark-to-market election for PFIC stock that is a nonqualified fund after the beginning of a taxpayer's holding period for such stock, a coordination rule applies to ensure that the taxpayer does not avoid the interest charge with respect to amounts attributable to periods before the election.

The foregoing discussion is based on currently effective provisions of the Code, existing and proposed regulations thereunder, and current administrative rulings and court decisions, all of which are subject to change. Any such change could affect the validity of this discussion. In addition, the implementation of certain aspects of the PFIC rules requires the issuance of regulations which in many instances have not been promulgated and which may have retroactive effect. There can be no assurance that any of these proposals will be enacted or promulgated, and if so, the form they will take or the effect that they may have on this discussion. Accordingly, and due to the complexity of the PFIC rules, U.S. Holders of the Company are strongly urged to consult their own tax advisors concerning the impact of these rules on their investment in the Company.

If 50% or more of the combined voting power or total value of the Company’s outstanding shares are held, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and the Company is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that the Company may be treated as a “foreign investment company” as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gain.

If more than 50% of the voting power of all classes of shares or the total value of the shares of the Company is owned, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts, each of whom own 10% or more of the total combined voting power of all classes of shares of the Company (“United States shareholder”), the Company could be treated as a “controlled foreign corporation” under Subpart F of the Code. This classification would effect many complex results one of which is the inclusion of certain income of a CFC which is subject to current U.S. tax. The United States generally taxes a United States shareholder of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such U.S. shareholders are generally treated as having received a current distribution out of the CFC’s Subpart F income and are also subject to current U.S. tax on their pro rata shares of the CFC’s earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Company who is or was a United States shareholder at any time during the five-year period ending with the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Company attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to United States shareholders of the CFC. This rule generally will be effective for taxable years of United States shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of United States shareholders. Special rules apply to United States shareholders who are subject to the special taxation rules under Section 1291 discussed above with respect to a PFIC. Because of the complexity of Subpart F, and because it is not clear that Subpart F would apply to U.S. Holders of common shares of the Company, a more detailed review of these rules is outside of the scope of this discussion.

10.F. Dividends and Paying Agents

Not Applicable.

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10.G. Statement by Experts

Not Applicable.

10.H. Document on Display

The documents concerning the Company referred to in this Annual Report may be viewed at Suite 725, 666 Burrard Street, Vancouver, British Columbia, Canada during normal business hours. Copies of our financial statements and other continuous disclosure documents required under the British Columbia Securities Act are available for viewing on the internet at www.SEDAR.com. Copies of our financial statements and other continuous disclosure documents are also available for viewing at www.sec.gov

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not subject to any material market risks at this time.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not Applicable.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not Applicable.

ITEM 15. CONTROLS AND PROCEDURES

The Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2007 being the date of our most recently completed fiscal year. Based upon that evaluation, our chief executive officer and our chief financial officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting management to material information relating to us required to be included in our periodic SEC filings.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed 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.

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During our most recently completed fiscal year ended March 31, 2007, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

ITEM 16. RESERVED

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

The Company does not have an audit committee financial expert serving on its audit committee. The Company has had some difficulty in attracting financial experts to serve on its board of directors, due to the Company’s small size. The Company believes its financial statements are not complex, and the Company does not view the retention of a financial expert as critical to its further development. However, the Company is currently considering appointing a director to the board and to the audit committee who would be a financial expert.

ITEM 16B. CODE OF ETHICS

The Company has not formally adopted a written code of ethics. The Company is reviewing the adoption of a formal code of ethics. The Company has guided its conduct by the provisions of the CBCA and the securities legislation applicable to it. Due to its size, management had not deemed it necessary to adopt a formal written code of ethics at this time.

ITEM 16C. PRINCIPAL ACCOUNTING FEES AND SERVICES

Fees incurred with Amisano Hanson for audit and non-audit services in the last two fiscal years for audit fees are outlined in the following table.

Table No. 11
Principal Accounting Fees

Nature of Services	Fees Paid to AuditorinYear Ended March 31, 2007.	Fees Paid to Auditor in Year Ended March 31, 2006.
Audit Fees(1)	$16,800	$16,800
Audit-Related Fees(2)	$1,930	Nil
Tax Fees(3)	Nil	$1,008
All Other Fees(4)	Nil	Nil
Total	$18,730	$17,808

Notes:

(1) “Audit Fees” include fees necessary to perform the annual audit and quarterly reviews of the Corporation’s consolidated financial statements. Audit Fees include fees for review of tax provisions and for accounting consultations on matters reflected in the financial statements. Audit Fees also include audit or other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits.

(2) “Audit-Related Fees” include services that are traditionally performed by the auditor. These audit-related services include employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation.

(3) “Tax Fees” include fees for all tax services other than those included in “Audit Fees” and “Audit-Related Fees”. This category includes fees for tax compliance, tax planning and tax advice. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions, and requests for rulings or technical advice from tax authorities.

(4) “All Other Fees” include all other non-audit services.

- 54 -

A. Audit Fees

The aggregate fees billed by the auditors of the Company were $16,800 and $16,800 for the fiscal years ended March 31, 2006 and 2007, respectively. These fees relate to the audit of the Company’s financial statements.

B. Audit-Related Fees

$1,930.00.

C. Tax Fees

Nil

D. All Other Fees

Nil

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not Applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER/AFFILIATED PURCHASERS

Not Applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

This Annual Report on Form 20-F includes the Company’s consolidated audited financial statements for the years ended March 31, 2007 and 2006, including the following:

1.	Independent Auditors’ Report of Amisano Hanson dated July 3, 2007.
2.	Balance Sheets as at March 31, 2007 and March 31, 2006.
3.	Statements of Operations for the years ended March 31, 2007, 2006 and 2005.
4.	Statements of Cash Flows for the years ended March 31, 2007, 2006 and 2005.
5.	Statement of Shareholders’ Equity for the period for the years ended March 31, 2007, 2006 and 2005.
6.	Notes to the Financial Statements.

ITEM 18. FINANCIAL STATEMENTS

The Company has elected to provide financial statements pursuant to Item 17.

ITEM 19. EXHIBITS

The following exhibits are included in this Form 20-F:

- 55 -

EXHIBITNUMBER	DESCRIPTION OFEXHIBIT
4.1	Earn-in Agreement between the Company and Meridian dated July 31, 2006(1)
4.2	Amended and Restated Option and Royalty Agreement among the Company, Golden Sands and AHL dated July 7, 2006(1)
4.3	Amending Agreement to the Amended and Restated Option and Royalty Agreement among the Company, Golden Sands and AHL, dated April 11, 2007
4.4	Malone Property Agreement between the Company and Newmont North America Exploration Ltd., dated April 17, 2006(1)
4.5	Investor Relations Agreement between Renmark Financial Communications Inc. and the Company dated June 15, 2007
4.6	Corporate Advisory Agreement between the Company and Excelsior Communications Incorporated dated September 1, 2007.
8.1	Subsidiaries of the Company
	Evolving Gold Corp., incorporated in the jurisdiction of Nevada.
12.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1	Certification of Chief Executive Officer pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2	Certification of Chief Financial Officer pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1) Incorporate by reference to the Company’s Annual Report on Form 20-F for the fiscal year ended March 31, 2006.

- 56 -

SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing of Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	EVOLVING GOLD CORP.
	(Registrant)
By:	/s/Robert F. Bick
	Name: ROBERT F. BICK
	Title: Chief Executive Officer
	DATE: October 15, 2007

EVOLVING GOLD CORP.

(An Exploration Stage Company)

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007 and 2006

(Stated in Canadian Dollars)

PARTNERSHIPOFINCORPORATEDPROFESSIONALS	AMISANOHANSON
	CHARTEREDACCOUNTANTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders,
Evolving Gold Corp.
(An Exploration Stage Company)

We have audited the consolidated balance sheets of Evolving Gold Corp. as at March 31, 2007 and 2006 and the consolidated statements of operations, cash flows and shareholders’ equity for each of the years in the three year period ended March 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2007 and 2006 and the results of its operations and its cash flows for each of the years in the three year period ended March 31, 2007, in accordance with Canadian generally accepted accounting principles.

Vancouver, Canada	“AMISANO HANSON”
July 3, 2007	Chartered Accountants

750 WEST PENDER STREET, SUITE 604	TELEPHONE:	604-689-0188
VANCOUVER CANADA	FACSIMILE:	604-689-9773
V6C 2T7	E-MAIL:	amishan@telus.net

EVOLVING GOLD CORP.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
March 31, 2007 and 2006
(Stated in Canadian Dollars)

ASSETS		2007			2006
Current
Cash	$	65,942		$	222,953
Other receivables		22,046			4,961
Prepaid expenses – Note 6		23,331			-
		111,319			227,914
Equipment – Note 3		22,543			1,187
Mineral properties – Notes 4 and 5, Schedule 1		1,113,875			737,297
	$	1,247,737		$	966,398
LIABILITIES
Current
Accounts payable and accrued liabilities – Note 6	$	288,995		$	107,254
SHAREHOLDERS' EQUITY
Share capital – Notes 4, 5 and 9
Authorized:
Unlimited number of common shares without par value
Issued:
12,529,842 shares (2006: 10,269,842 shares)		2,408,045			1,713,844
Share subscriptions – Note 9		100,000			-
Contributed surplus – Note 5		427,090			290,415
Deficit accumulated during the exploration stage		(1,976,393	)		(1,145,115	)
		958,742			859,144
	$	1,247,737		$	966,398

Commitments – Notes 4, 5, 9 and 10
Subsequent Events – Notes 4, 5 and 9

APPROVED BY THE DIRECTORS:

“Robert Bick”	Director	“Donald Gee”	Director
Robert Bick		Donald Gee

SEE ACCOMPANYING NOTES

EVOLVING GOLD CORP.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended March 31, 2007, 2006 and 2005
(Stated in Canadian Dollars)

		2007			2006			2005
Expenses
Accounting and audit	$	46,630		$	47,852		$	16,390
Bank charges and interest		2,031			1,593			913
Consulting – Note 6		90,600			51,605			35,264
Depreciation		1,750			44			-
Legal		91,469			55,715			30,820
Management fees – Note 6		145,059			7,279			103,879
Office and miscellaneous		35,897			13,713			4,689
Promotion, advertising and travel – Note 6		93,618			109,473			31,389
Rent and administration fees – Note 6		34,250			15,007			16,800
Stock-based compensation – Note 5		136,675			224,925			128,165
Transfer agent and filing fees		33,009			19,535			33,909
Write-down of exploration expenditures		120,290			44,038			-
Net loss for the year	$	(831,278	)	$	(590,779	)	$	(402,218	)
Basic and diluted loss per share	$	(0.07	)	$	(0.07	)	$	(0.07	)
Weighted average number of shares outstanding		11,581,952			8,505,316			5,601,196

SEE ACCOMPANYING NOTES

EVOLVING GOLD CORP.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended March 31, 2007, 2006 and 2005
(Stated in Canadian Dollars)

		2007			2006			2005
Operating Activities
Net loss for the year	$	(831,278	)	$	(590,779	)	$	(402,218	)
Add items not affecting cash:
Stock-based compensation		136,675			224,925			128,165
Depreciation		1,750			44			-
Write-down of mineral exploration expenditures		120,290			44,038			-
Changes in non-cash working capital items related to operations:
Other receivables		(17,085	)		(976	)		(6	)
Prepaid expenses		(23,331	)		-			25,550
Accounts payable and accrued liabilities		181,741			252,414			125,217
		(431,238	)		(70,334	)		(123,292	)
Investing Activities
Purchase of equipment		(23,106	)		(1,231	)		-
Deferred exploration costs		(374,551	)		(147,729	)		(56,093	)
Amounts received pursuant to earn-in agreement		168,552			-			-
Acquisition of resource properties		(106,869	)		(173,466	)		(37,047	)
		(335,974	)		(322,426	)		(93,140	)
Financing Activities
Issue of common shares for cash, net of share issue expense		510,201			622,959			96,000
Share subscriptions		100,000			-			-
Advance payable		-			(10,000	)		10,000
		610,201			612,959			106,000
Increase (decrease) in cash during the year		(157,011	)		220,199			(110,432	)
Cash, beginning of the year		222,953			2,754			113,186
Cash, end of the year	$	65,942		$	222,953		$	2,754
Supplemental disclosure of cash flow information:
Shares issued for share issue expense	$	30,000		$	29,100		$	-
Shares issued for acquisition of mineral property		184,000			244,000			96,000
Shares issued for debt settlement		-			285,610			-
Warrants issued for finder’s fee		-			11,640			-
Exchange of special warrants for common shares		-			-			306,500
	$	214,000		$	570,350		$	402,500
Supplemental disclosure of cash flow information
Cash paid for:
Interest	$	-		$	-		$	-
Income taxes	$	-		$	-		$

SEE ACCOMPANYING NOTES

EVOLVING GOLD CORP.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
for the years ended March 31, 2007, 2006 and 2005
(Stated in Canadian Dollars)

																Deficit
																Accumulated
																During the
			Share Capital			Special Warrants						Share		Contributed		Exploration
			Number		Amount	Number			Amount			Subscriptions		Surplus		Stage			Total
Balance, March 31, 2004			100	$	100	6,150,000		$	306,500		$	-	$	-	$	(152,118	)	$	154,482
Issuance of shares
Pursuant to conversion of special warrants
Series “A” warrants			1,400,000		14,000	(1,400,000	)		(14,000	)		-		-		-			-
Series “B” warrants			3,250,000		162,500	(3,250,000	)		(162,500	)		-		-		-			-
Series “F” warrants			1,100,000		110,000	(1,100,000	)		(110,000	)		-		-		-			-
Series “L” warrants			200,000		10,000	(200,000	)		(10,000	)		-		-		-			-
Series “P” warrants			200,000		10,000	(200,000	)		(10,000	)		-		-		-			-
Pursuant to resource property acquisition	- at $0.16		600,000		96,000	-			-			-		-		-			96,000
Pursuant to private placement	- at $0.16		600,000		96,000	-			-			-		-		-			96,000
Stock-based compensation charge			-		-	-			-			-		128,165		-			128,165
Net loss for the year ended March 31, 2005		��	-		-	-			-			-		-		(402,218	)		(402,218	)
			7,350,100		498,600	-			-			-		128,165		(554,336	)		72,429

…cont’d

SEE ACCOMPANYING NOTES

EVOLVING GOLD CORP.	Continued
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
for the years ended March 31, 2007, 2006 and 2005
(Stated in Canadian Dollars)

														Deficit
														Accumulated
														During the
		Share Capital				Special Warrants			Share		Contributed			Exploration
		Number		Amount		Number		Amount	Subscriptions		Surplus			Stage			Total
Balance, March 31, 2005		7,350,100		498,600		-			-		128,165			(554,336	)		72,429
Issuance of shares
Pursuant to resource property acquisition - at $0.61		400,000		244,000		-			-		-			-			244,000
Pursuant to debt settlement	- at $0.66	432,742		285,610		-			-		-			-			285,610
Pursuant to private placement	- at $0.50	290,000		145,000		-			-		-			-			145,000
Pursuant to private placement	- at $0.30	1,270,000		381,000		-			-		-			-			381,000
Pursuant to conversion of options		300,000		79,500		-			-		-			-			79,500
Pursuant to conversion of warrants		130,000		32,500		-			-		-			-			32,500
Stock-based compensation charge		-		-		-			-		224,925			-			224,925
Transfer from contributed surplus on conversion of
stock options		-		74,315		-			-		(74,315	)		-			-
Share issue expense - Cash		-		(15,041	)	-			-		-			-			(15,041	)
- Finders fees		97,000		-		-			-		-			-			-
- Finders warrants		-		(11,640	)	-			-		11,640			-			-
Net loss for the year ended March 31, 2006		-		-		-			-		-			(590,779	)		(590,779	)
Balance, March 31, 2006		10,269,842		1,713,844		-			-		290,415			(1,145,115	)		859,144
Issuance of shares
Pursuant to resource property acquisition - at $0.46		400,000		184,000		-			-		-			-			184,000
Pursuant to private placement	- at $0.30	1,500,000		450,000		-			-		-			-			450,000
Pursuant to conversion of warrants		260,000		65,000		-			-		-			-			65,000
Stock-based compensation charge		-		-		-			-		136,675			-			136,675
Share issue expense - Cash		-		(4,799	)	-			-		-			-			(4,799	)
- Finders fees		100,000		-		-			-		-			-			-
Net loss for the year ended March 31, 2007		-		-		-			-		-			(831,278	)		(831,278	)
Share subscriptions		-		-		-			100,000		-			-			100,000
Balance, March 31, 2007		12,529,842	$	2,408,045		-	$		100,000	$	427,090		$	(1,976,393	)	$	958,742

SEE ACCOMPANYING NOTES

EVOLVING GOLD CORP.	Schedule 1
(An Exploration Stage Company)
CONSOLIDATED SCHEDULE OF MINERAL PROPERTIES
for the years ended March 31, 2007 and 2006
(Stated in Canadian Dollars)

		Canada							United States
											Fisher,
											Siesta and
		Murray			Voisey Bay		Winnemucca		Malone		Alpha Butte		Other
		Property			Property		Property		Property		Properties		Properties			Total
Balance, March 31, 2005	$	34,617		$	-	$	181,523	$	-	$	-	$	-		$	216,140
Acquisition costs
Cash		-			35,000		61,525		-		-		-			96,525
Legal		-			1,647		37,949									39,596
Advance Royalty Payments		-			-		11,608		-		-		-			11,608
Shares		-			-		244,000		-		-		-			244,000
		-			36,647		355,082		-		-		-			391,729
Deferred exploration costs
Field expenses and other		3,381			-		-		-		-		-			3,381
Geological consulting		-			14,731		60,011		-		-		6,040			80,782
Staking and recording costs		-			7,440		81,863		-		-		-			89,303
		3,381			22,171		141,874		-		-		6,040			173,466
Write-down of properties		(37,998	)		-		-		-		-		(6,040	)		(44,038	)
Balance, March 31, 2006		-			58,818		678,479		-		-		-			737,297

…cont’d

SEE ACCOMPANYING NOTES

EVOLVING GOLD CORP.	Schedule 1 – (cont’d)
(An Exploration Stage Company)
CONSOLIDATED SCHEDULE OF MINERAL PROPERTIES
for the years ended March 31, 2007 and 2006
(Stated in Canadian Dollars)

		Canada									United States
													Fisher,
													Siesta and
		Murray			Voisey Bay			Winnemucca			Malone		Alpha Butte		Other
		Property			Property			Property			Property		Properties		Properties			Total
Balance, March 31, 2006		-			58,818			678,479			-		-		-			737,297
Acquisition costs
Cash		-			-			11,570			11,360		-		-			22,930
Shares		-			-			184,000			-		-		-			184,000
Legal					554			83,385			-		-		-			83,939
		-			554			278,955			11,360		-		-			290,869
Deferred exploration costs
Assays and reports		-			-			8,621			-		-		-			8,621
Field expenses and other		-			-			115			19,782		-		-			19,897
Geological consulting – Note 6		-			2,198			23,559			64,324		12,500		28,295			130,876
Geophysical and geological studies		-			-			-			93,955		-		-			93,955
Licenses and fees		-			-			-			13,192		-		-			13,192
Staking and recording costs – Note 6		11,825			18,600			-			-		77,585		-			108,010
		11,825			20,798			32,295			191,253		90,085		28,295			374,551
Write-down of properties		(11,825	)		(80,170	)		-			-		-		(28,295	)		(120,290	)
Amounts received pursuant to earn-in agreement		-			-			(168,552	)		-		-		-			(168,552	)
Balance, March 31, 2007	$	-		$	-		$	821,177		$	202,613	$	90,085	$	-		$	1,113,875

SEE ACCOMPANYING NOTES

EVOLVING GOLD CORP.
(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2007 and 2006
(Stated in Canadian Dollars)

Note 1 Continuance of Operations

Evolving Gold Corp. (the “Company”) was incorporated as 6109527 Canada Ltd. on June 19, 2003, under the Canada Business Corporation Act and is in the business of acquiring, exploring and evaluating mineral properties. On September 30, 2003, the Company changed its name to Evolving Gold Corp. The Company is in the exploration stage and has interests in mineral properties located in Canada and in the United States of America. Effective June 13, 2007, the common shares of the Company were listed on the TSX Venture Exchange (“TSX”) and trade under the symbol EVG.

The recoverability of amounts shown for mineral properties is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain financing to complete their development, and future profitable production or disposition thereof.

Note 2 Summary of Significant Accounting Policies

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in Canada. Differences with respect to accounting principles generally accepted in the United States of America are described in Note 11. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates, which have been made using careful judgement. Actual results may vary from these estimates.

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

a)	Principles of Consolidation
	These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Evolving Gold Corp., a United States company incorporated on March 16, 2007. All significant intercompany transactions have been eliminated.
b)	Mineral Properties
	The Company defers the cost of acquiring, maintaining its interest, exploring and developing mineral properties until such time as the properties are placed into production, abandoned, sold or considered to be impaired in value. Costs of producing properties will be amortized on a unit of production basis and costs of abandoned properties are written-off. Proceeds received from the sale of interests in mineral properties are credited to the carrying value of the mineral properties, with any excess included in operations. Write-downs due to impairment in value are charged to operations.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 2

Note 2 Summary of Significant Accounting Policies– (cont’d)

b)	Mineral Properties– (cont’d)
	The Company is in the process of exploring and developing its mineral properties and has not yet determined the amount of reserves available. Management reviews the carrying value of mineral properties on a periodic basis and will recognize impairment in value based upon current exploration results, the prospect of further work being carried out by the Company, the assessment of future probability of profitable revenues from the property or from the sale of the property. Amounts shown for properties represent costs incurred net of write-downs and recoveries, and are not intended to represent present or future values.
	Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and which do not contribute to current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the costs can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company’s commitment to a plan of action based on the then known facts.
c)	Income Taxes
	The Company follows the asset and liability method of accounting for income taxes. Under this method, current income taxes are recognized for the estimated income taxes payable for the current period. Future income tax assets and liabilities are recognized for temporary differences between the tax and accounting basis of assets and liabilities as well as for the benefit of losses available to be carried forward to future years for tax purposes only if it is more likely than not that they can be realized.
d)	Stock Based Compensation
	The Company has a stock-based compensation plan as disclosed in Note 5, whereby stock options are granted in accordance with the policies of regulatory authorities. The fair value of all share purchase options are expensed over their vesting period with a corresponding increase to contributed surplus.
	Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in contributed surplus, is recorded as an increase to share capital.
	The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options at the date of grant. Option valuation models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate and, therefore, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s share purchase options.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 3

Note 2 Summary of Significant Accounting Policies– (cont’d)

e)	Basic and Diluted Loss Per Share
	Basic loss per share is computed by dividing the loss for the year by the weighted average number of common shares outstanding during the year. Diluted loss per share reflects the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method. Fully dilutive amounts are not presented when the effect of the computations are anti-dilutive due to the losses incurred. Accordingly, there is no difference in the amounts presented for basic and diluted loss per share.
f)	Financial Instruments
	The carrying value of the Company’s financial instruments, consisting of cash, other receivables and accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such 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.
g)	Equipment and Depreciation
	Equipment is carried at cost and consists of computer equipment and office furniture and equipment. Depreciation is calculated on the straight-line method over the estimated useful life of the asset, being three years. No depreciation is taken on artwork.
h)	Asset Retirement Obligation
	The fair value of obligations associated with the retirement of tangible long-lived assets are recorded in the period the asset is put to use, with a corresponding increase to the carrying amount of the related asset. The obligations recognized are statutory, contractual or legal obligations. The liability is accreted over time for changes in the fair value of the liability through charges to accretion, which is included in depletion, depreciation and accretion expense. The costs capitalized to the related assets are amortized in a manner consistent with the depletion and depreciation of the related asset.
	At March 31, 2007, the fair value of the mineral properties site restoration costs is not significant.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 4

Note 2 Summary of Significant Accounting Policies– (cont’d)

i)	Impairment of Long-lived Assets
	Canadian generally accepted accounting principles require that long-lived assets and intangibles to be held and used by the Company be reviewed for possible impairment whenever events or changes in circumstances indicate that the asset may not be recoverable. If changes in circumstances indicate that the carrying amount of an asset that an entity expects to hold and use may not be recoverable, future cash flows expected to result from the use of the asset and its disposition must be estimated. If the undiscounted value of the future cash flows is less that the carrying amount of the asset, impairment is recognized.
j)	Foreign Currency Translation

Monetary items denominated in a foreign currency are translated into Canadian dollars at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets were acquired or obligations incurred. Foreign currency denominated revenue and expense items are translated at exchange rates prevailing at the transaction date. Gains or losses arising from the translations are included in operations.

Note 3 Equipment

				2007				2006
				Accumulated
		Cost		Amortization		Net		Net
Artwork	$	7,223	$	-	$	7,223	$	-
Office furniture and equipment		3,720		300		3,420		-
Computer equipment		13,394		1,494		11,900		1,187
	$	24,337	$	1,794	$	22,543	$	1,187

Note 4 Mineral Properties– Note 6

a)	Murray Property
	Pursuant to a property option agreement dated July 22, 2003 and amended September 16, 2004, between the Company and International Zimtu Technologies Inc., a public company, the Company has the option to earn a 70% undivided interest in certain mineral claims (the “Property”), located 78 kilometres northeast of Yellowknife, Northwest Territories.
	During the year ended March 31, 2006, the Company abandoned this option and wrote-off $37,998 in resource property costs. Similarly $11,825 of resource property incurred during the year ended March 31, 2007, was also written off.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 5

Note 4 Mineral Properties– Note 6 – (cont’d)

b)	Voisey Bay Property
	Pursuant to an option agreement dated May 4, 2005 between the Company and Geocore Exploration Inc. the Company was granted the right to acquire a 60% interest in a licence to a mine and explore 192 claims located in Labrador, Canada in exchange for $35,000 and the obligation to incur exploration expenditures of $500,000 by October 31, 2007. During the year ended March 31, 2007, the Company terminated this option agreement and wrote-off $80,170 in expenditures related to this property.
c)	Winnemucca Property
	Pursuant to an option agreement dated December 3, 2004 and amended January 7, 2005, February 25, 2005, April 21, 2005, January 26, 2006, April 27, 2006, June 16, 2006 and July 7, 2006, with Golden Sands Exploration Inc. (“Golden”) and its subsidiary company AHL Holdings Ltd. (“AHL”), the company was granted the right to acquire a 100% interest in unpatented mining claims (referred to as Golden Arc claims), located in Humboldt County, Nevada (the “Winnemucca Property”). In addition the Company has staked additional unpatented mining claims.
	On April 11, 2007, the Company paid US$10,000 to extend certain terms of the agreement. The parties are currently negotiating further amendments to the agreements.
	In order to vest its interest in the Winnemucca Property the Company must make aggregate cash payments to Golden of US$70,000, issue 1,800,000 shares to Golden (or its nominee), incur exploration expenditures of US$4,000,000 and make advance royalty payments as follows:
	i)	Cash Payments
		- US $80,000 (paid) (including US $10,000 for extension agreement);
	ii)	Share Issuances
		- 900,000 shares; (issued)
		- 400,000 shares on May 16, 2006, (issued);
		- 500,000 shares on or before December 31, 2007;
	iii)	Various legal costs
		- Pay various legal costs at the close of a private placement of shares (paid).

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 6

Note 4 Mineral Properties– Note 6 – (cont’d)

c)	Winnemucca Property– (cont’d)
	iv)	Exploration Expenditures
			US $500,000 on or before December 31, 2006 including US $200,000 on the Golden Arc claims ;
			an additional US $1,500,000 on or before December 31, 2007;
			and a further US $2,000,000 on or before December 31, 2008.
	v)	Advance Royalty Payments
			US$10,000 on or before March 16, 2006 (paid)
			an additional US$10,000 on or before December 3, 2006 (paid)
			an additional US$20,000 on or before December 3, 2007
			and a further US$20,000 on or before each successive December 3rduntil production commences from the claims and continues uninterrupted for a period of twelve consecutive months, at which time all further obligations to pay advance royalties will terminate, except for those advance royalties previously unpaid by the Company.
		All advance royalty payments will be deducted from the net smelter return royalty payments otherwise needed to be made.
	The Company must pay for a pre-feasibility study and have it delivered to Golden by June 30, 2009. The Company must also prepare a technical report and an exploration expense report and deliver this to Golden with all relevant data, information and reports by October 15, 2007.
	In addition, a finder’s fee of 100,000 shares was paid by the Company in December 2004 in connection with this transaction.
	The Winnemucca Property is subject to a 2% net smelter return (“NSR”). With respect to the original Golden Arc unpatented mineral claims, the Company may purchase the NSR for US $1,000,000 per 1% or an aggregate of US $2,000,000. No agreement exists for such purchase of the NSR on the remaining mineral claims.
	Pursuant to an earn-in agreement between the Company and Meridian Gold Inc. (subsequently assigned to Meridian Minerals Corp. (“Meridian”)) dated July 31, 2006, the Company agreed to grant Meridian an earn-in to acquire, directly or indirectly, an undivided 70% interest in Evolving’s option to purchase 100% of the right, title and interest in the Winnemucca Claims.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 7

Note 4 Mineral Properties– Note 6 – (cont’d)

c)	Winnemucca Property– (cont’d)
	To complete the earn-in Meridian must make the following:
		Cash payments of US$80,000 on closing (paid), US$80,000 on or before December 31, 2006 (paid) and an additional US$100,000 and US$240,000 on or before December 31, 2007 and December 31, 2008 respectively.
		Fund exploration expenditures aggregating US$ 500,000 on or before December 31, 2006. As at March 31, 2007, the company has extended the deadline.
		Fund exploration expenditures of US$ 1,500,000 on or before December 31, 2007.
		Fund exploration expenditures of an additional US$ 2,000,000 on or before December 31, 2008.
	Upon Meridian satisfying its obligations and the successful completion of the earn-in, Meridian and the Company will form a joint venture for purposes of carrying out the project.
d)	Malone Property
	On April 17, 2006 the Company entered into a quitclaim deed and royalty agreement with Newmont North America Exploration Limited whereby the Company was granted all rights, title, estate and interest in unpatented mineral claims located in Lordsburg, New Mexico, United States of America in exchange for payment of US$ 10,000 (paid) and an additional US$ 10,000 payable in one year (paid subsequent to March 31, 2007). The agreement is subject to a royalty of 2% of net smelter returns.
e)	Fisher, Siesta and Alpha Butte Properties

The Company has acquired by staking three new properties comprising approximately 7,700 hectares in Nevada.

Note 5	Share Capital– Note 9
	Escrow Shares
	As at March 31, 2007 there were 199,401 (2006: 598,215) shares held in escrow. These shares were subsequently released.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 8

Note 5 Share Capital– Note 9 – (cont’d)

Commitments:

Warrants

In September 2006, the Company completed a private placement of 1,500,000 units at $0.30 per unit resulting in proceeds of $450,000. Each unit was comprised of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase one common share of the Company at a price of $0.40 per share until September 7, 2008.

The Company applied the residual approach and allocated the total proceeds of $450,000 to the common shares and $nil to the attached warrants to the private placement. Finder’s fees for the September 2006 private placement were paid by the issue of 100,000 units with a fair market value of $30,000. This amount has been charged to share issue costs and credited to share capital.

In January 2007, 260,000 warrants were exercised at $0.25 per share for proceeds of $65,000 and an additional 210,000 warrants expired.

At March 31, 2007, there were 3,786,742 share purchase warrants outstanding entitling the holders thereof the right to purchase one common share for each warrant held:

Number of Shares	Exercise Price	Expiry Date
432,742	$0.35	May 25, 2007
290,000	$0.55	September 14, 2007
1,464,000	$0.40	January 18, 2008
1,600,000	$0.40	September 7, 2008
3,786,742

In May 2007 the Company received exchange approval to change the exercise price of 432,742 warrants issued in May 2005 from $0.82 to $0.35 per share. Also in May, 2007 321,969 of these warrants were exercised for proceeds of $112,689 and the remaining 110,773 warrants expired.

	2007				2006
	Number of			Weighted	Number of			Weighted
	Shares issuable			Average	Shares issuable			Average
	Pursuant to			Exercise	Pursuant to			Exercise
	Warrants			Price	Warrants			Price
Outstanding, beginning of year	2,656,742		$	0.46	600,000		$	0.25
Issued	1,600,000		$	0.40	2,186,742		$	0.50
Cancelled	(210,000	)	$	0.25	-
Exercised	(260,000	)	$	0.25	(130,000	)	$	0.25
Outstanding, end of year	3,786,742		$	0.41	2,656,742		$	0.46

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 9

Note 5 Share Capital– Note 9 – (cont’d)

Commitments– (cont’d)

Stock Option Plan and Stock-based Compensation

Details of stock options outstanding as at March 31, 2007 are as follows:

Number of Shares	Exercise Price	Expiry Date
250,000	$0.25	September 15, 2009
240,000	$0.36	April 7, 2011
490,000

A summary of the status of the stock option plan as of March 31, 2007 and 2006 and changes during the years then ended is presented below:

	2007				2006
				Weighted				Weighted
				Average				Average
	Number of			Exercise	Number of			Exercise
	Options			Price	Options			Price
Outstanding, beginning of year	585,000		$	0.44	550,000		$	0.26
Granted	430,000		$	0.36	485,000		$	0.61
Cancelled	(525,000	)	$	0.51	(150,000	)	$	0.65
Exercised	-		$	-	(300,000	)	$	0.26
Outstanding, end of year	490,000		$	0.35	585,000		$	0.44

The Company established a share purchase option plan (the “Plan”) in September 2004. The Board of Directors administers the Plan, pursuant to which the Board of Directors may grant from time to time incentive stock options up to an aggregate maximum of 10% of the issued and outstanding shares of the Company to directors, officers, employees, consultants or advisors. All options granted under the Plan shall expire not later than the fifth anniversary of the date the options were granted.

The exercise price of an option is determined by the Board of Directors, but shall not be less than the market price of the common shares of the Company on the TSX on the last business day before the date on which the options are granted, less any discount permitted by the rules of the exchange. Vesting and terms are at the discretion of the Board of Directors.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 10

Note 5 Share Capital– Note 9 – (cont’d)

Commitments– (cont’d)

Stock Option Plan and Stock-based Compensation– (cont’d)

During the year ended March 31, 2007, the Company granted options to directors and three consultants for 430,000 shares pursuant to the Plan exercisable at $0.36 per share. Based on this transaction the Company recorded stock-based compensation expense of $136,675 (2006: $224,925) and transferred $Nil (2006: $74,315) of stock-based compensation that had previously been recorded as contributed surplus, to share capital which related to exercised options.

The weighted fair value of the share purchase options granted during the year ended March 31, 2007 of $0.30 per option (2006: $0.46) is estimated using the Black-Scholes option valuation model with the following assumptions:

	2007	2006
Average risk-free interest rate	4.13%	3.4-3.8%
Expected life	5 years	4-5 years
Expected volatility	118%	111-125%
Expected dividends	Nil	Nil

In May 2007, the Company granted 2,060,000 share purchase options exercisable at $0.42 per share until May 2, 2012 and 200,000 share purchase options exercisable at $0.50 per share until May 13, 2012, to directors and consultants.

Note 6 Related Party Transactions

During the years ended March 31, the Company incurred charges to significant shareholders, directors and former directors of the Company as follows:

		Year ended March 31,
		2007		2006		2005
Consulting	$	39,600	$	40,396	$	-
Management fees		145,059		7,279		70,000
Promotion and advertising		15,713		2,442		450
Rent and administration fees		3,000		9,000		4,050
Deferred exploration costs
- geological consulting		110,573		25,000		-
- staking cost and recording		11,825		82,505		-
	$	325,770	$	166,622	$	74,500

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 11

Note 6 Related Party Transactions– (cont’d)

These transactions were measured by the exchange amount, which is agreed upon by the transacting parties.

Prepaid expenses include $11,360 (2006: Nil) derived from payments to directors.

Accounts payable and accrued liabilities include $101,950 (2006: $64,257) due to significant shareholders, directors and former directors of the Company.

Note 7 Corporation Income Taxes

The Company has accumulated approximately $1,075,000 in Canadian and foreign development and exploration resource expenditures. These amounts are available to carry forward and offset future taxable income at various rates per year.

The Company has approximate accumulated non-capital losses totalling $1,345,000 that can be used to offset taxable income of future years. The non-capital losses expire as follows:

2011	$	152,000
2015		274,000
2016		375,000
2027		544,000
	$	1,345,000

The significant components of the Company’s future income tax assets are as follows:

		2007			2006
Non-capital losses carried forward	$	459,000		$	276,000
Temporary differences		11,000			12,000
Resource property		17,000			15,000
Less: valuation allowance		(487,000	)		(303,000	)
	$	-		$	-

The Company has recorded a valuation allowance against its future income tax assets based on the extent to which it is more likely than not that sufficient taxable income will be realized in the future to utilize all the future tax assets.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 12

Note 8 Segmented Information

The Company operates in one reportable operating segment, being the exploration and evaluation of mineral properties for development. Geographical information is as follows:

					Year ending March 31,
		2007						2006
		Canada			United States			Canada			United States
Net loss	$	(799,694	)	$	(31,584	)	$	(584,379	)	$	(6,040	)
Total assets	$	133,862		$	1,113,875		$	287,919		$	678,479

Note 9 Subsequent Events– Notes 4 and 5

In April 2007, the Company completed a non-brokered private placement of 2,350,000 units at $0.25 per unit resulting in proceeds of $587,500 of which $100,000 is included in share subscriptions as at March 31, 2007. Each unit is comprised of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase one common share of the Company at a price of $0.35 per share until April 19, 2009. Finder’s fees of 55,000 units were issued with respect to this issue.

Also in April, 2007, the Company completed a brokered private placement of 12,053,000 units at $0.25 per unit resulting in net proceeds of $2,955,039. The agent for this private placement elected to receive their commission of 8% of gross proceeds in cash of $36,500 together with 818,000 units. Each unit is comprised of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase one common share of the Company at a price of $0.35 per share until April 26, 2009. The agent also received 1,205,300 compensation options which entitle the agent to purchase that number of units at $0.30 per unit for two years.

The Company has negotiated a private placement of up to 14,050,000 units at $0.40 per unit for proceeds of $5,620,000. Each unit will consist of one common share and one-half of a share purchase warrant. Each whole warrant will entitle the holder thereof to purchase one additional share of the Company at a price of $0.60 per share for a two year period from the date of issue. The Company will pay a finders fee of 10% of the proceeds in cash and 7% in warrants, which are exercisable at $0.65 per warrant over a two year period from the date of issue. This is subject to regulatory approval.

Note 10 Commitments– Note 5

a) The Company has signed three employment agreements with directors or companies controlled by directors of the Company whereby the Company will pay fixed monthly management fees of $7,500, $6,500 and $5,000 respectively. These employment agreements have a term of two years and expire on January 31, 2009.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 13

Note 10 Commitments– Note 5 – (cont’d)

b)	Effective March 14, 2007 the Company is also committed to a one year consulting agreement whereby fees will be paid based on services provided to a maximum of US$8,250 per month.
c)	The Company signed a memorandum of agreement to pay a consultant $3,000 per month for four months commencing February 21, 2007, for internet services. This agreement can be renewed for an additional four months with the issue of 50,000 options.
d)	The Company signed an office lease expiring April 30, 2012 which calls for monthly payments of $4,394 plus an applicable portion of operating costs. Operating costs are subject to change but are currently $3,217 per month. The total estimated annual commitment over the term of the lease, based on the current amount of operating costs is $91,329.

Note 11 Differences Between Canadian and United States Generally Accepted Accounting Principles

The financial statements have been prepared in accordance with accounting principles generally accepted in Canada (“CDN GAAP”) that differ in certain respects with those principles and practices that the Company would have followed had its financial statements been prepared in accordance with accounting principles and practices generally accepted in the United States of America (“US GAAP”).

The Company’s CDN GAAP differ from US GAAP as follows:

Mineral Properties and Deferred Exploration Costs

Under CDN GAAP, mineral properties, including exploration and acquisition costs, are carried at cost and written down if the properties are abandoned, sold or if management decides not to pursue the properties. Under SEC interpretation of US GAAP, the costs associated with mineral rights are capitalized as an intangible asset with all other mineral property and/or exploration costs expensed in the period incurred. Therefore an additional mineral property expense is required under US GAAP.

Exploration Stage Company

The Company is an exploration stage company as defined in Statement of Financial Accounting Standards No. 7, “Accounting and Reporting by Development Stage Enterprises” and the Securities and Exchange Commission Exchange Act Guide 7. The Company is devoting its present efforts to exploring and developing its mineral properties. All losses accumulated since inception has been considered as part of the Company exploration stage activities.

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 14

Note 11 Differences Between Canadian and United States Generally Accepted Accounting Principles – (cont’d)

New Accounting Standards

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

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

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

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

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 15

Note 11 Differences Between Canadian and United States Generally Accepted Accounting Principles – (cont’d)

New Accounting Standards– (cont’d)

Reconciliation of net loss determined in accordance with CDN GAAP to net loss determined under US GAAP are as follows:

		Year ended March 31,
Statement of Operations		2007			2006			2005
Net loss for the year per Canadian GAAP	$	(831,278	)	$	(590,779	)	$	(402,218	)
Mineral property exploration and acquisition
costs		(533,771	)		(521,157	)		(189,140	)
Net loss for the year per US GAAP	$	(1,365,049	)	$	(1,111,936	)	$	(591,358	)
Basic and diluted loss per share per US
GAAP	$	(0.12	)	$	(0.13	)	$	(0.11	)

The effects of the differences in accounting under CDN GAAP and US GAAP on the statements of cash flows and the balance sheets are as follows:

		Year ended March 31,
Statement of Cash Flows		2007			2006			2005
Cash flows used in operating activities per Canadian
GAAP	$	(431,238	)	$	(70,334	)	$	(123,292	)
Mineral properties acquired and exploration costs incurred		(470,060	)		(321,195	)		(93,140	)
Cash flows used in operating activities per US GAAP		(901,298	)		(391,529	)		(216,432	)
Cash flows used in investing activities per Canadian GAAP		(335,974	)		(322,426	)		(93,140	)
Mineral properties acquired and exploration costs incurred		470,060			321,195			93,140
Cash flows provided by investing activities per US GAAP		134,086			(1,231	)		-
Cash flows provided by financing activities per
Canadian and US GAAP		610,201			612,959			106,000
Increase (decrease) in cash per Canadian and US GAAP	$	(157,011	)	$	220,199		$	(110,432	)

Evolving Gold Corp.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2007 and 2006
(Stated in Canadian Dollars) – Page 16

Note 11 Differences Between Canadian and United States Generally Accepted Accounting Principles – (cont’d)

New Accounting Standards– (cont’d)

		Year ended March 31,
Balance Sheet		2007			2006
Total assets per Canadian GAAP	$	1,247,737		$	966,398
Mineral property exploration and acquisition costs		(1,102,515	)		(737,297	)
Total assets per US GAAP		145,222			229,101
Total liabilities per Canadian and US GAAP		(288,995	)		(107,254	)
	$	(143,773	)	$	121,847
Shareholders’ Equity
Deficit, per Canadian GAAP	$	(1,976,393	)	$	(1,145,115	)
Mineral property exploration and acquisition costs		(1,102,515	)		(737,297	)
Deficit, per US GAAP		(3,078,908	)		(1,882,412	)
Share capital per Canadian and US GAAP		2,408,045			1,713,844
Share subscription		100,000			-
Contributed surplus per Canadian and US GAAP		427,090			290,415
	$	(143,773	)	$	121,847