Black Diamond Holdings Corp (Form: 20FR12G, Received: 07/21/2006 11:01:19)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

X	Registration Statement Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934.

	or

	Annual Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 for the Fiscal Year Ended __________________.

	or

	Transition Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act pf 1934. For the transition period from _______ to ________.

Commission file number 000-_____

Black Diamond Holdings Corporation

(Exact name of Registrant as specified in its charter)

(Translation of Registrant's name into English)

Business Corporations Act (British Columbia)

(Jurisdiction of incorporation or organization)

Suite 600, 595 Hornby Street, Vancouver, BC, Canada, V6C 2E8

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class		Name of each exchange on which registered

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

Common Stock, without par value

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

(Title of Class)

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:
______________

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

If this report is an annual or transition report, indicate by check mark if the registrant is not required to filed
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934  ___ Yes   ___ No

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

Indicate which financial statement item the registrant elects to follow:      X       Item 17                Item 18.

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 _

If this is an annual report, indicated by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). ___ Yes ___ No

Black Diamond Holdings Corporation
Table of Contents
			Page No.
Part I
Item	1.	Identity of Directors, Senior Management and Advisors	5
Item	2.	Offer Statistics and Expected Timetable	5
Item	3.	Key Information	5
Item	4.	Information on the Company	11
Item	5.	Operating and Financial Review and Prospects	15
Item	6.	Directors, Senior Management and Employees	17
Item	7.	Major Shareholders and Related Party Transactions	20
Item	8.	Financial Information	21
Item	9.	The Offer and Listing	21
Item	10.	Additional Information.	22
Item	11.	Quantitative and Qualitative Disclosures About Market Risk	29
Item	12.	Description of Securities Other Than Equity Securities	29
Part II
Item	13.	Defaults, Dividend Arrearages and Delinquencies	30
Item	14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	30
Item	15	Controls and Procedures	30
Item	16	[Reserved by SEC]	30
Item	16A	Audit Committee Financial Expert	30
Item	16B	Code of Ethics	30
Item	16C	Principal Accountant Fees and Services	30
Item	16D	Exemptions from the Listing Standards for Audit Committees	30
Item	16E	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	30

Part III
Item	17.	Financial Statements	30
Item	18.	Financial Statements	30
Item	19.	Exhibits	30
Signatures			31

PART I

Introduction . Black Diamond Holding Corporation (together with its subsidiaries, referred to as “Black Diamond,” “Company”, “we”, “our” or “us”), a British Columbia corporation organized in 2000, distributes adult beverages (wine and spirit products) in Canada and the United States. Historically, we have sold most of our products, as a distributor, in Canada (British Columbia and Alberta), and a small amount has been sold in New York. We are now implementing a business plan to produce and market our private label of Liberty Valley ^tm wine products in the United States.

Item 1. Identity of Directors, Senior Management and Advisors . The president of the Company is Bradley J. Moynes, Suite 600, 595 Hornby Street, Vancouver, BC, Canada, V6C 2E8; and the chief financial officer of the Company is Brian Cameron, 12538 - 52A Avenue, Surrey, British Columbia, V3X 3K3. See Item 6 for further information.

The Company’s audit firm is Watson Dauphinee & Masuch, Suite 420, 1501 West Broadway, Vancouver, British Columbia V6J 4Z6. For further information, see Item 16C and the financial statements under Item 8.

Item 2. Offer Statistics and Expected Timetable . Not applicable.

Item 3. Key Information .

A. Selected Financial Data .

The following selected information should be read in conjunction with the Company’s financial statements, and notes, filed with this Form 20-F. This information, and all other financial information in this Form 20-F, is stated in Canadian dollars unless otherwise noted.

The financial information is presented on the basis of generally accepted accounting principles in Canada. With respect to the Company’s financial statements, there are no material differences from applying these principles compared to applying United States generally accepted accounting principles. Please see note 15.

Selected Consolidated Financial and Operating Data


		Year Ended December 31

Operating Data		2005	2004	2003


Sales - gross profit, net of cost of sales	$	36,176	$ 123,516	$ 50,352

Operating profit (loss)		(727)	73,563	(6,197)
(Loss) for the year		(273,567)	(118,432)	(148,391)

(Loss) per common share – basic and diluted		(0.03	(0.01)	(0.02)

Weighted average number of shares outstanding		9,629,693	9,168,780	9,160,247


		At	At
Balance Sheet Data	December		December
		31, 2005	31, 2004


Current assets		53,033	188,568

Current liabilities		194,375	212,894

Total assets		55,517	190,465



Share capital		599,198	369,170

Accumulated Shareholders’ deficit		(950,312)	(676,745)

Dividends per common share		-0-	-0-

Exchange Rates

The Company’s financial statements are stated in Canadian dollars. Due to the fact that the Company is a Canadian corporation and has done all of its business in the last three fiscal years in Canadian dollars, this item is not applicable for this Form 20-F registration statement. The Company realized gains on foreign exchange of $ 6,817 and $27,931 in 2005 and 2004 respectively, and a loss of $(14,163) in 2003. These gains, and the loss, were due to currency swings between the Canadian and United States dollar. We believe that these amounts are not sufficiently large in the context of the Company’s operations to require presentation of exchange rates during the three years.

In this Form 20-F, references to “dollars”, “$” or “Cdn$” are to Canadian dollars, unless otherwise specified. Reference to “US$” refers to United States dollars. The Bank of Canada closing exchange rate on June 20, 2006 was Cdn$0.8958 per US$1.00.

B. Capitalization and Indebtedness

The following table sets forth our capitalization as of December 31, 2005, using:

* 10,735,447 shares outstanding on an actual basis; and

* 12,447,223 shares outstanding on an as adjusted basis to reflect changes through May 31, 2006.

You should read this information together with our consolidated financial statements, including the related notes, and Item 5, “Operating and Financial Review and Prospects.”

	December 31, 2005
	Actual	As Adjusted

Cash and cash equivalents	$ 20,347	$ 53,295

Long-term obligations, less current portion	$212,256	$212,256
Shareholders’ deficiency
Share capital, without par value,
10,735,447 shares outstanding, actual; 12,427,223
shares as adjusted	$599,198	$855,964
Accumulated deficit	$(950,312)	$(950,312)
Shareholders’ deficiency	$(351,114)	$(94,348)
Total Capitalization (long-term debt plus
shareholders’ deficiency)	$(138,858)	$(117,908)

As adjusted information is presented as of May 31, 2006; as adjusted shares and shareholders’ deficit excludes 1,691,776 common shares issuable upon the exercise of warrants outstanding as of May 31, 2006, with an exercise price of $0.30 per share.

C.	Reasons for The Offer and Use of Proceeds . Not applicable.

D.	Forward Looking-Statements and Risk Factors .

Forward-looking Statements . In this document, we are showing you a picture which is part historical (events which have happened) and part predictive (events which we believe will happen). Except for the historical information, all of the information in this document make up "forward looking" statements. Specifically, all statements (other than statements of historical fact) regarding our financial position, business strategy and plans and objectives are forward-looking statements. These forward-looking statements are based on the beliefs of management, as well as assumptions made by and information currently available to management. These statements involve known and unknown risks, including the risks resulting from economic and market conditions, accurately forecasting operating and capital expenditures and capital needs, successful anticipation of competition which may not yet be fully developed, and other business conditions. Our use of the words "anticipate", "believe", "estimate", "expect", "may", "will", "continue" and "intend", and similar words or phrases, are intended to identify forward-looking statements (also known as "cautionary statements"). These statements reflect our current views with respect to future events. They are subject to the realization in fact of assumptions, but what we now believe will occur may turn out to be inaccurate or incomplete. We cannot assure you that our expectations will prove to be correct. Actual operating results and financial performance may prove to be very different from what we now predict or anticipate. The "risk factors" below specifically address all of the factors now identifiable by us that may influence future operating results and financial performance.

Risk Factors .

Risks Related to the Business

We have a history of operating losses and need additional capital to implement our business plan . For the year ended December 31, 2005, we recorded a net loss of $ 273,567 from operations. The financial statements have been prepared using Canadian generally accepted accounting principles applicable to a going concern. However, as shown in note 1 to the financial statements, our ability to continue operations is uncertain. We will need additional capital to fully implement our business plan of selling the Liberty Valley ^TM product line to United States consumers.

The working capital deficit at December 31, 2005 was $ 142,342 (approximately $ 145,000_ at May 31, 2006). Historically, we have met working capital needs primarily by selling equity to Canadian residents, and from loans (including loans from relatives of principal shareholders). We are estimating that at least $500,000 will be needed to begin an active marketing campaign for the Liberty Valley ^TM wines, produce the products in anticipation of sales, and pay general and administrative costs pending receipt of revenues from selling the product. A full implementation of our business plan for the Liberty Valleytm product line will be delayed until the necessary capital is raised. We are seeking sources of equity capital, but there are no agreements in place as of the date this Form 20-F is filed. See Item 5, “Operating and Financial Review and Prospects.”

We are dependent on three officers to run our business, and may not be able to recruit and retain the key personnel needed to build and run a large wine marketing organization . We are dependent on our president Bradley J. Moynes, vice president James Robert Moynes, and chief financial officer Brian Cameron, to run our business at the present time. As we begin a large marketing campaign for the Liberty Valley ^tm portfolio, we will have to recruit personnel with experience in adult beverage marketing. The Company is early stage, so we may not be able to successfully attract and retain such persons.

The Company may not be able to effectively compete in the adult beverage production and sales market . We have distributed wine and spirit products in Canada and the United States previously. Our new business plan is to introduce and sell our own branded Liberty Valley ^tm wines portfolio in the United States.

The premium table wine industry is intensely competitive and highly fragmented. There are approximately 3,700 wineries in the United States alone; the largest sell wine under their proprietary labels and are vertically integrated with their own vineyards, and supplement their grape inventory through contracts with independent producers. Other wineries bottle wine for various private label distributors.

Our products may compete in the premium wine market segments with many other premium domestic, and foreign, wines. Our wines may also compete with popular-priced generic wines and with other alcoholic and, to a lesser degree, non-alcoholic beverages, for shelf space in retail stores and for marketing focus by independent distributors, most of whom carry extensive brand portfolios. Being a fairly new and smaller company than many of our competitors who have greater financial, technical, marketing and public relations resources than we presently have, may put us at a disadvantage. We may be unable to compete successfully against other producers.

We may not be able to establish and maintain an effective distribution network in the United States . The success of the Liberty Valley ^tm product line will depend first on setting up distribution agreements with established beverage distributors who will market the wines to their retail outlet and restaurant customers; and second, on consumers buying the products. Presently, we are in negotiations with two large distributors but

final terms have not been agreed upon. We expect the distributors we appoint to resell the products principally to retail outlets including grocery stores, package liquor stores, club and discount stores, and restaurants. The replacement or poor performance of a distributor, or an inability to collect accounts receivable, could materially and adversely affect the Company’s results of operations and financial condition. Distribution channels for adult beverage products have been consolidating in recent years. In addition, retailers of the Liberty Valley ^tm brand will also be offering other wines that will compete directly with ours for retail shelf space and consumer purchases. There is a risk that resellers may give higher priority to competing products. Our distributors may not continue to repurchase our products or provide their customers with adequate levels of promotional support.

Reliance on limited product sources may adversely impact the Company . We are currently negotiating a supply source from a leading California Winery to produce, bottle, label and ship Tier I and Tier II Liberty Valley ^tm wines. We may seek another source for Tier III (the Signature Series). Assuming we sign agreements for the products, we will be dependent on their timely production and shipping of product that meets our specifications. Failure to meet our specifications could result in alternative sourcing, which may cause interruption to our business.

The Liberty Valley ^tm product line has not been demonstrated to have broad consumer appeal . We have sold only a limited amount of the new product line. While we have spent considerable time and capital investing in the market opportunity there is no assurance Liberty Valley ™ will have broad consumer appeal. After investing time and capital into initial production runs, the products may not sell in expected volumes. The Company is not a large corporation introducing a new product, with the ability to absorb the losses of a failed market introduction. Such a failure could harm the Company’s ability to stay in business.

Variable sales may cause stock price variances . The adult beverage distribution industry is subject to seasonal and quarterly fluctuations in revenues and operating results. Sales volume tends to increase during summer months and the holiday season, but decrease after the holiday season. As a result, our sales and earnings are likely to be highest during the fourth quarter and lowest in the first quarter. This may cause fluctuations in the market price of our common stock.

Vineyard disease and other factors could adversely impact operations . Various diseases, pests, fungi, viruses, drought, frosts and certain other weather conditions can affect the quality and quantity of grapes available to the vineyards we will sign up. Many California vineyards have been infested in recent years with phylloxera. It is possible that our producers’ vineyards could be infected with current or new strains of phylloxera. Pierce's Disease is a vine bacterial disease that has been in California for more than 100 years. Both of these diseases are hard to control after infestation. In addition, future government restrictions on the use of fertilizers and other materials in grape growing may increase vineyard costs and/or reduce production. Grape growing also requires adequate water supplies. A substantial reduction in water supplies could result in material losses of grape crops and vines. If these factors impact our producers, our costs may be increased thus affecting profitability.

Our business requires vigilant protection of intellectual property . Our Liberty Valley ^tm wines are branded consumer products. The market’s ability to distinguish our brand name from the competition depends, in part, on the vigilant enforcement of the name. Competitors may use trademarks, trade-names or brand names that are similar to ours, which could weaken our intellectual property rights. If competitors infringe on our Company, we may have to litigate to protect the rights. Litigation is expensive and would divert attention from business operations, and the end result of any litigation is uncertain.

Product liability claims could adversely impact the business . A discovery of contamination in any of our wines, through tampering or otherwise, could result in a product recall, which would significantly damage our reputation and could seriously harm our business and sales. Although the Company will maintain insurance against such risk, it might not be enough to cover liabilities.

Increased excise taxes or changes in government regulation could hurt operations . The sale of beverage alcohol products in the United States is subject to excise and other taxes, which change from time to time. Significant increases in these taxes could materially and adversely affect the Company’s financial condition or results of operations. Recently, many states have considered proposals to increase, and some of these states have increased, state alcohol excise taxes. New or increased licensing fees, requirements or taxes could also have a material adverse effect on the Company’s financial condition or results of operations.

The beverage alcohol products industry is subject to extensive regulation by federal, state and local governmental agencies concerning such matters as licensing, trade and pricing practices, permitted and required labeling, advertising and relations with wholesalers and retailers. Some federal and state regulations also require warning labels and signage. Changes could require re-labeling of our wines, which is expensive and time-consuming, because any changes must be approved by the Alcohol and Tobacco Tax and Trade Bureau, US Department of the Treasury, (the “TTB”).

Risks Related to Our Stock

If we have to raise capital by selling securities in the future, your rights and the value of your investment in the Company could be reduced . If we issue debt securities, the lenders would have a claim to our assets that would be superior to the stockholder rights. Interest on the debt would increase costs and negatively impact operating results. If we issue more common stock or any preferred stock, your percentage ownership will decrease and your stock may experience additional dilution, and the holders of preferred stock (called preference securities in Canada) may have rights, preferences and privileges which are superior to (more favorable) the rights of holders of the common stock. It is likely the Company will sell securities in the future. The terms of such future transactions presently are not determinable.

If the market for our common stock is illiquid in the future, you could encounter difficulty if you try to sell your stock . Our stock trades on the “pink sheets” but it is not actively traded. If there is no active trading market, you may not be able to resell your shares at any price, if at all. It is possible that the trading market in the future will continue to be "thin" or "illiquid," which could result in increased price volatility. Prices may be influenced by investors' perceptions of us and general economic conditions, as well as the market for beverage companies generally. Until our financial performance indicates substantial success in executing our business plan, it is unlikely that there will be coverage by stock market analysts will be extended. Without such coverage, institutional investors are not likely to buy the stock. Until such time, if ever, as such coverage by analysts and wider market interest develops, the market may have a limited capacity to absorb significant amounts of trading. As the stock is a “penny stock,” there are additional constraints on the development of an active trading market – see the next risk factor.

The penny stock rule operates to limit the range of customers to whom broker-dealers may sell our stock in the market . In general, "penny stock" (as defined in the SEC’s rule 3a51-1 under the Securities Exchange Act of 1934) includes securities of companies which are not listed on the principal stock exchanges, or the Nasdaq National Market or the Nasdaq Capital Market, and which have a bid price in the market of less than $5.00; and companies with net tangible assets of less than $2 million ($5 million if the issuer has been in continuous operation for less than three years), or which has recorded revenues of less than $6 million in the last three years.

As "penny stock," our stock therefore is subject to the SEC’s rule 15g-9, which imposes additional sales practice requirements on broker-dealers which sell such securities to persons other than established customers and "accredited investors" (generally, individuals with net worth in excess of $1 million or annual incomes exceeding $200,000, or $300,000 together with their spouses, or individuals who are the officers or directors of the issuer of the securities). For transactions covered by rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to sale. This rule may adversely affect the ability of broker-dealers to sell our stock, and therefore may adversely affect our stockholders' ability to sell the stock in the public market.

Your legal recourse as a United States investor could be limited . The Company is incorporated under the laws of British Columbia. Most of the assets now are located in Canada. Our directors and officers and the audit firm are residents of Canada. As a result, if any of our shareholders were to bring a lawsuit in the United States against the officers, directors or experts in the United States, it may be difficult to effect service of legal process on those people who reside in Canada, based on civil liability under the Securities Act of 1933 or the Securities Exchange Act of 1934. In addition, we have been advised that a judgment of a United States court based solely upon civil liability under these laws would probably be enforceable in Canada, but only if the U.S. court in which the judgment were obtained had a basis for jurisdiction in the matter. We also have been advised that there is substantial doubt whether an action could be brought successfully in Canada in the first instance on the basis of liability predicated solely upon the United States' securities laws.

Item 4. Information on the Company

A. History and Development of the Company .

The Company is a British Columbia corporation (organized on December 28, 2000, incorporation number BC 0619991, which is the incorporation number reflecting transition to the new corporate statute (the British Columbia Business Corporations Act)). The registered office is at 4 ^th Floor, 888 Fort Street, Victoria, British Columbia V8W 2K1. The corporate office is at suite 600, 595 Hornby Street, Vancouver, British Columbia V6C 2E8; telephone 604.646.5620. We do not have an agent in the United States.

B. Overview

Since 2001, we have been engaged in the distribution of adult beverage products in Canada (primarily in the Provinces of British Columbia and Alberta), through our wholly owned subsidiary, Black Diamond Importers Inc. Beginning in mid-2003, we began marketing private label wine products in the United States under the “Liberty Valley” ^tm name and label, with red and white wines produced in Argentina. These activities were conducted through Black Diamond Importers Inc. ), a wholly-owned subsidiary. The trademark “Liberty Valley ™” originally was issued by the United States Patent and Trademark Office to Black Diamond Holdings, Corp and is now owned by it’s 100% solely owned subsidiary, Liberty Valley Wines, LLC (LVW). We have ceased almost all operations in the Canadian distribution business, and are now preparing to distribute our Liberty Valley ™ product line in the United States. Our wine will be sourced within the United States.

Business in Canada

Our business began with securing the Canadian distribution rights to a United States produced infused vodka product known and branded as Zone Vodka, which had not previously been sold in Canada. We negotiated Canadian distribution rights with the manufacturer and started up a sales and marketing strategy based on creating demand without mass advertising.

The provincial government controls the distribution of adult beverages in Canada and specifically British Columbia. Retail distribution is facilitated through government operated liquor stores and through private beer and wine stores or local agents acting on behalf of the government. For all products imported into British Columbia, the Liquor Distribution Branch (the “LDB”) is the “importer of record.” The LDB sets listings and prices and only those products that secure a listing are made available to the consumer. Sales quotas must be maintained for products to keep their listing.

We were successful in establishing brand recognition in the restaurant and licensed establishment industry to create consumer awareness, and through this a retail demand for its licensed products and consequent listing of these products with the British Columbia LDB. We believe that but for our strategy of creating demand in this manner, a number of products would not have obtained LDB listing and the products would never have been sold in Canada. We refer to this strategy as “pull marketing.” We established the Company as a reputable Canadian distributor of premium adult beverage products. Of critical importance was the identification of new high quality lifestyle products that did not have distribution in Canada and specifically Western Canada. The strategy of driving consumer interest in potential new product listings led to negotiating licensing agreements for a diversified group of product offerings. We secured licenses to distribute Zone Vodka and Redrum as well as a collection of unique French, Argentinean and Chilean wines and tequila products.

Due in part to the structure and regulation of the Canadian beer, wine and spirits industry, the key to success as a distributor requires the securing of listings of products with the local liquor distribution agencies and providing consumer awareness for the products distributed. Capital requirements were limited given that once a listing was secured; the purchaser became the LBD. This made entrance into the business more dependent upon the quality of product and securing the listing, than upon capital necessary to procure inventory. The Company utilized pull marketing to secure listings for its licensed products and established a reputation for quality and support for the British Columbia and Alberta liquor distribution authorities.

While the Canadian business model had attractive features, it was constrained by very small margins and a relatively small consumer base. Growth of the business was a direct function of volume and price. We considered purchasing and/or joint venturing with other distributors whose primary value was the quality of their listings. However, like the Company’s business in Canada, often the value of the smaller distributors depends on relationships they hold with the producer (i.e. the distiller or the vintner). In the absence of a continuing and quantifiable relationship with the producer, value can’t be quantified. Thus, after reviewing several potential acquisitions, we concluded that either substantial capital was required to purchase mature distributors, or in the case of smaller enterprises, the long-term value could not be adequately quantified. Therefore, expansion through acquisition was not pursued.

We began to identify other business opportunities in wine and spirits, and in particular, private labeling our own product for distribution in the United States, where we believe the opportunities for profit margin are significantly greater. In the United States, generally, the adult beverage distribution industry is subject to labeling and production regulations, and taxation, but products are sold by the private sector without having to be approved (“listed”) by the government.

Sales volumes in 2003 through 2006 reflect the change in direction to a new business model. In 2003, sales were $204,661, peaking at $291,091 in 2004, and falling to $124,847 in 2005, as we focused our efforts on a private label for the United States market. By mid-2006, most of our Canadian distribution business was wound up. See Item 5, “Operating and Financial Review and Prospects” below.

Business in the United States

Liberty Valley Private Label

In November 2001, management visited New York City and met with a local chamber of commerce to establish a format for the distribution of a private labeled wine product, known as “Liberty Valley” ^tm , using a “cause marketing” plan for a chamber to assist in providing product awareness and access to restaurants and wine bars. We view cause marketing as a variant on our basic pull marketing strategy, except that it will involve our own “private labeled” products. Part of the cause marketing strategy is to make donations to chambers of commerce or charities, as a means of enlisting the assistance of persons who have business contacts in the restaurant, and wholesale and retail beverage distribution industry, to get visibility (brand awareness) for our product.

We private labeled (had produced and bottled wines bearing our own label) the “Liberty Valley” ^tm Valor Series with compliance and approvals from the BATF – see below. These Cabernet Sauvignon and Chardonnay products were bottled by vintners in Argentina and shipped to the United States. We appointed a national distributor (MHW Ltd. of Manhasset, New York) to serve as the national distributor for the initial Liberty Valley ^tm product line, and began a limited sales and marketing program in New York in mid-2003. MHW also provided shipping and related services. See Item 5, Operating and Financial Review and Prospects. There is no current agreement with MHW.

Trademark and TTB Approval

The United States Patent and Trademark Office originally issued to Black Diamond Holdings, Corp. a registered trademark for the Liberty Valley ^tm name. In 2005, the trademark was sold for $1.00 to Liberty Valley Wines LLC.

All labels for wine and spirit products sold in the United States must be approved by the Alcohol and Tobacco Tax and Trade Bureau, United States Department of the Treasury, (the “TTB”) under the Federal Alcohol Administration Act the first Liberty Valley ^tm label (for an Argentinean produced wine) was submitted to the TTB for approval, and was approved by the TTB on January 14, 2003. The label is unique because it bears an image of the Statue of Liberty, a United States historical monument. The placement of an image of a national historic monument on a wine or spirit label is unique and to our knowledge we hold the only such right to respect to the Statue of Liberty.

Redesigned labels and a marketing plan for the Liberty Valley ^tm wine collection, with improved quality images of the Statue of Liberty, will be submitted to the TTB in the summer 2006.

The Company launched its United States marketing and sales program in August, 2003. During 2004, we developed significant interest for Liberty Valley ^tm in New York City with representatives of the wine industry, the financial community and political circles. The Company’s President, Brad Moynes, was a guest at a United Nations networking event where Liberty Valley ^tm wines were showcased, participated in the Veteran’s Day Parade, and proudly supported New York revitalization efforts, and attended events with the City’s mayor and other dignitaries. Further contacts have been developed in 2005 and 2006.

Marketing and Distribution

Cause Marketing

“Cause marketing” is traditionally understood as a commercial relationship between a charity and a company, which involves associating a charity’s logo with a brand, product or service. The association encourages sales of the product as well as raising funds for the charity. We have intended to develop a variant of cause marketing by agreeing to make contributions to the charities supported by businessmen who have contacts in the wholesale and retail wine distribution industry, as well as the restaurant industry. Contributions will be based on sales volumes (a percentage of gross sales to the introduced contacts), and will be recorded as a cost of sales. We are currently pursuing agreements in principle with a Greenwich Connecticut foundation to support our cause marketing programs.. In our previous business activities in New York, we conducted a cause marketing program with one of the local chambers of commerce.

Distribution

We are in negotiations with several large wine and spirit distributors, as well a multi-state retailer, to represent our portfolio in the United States. We would anticipate that our relationship will be such that the distributor will purchase product directly from us at standard commercial margins within our industry on a wholesale basis.

Wine Supply and Source

We intend to formulate a comprehensive production relationship with a California winery for the Tier I and Tier II Liberty Valley ^tm portfolio (see below). The winery will be an established mid-size vintner that specializes in private label, and produces wine from its own vineyards and from grapes bought from other producers. We expect the relationship to provide consistent quality, firm pricing, bottling, labeling, shipping, and assistance with label compliance from the TTB.

Product Offerings:

We intend to offer a three-tiered price-break portfolio of Liberty Valley ^tm products. We believe each will be of higher quality than competing products. Tiers I and II are expected to be produced from a Lodi, California winery. Tier III likely will be sourced from a Napa Valley, California producer not yet selected.

·	Tier I - the Valor Series - will be a Cabernet Sauvignon and a Chardonnay, with a suggested retail price of approximately US$6.95 per bottle. The product will targeted national retailers and volume accounts. The label is a redesigned version of the original Liberty Valley ^tm from 2003.

·	Tier II - the Freedom Series – will be a Cabernet Sauvignon, Merlot and a Chardonnay, with a suggested retail price of approximately US$9.95.

·	Tier III - the Signature Series – will be a Pinot Noir and a Chardonnay, super premium, priced in the US$19.95 range. These wines will be targeted to exclusive hotels and restaurants, national retail accounts, and other selected markets.

Distribution Agreements :

We are presently seeking distribution relationships with several major distribution companies in the United States who collectively cover the majority of the United States wine and spirits market. No agreements have been signed to date.

Competition

Sustained growth in per capita wine consumption in the United States, and an increasing number of domestic and foreign wine producers has created an extremely competitive environment for the Company. The successful marketing of our quality and reasonably priced wines, with the distinctive Liberty Valley ^tm label, will depend on the ability of our cause marketing contacts to induce the end-point retailers (liquor and wine outlets, restaurants, etc.) to feature and recommend our products.

However, new quality wine products are introduced to the United States market every year, and many of the established brands are backed by large and well financed companies with a history of successful sales with distributors. We cannot offer assurance that our marketing efforts will be successful.

The Company’s Organization Structure .

Black Diamond Holdings Corporation (the “Company”):

Black Diamond Importers Inc. – British Columbia corporation – 100% subsidiary.

Liberty Valley Wines, LLC – Delaware limited liability company – 100% subsidiary.

Property, Plant and Equipment .

The Company currently leases office space (approximately 300 square feet) at Suite 600, 595 Hornby Street, Vancouver, British Columbia V6C 2E8; this lease is for $2,000 per month on a month to month basis

Warehouse space for Canadian product inventory is provided by Container World, a British Columbia company. Container World provides inventory management, prepares and executes customs and duties forms, and freight forwarding services for the Company. Similar services for the initial Liberty Valley ^tm product launch in the United States in 2003 have been provided by MHW Ltd. (Manhasset, New York) in 2003, 2004 and 2005. See Item 5, Operating and Financial Review and Prospects.

We own computer and office furniture and equipment with a depreciated cost of $$2,484 at December 31, 2005. See note 2(b) to the financial statements.

Item 5. Operating and Financial Review and Prospects .

The Company's financial statements are stated in Canadian dollars and have been prepared in accordance with Canadian Generally Accepted Accounting Principles ("Canadian GAAP"). In some respects financial statements prepared under Canadian GAAP may differ materially from financial statements prepared under United States Generally Accepted Accounting Principles ("US GAAP"). As of December 31, 2005 there were no material differences in result between the two GAAP presentations.

The Government of Canada permits a floating exchange rate to determine the value of the Canadian dollar against the United States dollar. We anticipate that almost all of our sales will be made to the United States. If currency exchange rates fluctuate substantially, cash flows from operations could be impacted negatively or positively, depending on direction.

A. Operating Results .

Fiscal Year Ended December 31, 2005, Compared to Fiscal Years Ended December 31, 2004 and 2003 .

Revenues moved up from $204,661 in 2003 to $291,091 for 2004 due to significant emphasis placed on the Canadian market in that year. Revenues dropped to $124,847 for 2005 as we wound down the Canadian distribution business to concentrate on setting up the Liberty Valley ^tm marketing strategy in the United States Operating profits in 2003 and 2004 were a direct function of revenues in those years. The $727 operating loss in 2005 reflects the impact of fixed warehouse and distributor fees paid on lower revenues for the period.

Administration expenses increased by 94% in 2005 compared to 2003, primarily due to amounts paid to set up the Liberty Valley ^tm marketing strategy. Accounting and legal cost declined from 2004 and 2003 (most of these expenses were legal, and related to trademark legal costs), but other categories offset that decline (advertising and promotion, up 266%; consulting, up 59%; travel, up 337%; and office/office rent/telephone, up 48%). In addition, management fees (salaries to officers) was zero in 2003, and $69,360 in 2005.

The “warehouse rent” component of operating expenses in 2003, 2004 and 2005 is comprised of amounts paid to Container World (for products held for sale in Canada) and to MHW Ltd. (for the initial Liberty Valley ^tm product launch in the United States). The $25,517 paid for warehouse rent in 2003 included the expense of shipping two full shipping containers of Liberty Valley product from Argentina. Warehouse rent expense declined in 2004 and 2005 as the Canadian side of the business began winding down and we awaited the outcome of initial marketing in the United States to assess the economics of the Liberty Valley ^tm product line. This expense item will increase to the extent the product line is successful in the United States, but shipping costs will be significantly decreased by having product bottled and shipped within the United States. In mid-2006, we have a very limited amount of inventory in Canada and expected to liquidate most of it during the year. We don’t expect to seek additional products to sell in Canada, but we will keep selling one rum product.

The “distributor fees” component of operating expenses in the three years is generally comprised of government fees and expenses incurred in the distribution business (customs, duties, compliance reporting, and the like). As a percentage of sales, this line item is expected to be significantly lower for sales of United States products in the United States, compared to the distributor fees expense in the three years related to shipping foreign product into Canada and the United States.

We recorded a foreign exchange loss of $14,163 in 2003, but gains for this item in each of 2004 and 2005 as the Canadian dollar (product sales in Canada) appreciated substantially over the cost of goods (purchased outside Canada). Also negatively impacting operations in 2005 was the write-down of $31,800 in obsolete inventory held in by MHW Ltd. on our behalf in New Jersey. The amount of inventory was approximately 1,500 cases of Liberty Valley ^tm cabernet sauvignon and chardonnay (2002) vintage wines that had exceeded the peak “best before date.” The Company decided to destroy the wine rather than risk a poor wine review from consumers. The quality shelf life expectancy for these products is approximately 3.5 years.. At December 31, 2005, inventory was 29% of the amount recorded at December 31, 2004.

B. Liquidity and Capital Resources

Historically, we have financed operations through loans (most from related parties) and by selling equity. At December 31, 2005, total debt was $406,613, of which $229,804 was owed to relatives of Bradley J. Moynes and James Robert Moynes, officers of the Company. Related party debt is unsecured. See note 6 to the financial statements.

In 2005, we sold to residents of Canada 1,266,667 units (one share for $0.15 and one warrant to buy a share for $0.30 until July 31, 2007) for net proceeds of $189,759. We also reduced accounts payable and an unrelated party debt by issuing shares. See note 8 to the financial statements.

In 2006, additional capital in the net amount of $238,766 was raised by the sale of 1,591,776 units, and an account payable to an officer was reduced by the issuance of 50,000 shares. See note 14 to the financial statements.

The working capital deficiency at December 31, 2005 was $141,342. A significant part of the working capital deficiency (estimated to be $$145,000 at May 31, 2006) is attributable to the existence of accounts payable with no offsetting inventory or accounts receivable . Additional capital will be needed to sustain operations and in particular to launch the Liberty Valley ^tm products in 2006 and 2007. We estimate that at a minimum, $500,000 will be required to pay for initial inventory and marketing expenses. It is likely the capital would be raised through equity or subordinated debt.. There are no present arrangements to raise the capital, and it is possible that we will be unsuccessful in this effort.

C.	Research and Development, Patents and Licenses, Etc. Not applicable.

D.	Trend Information .

Management is not aware of any trend, commitment, event or uncertainty that is expected to have a material effect on its business, financial condition or results of operations.

E. Off-Balance Sheet Arrangements . Not applicable. Item 6. Directors, Senior Management, and Employees A. Directors, Senior Management, and Employees .

The following table sets forth the name, positions held and principal occupation of each of our directors, senior management and employees upon whose work the Company is dependent. Information on such persons’ share ownership is under Item 7.

Name and Positions Held	Experience and Principal Business Activities

Bradley J. Moynes (36)	President and CEO, and Secretary-Treasurer of the Company since
President, Chief Executive Officer,	December 2000. From June 2000 until he became an officer and
and Director	Director of the Company, Mr. Moynes was an Investment Advisor
	with Canaccord Capital Corp. From May 1997 to May 2000, he was
	an Investment Advisor with Georgia Pacific Securities Corp.
	Canaccord and Georgia Pacific are broker-dealer firms registered in
	Canada. Mr. Moynes attended Orange Coast College in Costa Mesa,
	California from 1989 to 1991.

Brian Cameron (54)		CFO of the Company and a director since March 11, 2005. Since
Chief Financial Officer, and		1982, Mr. Cameron has been the managing partner for Cameron &
Director		Associates, a financial consulting firm based in Vancouver, British
		Columbia. Mr. Cameron serves as the CFO of several public and
		private corporations. . In 1974, Mr. Cameron received a Bachelor of
		Commerce from the University of British Columbia. Mr. Cameron
		serves as CFO of Battery and Wireless Solutions Inc. a British
		Columbia publicly traded corporation listed for trading on the Toronto
		Venture Exchange as well as several private Canadian and United
		States private companies. None of the enterprises for which Mr.
		Cameron serves as CFO are SEC registered. Dates of service with
		these companies commenced in 2003.

James Robert Moynes (61)		Vice-President of the Company since December 2000. From 1986 to
Vice-President		1997, Mr. Moynes was a licensed real estate salesman in British
		Columbia. He was retired from 1997 until he became an officer of the
		Company in December 2000. Mr. Moynes and his wife Georgia
		Moynes (a principal shareholder of the Company) are the parents of
		Bradley J. Moynes.

B. Compensation .

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation paid to the three executive officers of the Company in the three fiscal years ended December 31, 2005. The table includes compensation paid for service by such persons to subsidiaries.

Executive Compensation Plans and Employment Agreements

					Long Term Compensation
		Annual Compensation				Awards Payouts
(a)	(b)	(c)	(d)	(e)	(f)		(g)	(h)	(i)
				Other
Name				Annual	Restricted			LPIT	All Other
and Current				Compen-	Stock		Options ⁽⁶⁾	Pay-	Compen-
Principal				sation	Award(s)		or	Outs	sation
Position	Year	Salary($)	Bonus($)	($)	($)		SARs(#)	($)	($) ⁽⁷⁾
Bradley J. Moynes,	2005	$34,680	$ -0-	$-0-	$ -0-		-0-	$-0-	$ -0-
President and CEO	2004		-0-	-0-	-0-		-0-	$-0-	-0-
	2003		-0-	-0-	-0-		-0-	-0-	-0-
James Robert	2005	$34,680	$ - 0-	$-0-	$ -0-		-0-	$-0-	$ -0-
Moynes,
Vice-President	2004		-0-	-0-	-0-		-0-	-0-	-0-
	2003		-0-	-0-	-0-		-0-	-0-	-0-
Brian Cameron,	2005	$30,526	$ -0-	$-0-	$ -0-		-0-	$-0-	$-0-
CFO

Management Agreements

On January 1, 2003, the Company signed ten-year Management Agreements with Brad J. Moynes and James Robert Moynes, to pay US$36,000 annually to each for service as officers. In 2005 and 2004, US$34,680 and US$20,000 was paid to each of them; the balance which would have been owed under the Management Agreements was waived by them. Nothing was paid to them in 2003, and they have waived all amounts for 2003.

On January 1, 2006, the Company signed one-year Management Agreements with Bradley J. Moynes and James Robert Moynes, replacing the 2003 agreements. Under the new Management Agreements, the Company has agreed to pay each officer US$60,000 annually.

On February 25, 2005, the Company signed a three month Consulting Agreement (for general financial and business consulting services) with Cameron & Associates, and paid C&A $10,500 for the three months ending April 30, 2005. On July 22, 2005, the Company signed a six month Consulting Agreement with C&A (through December 31, 2005), and paid C&A $21,000; this agreement also covered general financial and business consulting services. Brian Cameron is the sole owner of C&A. There presently is no written agreement between C&A and the Company for Mr. Cameron’s continuing service as an officer of the Company.

Equity Compensation Plans . The Company has not established any option or other equity compensation plan for officers and employees, but may do so in the future.

C. Board Practices .

Each director holds office until the next annual general meeting of the Company unless his office is earlier vacated in accordance with the Articles of the Company or the Canada Business Corporations Act.

During the most recently completed fiscal year, there are no arrangements (standard or otherwise) under which directors of the Company were compensated by the Company or its subsidiaries for services rendered in their capacity as directors, nor were any amounts paid to the directors for committee participation or special assignments, other than the granting of stock options. There were no arrangements under which the directors would receive compensation or benefits in the event of the termination of that office.

The Company does not have audit, compensation, or corporate governance committees at the present time. We intend to apply for trading on the OTCBB, so we believe we are not required to have such committees.

D. Employees .

The Company currently has three officers. Employees will be added in sales and marketing as warranted.

E. Share Ownership .

Our directors and officers own the indicated shares of common stock as at the date hereof; percentages are based on 12,427,223 shares outstanding on May 31, 2006

		Percentage of
		outstanding at May
Name	No. of Shares	31, 2006

Bradley J. Moynes	3,675,625	29.7%

Brian Cameron	224,980	1.8%

James Robert Moynes	1,888,740	15.2%


Item 7. Major Shareholders and Related Party Transactions .

A. Major Shareholders .

To our knowledge, other than the directors and officers as disclosed above, the only other persons beneficially owning, directly or indirectly, or exercising control or direction over, common shares carrying more than 5% of the voting rights attached to the 12,427,223 shares outstanding at May 31, 2006, is

	Number of
Name	shares	Percentage owned

Georgia	887,731	7.1%
Moynes


·	Mrs. Moynes is the wife of James Robert Moynes and the mother of Bradley J. Moynes.

The Company has approximately 50 shareholders of record. The number of shareholders holding securities beneficially through street name nominees, as reflected in the record position of Cede & Co. and other intermediaries, is approximately 16.22% . None of the major shareholders, if any, have different voting rights.

To the best of our knowledge, approximately 83.78 % of the Company’s common shares are owned by residents of Canada. The number of shareholders holding securities beneficially through street name nominees, as reflected in the record position of Cede & Co. and other intermediaries, who may be residents of other countries, is approximately 16.22% . These assumptions are based on our shareholder registry issued by Pacific Stock Transfer as of May 31, 2006 that approximately 83.78% of the shares are owned by Canadian residents.

To our knowledge, we are not directly or indirectly owned or controlled by another corporation or by any foreign government, or by any other natural or legal person, nor are there any arrangements which may result in a change of control of the Company.

B. Related Party Transactions .

On August 23, 2003, we borrowed $159,914 from Georgia Moynes (wife of James Robert Moynes and mother of Bradley J. Moynes, officers of the Company). The promissory note is unsecured, bears annual interest at 12%, and is due on January 31, 2007. We paid $10,000 against principal in 2005.

Paseo Investments Ltd., a private company owned by James Robert Moynes, loaned $62,342 to the Company on August, 2001. This debt is unsecured, does not bear interest, and is due on December 31, 2007.

At December 31, 2005, $17,548 was owed to Bradley J. Moynes, . These amounts are unsecured, do not bear interest, and have no specific terms of repayment.

C. Interest of Experts and Counsel . None.

Item 8. Financial Information . See the financial statements under Item 17.

Item 9. The Offer and Listing .

A. Offer and Listing Details .

The Company's common shares are traded on the “pink sheets” under the symbol BDMHF; the shares are not listed on any exchange or traded on any other medium. Trading commenced in the first quarter 2004.

The following table sets forth the high and low closing prices on the pink sheets for the periods indicated.

By Quarters in 2004 and 2005	High Sales Price	Low Sales Price

Fourth Quarter 2005	$0.30	$0.10
Third Quarter 2005	$0.30	$0.10
Second Quarter 2005	$0.30	$0.10
First Quarter 2005	$0.30	$0.10
Fourth Quarter 2004	$0.30	$0.10
Third Quarter 2004	$0.30	$0.10
Second Quarter 2004	$0.30	$0.10
First Quarter 2004	$0.30	$0.10

	On June 15, 2006, the closing price was $0.25 per share.

B.	Plan of Distribution . Not applicable.

C.	Markets . See "Offer and Listing Details" above.

D.	Selling Shareholders . Not applicable.

E.	Dilution . Not applicable.

F.	Expenses of the Issue . Not applicable.

Item 10. Additional Information .

A.	Share Capital . Not required.

B.	Memorandum and Articles of Association .

The Company is registered under the Canada Business Corporations Act ( BC 0619991).

With respect to directors, under the by-laws, a director who is a party to a material contract or proposed material contract with us, or is a director or officer of or has a material interest in any person who is a party to a material contract or proposed material contract with us, must disclose to us in writing the nature and extent of such interest. An interested director can vote on only a limited number of such matters (securing a loan from the director to the Company, his remuneration, indemnity or insurance, or a contract with an affiliate) provided the interest is disclosed. Otherwise, even with disclosure of the interest, such a director cannot vote on a material contract or proposed material contract. A contract approved by the board of directors is not voidable because one or more directors has a conflict of interest, if the conflict is disclosed and the interested director(s) do not vote on the matter. Subject to the conflict of interest provisions summarized above, there is no restriction in the by-laws on the power of the board of directors to have the Company borrow money, issue debt obligations, or secure debt or other obligations of the Company. The by-laws contain no provision for the retirement or non-retirement of directors under an age limit requirement. A director is not required to hold any shares of the Company in order to be a director.

The Articles of the Company provide for the issuance of 100,000,000 shares of common stock, without par value. All holders of common stock have equal voting rights, equal rights to dividends when and if declared, and equal rights to share in assets upon liquidation of the corporation. The common shares are not subject to any redemption or sinking fund provisions. Directors serve from year to year, there being no provision for a staggered board; cumulative voting for directors is not allowed. Between annual general meetings, the existing board can appoint one or more additional directors to serve until the next annual general meeting, but the number of additional directors shall not at any time exceed one-third of the number of directors who held office at the expiration of the last annual meeting. All issued and outstanding shares are fully paid and non-assessable securities.

In order to change the rights of the holders of common stock, the passing of a special resolution by such shareholders is required, being the affirmative vote of not less than 2/3 of the votes cast in person or by proxy at a duly called meeting of shareholders.

An annual meeting of shareholders must be called by the board of directors not later than 15 months after the last annual meeting. The board at any time may call a special meeting of shareholders. Notice of any meeting must be sent not less than 21 and not more than 50 days before the meeting, to every shareholder entitled to vote at the meeting. All shareholders entitled to vote are entitled to be present at a shareholders meeting. A quorum is the presence in person or by proxy of the holders of at least 5% of the issued and outstanding shares of common stock.

Except under the Investment Canada Act, there are no limitations specific to the rights of non-Canadians to hold or vote our shares under the laws of Canada or our charter documents. The Investment Canada Act ("ICA") requires a non-Canadian making an investment which would result in the acquisition of control of a Canadian business, the gross value of the assets of which exceed certain threshold levels or the business activity of which is related to Canada's cultural heritage or national identity, to either notify, or file an application for review with, Investment Canada, the federal agency created by the ICA. The notification procedure involves a brief statement of information about the investment on a prescribed form which is required to be filed with Investment Canada by the investor at any time up to 30 days after implementation of the investment. It is intended that investments requiring only notification will proceed without intervention by government unless the investment is in a specific type of business related to the scope of the ICA. If an investment is reviewable under the ICA, an application for review in the prescribed form normally is required to be filed with Investment Canada before the investment is made and it cannot be implemented until

completion of review and Investment Canada has determined that the investment is likely to be of net benefit to Canada. If the agency is not so satisfied, the investment cannot be implemented if not made, or if made, it must be unwound.

C. Material Contracts .

Except as otherwise disclosed in this Form 20-F, we have no material contracts.

D. Exchange Controls .

There are no laws, decrees or regulations in Canada relating to restrictions on the export or import of capital, or affecting the remittance of interest, dividends or other payments to non-resident holders of our shares of common stock.

E. Taxation .

Canada .

Canadian Federal Income Tax Information for United States Residents

The following is a discussion of material Canadian federal income tax considerations generally applicable to holders of our common shares who acquire such shares in this offering and who, for purposes of the Income Tax Act (Canada) and the regulations thereunder, or the Canadian Tax Act:

deal at arm’s length and are not affiliated with us;
hold such shares as capital property;
do not use or hold (and will not use or hold) and are not deemed to use or hold our common shares, in or in the course of carrying on business in Canada;
have not been at any time residents of Canada; and
are, at all relevant times, residents of the United States, or U.S. Residents, under the Canada- United States Income Tax Convention (1980), or the Convention.

TAX MATTERS ARE VERY COMPLICATED AND THE CANADIAN FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON SHARES WILL DEPEND UPON THE STOCKHOLDER’S PARTICULAR SITUATION. THE SUMMARY OF MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS INTENDED TO PROVIDE ONLY A GENERAL SUMMARY AND IS NOT INTENDED TO BE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES.

THIS DISCUSSION DOES NOT INCLUDE A DESCRIPTION OF THE TAX LAWS OF ANY PROVINCE OR TERRITORY WITHIN CANADA. ACCORDINGLY, HOLDERS AND PROSPECTIVE HOLDERS OF OUR COMMON SHARES ARE ENCOURAGED TO CONSULT WITH THEIR OWN TAX ADVISERS ABOUT THE TAX CONSEQUENCES TO THEM HAVING REGARD TO THEIR OWN PARTICULAR CIRCUMSTANCES, INCLUDING ANY

CONSEQUENCES OF PURCHASING, OWNING OR DISPOSING OF OUR COMMON SHARES ARISING UNDER CANADIAN FEDERAL, CANADIAN PROVINCIAL OR TERRITORIAL, U.S. FEDERAL, U.S. STATE OR LOCAL TAX LAWS OR TAX LAWS OF JURISDICTIONS OUTSIDE THE UNITED STATES OR CANADA.

This summary is based on the current provisions of the Canadian Tax Act, proposed amendments to the Canadian Tax Act publicly announced by the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”), and the provisions of the Convention as in effect on the date hereof. No assurance can be given that the Proposed Amendments will be entered into law in the manner proposed, or at all. No advance income tax ruling has been requested or obtained from the Canada Revenue Agency to confirm the tax consequences of any of the transactions described herein.

This summary is not exhaustive of all possible Canadian federal income tax consequences for U.S. Residents, and other than the Proposed Amendments, does not take into account or anticipate any changes in law, whether by legislative, administrative, governmental or judicial decision or action, nor does it take into account Canadian provincial, U.S. or foreign tax considerations which may differ significantly from those discussed herein. No assurances can be given that subsequent changes in law or administrative policy will not affect or modify the opinions expressed herein.

A U.S. Resident will not be subject to tax under the Canadian Tax Act in respect of any capital gain on a disposition of our common shares unless such shares constitute “taxable Canadian property”, as defined in the Canadian Tax Act, of the U.S. Resident and the U.S. Resident is not eligible for relief pursuant to the Convention. Our common shares will not constitute “taxable Canadian property” if, at any time during the 60-month period immediately preceding the disposition of the common shares, the U.S. Resident, persons with whom the U.S. Resident did not deal at arm’s length, or the U.S. Resident together with all such persons, did not own 25% or more of the issued shares of any class or series of shares of our capital stock. In addition, the Convention generally will exempt a U.S. Resident who would otherwise be liable to pay Canadian income tax in respect of any capital gain realized by the U.S. Resident on the disposition of our common shares, from such liability provided that the value of our common shares is not derived principally from real property situated in Canada. The Convention may not be available to a U.S. Resident that is a U.S. LLC which is not subject to tax in the U.S.

Amounts in respect of our common shares paid or credited or deemed to be paid or credited as, on account or in lieu of payment of, or in satisfaction of, dividends to a U.S. Resident will generally be subject to Canadian non-resident withholding tax at the rate of 25%. Currently, under the Convention the rate of Canadian nonresident withholding tax will generally be reduced to:

5% of the gross amount of dividends if the beneficial owner is a company that is resident in the U.S. and that owns at least 10% of our voting shares; or
15% of the gross amount of dividends if the beneficial owner is some other resident of the U.S.

United States Federal Income Tax Information for United States Holders

The following is a general discussion of material U.S. federal income tax consequences of the ownership and disposition of our common shares by U.S. Holders (as defined below). This discussion is based on the United States Internal Revenue Code of 1986, as amended, Treasury regulations promulgated thereunder, and

judicial and administrative interpretations thereof, all as in effect at the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion only addresses the tax consequences for U.S. Holders that will hold their common shares as a “capital asset” and does not address U.S. federal income tax consequences that may be relevant to particular U.S. Holders in light of their individual circumstances or U. S. Holders that are subject to special treatment under certain U.S. federal income tax laws, such as:

		tax-exempt organizations and pension plans;

		persons subject to alternative minimum tax;

		banks and other financial institutions;

		insurance companies;

		partnerships and other pass-through entities (as determined for United States federal income tax purposes);

		broker-dealers;

		persons who hold their common shares as a hedge or as part of a straddle, constructive sale, conversion transaction, and other risk management transaction; and

		persons who acquired their common shares through the exercise of employee stock options or otherwise as compensation.

As used herein, the term “U.S. Holder” means a beneficial owner of our common shares that is:

	an individual citizen or resident of the United States;

	a corporation, a partnership or entity treated as a corporation or partnership for U.S. federal income tax purposes, that is created or organized in or under the laws of the United States or any political subdivision thereof;

	an estate the income of which is subject to U.S. federal income taxation regardless of its source; and

	a trust if both:

		a United States court is able to exercise primary supervision over the administration of the trust; and

		one or more United States persons have the authority to control all substantial decisions of the trust.

TAX MATTERS ARE VERY COMPLICATED AND THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON SHARES WILL DEPEND UPON THE STOCKHOLDER’S PARTICULAR SITUATION. THE SUMMARY OF MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS INTENDED TO PROVIDE ONLY A GENERAL SUMMARY AND IS NOT INTENDED TO BE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.

NOTE THAT THIS DISCUSSION DOES NOT INCLUDE A DESCRIPTION OF THE TAX LAWS OF ANY STATE OR LOCAL GOVERNMENT WITHIN THE UNITED STATES. ACCORDINGLY, HOLDERS AND PROSPECTIVE HOLDERS OF OUR COMMON SHARES ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS ABOUT THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON SHARES.

Ownership of Shares

The gross amount of any distribution received by a U.S. Holder with respect to our common shares generally will be included in the U.S. Holder’s gross income as a dividend to the extent attributable to our current and accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent a distribution received by a U.S. Holder is not a dividend because it exceeds the U.S. Holder’s pro rata share of our current and accumulated earnings and profits, it will be treated first as a tax-free return of capital and reduce (but not below zero) the adjusted tax basis of the U.S. Holder’s shares. To the extent the distribution exceeds the adjusted tax basis of the U.S. Holder’s shares, the remainder will be taxed as capital gain (the taxation of capital gain is discussed under the heading “Sale of Shares” below).

For taxable years beginning before January 1, 2009, dividends received by non-corporate U.S. Holders from a qualified foreign corporation are taxed at the same preferential rates that apply to long-term capital gains. A foreign corporation is a “qualified foreign corporation” if it is eligible for the benefits of a comprehensive income tax treaty with the United States (the income tax treaty between Canada and the United States is such a treaty) or the shares with respect to which such dividend is paid is readily tradable on an established securities market in the United States (such as the Nasdaq Capital Market). Notwithstanding satisfaction of one or both of these conditions, a foreign corporation is not a qualified foreign corporation if it is a passive foreign investment company (“PFIC”) for the taxable year of the corporation in which the dividend is paid or the preceding taxable year. (Whether a foreign corporation is a PFIC is discussed below under the heading “Passive Foreign Investment Companies”). A foreign corporation that is a PFIC for any taxable year within a U.S. person’s holding period generally is treated as a PFIC for all subsequent years in the U.S. person’s holding period. Although we have not been, are not now, and don’t expect to be a PFIC, and we don’t expect to pay dividends, you should be aware of the following matters in the event that we do become a PFIC and do pay dividends.

If we were to become a PFIC, then U.S. Holders who acquire our common shares may be treated as holding shares of a PFIC throughout their holding period for the purpose of determining whether dividends received from us are dividends from a qualified foreign corporation. As a consequence, dividends received by U.S. Holders may not be eligible for taxation at the preferential rates applicable to long-term capital gains.

If a distribution is paid in Canadian dollars, the U.S. dollar value of such distribution on the date of receipt is used to determine the amount of the distribution received by a U.S. Holder. A U.S. Holder who continues to hold such Canadian dollars after the date on which they are received, may recognize gain or loss upon their disposition due to exchange rate fluctuations. Generally such gains and losses will be ordinary income or loss from U.S. sources.

U.S. Holders may deduct Canadian tax withheld from distributions they receive for the purpose of computing their U.S. federal taxable income (or alternatively a credit may be claimed against the U.S. Holder’s U.S. federal income tax liability as discussed below under the heading “Foreign Tax Credit”). Corporate U.S. Holders generally will not be allowed a dividends received deduction with respect to dividends they receive from us.

Foreign Tax Credit

Generally, the dividend portion of a distribution received by a U.S. Holder will be treated as income in the passive income category for foreign tax credit purposes. Subject to a number of limitations, a U.S. Holder may elect to claim a credit against its U.S. federal income tax liability (in lieu of a deduction) for Canadian withholding tax deducted from its distributions. The credit may be claimed only against U.S. federal income tax attributable to a U.S. Holder’s passive income that is from foreign sources.

If we were to become a qualified foreign corporation with respect to a non-corporate U.S. Holder, dividends received by such U.S. Holder will qualify for taxation at the same preferential rates that apply to long-term capital gains. In such case, the dividend amount that would otherwise be from foreign sources is reduce by multiplying the dividend amount by a fraction, the numerator of which is the U.S. Holder’s preferential capital gains tax rate and the denominator of which is the U.S. Holder’s ordinary income tax rate. The effect is to reduce the dividend amount from foreign sources, thereby reducing the U.S. federal income tax attributable to foreign source income against which the credit may be claimed. Canadian withholding taxes that cannot be claimed as a credit in the year paid may be carried back to the preceding year and then forward 10 years and claimed as a credit in those years, subject to the same limitations referred to above.

The rules relating to the determination of the foreign tax credit are very complex. U.S. Holders and prospective U.S. Holders should consult their own tax advisors to determine whether and to what extent they would be entitled to claim a foreign tax credit.

Sale of Shares

Subject to the discussion of the “passive foreign investment company” rules below, a U.S. Holder generally will recognize capital gain or loss upon the sale of our shares equal to the difference between: (a) the amount of cash plus the fair market value of any property received; and (b) the U.S. Holder’s adjusted tax basis in such shares. This gain or loss generally will be capital gain or loss from U.S. sources, and will be long-term capital gain or loss if the U.S. Holder held its shares for more than 12 months. Generally, the net long-term capital gain of a non-corporate U.S. Holder from the sale of shares is subject to taxation at a top marginal rate of 15%. Capital gain that is not long-term capital gain is taxed at ordinary income rates. The deductibility of capital losses is subject to certain limitations.

Passive Foreign Investment Companies

We will be a PFIC if in any taxable year either: (a) 75% or more of our gross income consists of passive income; or (b) 50% or more of the value of our assets is attributable to assets that produce, or are held for the

production of, passive income. Subject to certain limited exceptions, if we meet the gross income test or the asset test for a particular taxable year, our shares held by a U.S. Holder in that year will be treated as shares of a PFIC for that year and all subsequent years in the U.S. Holder’s holding period, even if we fail to meet either test in a subsequent year.

If we were a PFIC in the future, gain realized by a U.S. Holder from the sale of PFIC Shares and certain dividends received on such shares would be subject to tax under the excess distribution regime, unless the U.S. Holder made one of the elections discussed below. Under the excess distribution regime, federal income tax on a U.S. Holder’s gain from the sale of PFIC Shares would be calculated by allocating the gain ratably to each day the U.S. Holder held its shares. Gain allocated to years preceding the first year in which we were a PFIC in the U.S. Holder’s holding period, if any, and gain allocated to the year of disposition would be treated as gain arising in the year of disposition and taxed as ordinary income. Gain allocated to all other years would be taxed at the highest tax rate in effect for each of those years. Interest for the late payment of tax would be calculated and added to the tax due for each of the PFIC Years, as if the tax was due and payable with the tax return filed for that year. A distribution that exceeds 125% of the average distributions received on PFIC Shares by a U.S. Holder during the 3 preceding taxable years (or, if shorter, the portion of the U.S. Holder’s holding period before the taxable year) would be taxed in a similar manner.

A U.S. Holder may avoid taxation under the excess distribution regime by making a qualified electing fund (“QEF”) election. For each year that we would meet the PFIC gross income test or asset test, an electing U.S. Holder would be required to include in gross income, its pro rata share of our net ordinary income and net capital gains, if any. The U.S. Holder’s adjusted tax basis in our shares would be increased by the amount of such income inclusions. An actual distribution to the U.S. Holder out of such income generally would not be treated as a dividend and would decrease the U.S. Holder’s adjusted tax basis in our shares. Gain realized from the sale of our shares covered by a QEF election would be taxed as a capital gain. U.S. Holders will be eligible to make QEF elections, only if we agree to provide to the U.S. Holders, which we do, the information they will need to comply with the QEF rules. Generally, a QEF election should be made by the due date of the U.S. Holder’s tax return for the first taxable year in which the U.S. Holder held our shares that includes the close of our taxable year for which we met the PFIC gross income test or asset test. A QEF election is made on IRS Form 8621.

A U.S. Holder may also avoid taxation under the excess distribution regime by timely making a mark-to-market election. An electing U.S. Holder would include in gross income the increase in the value of its PFIC Shares during each of its taxable years and deduct from gross income the decrease in the value of its PFIC Shares during each of its taxable years. Amounts included in gross income or deducted from gross income by an electing U.S. Holder are treated as ordinary income and ordinary deductions from U.S. sources. Deductions for any year are limited to the amount by which the income inclusions of prior years exceed the income deductions of prior years. Gain from the sale of PFIC Shares covered by an election is treated as ordinary income from U.S. sources while a loss is treated as an ordinary deduction from U.S. sources only to the extent of prior income inclusions. Losses in excess of such prior income inclusions are treated as capital losses from U.S. sources. A mark-to-market election is timely if it is made by the due date of the U.S. Holder’s tax return for the first taxable year in which the U.S. Holder held our shares that includes the close of our taxable year for which we met the PFIC gross income test or asset test. A mark-to-market election is also made on IRS Form 8621.

As noted above, a PFIC is not a qualified foreign corporation and hence dividends received from a PFIC are not eligible for taxation at preferential long-term capital gain tax rates. Similarly, ordinary income included in the gross income of a U.S. Holder who has made a QEF election or a market-to-market election, and dividends received from corporations subject to such election, are not eligible for taxation at preferential long-term capital gain rates. The PFIC rules are extremely complex and could, if they apply, have significant, adverse effects on the taxation of dividends received and gains realized by a U.S. Holder. Accordingly, prospective U.S. Holders are strongly urged to consult their tax adviser concerning the potential application of these rules to their particular circumstances.

Controlled Foreign Corporation

Special rules apply to certain U.S. Holders that own stock in a foreign corporation that is classified as a “controlled foreign corporation” (“CFC”). We do not expect to be classified as a CFC. However, future ownership changes could cause us to become a CFC. Prospective U.S. Holders are urged to consult their tax advisor concerning the potential application of the CFC rules to their particular circumstances.

Information Reporting and Backup Withholding

United States information reporting and backup withholding requirements may apply with respect to distributions to U.S. Holders, or the payment of proceeds from the sale of shares, unless the U.S. Holder: (a) is an exempt recipient (including a corporation); (b) complies with certain requirements, including applicable certification requirements; or (c) is described in certain other categories of persons. The backup withholding tax rate is currently 28%. Any amounts withheld from a payment to a U.S. Holder under the backup withholding rules may be credited against any U.S. federal income tax liability of the U.S. Holder and may entitle the U.S. Holder to a refund.

F.	Dividends and Paying Agents . Not applicable.

G.	Statements by Experts . Not applicable.

H.	Documents on Display . Not applicable.

I.	Subsidiary Information . See the notes to the financial statements.

Item 11. Quantitative and Qualitative Disclosures About Market Risk . Not applicable

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 . Not applicable.
Item 16A.	Audit Committee Financial Experts . Not applicable.
Item 16B.	Code of Ethics . Not applicable.
Item 16C.	Principal Accountant Fees and Services . Not applicable.
Item 16D.	Exemptions from the Listing Standards for Audit Committees . Not applicable.
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers . None.

PART III

Item 17. Financial Statements .

See the financial statements of the Company for the three fiscal years ended December 31, 2005, the notes thereto, and the auditors’ reports thereon, which are included in this Form 20-F. All of the financial information is presented in accordance with Canadian GAAP; however, as stated in the notes, there are no material differences between Canadian GAAP and United States GAAP as applied to our financial statements.

Item 18. Financial Statements . Not applicable.

Item 19. Exhibits

Exhibit No.	Description of Exhibit

3.(i)	Notice of Articles and Transition Application

3.(ii)	Articles (Schedule “A”)

4(1)	Management Agreement of January 1, 2006 (Bradley James Moynes)

4(2)	Management Agreement of January 1, 2006 (James Robert Moynes)

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

		Black Diamond Holdings Corporation


Date:	July 20, 2006	/s/ Bradley J. Moynes	.
		Bradley J. Moynes,
		President

Black Diamond Holdings Corporation

December 31, 2005 and 2004
(Expressed in Canadian Dollars)

Consolidated Financial Statements

	Page

Management’s Responsibility for Financial Reporting	2
Auditors’ Report	3
Comments by Auditors for U.S. Readers on Canada-
U.S. Reporting Difference	4
Consolidated Balance Sheets	5
Consolidated Statements of Operations and Deficit	6
Consolidated Statements of Cash Flows	7
Notes to the Consolidated Financial Statements	8-16

Management’s Responsibility for Financial
Reporting

The consolidated financial statements have been prepared by and are the responsibility of
the management of the Company. The consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in Canada, using
management’s best estimates and judgments based on currently available information.
When alternative accounting methods exist, management has chosen those it considers
most appropriate in the circumstances.

The Company maintains an appropriate system of internal controls to provide reasonable
assurance that financial information is accurate and reliable and that the Company’s assets
are appropriately accounted for and adequately safeguarded.

The Company’s independent auditors, Watson Dauphinee & Masuch, Chartered
Accountants, were appointed by the shareholders to conduct an audit in accordance with
generally accepted auditing standards in Canada and the Public Company Accounting
Oversight Board (United States), and their report follows.

“Bradley Moynes”
Bradley J. Moynes
President and Chief Executive Officer

“Brian Cameron”
Brian Cameron
Chief Financial Officer

Auditors’ Report

To the Shareholders of:
Black Diamond Holdings Corporation

We have audited the Consolidated Balance Sheets of Black Diamond Holdings
Corporation as at December 31, 2005 and 2004 and the Consolidated Statements of
Operations and Deficit and Cash Flows for each of the years in the three-year period
ended December 31, 2005. 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 standards of the Public Company Accounting Oversight Board (United
States). 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 December 31, 2005 and 2004 and the
results of its operations and the changes in its cash flows for each of the years in the three-
year period ended December 31, 2005 in accordance with Canadian generally accepted
accounting principles.

“Watson Dauphinee & Masuch”
Chartered Accountants

Vancouver, B.
May 31, 2006

Comments by Auditors for U.S. Readers on
Canada-U.S. Reporting Difference

In the United States, reporting standards for auditors require the addition of an
explanatory paragraph (following the opinion paragraph) when the financial statements
are affected by conditions and events that cast substantial doubt on the Company’s ability
to continue as a going concern, such as those described in Note 1 to the consolidated
financial statements. Our report to the shareholders dated May 31, 2006 is expressed in
accordance with Canadian reporting standards which do not permit a reference to such
events and conditions in the auditors’ report when they are adequately disclosed in the
consolidated financial statements.

“Watson Dauphinee & Masuch”
Chartered Accountants

Vancouver, B.C.
May 31, 2006

BLACK DIAMOND HOLDINGS CORPORATION

Consolidated Balance Sheets
As at December 31, 2005 and 2004
(Expressed in Canadian Dollars)

	2005	2004
	$	$
ASSETS

CURRENT
Cash	20,347	22,182
Accounts Receivable	10,418	3,553
Inventory	15,115	144,680
Due from Black Diamond Trading Ltd. (Note 3)	6,883	6,883
Due from Shareholders (Note 4)	-	11,270
Prepaid Expenses	270	-


	53,033	188,568

Property and Equipment (Note 5)	2,484	1,897


	55,517	190,465



LIABILITIES

CURRENT
Accounts Payable and Accrued Liabilities	147,752	212,894
Current Portion of Promissory Notes Payable (Note 6)	29,075	-
Due to Shareholders (Note 4)	17,548	-


	194,375	212,894

Promissory Notes Payable (Note 6)	149,914	222,804
Due to Paseo Investments Ltd. (Note 7)	62,342	62,342


	406,631	498,040



SHAREHOLDERS’ DEFICIENCY

Share Capital (Note 8)	599,198	369,170
Deficit	(950,312)	(676,745)


	(351,114)	(307,575)


	55,517	190,465

Nature and Continuance of Operations (Note 1)
Commitment (Note 11)
Subsequent Events (Note 14)


Approved on Behalf of the Board:


“Bradley Moynes”	“Brian Cameron”

Bradley J. Moynes, Director	Brian Cameron, Director

BLACK DIAMOND HOLDINGS CORPORATION

Consolidated Statements of Operations and Deficit

For the Years Ended December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

	2005	2004	2003
	$	$	$

SALES	124,847	291,091	204,661
COST OF SALES	88,671	167,575	154,309


GROSS PROFIT	36,176	123,516	50,352


OPERATING EXPENSES
Distributor Fees	22,368	38,330	30,968
Warehouse Rent	14,535	11,623	25,581


	36,903	49,953	56,549


OPERATING (LOSS) PROFIT	(727)	73,563	(6,197)



ADMINISTRATION EXPENSES
Accounting and Legal	18,923	30,100	36,564
Advertising and Promotion	44,236	12,934	16,606
Amortization	692	677	933
Automobile	3,991	3,121	2,403
Consulting Fees (Note 10(b))	41,086	61,197	25,782
Financing Fees	-	-	9,914
Interest and Bank Charges (Note 10(c))	21,808	18,228	8,210
Management Fees (Note 10(a))	69,360	40,000	-
Office	19,125	29,964	5,037
Office Rent	8,378	12,846	15,290
Telephone	8,281	5,377	3,737
Travel	11,977	5,482	3,555


	247,857	219,926	128,031


LOSS BEFORE OTHER ITEMS	(248,584)	(146,363)	(134,228)
Foreign Exchange Gain (Loss)	6,817	27,931	(14,163)
Inventory Write-Down	(31,800)	-	-


NET LOSS FOR THE YEAR	(273,567)	(118,432)	(148,391)

Deficit, Beginning of the Year	(676,745)	(558,313)	(409,922)


DEFICIT, END OF THE YEAR	(950,312)	(676,745)	(558,313)


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	9,629,693	9,168,780	9,160,247



BASIC AND DILUTED LOSS PER SHARE	(0.03)	(0.01)	(0.02)

BLACK DIAMOND HOLDINGS CORPORATION

Consolidated Statements of Cash Flows
For the Years Ended December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

	2005	2004	2003
	$	$	$
CASH PROVIDED FROM (UTILIZED FOR):

OPERATING ACTIVITIES

Net Loss for the Year	(273,567)	(118,432)	(148,391)

Non-Cash Items:
Amortization	692	677	933
Management Fees	69,360	40,000	-
Office	-	-	(5,000)
Unrealized Foreign Exchange Gain	(2,370)	-	-
Inventory Write-Down	31,800	-	-
Changes in Non-Cash Working Capital Accounts
(Note 13(a))	34,312	18,219	(2,218)


	(139,773)	(59,536)	(154,676)


FINANCING ACTIVITIES

Shares Issued for Cash, Net of Issuance Costs	189,759	-	29,368
(Repayments to) Advances from Black Diamond
Trading Ltd.	-	(983)	20,000
Advances from Paseo Investments Ltd.	-	-	30,142
Repayments to Shareholders	(40,542)	(13,288)	(52,319)
(Repayments of) Proceeds from Promissory Notes	(10,000)	71,890	150,914


	139,217	57,619	178,105


INVESTING ACTIVITY

Acquisition of Property and Equipment	(1,279)	-	-


(DECREASE) INCREASE IN CASH	(1,835)	(1,917)	23,429

Cash, Beginning of the Year	22,182	24,099	670


CASH, END OF THE YEAR	20,347	22,182	24,099



Supplemental Cash Flow Information (Note 13)

BLACK DIAMOND HOLDINGS CORPORATION

Notes to the Consolidated Financial Statements
December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

NOTE 1 – NATURE AND CONTINUANCE OF OPERATIONS

Black Diamond Holdings Corporation (“the Company”) was incorporated on December 28, 2000 under
the Company Act of the Province of British Columbia. The Company is a distributor of liquor and wine
products in the Province of British Columbia, Canada, and in the State of New York, United States.

These accompanying financial statements have been prepared using Canadian generally accepted
accounting principles applicable to a going concern.

While these accompanying financial statements have been prepared on the assumption that the Company
is a going concern and will be able to realize its assets and discharge its liabilities in the normal course of
business, certain events and conditions cast substantial doubt on this assumption. The Company had a
loss of $273,567 for the year ended December 31, 2005, and a working capital deficit of $141,342, an
accumulated deficit of $950,312 and a shareholders’ deficiency of $351,114 at December 31, 2005.
Operations for the year ended December 31, 2005 have been funded primarily from the issuance of share
capital, the continued support of creditors and net changes in working capital balances.

The Company’s ability to continue operations is uncertain and is dependent upon its ability to achieve
profitability and obtain new sources of financing. The outcome of these matters cannot be predicted at
this time. These consolidated financial statements do not reflect any adjustments to the amounts and
classifications of assets and liabilities, which would be necessary should the Company be unable to
continue operations.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements are prepared using Canadian Generally Accepted Accounting
Principles (“Cdn GAAP”). The significant accounting policies followed by the Company and its
subsidiaries are summarized below:

a)	Basis of Presentation

	The consolidated financial statements include the accounts of the Company and its wholly- owned subsidiaries, Black Diamond Importers Inc. and Liberty Valley Wines, LLC. All inter- company transactions and balances have been eliminated.

b)	Inventory

	Inventory consists of liquor products and is valued at the lower of cost and net realizable value. Cost of sales is determined on a weighted average cost basis.

c)	Property and Equipment

	Property and equipment are recorded at cost. Amortization is calculated using the following methods and annual rates, except in the year of acquisition when one-half the rate is used:

Computer Equipment	30% Per Annum, Declining Balance Basis
Furniture and Equipment	20% Per Annum, Declining Balance Basis

BLACK DIAMOND HOLDINGS CORPORATION

Notes to the Consolidated Financial Statements
December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

d)	Share Capital and Stock-Based Compensation

	The Company records proceeds from share issuances net of commissions and issuance costs.

	Employee stock options and other types of stock-based compensation are accounted for using the fair value based method. Under the fair value based method, compensation cost is measured using the Black-Scholes option pricing model at the date of grant of the option and is expensed over the vesting period. The Company has not awarded any stock options for each of the years in the three-year period ended December 31, 2005.

e)	Revenue Recognition

	Revenue is recognized upon shipment of products to the purchaser and when reasonable assurance exists regarding the collectibility of the consideration that will be derived from the sale of the products.

f)	Income Taxes

	The Company uses the asset and liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Future income tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. Changes to these balances are recognized in income in the period in which they occur. The amount of future income tax assets recognized is limited to the amount that is more likely than not to be realized.

g)	Loss Per Share

	Loss per share is calculated using the weighted average number of common shares outstanding during the year. Diluted loss per share is the same as basic loss per share as the issuance of shares on the exercise of share purchase warrants would be anti-dilutive.

h)	Foreign Currency Translation

	The functional currency of the Company is the Canadian dollar. Transactions in foreign currencies are translated to Canadian dollars at the rates in effect on the transaction date. Exchange gains or losses arising on translation or settlement of foreign currency denominated monetary items are charged to earnings in the period they arise.

The accounts of integrated foreign operations, which are recorded in United States dollars have been
translated into Canadian dollars as follows:

Monetary Items	At the exchange rate prevailing at the balance sheet date
Non-Monetary Items	At historical exchange rates
Revenue and Expense Items	At the average exchange rate for the year

i)	Impairment of Long-Lived Assets

	Long-lived assets are assessed for impairment when events and circumstances warrant. The carrying value of a long-lived asset is impaired when the carrying amount exceeds the estimated undiscounted net cash flow from use and fair value. In that event, the amount by which the carrying value of an impaired long-lived asset exceeds its fair value is charged to earnings.

j)	Financial Instruments

	Financial instruments include cash, accounts receivable, amounts due from Black Diamond Trading Inc., accounts payable and accrued liabilities, promissory notes payable and amounts due to Paseo Investments Ltd. and shareholders. The Company is not exposed to significant interest, credit or exchange risk arising from these financial statements. The estimated fair value of these financial instruments approximates their carrying values because of the short term to maturity of these instruments.

	The carrying value of the promissory notes payable approximates their fair values due to the interest rate implicit in these instruments.

k)	Use of Estimates

	The preparation of financial statements in conformity with Cdn GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management estimates include the determination of net recoverable amount of assets, the determination of the amortization period of property and equipment, the realization of future tax assets and the estimated amount of accrued liabilities. Actual results could differ from those estimates.

l)	Comparative Figures

	Certain items in the prior years’ financial statements have been reclassified to conform with current year’s financial statements presentation.

NOTE 3 – DUE FROM BLACK DIAMOND TRADING LTD.

Amounts due from Black Diamond Trading Ltd., a company controlled by the controlling shareholders of
the Company, are unsecured, non-interest bearing and have no specific terms of repayment.

NOTE 4 – DUE TO/FROM SHAREHOLDERS

Amounts due to/from shareholders are unsecured, non-interest bearing and have no specific terms of
repayment.

BLACK DIAMOND HOLDINGS CORPORATION

Notes to the Consolidated Financial Statements
December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

NOTE 5 – PROPERTY AND EQUIPMENT

		Accumulated	Net Book
	Cost	Amortization	Value
	$	$	$
2005
Computer Equipment	3,889	3,096	793
Furniture and Equipment	2,935	1,244	1,691


	6,824	4,340	2,484



2004
Computer Equipment	3,889	2,756	1,133
Furniture and Equipment	1,656	892	764


	5,545	3,648	1,897

NOTE 6 – PROMISSORY NOTES PAYABLE

		2005	2004
		$	$
a)	On August 22, 2003, the Company issued a promissory note
	payable to a relative of the controlling shareholders of the
	Company for cash advanced to the Company in the amount of
	$159,914. The note is unsecured, bears interest at 12% per annum,
	payable monthly, and is due on January 31, 2007.	149,914	159,914

b)	On October 14, 2004, the Company issued a promissory note
	payable to an arm’s length party for cash advanced to the
	Company in the amount of $62,890 (US$50,000). The note is
	secured by inventory and personal guarantees of the controlling
	shareholders of the Company and is due on January 14, 2006. The
	Company is required to pay interest to the lender in the amount of
	the greater of US$4.50 per case of La Joya wine sold or US$6,750.

	During the year ended December 31, 2005, the Company issued
	250,000 common shares in settlement of $31,445 (US$25,000) of
	the outstanding amount and paid $4,281 in interest to the lender.

	As at the auditors’ report date, the remaining balance of the debt
	has not been repaid.	29,075	62,890


		178,989	222,804

	Less: Current Portion	(29,075)	-


		149,914	222,804

BLACK DIAMOND HOLDINGS CORPORATION

Notes to the Consolidated Financial Statements
December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

NOTE 7 – DUE TO PASEO INVESTMENTS LTD.

Amounts due to Paseo Investments Ltd., a company controlled by relatives of the controlling shareholders
of the Company, are unsecured, non-interest bearing and are due on December 31, 2007.

NOTE 8 – SHARE CAPITAL
a)	Authorized
	100,000,000 common shares without par value
b)	Issued and Outstanding
		Number of	Amount
		Common Shares	$
	Balance, December 31, 2003	9,168,780	369,170
	No Change in the Year	-	-

	Balance, December 31, 2004	9,168,780	369,170
	Issued During the Year
	For Cash – Private Placement, Net of Issuance Costs (i)	1,266,667	189,759
	For Accounts Payable (ii)	50,000	8,824
	For Promissory Note (iii)	250,000	31,445

	Balance, December 31, 2005	10,735,447	599,198

(i)	The Company issued 1,266,667 units at US$0.15 per unit for total gross proceeds of $230,962 (US$190,000). Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company exercisable at a price of US$0.30 per share until July 31, 2007. Share issuance costs totalling $41,203 have been charged against share capital.

(ii)	The Company issued 50,000 common shares at $0.176 per share for settlement of accounts payable in the amount of $8,824.

(iii)	The Company issued 250,000 common shares at US$0.10 per share for partial settlement of a promissory note in the amount of $31,455 (US$25,000) (Note 6(b)).

BLACK DIAMOND HOLDINGS CORPORATION

Notes to the Consolidated Financial Statements
December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

NOTE 8 – SHARE CAPITAL (Continued)
c)	Share Purchase Warrants
	The Company has the following warrants outstanding:	Number of	Exercise Price
		Warrants	Per Share
			US$
	Balance, December 31, 2003	-	-
	No Change in the Year	-	-

	Balance, December 31, 2004	-	-
	Issued During the Year (Note 8(b)(i))	1,266,667	0.30

	Balance, December 31, 2005	1,266,667	0.30

	The warrants expire on July 31, 2007.

NOTE 9 – ACQUISITION

On May 23, 2005, the Company acquired all of the issued and outstanding shares of Liberty Valley Wines,
LLC (“Liberty Valley”) from an officer (also a shareholder) of the Company for cash consideration of
$1.00. Liberty Valley is a corporation incorporated in the State of Delaware, United States.

Liberty Valley is an inactive corporation with no assets, liabilities, income or expenses. The acquisition
has been accounted for by the purchase method and the operating results are included in the consolidated
financial statements commencing from the date of the acquisition.

NOTE 10 – RELATED PARTY TRANSACTIONS

In addition to those transactions disclosed elsewhere in these financial statements, the Company had the
following transactions with related parties:

		2005	2004	2003
		$	$	$
a)	Management fees charged by the President and
	the Vice-President, both major shareholders of
	the Company, for management, administration,
	supervision and company development
	services.	69,360	40,000	-

b)	Consulting fees charged by a company
	controlled by a Director of the Company for
	management and administration services.	30,526	-	-

c)	Interest paid to a relative of the controlling
	shareholders of the Company for cash advanced
	to the Company (Note 6(a))	17,911	18,000	6,000

All related party transactions were in the normal course of operations and were measured at their fair
value.

BLACK DIAMOND HOLDINGS CORPORATION

Notes to the Consolidated Financial Statements
December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

NOTE 11 - COMMITMENT

On January 01, 2003, the Company entered into management agreements with the President and the Vice-
President of the Company for general management and operational services. Under the terms of the
agreements, which are for terms of ten years, the Company is required to pay combined management fees
of US$72,000 per annum.

NOTE 12 – INCOME TAXES

a) Provision for Income Taxes

A reconciliation of the statutory tax rates with the Company’s income tax expense is as follows:

		2005	2004	2003
	Combined Canadian federal and provincial
	income tax rates	17.6%	17.6%	17.6%

		$	$	$
	Loss before income taxes	(273,567)	(118,432)	(148,391)

	Expected income tax recovery	(48,203)	(20,868)	(26,146)
	Item not deductible for tax purposes	451	396	64
	Unrecognized tax benefits	47,752	20,472	26,082

	Total income tax expense (recovery)	-	-	-

b)	Future Income Taxes

The tax effects of significant temporary differences that give rise to future income tax assets are:

	2005	2004
Combined Canadian federal and provincial income tax rates	17.6%	17.6%

	$	$
Future income tax assets resulting from:
Non-capital losses carry-forward	167,635	118,853
Share issuance costs	5,808	-
Tax value of assets in excess of net book values	122	-
Valuation allowance	(173,565)	(118,853)

Net future income tax assets	-	-

BLACK DIAMOND HOLDINGS CORPORATION

Notes to the Consolidated Financial Statements
December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

NOTE 12 – INCOME TAXES (Continued)

b) Future Income Taxes (Continued)

As at December 31, 2005, the Company and its subsidiaries have non-capital losses of approximately
$951,390 which may be applied to reduce taxable income of future years. The non-capital losses
expire as follows:

Year	$

2006		1,186
2007		15,622
2008		205,445
2009		186,429
2010		148,025
2014		116,183
2015		278,500

		951,390

Future tax benefits which may arise as a result of these losses have not been recognized in these
financial statements.

NOTE 13 – SUPPLEMENTAL CASH FLOW INFORMATION
a)	Change in Non-Cash Working Capital Accounts:
		2005	2004	2003
		$	$	$
	Accounts Receivable	(6,865)	1,773	(5,327)
	Inventory	97,765	(13,376)	(104,626)
	Prepaid Expenses	(270)	-	-
	Accounts Payable and Accrued Liabilities	(56,318)	29,822	107,735

		34,312	18,219	(2,218)

b)	Significant Non-Cash Financing Activities:
	Issuance of Shares for Settlement of Accounts
	Payable	8,824	-	-
	Issuance of Shares for Settlement of Promissory
	Notes Payable	31,445	-	-

		40,269	-	-

c)	Other Information:
	Interest Paid	21,008	16,819	5,213

BLACK DIAMOND HOLDINGS CORPORATION

Notes to the Consolidated Financial Statements
December 31, 2005, 2004 and 2003
(Expressed in Canadian Dollars)

NOTE 14 – SUBSEQUENT EVENTS

a)	On April 28, 2006, the Company completed a brokered private placement of 1,591,776 units at a price f US$0.15 per unit, raising gross proceeds of US$238,766. Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company exercisable at a price of US$0.30 per share until December 31, 2007. The Company paid finders’ fees in the amount of US$15,000. The Company also issued 100,000 share purchase warrants exercisable at a price of US$0.30 per share until December 31, 2007 to the agent.

b)	On April 20, 2006, the Company issued 50,000 common shares at US$0.15 per share for settlement of accounts payable to an officer of the Company in the amount of US$7,500.

NOTE 15 – DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”)

The Company prepares its consolidated financial statements in accordance with accounting principles
generally accepted in Canada which would not differ in all material respects from those principles that the
Company would have followed had its consolidated financial statements been prepared in accordance with
accounting principles generally accepted in the United States and from practices prescribed by the
Securities and Exchange Commission. Accordingly, there were no reported differences for the Company
for each of the years in the three-year period ended December 31, 2005 which would require
reconciliation from Cdn GAAP to US GAAP.

Transition Application

FORM 43
BUSINESS CORPORATIONS ACT
Section 437


FILING DETAILS:	Transition Application for:
	BLACK DIAMOND HOLDINGS CORPORATION

Filed Date and Time:	March 27, 2006 02:37 PM Pacific Time

Transition Date and	Transitioned on March 27, 2006 02:37 PM Pacific Time
Time:

TRANSITION APPLICATION

This confirms there has been filed with the registrar all records necessary to ensure that the information
in the corporate registry respecting the directors of the company is, immediately before the transition
application is submitted to the registrar for filing, correct.

Incorporation Number:	Name of Company:
BC0619991	BLACK DIAMOND HOLDINGS CORPORATION

NOTICE OF ARTICLES

Name of Company:

BLACK DIAMOND HOLDINGS CORPORATION

REGISTERED OFFICE INFORMATION

Mailing Address:	Delivery Address:
4TH FLOOR, 888 FORT STREET	4TH FLOOR, 888 FORT STREET
VICTORIA BC V8W 2K1	VICTORIA BC V8W 2K1
CANADA	CANADA

RECORDS OFFICE INFORMATION

Mailing Address:	Delivery Address:
4TH FLOOR, 888 FORT STREET	4TH FLOOR, 888 FORT STREET
VICTORIA BC V8W 2K1	VICTORIA BC V8W 2K1
CANADA	CANADA


DIRECTOR INFORMATION

Last Name, First Name, Middle Name:
Cameron, Brian

Mailing Address:	Delivery Address:
12538 52 A AVENUE	12538 52 A AVENUE
SURREY BC V8X 3K3	SURREY BC V8X 3K3
CANADA	CANADA


Last Name, First Name, Middle Name:
MOYNES, BRADLEY JAMES

Mailing Address:	Delivery Address:
2502 1088 QUEBEC ST	2502 1088 QUEBEC ST
VANCOUVER BC V6A 4H2	VANCOUVER BC V6A 4H2
CANADA	CANADA

PRE-EXISTING COMPANY PROVISIONS

The Pre-existing Company Provisions apply to this company.

AUTHORIZED SHARE STRUCTURE

1.	100,000,000	Common Shares	Without Par Value

			With Special Rights or
			Restrictions attached

Notice of Articles

BUSINESS CORPORATIONS ACT

This Notice of Articles was issued by the ?Registrar on: March 27, 2006 02:37 PM Pacific Time

Incorporation Number: BC0619991

Recognition Date: Incorporated on December 28, 2000

NOTICE OF ARTICLES

Name of Company:

BLACK DIAMOND HOLDINGS CORPORATION

REGISTERED OFFICE INFORMATION

Mailing Address:	Delivery Address:
4TH FLOOR, 888 FORT STREET	4TH FLOOR, 888 FORT STREET
VICTORIA BC V8W 2K1	VICTORIA BC V8W 2K1
CANADA	CANADA

RECORDS OFFICE INFORMATION

Mailing Address:	Delivery Address:
4TH FLOOR, 888 FORT STREET	4TH FLOOR, 888 FORT STREET
VICTORIA BC V8W 2K1	VICTORIA BC V8W 2K1
CANADA	CANADA

DIRECTOR INFORMATION

Last Name, First Name, Middle Name:
Cameron, Brian

Mailing Address:	Delivery Address:
12538 52 A AVENUE	12538 52 A AVENUE
SURREY BC V8X 3K3	SURREY BC V8X 3K3
CANADA	CANADA


Last Name, First Name, Middle Name:
MOYNES, BRADLEY JAMES

Mailing Address:	Delivery Address:
2502 1088 QUEBEC ST	2502 1088 QUEBEC ST
VANCOUVER BC V6A 4H2	VANCOUVER BC V6A 4H2
CANADA	CANADA

PRE-EXISTING COMPANY PROVISIONS

The Pre-existing Company Provisions apply to this company.

AUTHORIZED SHARE STRUCTURE

1.	100,000,000	Common Shares	Without Par Value

			With Special Rights or
			Restrictions attached

SCHEDULE “A”

BLACK DIAMOND HOLDINGS CORP.
(the “Company”)

ARTICLES


		Incorporation Number BC0619991

1.	Interpretation	2
2.	Shares and Share Certificates	2
3.	Issue of Shares	4
4.	Share Registers	4
5.	Share Transfers	5
6.	Transmission of Shares	6
7.	Purchase of Shares	6
8.	Borrowing Powers	7
9.	Alterations	7
10.	Meetings of Shareholders	8
11.	Proceedings at Meetings of Shareholders	9
12.	Votes of Shareholders	13
13.	Directors	16
14.	Election and Removal of Directors	18
15.	Alternate Directors	20
16.	Powers and Duties of Directors	21
17.	Disclosure of Interest of Directors	22
18.	Proceedings of Directors	23
19.	Executive and Other Committees	25
20.	Officers	26
21.	Indemnification	27
22.	Dividends	28
23.	Documents, Records and Reports	29
24.	Notices	30
25.	Seal	31
26.	Prohibitions	32
27.	Special Rights Attached To Common Shares	32

Page 2

1. I NTERPRETATION

1.1 Definitions

In these Articles, unless the context otherwise requires:

(1)	“board of directors”, “directors” and “board” mean the directors or sole director of the Company for the time being;

(2)	“ Business Corporations Act ” means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

(3)	“legal personal representative” means the personal or other legal representative of the shareholder;

(4)	“registered address” of a shareholder means the shareholder’s address as recorded in the central securities register;

(5)	“seal” means the seal of the Company, if any.

1.2 Business Corporations Act and Interpretation Act Definitions Applicable

The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act , with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict between these Articles and the Business Corporations Act , the

Business Corporations Act will prevail.

2.	S HARES AND S HARE C ERTIFICATES

2.1	Authorized Share Structure

The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.

2.2 Form of Share Certificate

Each share certificate issued by the Company must comply with, and be signed as required by, the

Business Corporations Act .

2.3 Shareholder Entitled to Certificate or Acknowledgment

Each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.

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2.4 Delivery by Mail

Any share certificate or non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate may be sent to the shareholder by mail at the shareholder’s registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or acknowledgement is lost in the mail or stolen.

2.5 Replacement of Worn Out or Defaced Certificate or Acknowledgement

If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they think fit:

(1)	order the share certificate or acknowledgment, as the case may be, to be cancelled; and

(2)	issue a replacement share certificate or acknowledgment, as the case may be.

2.6 Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

If a share certificate or a non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, as the case may be, if the directors receive:

(1)	proof satisfactory to them that the share certificate or acknowledgment is lost, stolen or destroyed; and

(2)	any indemnity the directors consider adequate.

2.7 Splitting Share Certificates

If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

2.8 Certificate Fee

There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not exceed the amount prescribed under the Business Corporations Act , determined by the directors.

2.9 Recognition of Trusts

Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

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3.	I SSUE OF S HARES

3.1	Directors Authorized

Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

3.2 Commissions and Discounts

The Company may at any time, pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company.

3.3 Brokerage

The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

3.4 Conditions of Issue

Except as provided for by the Business Corporations Act , no share may be issued until it is fully paid. A share is fully paid when:

(1)	consideration is provided to the Company for the issue of the share by one or more of the following:

	(a)	past services performed for the Company;

	(b)	property;

	(c)	money; and

(2)	the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

3.5 Share Purchase Warrants and Rights

Subject to the Business Corporations Act , the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.

4.	S HARE R EGISTERS

4.1	Central Securities Register

As required by and subject to the Business Corporations Act , the Company must maintain in British Columbia a central securities register. The directors may, subject to the Business Corporations Act , appoint an agent to maintain the central securities register. The directors may also appoint one or more

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agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

4.2 Closing Register

The Company must not at any time close its central securities register.

5.	S HARE T RANSFERS

5.1	Registering Transfers

A transfer of a share of the Company must not be registered unless:

(1)	a duly signed instrument of transfer in respect of the share has been received by the Company;

(2)	if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate has been surrendered to the Company; and

(3)	if a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment has been surrendered to the Company.

5.2 Form of Instrument of Transfer

The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or in any other form that may be approved by the directors from time to time.

5.3 Transferor Remains Shareholder

Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

5.4 Signing of Instrument of Transfer

If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer:

(1)	in the name of the person named as transferee in that instrument of transfer; or

(2)	if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

5.5 Enquiry as to Title Not Required

Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in

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the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

5.6 Transfer Fee

There must be paid to the Company, in relation to the registration of any transfer, the amount, if any, determined by the directors.

6.	T RANSMISSION OF S HARES

6.1	Legal Personal Representative Recognized on Death

In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder’s interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate.

6.2 Rights of Legal Personal Representative

The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Company.

7.	P URCHASE OF S HARES

7.1	Company Authorized to Purchase Shares

Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act , the Company may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms specified in such resolution.

7.2 Purchase When Insolvent

The Company must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for believing that:

(1)	the Company is insolvent; or

(2)	making the payment or providing the consideration would render the Company insolvent.

7.3 Sale and Voting of Purchased Shares

If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it: (1) is not entitled to vote the share at a meeting of its shareholders;

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(2)	must not pay a dividend in respect of the share; and

(3)	must not make any other distribution in respect of the share.

8. B ORROWING P OWERS

The Company, if authorized by the directors, may:

(1)	borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

(2)	issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

(3)	guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

(4)	mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

9.	A LTERATIONS

9.1	Alteration of Authorized Share Structure

Subject to Article 9.2 and the Business Corporations Act , the Company may by special resolution:

(1)	create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;

(2)	increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;

(3)	subdivide or consolidate all or any of its unissued, or fully paid issued, shares;

(4)	if the Company is authorized to issue shares of a class of shares with par value:

	(a)	decrease the par value of those shares; or

	(b)	if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

(5)	change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;

(6)	alter the identifying name of any of its shares; or

(7)	otherwise alter its shares or authorized share structure when required or permitted to do so by the

	Business Corporations Act .

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9.2 Special Rights and Restrictions

Subject to the Business Corporations Act , the Company may by special resolution:

(1)	create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or

(2)	vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.

9.3 Change of Name

The Company may by special resolution authorize an alteration of its Notice of Articles in order to change its name.

9.4 Other Alterations

If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by special resolution alter these Articles.

10.	Meetings of Shareholders

10.1	Annual General Meetings

Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act , the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

10.2 Resolution Instead of Annual General Meeting

If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 10.2, select as the Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

10.3 Calling of Meetings of Shareholders

The directors may, whenever they think fit, call a meeting of shareholders.

10.4 Notice for Meetings of Shareholders

The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:

(1)	if and for so long as the Company is a public company, 21 days;

(2)	otherwise, 10 days.

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10.5 Record Date for Notice

The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act , by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

(1)	if and for so long as the Company is a public company, 21 days;

(2)	otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.6 Record Date for Voting

The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act , by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.7 Failure to Give Notice and Waiver of Notice

The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

10.8 Notice of Special Business at Meetings of Shareholders

If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

(1)	state the general nature of the special business; and

(2)	if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:

	(a)	at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and

	(b)	during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

11.	P ROCEEDINGS AT M EETINGS OF S HAREHOLDERS

11.1	Special Business

At a meeting of shareholders, the following business is special business:

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(1)	at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;

(2)	at an annual general meeting, all business is special business except for the following:

	(a)	business relating to the conduct of or voting at the meeting;

	(b)	consideration of any financial statements of the Company presented to the meeting;

	(c)	consideration of any reports of the directors or auditor;

	(d)	the setting or changing of the number of directors;

	(e)	the election or appointment of directors;

	(f)	the appointment of an auditor;

	(g)	the setting of the remuneration of an auditor;

	(h)	business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;

	(i)	any other business which, under these Articles or the Business Corporations Act , may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

11.2 Special Majority

The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

11.3 Quorum

Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

11.4 One Shareholder May Constitute Quorum

If there is only one shareholder entitled to vote at a meeting of shareholders:

(1)	the quorum is one person who is, or who represents by proxy, that shareholder, and

(2)	that shareholder, present in person or by proxy, may constitute the meeting.

11.5 Other Persons May Attend

The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

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11.6 Requirement of Quorum

No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

11.7 Lack of Quorum

If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

(1)	in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and

(2)	in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.

11.8 Lack of Quorum at Succeeding Meeting

If, at the meeting to which the meeting referred to in Article 11.7(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

11.9 Chair

The following individual is entitled to preside as chair at a meeting of shareholders:

(1)	the chair of the board, if any; or

(2)	if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

11.10 Selection of Alternate Chair

If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number to be chair of the meeting or if all of the directors present decline to take the chair or fail to so choose or if no director is present, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.

11.11 Adjournments

The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

11.12 Notice of Adjourned Meeting

It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

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11.13 Decisions by Show of Hands or Poll

Subject to the Business Corporations Act , every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.

11.14 Declaration of Result

The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

11.15 Motion Need Not be Seconded

No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

11.16 Casting Vote

In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

11.17 Manner of Taking Poll

Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

(1)	the poll must be taken:

	(a)	at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and

	(b)	in the manner, at the time and at the place that the chair of the meeting directs;

(2)	the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and

(3)	the demand for the poll may be withdrawn by the person who demanded it.

11.18 Demand for Poll on Adjournment

A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

11.19 Chair Must Resolve Dispute

In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

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11.20 Casting of Votes

On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

11.21 Demand for Poll

No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.

11.22 Demand for Poll Not to Prevent Continuance of Meeting

The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

11.23 Retention of Ballots and Proxies

The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.

12.	V OTES OF S HAREHOLDERS

12.1	Number of Votes by Shareholder or by Shares

Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

(1)	on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and

(2)	on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

12.2 Votes of Persons in Representative Capacity

A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

12.3 Votes by Joint Holders

If there are joint shareholders registered in respect of any share:

(1)	any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or

(2)	if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

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12.4 Legal Personal Representatives as Joint Shareholders

Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders.

12.5 Representative of a Corporate Shareholder

If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

(1)	for that purpose, the instrument appointing a representative must:

	(a)	be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

	(b)	be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;

(2)	if a representative is appointed under this Article 12.5:

	(a)	the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and

	(b)	the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.6 Proxy Provisions Do Not Apply to All Companies

Articles 12.7 to 12.15 do not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

12.7 Appointment of Proxy Holders

Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

12.8 Alternate Proxy Holders

A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

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12.9 When Proxy Holder Need Not Be Shareholder

A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

(1)	the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;

(2)	the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or

(3)	the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

12.10 Deposit of Proxy

A proxy for a meeting of shareholders must:

(1)	be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(2)	unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.

A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.11 Validity of Proxy Vote

A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

(1)	at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2)	by the chair of the meeting, before the vote is taken.

12.12 Form of Proxy

A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:

[name of company]
(the “Company”)

The undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name] , as proxy holder for the undersigned to attend, act and vote for and on behalf of the

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undersigned at the meeting of shareholders of the Company to be held on [month, day, year] and at
any adjournment of that meeting.

Number of shares in respect of which this proxy is given (if no number is specified, then this proxy
if given in respect of all shares registered in the name of the shareholder):
_____________________

Signed [month, day, year]

[Signature of shareholder]

[Name of shareholder—printed]

12.13 Revocation of Proxy

Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

(1)	received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2)	provided, at the meeting, to the chair of the meeting.

12.14 Revocation of Proxy Must Be Signed

An instrument referred to in Article 12.13 must be signed as follows:

(1)	if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;

(2)	if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.

12.15 Production of Evidence of Authority to Vote

The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to
vote at the meeting and may, but need not, demand from that person production of evidence as to the
existence of the authority to vote.

13.	D IRECTORS

13.1	First Directors; Number of Directors

The first directors are the persons designated as directors of the Company in the Notice of Articles that
applies to the Company when it is recognized under the Business Corporations Act . The number of
directors, excluding additional directors appointed under Article 14.8, is set at:

(1)	subject to paragraphs (2) and (3), the number of directors that is equal to the number of the Company’s first directors;

(2)	if the Company is a public company, the greater of three and the most recently set of:

	(a)	the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

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(b) the number of directors set under Article 14.4;

(3)	if the Company is not a public company, the most recently set of:

	(a)	the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

	(b)	the number of directors set under Article 14.4.

13.2 Change in Number of Directors

If the number of directors is set under Articles 13.1(2)(a) or 13.1(3)(a):

(1)	the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;

(2)	if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.

13.3 Directors’ Acts Valid Despite Vacancy

An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

13.4 Qualifications of Directors

A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

13.3 Remuneration of Directors

The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.

13.4 Reimbursement of Expenses of Directors

The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.

13.5 Special Remuneration for Directors

If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

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13.6 Gratuity, Pension or Allowance on Retirement of Director

Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

14.	E LECTION AND R EMOVAL OF D IRECTORS

14.1	Election at Annual General Meeting

At every annual general meeting and in every unanimous resolution contemplated by Article 10.2:

(1)	the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and

(2)	all the directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election or re-appointment.

14.2 Consent to be a Director

No election, appointment or designation of an individual as a director is valid unless:

(1)	that individual consents to be a director in the manner provided for in the Business Corporations Act ;

(2)	that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or

(3)	with respect to first directors, the designation is otherwise valid under the Business Corporations Act .

14.3 Failure to Elect or Appoint Directors

If:

(1)	the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the

	Business Corporations Act ; or

(2)	the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors;

then each director then in office continues to hold office until the earlier of:

(3)	the date on which his or her successor is elected or appointed; and

(4)	the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

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14.4 Places of Retiring Directors Not Filled

If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.

14.5 Directors May Fill Casual Vacancies

Any casual vacancy occurring in the board of directors may be filled by the directors.

14.6 Remaining Directors Power to Act

The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act , for any other purpose.

14.7 Shareholders May Fill Vacancies

If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

14.8 Additional Directors

Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any time exceed:

(1)	one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or

(2)	in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 14.8.

Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(1), but is eligible for re-election or re-appointment.

14.9 Ceasing to be a Director

A director ceases to be a director when:

(1)	the term of office of the director expires;

(2)	the director dies;

(3)	the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or

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(4) the director is removed from office pursuant to Articles 14.10 or 14.11.

14.10 Removal of Director by Shareholders

The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

14.11 Removal of Director by Directors

The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

15.	A LTERNATE D IRECTORS

15.1	Appointment of Alternate Director

Any director (an “appointor”) may by notice in writing received by the Company appoint any person (an “appointee”) who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company.

15.2 Notice of Meetings

Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is not present.

15.3 Alternate for More Than One Director Attending Meetings

A person may be appointed as an alternate director by more than one director, and an alternate director:

(1)	will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;

(2)	has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;

(3)	will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity;

(4)	has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.

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15.4 Consent Resolutions

Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in writing.

15.5 Alternate Director Not an Agent

Every alternate director is deemed not to be the agent of his or her appointor.

15.6 Revocation of Appointment of Alternate Director

An appointor may at any time, by notice in writing received by the Company, revoke the appointment of an alternate director appointed by him or her.

15.7 Ceasing to be an Alternate Director

The appointment of an alternate director ceases when:

(1)	his or her appointor ceases to be a director and is not promptly re-elected or re-appointed;

(2)	the alternate director dies;

(3)	the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for the Company;

(4)	the alternate director ceases to be qualified to act as a director; or

(5)	his or her appointor revokes the appointment of the alternate director.

15.8 Remuneration and Expenses of Alternate Director

The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

16.	P OWERS AND D UTIES OF D IRECTORS

16.1	Powers of Management

The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

16.2 Appointment of Attorney of Company

The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney

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may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

17.	D ISCLOSURE OF I NTEREST OF D IRECTORS

17.1	Obligation to Account for Profits

A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act ) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act .

17.2 Restrictions on Voting by Reason of Interest

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

17.3 Interested Director Counted in Quorum

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

17.4 Disclosure of Conflict of Interest or Property

A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act .

17.5 Director Holding Other Office in the Company

A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

17.6 No Disqualification

No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

17.7 Professional Services by Director or Officer

Subject to the Business Corporations Act , a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

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17.8 Director or Officer in Other Corporations

A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act , the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

18.	P ROCEEDINGS OF D IRECTORS

18.1	Meetings of Directors

The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

18.2 Voting at Meetings

Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

18.3 Chair of Meetings

The following individual is entitled to preside as chair at a meeting of directors:

(1)	the chair of the board, if any;

(2)	in the absence of the chair of the board, the president, if any, if the president is a director; or

(3)	any other director chosen by the directors if:

	(a)	neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;

	(b)	neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

	(c)	the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

18.4 Meetings by Telephone or Other Communications Medium

A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 18.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner .

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18.5 Calling of Meetings

A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.

18.6 Notice of Meetings

Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors and the alternate directors by any method set out in Article 24.1 or orally or by telephone.

18.7 When Notice Not Required

It is not necessary to give notice of a meeting of the directors to a director or an alternate director if:

(1)	the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or

(2)	the director or alternate director, as the case may be, has waived notice of the meeting.

18.8 Meeting Valid Despite Failure to Give Notice

The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director or alternate director, does not invalidate any proceedings at that meeting.

18.9 Waiver of Notice of Meetings

Any director or alternate director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and, unless the director otherwise requires by notice in writing to the Company, to his or her alternate director, and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director or alternate director.

18.10 Quorum

The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at two directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

18.11 Validity of Acts Where Appointment Defective

Subject to the Business Corporations Act , an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

18.12 Consent Resolutions in Writing

A resolution of the directors or of any committee of the directors consented to in writing by all of the directors entitled to vote on it, whether by signed document, fax, email or any other method of transmitting legibly recorded messages, is as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors duly called and held. Such resolution may be in two or more counterparts which together are deemed to constitute one resolution in writing. A resolution passed

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in that manner is effective on the date stated in the resolution or on the latest date stated on any counterpart. A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

19.	E XECUTIVE AND O THER C OMMITTEES

19.1	Appointment and Powers of Executive Committee

The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors’ powers, except:

(1)	the power to fill vacancies in the board of directors;

(2)	the power to remove a director;

(3)	the power to change the membership of, or fill vacancies in, any committee of the directors; and

(4)	such other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.

19.2 Appointment and Powers of Other Committees

The directors may, by resolution:

(1)	appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;

(2)	delegate to a committee appointed under paragraph (1) any of the directors’ powers, except:

	(a)	the power to fill vacancies in the board of directors;

	(b)	the power to remove a director;

	(c)	the power to change the membership of, or fill vacancies in, any committee of the directors; and

	(d)	the power to appoint or remove officers appointed by the directors; and

(3)	make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors’ resolution.

19.3 Obligations of Committees

Any committee appointed under Articles 19.1 or 19.2, in the exercise of the powers delegated to it, must:

(1)	conform to any rules that may from time to time be imposed on it by the directors; and

(2)	report every act or thing done in exercise of those powers at such times as the directors may require.

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19.4 Powers of Board

The directors may, at any time, with respect to a committee appointed under Articles 19.1 or 19.2:

(1)	revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;

(2)	terminate the appointment of, or change the membership of, the committee; and

(3)	fill vacancies in the committee.

19.5 Committee Meetings

Subject to Article 19.3(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Articles 19.1 or 19.2:

(1)	the committee may meet and adjourn as it thinks proper;

(2)	the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;

(3)	a majority of the members of the committee constitutes a quorum of the committee; and

(4)	questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

20.	O FFICERS

20.1	Directors May Appoint Officers

The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

20.2 Functions, Duties and Powers of Officers

The directors may, for each officer:

(1)	determine the functions and duties of the officer;

(2)	entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and

(3)	revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

20.3 Qualifications

No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act . One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as the managing director must be a director. Any other officer need not be a director.

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20.4 Remuneration and Terms of Appointment

All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.

21.	I NDEMNIFICATION
21.1	Definitions

In this Article 21:

(1)	“eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

(2)	“eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternate director of the Company (an “eligible party”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director of the Company:

	(a)	is or may be joined as a party; or

	(b)	is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

(3)	“expenses” has the meaning set out in the Business Corporations Act .

21.2 Mandatory Indemnification of Directors and Former Directors

Subject to the Business Corporations Act , the Company must indemnify a director, former director or alternate director of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 21.2.

21.3 Indemnification of Other Persons

Subject to any restrictions in the Business Corporations Act , the Company may indemnify any person.

21.4 Non-Compliance with Business Corporations Act

The failure of a director, alternate director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.

21.5 Company May Purchase Insurance

The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who:

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(1)	is or was a director, alternate director, officer, employee or agent of the Company;

(2)	is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;

(3)	at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;

(4)	at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;

against any liability incurred by him or her as such director, alternate director, officer, employee or agent or person who holds or held such equivalent position.

22.	D IVIDENDS

22.1	Payment of Dividends Subject to Special Rights

The provisions of this Article 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

22.2 Declaration of Dividends

Subject to the Business Corporations Act , the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

22.3 No Notice Required

The directors need not give notice to any shareholder of any declaration under Article 22.2.

22.4 Record Date

The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

22.5 Manner of Paying Dividend

A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways.

22.6 Settlement of Difficulties

If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

(1)	set the value for distribution of specific assets;

(2)	determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

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(3) vest any such specific assets in trustees for the persons entitled to the dividend.

22.7 When Dividend Payable

Any dividend may be made payable on such date as is fixed by the directors.

22.8 Dividends to be Paid in Accordance with Number of Shares

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

22.9 Receipt by Joint Shareholders

If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

22.10 Dividend Bears No Interest

No dividend bears interest against the Company.

22.11 Fractional Dividends

If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

22.12 Payment of Dividends

Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

22.13 Capitalization of Surplus

Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the surplus or any part of the surplus.

23.	D OCUMENTS , R ECORDS AND R EPORTS

23.1	Recording of Financial Affairs

The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Business Corporations Act .

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23.2 Inspection of Accounting Records

Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

24.	N OTICES

24.1	Method of Giving Notice

Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

(1)	mail addressed to the person at the applicable address for that person as follows:

	(a)	for a record mailed to a shareholder, the shareholder’s registered address;

	(b)	for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;

	(c)	in any other case, the mailing address of the intended recipient;

(2)	delivery at the applicable address for that person as follows, addressed to the person:

	(a)	for a record delivered to a shareholder, the shareholder’s registered address;

	(b)	for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;

	(c)	in any other case, the delivery address of the intended recipient;

(3)	sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;

(4)	sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;

(5)	physical delivery to the intended recipient.

24.2 Deemed Receipt of Mailing

A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

24.3 Certificate of Sending

A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1 is conclusive evidence of that fact.

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24.4 Notice to Joint Shareholders

A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing the notice to the joint shareholder first named in the central securities register in respect of the share.

24.5 Notice to Trustees

A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

(1)	mailing the record, addressed to them:

	(a)	by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and

	(b)	at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

(2)	if an address referred to in paragraph (1)(b) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

25.	S EAL

25.1	Who May Attest Seal

Except as provided in Articles 25.2 and 25.3, the Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

(1)	any two directors;

(2)	any officer, together with any director;

(3)	if the Company only has one director, that director; or

(4)	any one or more directors or officers or persons as may be determined by the directors.

25.2 Sealing Copies

For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer.

25.3 Mechanical Reproduction of Seal

The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other

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securities one or more unmounted dies reproducing the seal and the chair of the board or any senior
officer together with the secretary, treasurer, secretary-treasurer, an assistant secretary, an assistant
treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be
impressed on such definitive or interim share certificates or bonds, debentures or other securities by the
use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so
impressed are for all purposes deemed to be under and to bear the seal impressed on them.

26. P ROHIBITIONS

26.1 Definitions

In this Article 26:

(1)	“designated security” means:

	(a)	a voting security of the Company;

	(b)	a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or

	(c)	a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or (b);

(2)	“security” has the meaning assigned in the Securities Act (British Columbia);

(3)	“voting security” means a security of the Company that:

	(a)	is not a debt security, and

	(b)	carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

26.2 Application

Article 26.3 does not apply to the Company if and for so long as it is a public company or a pre-existing
reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to
which the Statutory Reporting Company Provisions apply.

26.3 Consent Required for Transfer of Shares or Designated Securities

No share or designated security may be sold, transferred or otherwise disposed of without the consent of
the directors and the directors are not required to give any reason for refusing to consent to any such sale,
transfer or other disposition.

27.	S PECIAL R IGHTS A TTACHED T O C OMMON S HARES

27.1	The Common Voting shares without par value (the "Common shares") have the following special

rights and restrictions set out in this Part attached to them:

27.2 Dividends

(1)	Each holder of a Common share is entitled, as such, to receive, on the date fixed for payment thereof, and the Company will pay thereon, such dividends as the Directors may in their sole and

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absolute discretion declare from time to time out of the money or other property of the Company properly applicable to the payment of dividends.

(2)	No holder of a Common share will be entitled, as such, to any dividend other than or in excess of the dividends, if any, declared pursuant to paragraph (1);

27.3	Meetings
(1)	Each holder of a Common share, as such, is entitled to receive notice of, and to attend and vote in
	person or by proxy, at all meetings of the members of the Company and to vote for the election or
	participate in the appointment of directors.
(2)	Each holder of a Common share is entitled to one vote for each such share held.
27.4	Winding up

(1)	In the event of the liquidation, dissolution or winding up of the Company or any other distribution of property or assets of the Company among its members for the purpose of winding up its affairs, each holder of a Common share will share pari passu in all remaining property and assets of the Company.

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MANAGEMENT AGREEMENT

January 1, 2006.

BETWEEN:

	BLACK DIAMOND HOLDINGS CORP., a British Columbia corporation with offices at
	600-595 Hornby St., Vancouver, BC V6C 2E8
	Phone No. (604) 646-5620
	(Herein referred to as the " Company ")
	Of the First Part
AND:
	BRADLEY JAMES MOYNES , businessman, with an office at
	600-595 Hornby St., Vancouver, BC V6C 2E8
	Phone No. (604) 646-5620
	(Herein referred to as the " President ")
	Of the Second Part

WHEREAS:

·	The President has accepted an engagement to work for the Company in accordance with the terms and conditions of this Agreement.

THIS AGREEMENT WITNESSES that in consideration of the premises, mutual covenants and agreements herein contained,
the parties agree as follows:

1.	Services:

1.1	The President shall work on behalf of the company, including without limitation the following services:

1.2	As President and CEO, oversee all operations of the Company, including the operations of the wholly owned

		subsidiary, Black Diamond Importers Inc. and Liberty Valley Wines LLC.

2.	Compensation:

	a)	The President shall be paid an annual salary of $60,000.00 USD.

	b)	The parties acknowledge and agree that the President is an employee of the Company.

3. Terms and Termination:

a)	The term of this Agreement commences on the date set out at the top of the first page hereof and continues for the period of one (1) years. The parties may extend the term by mutual consent in writing.

b)	Either party may terminate this Agreement at any time and for any reason upon providing the other party with one year written notice of termination. Such termination shall not affect any amount owing, obligation or liability existing or incurred prior to the date of such termination, including fees payable to the Manager.

4.	General:

	a) This Agreement shall not be modified, amended, rescinded or waived, in whole or in part, except by written amendment signed by the parties hereto.

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b)	Each of the parties acknowledges and confirms that he/she has been provided sufficient opportunity to obtain the recommended independent legal advice and understands the terms of, and its rights and obligations under this Agreement.

c)	Time is of the essence with respect to the performance of obligations in this Agreement.

d)	This Agreement shall inure to the benefit of and be binding on all of the parties hereto and their respective executors, administrators, successors and permitted assigns.

e)	This Agreement shall be construed and governed by the laws of the Province of British Columbia.

f)	The headings to the articles, paragraphs, parts or clauses of this Agreement and the table of contents are inserted for convenience only and shall not affect the construction hereof.

g)	The parties hereto acknowledge that they have carefully read this Agreement and understand and agree to be bound by all of the terms and conditions found herein.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed and delivered as of the day and
year first above written.

______________________________
Brad J. Moynes
President
Black Diamond Holdings Corp.

Accepted By:

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MANAGEMENT AGREEMENT

January 1, 2006.

BETWEEN:
	BLACK DIAMOND HOLDINGS CORP., a British Columbia corporation with offices at
	600-595 Hornby St., Vancouver, BC V6C 2E8
	Phone No. (604) 646-5620
	(Herein referred to as the " Company ")
		Of the First Part
AND:
	J. ROBERT MOYNES , businessman, with an office at
	Suite 8 – 1063 W. 7 ^th Ave., Vancouver, BC V6H 1B2
	Phone No. (604) 738-0455
	(Herein referred to as the " Vice President” )
		Of the Second Part
WHEREAS:

·	The Vice President has accepted an engagement to work for the Company in accordance with the terms and conditions of this Agreement.

THIS AGREEMENT WITNESSES that in consideration of the premises, mutual covenants and agreements herein contained,
the parties agree as follows:

1.	Services:

1.1	The Vice President shall work on behalf of the Company, including without limitation the following services:

1.2	As Portfolio Manager, manage the product portfolio of Wine, Spirits, & Beer for the wholly owned company

		subsidiary, Black Diamond Importers Inc.

2.	Compensation:

	a)	The Vice President shall be paid an annual salary of $60,000.00 USD.

	b)	The parties acknowledge and agree that the Portfolio Manager is an employee of the Company.

3. Terms and Termination:

a)	The term of this Agreement commences on the date set out at the top of the first page hereof and continues for the period of one (1) years. The parties may extend the term by mutual consent in writing.

b)	Either party may terminate this Agreement at any time and for any reason upon providing the other party with one year written notice of termination. Such termination shall not affect any amount owing, obligation or liability existing or incurred prior to the date of such termination, including fees payable to the Vice President.

4.	General:

	a) This Agreement shall not be modified, amended, rescinded or waived, in whole or in part, except by written amendment signed by the parties hereto.

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b)	Each of the parties acknowledges and confirms that he/she has been provided sufficient opportunity to obtain the recommended independent legal advice and understands the terms of, and its rights and obligations under this Agreement.

c)	Time is of the essence with respect to the performance of obligations in this Agreement.

d)	This Agreement shall inure to the benefit of and be binding on all of the parties hereto and their respective executors, administrators, successors and permitted assigns.

e)	This Agreement shall be construed and governed by the laws of the Province of British Columbia.

f)	The headings to the articles, paragraphs, parts or clauses of this Agreement and the table of contents are inserted for convenience only and shall not affect the construction hereof.

g)	The parties hereto acknowledge that they have carefully read this Agreement and understand and agree to be bound by all of the terms and conditions found herein.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed and delivered as of the day and
year first above written.

____________________________
J. Robert Moynes,
Vice President
Black Diamond Holdings Corp.

Accepted By:

____________________________
J. Robert Moynes

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