Cadillac Ventures Inc. – Management’s Discussion and Analysis Fiscal

8/14/2019 Cadillac Ventures Inc. – Management’s Discussion and Analysis Fiscal

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CADILLAC VENTURES INC. – MANAGEMENT’S DISCUSSION AND ANALYSIS

Fiscal year ended May 31, 2008

Introduction

This is the management discussion and analysis (“MD&A”) of results, operations andfinancial condition of Cadillac Ventures Inc. (“Cadillac” or the “Company”)) (formerly BluePower Energy Corporation) the operating and financial results of the Company for thefiscal year ended May 31, 2008. The MD&A supplements, but does not form part of theconsolidated financial statements of the Company, and should be read in conjunctionwith Cadillac’s consolidated financial statements and related notes for the fiscal year ended May 31, 2008, as well as the results of fiscal years 2007 and 2006. The Companyprepares and files its consolidated financial statements in accordance with Canadiangenerally accepted accounting principles (“GAAP”). The currency referred to in thisdocument is the Canadian Dollar.

Overview the Fiscal Year

The year ended May 31, 2008 was a successful year for Cadillac with regards to bothfinancing and project exploration activities.

The Company announced in December 2007 that it had raised $ 540,400 in flow-through funds to be applied to further exploration. Cadillac also announced in April 2008that it had successfully completed a non-brokered private placement of $2,700,000 withTrafigura Beheer B.V. (Amsterdam) through the issue of 4,218,750 shares at $0.64 per share. Trafigura now holds approximately 12.4% of the issued and outstanding sharesof Cadillac.

During the year the Company progressed its exploration programs at both the Burnt Hill

joint venture project with Noront Resources Inc., earning a 51% interest in the project,and on the Company’s 100% owned New Alger project, with encouraging results on bothprojects.

The Company announced in April 2008 that it had earned a 51% interest in the Burnt Hillproject from Noront Resources Inc. having satisfied the conditions of the amendedoption agreement including the expenditure of $1,500,000, funded by Noront, on BurntHill with Cadillac as operator together with the subsequent issue by the Company inMarch 2008 of 1,875,000 shares to Noront. This share issuance was representative of the work requirement under the option agreement on Burnt Hill. This share issue was inaddition to the issue of 2,500,000 common shares to Noront which took place inSeptember 2007, was also one part of the terms of the original agreement whereby

Noront provided Cadillac with an option to acquire a 51% interest in Burnt Hill. Thecompany has an option to earn a further 14% interest in Burnt Hill through the paymentto Noront of $500,000 in either cash or common shares as determined by Cadillac.Subsequent to acquiring the 51% interest the Company expended $256,627 to May 31,2008 on the project.

Cadillac announced the results of the Burnt Hill program in March 2008 and theseresults are discussed in Section 1.4 of the MD&A. Cadillac management is encouragedby the results of the program and intends to further develop the project by drilling the



remaining planned holes which, once completed, should allow the Company to completea resource estimate on Burnt Hill. Expenditure on New Alger during the year amounted to $755,120 gross on anexploration and drilling program which consisted of a drill program to drill test severalanomalies identified by airborne geophysics and to drill into the historically productive

area of the property. The Company announced the results of the program in May statingthat all holes drilled had returned gold assays. As a subsequent event the Companyannounced in July 2008 that drilling would resume on the New Alger property during2008.

The Company reported during the year that Mr Norman Brewster had been electedPresident and CEO and a member of the Board of Cadillac. The Company also reportedthat Mr Leo O’Shaughnessy had joined the Company as CFO.

Additional Information

Additional information relating to the Corporation is available on the Internet at the

SEDAR website at www.sedar.com.

1.1 Date of MD&A

This MD&A was prepared on August 25, 2008.

1.2 Overall Performance

Cadillac Ventures Inc. incurred a net loss of $717,216 for the year ended May 31, 2008compared with a net loss of $423,428 for the year ended May 31, 2007.

The net loss for the year ended May 31, 2008 before future income tax recovery

amounted to $873,932 which compares to $710,672 for the previous year, an increaseof $163,260. The increase in the loss is reflective of the increased level of activity of theCompany during the year and includes increases in Stock-based compensation of $75,400, Management and consultancy fees of $44,700, Shareholder relations costs of $ 35,902, Office and general costs of $21,130 and Flow-through interest charges of $35,384, all offset by a reduction in Legal and audit costs of $49,446. The expensesincurred by the Company are detailed under Operations in Section 1.15. Future incometax recovery for the year ended May 31, 2008 amounted to $156,716 compared to$287,244 for the corresponding period of 2007. Future income tax recovery arose fromthe issue of flow-through common shares by the Company during the 2007 calendar year whereby the exploration expenses from these proceeds were renounced. Thisrenunciation created a future income tax recovery credit which is reflected in the

Consolidated Statement of Loss for the year. The net loss for the year ended May 31,2008 after future income tax recovery was $717,216 compared to a net loss of $423,428for the corresponding period of 2007.

The Company has experienced this increase in operating expenses at the same timethat the Company has been expanding its activities. The Company expects that ongoingexpenses will continue at these levels at a minimum, but more likely will increase as theproject activity level of the Company increases. The Company intends to continue toraise equity funds in order to meet these expenses, should the Company be unable to



raise these funds on an ongoing basis its ability to continue its business could beaffected.

1.3 Selected Annual Information

Selected Annual Information Year EndedYear

EndedYear

Ended

31-May-0831-May-

0731-May-

06

Interest and other income 5,253 0 0

Income or Loss (In Total) -717,216 -423,428 -37,001

Income or Loss\per Share Basic (Note 1) -0.03 -0.02 -0.01

Income or Loss\per Share Diluted (Note 1) -0.03 -0.02 -0.01

Total Assets 7,273,050 2,024,066 411,914 Total Long Term Financial Liabilities 0 0 0

Cash Dividends Declared 0 0 0Note 1 - Earnings per share reflects a 1 for 5 common share consolidation that occurred during the year ended May 31, 2006.Comparative earnings per share have been restated accordingly.

1.4 Results of Operations

2007 Financing Activities

Date AmountRaised Stated Use of Proceeds Actual Use of Proceeds

Dec2007

$ 540,400Flow-Through

Eligible Exploration Expenses Exploration expenditureongoing asstated

April2008

$2,700,000 Exploration Expenses andGeneral Working Capital

Not yet expended

Fiscal Year Project Activity Summary During the year ending May 31, 2008 Cadillac Ventures Inc. progressed its explorationprograms on both the Burnt Hill tungsten and molybdenum joint venture project with

Noront Resources Inc. where the company earned a 51% interest in the project and onits 100% owned New Alger project with encouraging results on both projects.

Burnt Hill

In June 2007 Cadillac and Noront amended the terms of the option agreement wherebyNoront would fund a $1,500,000 exploration program on Burnt Hill over the remainder of the calendar year with Cadillac as operator. Cadillac in turn agreed to issue, at a later date, common stock to Noront representative of the spending obligation Cadillac had



under the option agreement, which resulted in 1,875,000 common shares being issuedto Noront in March 2008 and Cadillac attaining a 51% ownership interest in the Burnt HillProject. This share issue was in addition to the issue of 2,500,000 common shares toNoront which took place in September 2007 and was part of the terms of the originalagreement whereby Noront provided Cadillac with an option to acquire a 51% interest inBurnt Hill. The fair value that has been attributed to these share issues totals $2,520,750

which has been classified as Acquisition costs and is included under the caption Mineralproperties in the Company’s Consolidated Balance Sheet at May 31,2008.

The $1,500,000 exploration program funded by Noront commenced in the Fall 2007exploration season and was completed by year end. This program consisted primarily of confirmatory and exploration drilling on the various Burnt Hill claims designed to test andconfirm historically reported drill results with the objective of bringing the historical datato an NI 43-101 compliant level. Cadillac announced the results of this work programwith Noront in March 2008. (See Press Release dated March 25, 2008). The Burnt HillProject was found to contain widespread tungsten and molybdenite mineralization inmultiple zones along and across strike and down dip from historically definedmineralization. The Technical NI 43-101 Report on the Burnt Hill Project was

subsequently filed on Sedar (www.sedar.com) and is also available on the company’swebsite.

Cadillac management is encouraged by the results of the program which suggests thereis potential for an open pit operation. It is the intention of management to further develop the project by drilling the remaining planned holes which once completed shouldallow the Company to complete a resource estimate on Burnt Hill.

Subsequent to acquiring the 51% interest the Company expended $ 256,627 to May 31,2008 on the project. Cadillac has a further option to acquire an additional 14% interestin the Burnt Hill project on the payment of $500,000 in either cash or common shares asdetermined by Cadillac.

New Alger

Expenditures on New Alger during the year totaled $ 755,120. Quebec refundable taxcredits and mining duty refunds relating to the New Alger property amount to $ 385,026which results in the net expenditure on New Alger being adjusted a net amount of $370,094. The Quebec tax credits and mining duty refunds are for the two years endedMay 31, 2008. The exploration and drilling program at New Alger commenced in the Fallof 2007 and consisted of a drill program to both drill test several anomalies identified byairborne geophysics and to drill into the historically productive areas of the property. Atthe conclusion of this phase of the program the Company had completed 3495 meters indrill program, drilling a total of 12 holes.

The program had two objectives – to drill test 4 IP anomalies identified in a previousgeophysical survey and to test potential mineralized shoots at depths ranging from 250-400 meters along the known mineralization of the former Thomson-Cadillac Mine.

The company announced the results of this program in May, stating that the programhad been a success in achieving its objectives with all holes drilled returning goldassays. The detailed results of the drilling programs are included in the May 7, 2008Press Release.



As a subsequent event in July 2008 Cadillac announced that drilling would resume onthe Company’s New Alger property. The initial stage of the 2008 program is planned todo further testing on one of the geophysical anomalies previously drilled as well as testfor identified mineralization at deeper depths.

1.5 Summary of Quarterly ResultsFourth Third Second FirstQuarter Quarter Quarter Quarter

31-May-08 29-Feb-08 31-Aug-07 31-Aug-07

Interest and other income 5,253 0 0 0

Income or Loss (Before DiscontinuedOperations and Extraordinary Items) (430,279) (23,147) (201,888) (61,902)Income or Loss\per Share Basic (0.02) (0.00) (0,01) (0.00)Income or Loss\per Share Diluted (0.02) (0.00) (0.01) (0.00)

Income or Loss (Total) (430,279) (23,147) (201,888) (61,902)Income or Loss\per Share Basic (0.02) (0.00) (0.01) (0.00)Income or Loss\per Share Diluted (0.02) (0.00) (0.01) (0.00)

Fourth Third Second FirstQuarter Quarter Quarter Quarter

31-May-07 28-Feb-07 30-Nov-06 31-Aug-06

Interest and other income 0 0 0 0

Income or Loss (Before DiscontinuedOperations and Extraordinary Items) (388,060) 115,190 (104,562) (45,996)Income or Loss\per Share Basic (Note 1) (0.02) 0.01 (0.01) 0.00Income or Loss\per Share Diluted (Note 1) (0.02) 0.01 (0.01) 0.00

Income or Loss (Total) (388,060) 115,190 (104,562) (45,996)Income or Loss\per Share Basic (Note 1) (0.02) 0.01 (0.01) 0.00Income or Loss\per Share Diluted (Note 1) (0.02) 0.01 (0.01) 0.00Note 1 - Earnings per share reflects a 1 for 5 common share consolidation that occurred during the year ended May 31,2006.

Cadillac Ventures Inc. incurred a loss of $430,279 in the fourth quarter of 2008 mainly

due to stock based compensation costs of $299,824, legal and audit fees of $55,061 andmanagement and consulting fees of $62,300. With the exception of the third quarters of 2008 and 2007, which include Future income tax recoveries reflecting the renouncementof flow-through exploration charges, there has been a trend of increased quarterlylosses. In general the expenditure and activity level of the Company has increasedsubstantially during the year which impacts on the operating costs of the Company andwill continue to do so on an ongoing basis. This activity level is expected to further increase during the coming year following the Company’s closure of a private placingfinancing of $2.7 million with Trafigura in April 2008.



1.6 Liquidity

Cadillac Ventures Inc. reported a working capital of $3,389,697 at May 31,2008compared with a working capital of $1,314,460 as at May 31,2007. The Company had acash balance of $3,202,630 as at May 31, 2008, compared with a cash balance of

$1,305,811 as at May 31, 2007. At May 31, 2008 the Company also held mineralproperty assets with a cost value of $3,764,027 compared with $616,556 at May 31,2007. These are included in total assets of $7,273.050 at May 31, 2008 compared to$2,024,066 at May 31, 2007. These amounts are a direct reflection of the financingactivities undertaken by the Company together with the expenditure on work programsduring the year on both the New Alger Property and the 51% owned Burnt Hill Project.Against this positive cash balance and asset base the Company has liabilities which total$119,326 at May 31, 2008 compared to $93,050 at May 31, 2007. These are comprisedof mineral property expenditures, various professional fees and costs associated withthe re-organization, consolidation and requisite filings incurred in conjunction with thenewly active status of the Company.

The Company announced in December 2007 that it had raised a total of $540,400 inflow through funds to fund future exploration through the non-brokered placement of 675,000 shares at a price of $0.80 per share. The Company further announced in April2008 that it had successfully completed a non- brokered private placement of $2.7million with Trafigura Beheer B.V. (Amsterdam) at $0.64 per share. The proceeds fromthis proposed financing will be used for exploration expenditures and general workingcapital purposes.

The Company is continuing its efforts to raise funds for future developments andoperations and to meet its ongoing obligations as they arise. There is however, noassurance that the Company will be successful in its efforts, in which case, the Companymay not be able to meet its obligations. The consolidated financial statements have

been prepared on a going concern basis as discussed in Note 1 of the May 31, 2008consolidated financial statements.

Should the Company be unable to realize on its assets and discharge its liabilities in thenormal course of business, the net realizable value of its assets may be materially lessthan the amounts recorded on the consolidated balance sheet.

1.7 Capital Resources

At May 31, 2008 the Company had the following capital requirements under existingarrangements.

a) Accounts payable in the normal course of business.

1.8 Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements

1.9 Transactions with Related Parties

The Company has engaged Billiken Management Services Inc. ("Billiken") to managethe New Alger Property. Billiken charges a fee based on a percentage of expenses



incurred on behalf of the Company. The former President/CEO, corporate secretary anddirector of the Company holds a non-controlling ownership interest in Billiken through aprivate company. For the year ended May 31, 2008, the fee totaled $72,891 (2007 -$3,089). As at May 31, 2008, there was a balance of $43,885 owing to Billiken from theCompany (As of May 31,2007, $11,439 was due to the Company from Billiken).

During the year, consulting fees paid/payable to the former President/CEO, corporatesecretary and director of the Company amounted to $26,000 (2007- $43,000).

For the year ended May 31, 2008, consulting fees of $60,000 were paid to a companycontrolled by the President/CEO of the Company (2007 - $90,000).

During the year, consulting fees of $22,500 were paid to the CFO of the Company (2007- $Nil).

As at May 31, 2008, pursuant to the financing disclosed in Note 6(a)(vi) of the May 31,2007 audited consolidated financial statements, the following related parties of theCompany participated in the private placement by purchasing offered units: Nominex

Ltd. (of which Neil Novak, a director of the Company, is the President) - 62,500 units;Nicole Brewster, the former Secretary and a former director of the Company -62,500units; Jim Voisin, the former President/CEO, corporate secretary and a director of theCompany -62,500 units; and Norm Brewster, the President/CEO of the Company -250,000 units. These units were purchased on the same terms and conditions as other participants in the financing.

These transactions have been measured at the exchange amount

1.10 Fourth Quarter

The net loss for the quarter ended May 31, 2008 amounted to $ 430,279 which

compares to the net loss of $ 388,060 for the corresponding period of 2007 an increaseof $ 42,219. This increase is mainly due to increases in management and consultingfees $ 44,300 and stock-based compensation $ 31,324 during the fourth quarter of fiscal2008 offset by a reduction in legal and audit fees $ 18,302 of fiscal 2008.

1.11 Proposed Transactions

The Company presently has no planned or proposed business or asset acquisitions or dispositions.

1.12 Critical Accounting Estimates

Cadillac did not rely on any critical accounting estimates in the most recent fiscal year.

1.13 Changes in Accounting Policies Including Initial Adoption

There have been no changes in accounting policies in fiscal 2008.

1.14 Financial Instruments and Other Instruments



The Company’s current financial instruments consist of cash and cash equivalents,accounts receivable, accounts payable and accrued liabilities. The carrying valuesapproximate the fair values of these financial instruments due to the short-term maturityof these items.

1.15 Other MD&A Requirements

Additional Disclosure for Venture Issuers without Significant Revenue or Exploration

Capitalized Costs - Mineral Properties

Cumulative Since

Balance Balance Inception of the

at atDevelopment

Stage

New Alger Propery 31-May-08 31-May-07 (April 28, 2006)

Acquisition cost 75,000 75,000 75,000

Assays 8,201 202 8,201

Claim maintenance 33,675 13,156 33,675

Drilling 542,621 - 542,621

IP Surveys 140,754 136,722 140,754

Geological 166,421 75,000 166,421

Consulting 16,905 1,658 16,905

Line Cutting 30,690 30,690 30,690

Taxes - 10,686 -

Goodwill 183,419 183,419 183,419

Management fees 5,951 3,089 5,951

Travel and related costs 26,312 - 26,312

Other 69,163 14,370 69,163

-------------- ------------------- ------------------------

1,299,112 543,992 1,299,112

Less Quebec refundable tax credits

and mining duty refunds. -387,462 -2,436 -387,462

-------------- ------------------- ------------------------

911,650 541,556 911,650

========= =========== =============



Capitalized Costs - Mineral Properties cont’d..

Cumulative Since

Balance Balance Inception of the

at atDevelopment

Stage

Burnt Hill Property 31-May-08 31-May-07 (April 28, 2006)

Acquisition cost 2,595,750 75,000 2,595,750

Lab Analysis 68,353 - 68,353

Drilling 77,456 - 77,456

IP Surveys 21,784 - 21,784

Geological 36,587 - 36,587

Management fees 15,448 - 15,448

Travel and related costs 14,112 - 14,112

Other 22,887 - 22,887Total 2,852,377 75,000 2,852,377

Total Capitalized Costs 3,764,027 616,556 3,764,027

Year Year

Operations ended ended

31-May-08 31-May-07

Expenses

Stock-option compensation 428,900 353,500

Legal and audit 87,479 136,925

Management and consulting fees 154,300 109,600

Shareholder relations 96,889 60,987

Accounting and corporate services 36,381 30,938

Office and general 39,852 18,722

Flow-through interest charges 35,384 0

------------------- ----------------

Net loss before the following 879,185 710,672

Less: interest and other income 5,253 0

Less: future income tax recovery 156,716 287,244

------------------- ----------------

Loss for the year 717,216 423,428

=========== =========



consultants and others for mineral exploration and exploitation expertise. Substantialexpenditures are required to establish mineral reserves and resources through drilling, todevelop metallurgical processes to extract the metal from the ore and, in the case of some properties, to develop the mining and processing facilities and infrastructure at anysite chosen for mining, or to upgrade existing infrastructure. There can be no assurancethat the funds required to exploit any mineral reserves and resources discovered by the

Company will be obtained on a timely basis or at all. The economics of exploiting mineralreserves and resources discovered by the Company are affected by many factors, manyoutside the control of the Company, including the cost of operations, variations in thegrade of ore mined and metals recovered, price fluctuations in the metal markets, costsof processing equipment, and other factors such as government regulations, includingregulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection. There can be no assurance that the Company’smineral exploration and exploitation activities will be successful.

Country Risk

The Company could be at risk regarding any political developments in the Country in

which it operates. At present the Company is only active in Canada.

Uninsurable Risks

Mineral exploration activities involve numerous risks, including unexpected or unusualgeological operating conditions, rock bursts, cave-ins, fires, floods, earthquakes andother environmental occurrences and political and social instability. It is not alwayspossible to obtain insurance against all such risks and the Company may decide not toinsure against certain risks as a result of high premiums or other reasons. Should suchliabilities arise, they could negatively affect the Company’s profitability and financialposition and the value of the common shares of the Company. The Company does notmaintain insurance against environmental risks.

Environmental Regulation and Liability

The Company’s activities are subject to laws and regulations controlling not only mineralexploration and exploitation activities themselves but also the possible effects of suchactivities upon the environment. Environmental legislation may change and make themining and processing of ore uneconomic or result in significant environmental or reclamation costs. Environmental legislation provides for restrictions and prohibitions onspills, releases or emissions of various substances produced in association with certainmineral exploitation activities, such as seepage from tailings disposal areas that couldresult in environmental pollution. A breach of environmental legislation may result in theimposition of fines and penalties or the suspension or closure of operations. In addition,

certain types of operations require the submission of environmental impact statementsand approval thereof by government authorities.

Environmental legislation is evolving in a manner which may mean stricter standardsand enforcement, increased fines and penalties for non-compliance, more stringentenvironmental assessments of proposed projects and a heightened degree of responsibility for companies and their directors, officers and employees. Permits from avariety of regulatory authorities are required for many aspects of mineral exploitationactivities, including closure and reclamation. Future environmental legislation could



cause additional expense, capital expenditures, restrictions, liabilities and delays in thedevelopment of the Company’s properties, the extent of which cannot be predicted. Inthe context of environmental permits, including the approval of closure and reclamationplans, the Company must comply with standards and laws and regulations which mayentail costs and delays depending on the nature of the activity to be permitted and howstringently the regulations are implemented by the permitting authority. The Company

does not maintain environmental liability insurance.

Regulations and Permits

The Company’s activities are subject to a wide variety of laws and regulations governinghealth and worker safety, employment standards, waste disposal, protection of theenvironment, protection of historic and archaeological sites, mine development andprotection of endangered and protected species and other matters. The Company isrequired to have a wide variety of permits from governmental and regulatory authoritiesto carry out its activities. These permits relate to virtually every aspect of the Company’sexploration and exploitation activities. Changes in these laws and regulations or changesin their enforcement or interpretation could result in changes in legal requirements or in

the terms of the Company’s permits that could have a significant adverse impact on theCompany’s existing or future operations or projects. Obtaining permits can be acomplex, time-consuming process. There can be no assurance that the Company will beable to obtain the necessary permits on acceptable terms, in a timely manner or at all.The costs and delays associated with obtaining permits and complying with thesepermits and applicable laws and regulations could stop or materially delay or restrict theCompany from continuing or proceeding with existing or future operations or projects.Any failure to comply with permits and applicable laws and regulations, even if inadvertent, could result in the interruption or closure of operations or material fines,penalties or other liabilities.

Potential Dilution

The issue of common shares of the Company upon the exercise of the options andwarrants will dilute the ownership interest of the Company’s current shareholders. TheCompany may also issue additional option and warrants or additional common sharesfrom time to time in the future. If it does so, the ownership interest of the Company’sthen current shareholders could also be diluted.



CADILLAC VENTURES INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2008 and 2007

(EXPRESSED IN CANADIAN DOLLARS)



July 25, 2008

Auditors' Report

To the Shareholders of Cadillac Ventures Inc.

We have audited the consolidated balance sheets of Cadillac Ventures Inc. (A Development Stage Company) as atMay 31, 2008 and 2007 and the related consolidated statements of loss and comprehensive loss, cash flows andchanges in shareholders' equity for each of the years then ended. 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. Those standardsrequire 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 anddisclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant 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 May 31, 2008 and 2007 and the results of its operations and its cash flows for each of the yearsthen ended in accordance with Canadian generally accepted accounting principles.

"McCarney Greenwood LLP"

Toronto, Canada McCarney Greenwood LLPChartered AccountantsLicensed Public Accountants



CADILLAC VENTURES INC.(Incorporated under the laws of Ontario)(A Development Stage Company)Consolidated Balance Sheets(Expressed in Canadian Dollars)As at May 31

2008 2007

ASSETSCurrent

Cash and cash equivalents (Note 3) $ 3,202,630 $ 1,305,811Accounts receivable 11,630 99,263Quebec refundable tax credits and mining duties receivable (Note 2(d)) 294,763 2,436

3,509,023 1,407,510

Mineral properties (Note 4) 3,764,027 616,556

$ 7,273,050 $ 2,024,066

LIABILITIESCurrent

Accounts payable and accrued liabilities $ 119,326 $ 93,050

SHAREHOLDERS' EQUITYShare capital (Note 5(b)) 8,769,398 3,236,474Warrants (Note 5(c)) 859,041 864,441Contributed surplus (Note 5(f)) 766,950 354,550Deficit (3,241,665) (2,524,449)

7,153,724 1,931,016

$ 7,273,050 $ 2,024,066

See accompanying notes to consolidated financial statements

Nature of operations and going concern (Note 1)

Approved by the Board "Norman Brewster" Director "Maurice Stekel" Director

- 1 -



CADILLAC VENTURES INC.(Incorporated under the laws of Ontario)(A Development Stage Company)Consolidated Statements of (Loss)/Income and Comprehensive (Loss)/Income(Expressed in Canadian Dollars)

Cumulativefrom date

of inception of

thedevelopment

Year ended May 31, stage2008 2007 (April 28, 2006)

ExpensesStock-based compensation (Note 5(d)) $ 428,900 $ 353,500 $ 782,400Management and consulting fees 154,300 109,600 263,900Shareholder relations 96,889 60,987 159,158Legal and audit 87,479 136,925 235,703Office and general 39,852 18,722 50,827Accounting and corporate services 36,381 30,938 70,966Flow-through interest charges 35,384 - 43,135

Interest income (5,253) - (5,253)

873,932 710,672 1,600,836

Net (loss) before the following (873,932) (710,672) (1,600,836)Future income tax recovery (Note 6) 156,716 287,244 505,183

Net (loss) and comprehensive (loss) $ (717,216) $ (423,428) $(1,095,653)

(Loss) per share - basic anddiluted (Note 5(e)) $ (0.03) $ (0.02)


- 2 -



CADILLAC VENTURES INC.(Incorporated under the laws of Ontario)(A Development Stage Company)Consolidated Statements of Cash Flows(Expressed in Canadian Dollars)

Cumulativefrom date

of inception of the

development Year ended May 31, stage2008 2007 (April 28, 2006)

OPERATING ACTIVITIESNet (loss) for the period $ (717,216) $ (423,428) $ (1,095,653)Adjustments for:

Future income tax recovery (156,716) (287,244) (505,183)Stock-based compensation (Note 5(d)) 428,900 353,500 782,400

Changes in non-cash working capitalAccounts receivable 87,633 (80,363) 5,094Prepaids - 458 458Accounts payable and accrued liabilities 26,276 1,073 6,834

Effect on non-cash working capital as aresult of acquisition of subsidiary - - (5,885)

(331,123) (436,004) (811,935)

FINANCING ACTIVITIESProceeds from issuance of common shares 3,240,400 1,914,350 5,154,750Proceeds from exercise of options 10,000 - 10,000Proceeds from exercise of warrants 10,000 84,700 94,700Cost of share capital issuance (13,410) (30,799) (44,209)Due from a related company - (11,439) (11,439)

3,246,990 1,956,812 5,203,802

INVESTING ACTIVITIESExpenditures on mineral properties (1,019,048) (338,714) (1,608,144)Cash acquired on acquisition of subsidiary - - 10,363Costs of acquisition of subsidiary - - (30,357)Effect on mining interests as a result of

acquisition of subsidiary - - 275,879

(1,019,048) (338,714) (1,352,259)

Change in cash and cash equivalents during the period 1,896,819 1,182,094 3,039,608Cash and cash equivalents, beginning of period 1,305,811 123,717 163,022

Cash and cash equivalents, end of period $ 3,202,630 $ 1,305,811 $ 3,202,630

- 3 -



CADILLAC VENTURES INC.(Incorporated under the laws of Ontario)(A Development Stage Company)Consolidated Statements of Cash Flows(Expressed in Canadian Dollars)

Cumulativefrom date

of inception of the


SUPPLEMENT SCHEDULE OF NON-CASH TRANSACTIONSShare issuance for the acquisitionof Chilly-Bin $ - $ - $ 250,000Shares issued for Burnt Hill property (Note 4(2)) $ 2,420,750 $ - $ 2,420,750


- 4 -



CADILLAC VENTURES INC.(Incorporated under the laws of Ontario)(A Development Stage Company)Consolidated Statements of Changes in Shareholders' Equity(Expressed in Canadian Dollars)

Cumulativefrom date

of inception of

thedevelopment


Share capitalBalance, beginning of period $ 3,236,474 $ 2,394,498 $ 2,394,498Private placements 3,240,400 1,914,350 5,154,750Fair value of warrants issued (864,441) (864,441)Exercise of warrants 10,000 84,700 94,700Fair value of warrants exercised 5,400 25,410 30,810Flow-through tax effect (156,716) (287,244) (443,960)Share issue costs (13,410) (30,799) (44,209)

Shares issued for Burnt Hillproperty (Note 4(2)) 2,420,750 - 2,420,750

Exercise of options 10,000 - 10,000Fair value of options exercised 16,500 - 16,500

Balance, end of period $ 8,769,398 $ 3,236,474 $ 8,769,398

WarrantsBalance, beginning of period $ 864,441 $ 25,425 $ 25,425Fair value of warrants issued - 864,441 864,441Fair value of warrants exercised (5,400) (25,410) (30,810)Fair value of warrants expired - (15) (15)

Balance, end of period $ 859,041 $ 864,441 $ 859,041

Contributed surplusBalance, beginning of period $ 354,550 $ 1,035 $ 1,035Fair value of options granted 428,900 353,500 782,400Fair value of warrants expired - 15 15Fair value of options exercised (16,500) - (16,500)



- 5 -



CADILLAC VENTURES INC.(Incorporated under the laws of Ontario)(A Development Stage Company)Consolidated Statements of Changes in Shareholders' Equity(Expressed in Canadian Dollars)

Cumulativefrom date

of inception of

thedevelopment


DeficitBalance, beginning of period $(2,524,449) $(2,101,021) $(2,135,104)Net (loss) for the period (717,216) (423,428) (1,095,653)Restructuring cost - - (10,908)

Balance, end of period $(3,241,665) $(2,524,449) $(3,241,665)

Total shareholders' equity $ 7,153,724 $ 1,931,016 $ 7,153,724


- 6 -



CADILLAC VENTURES INC.(A Development Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)May 31, 2008 and 2007

1. NATURE OF OPERATIONS AND GOING CONCERN

Cadillac Ventures Inc. ("Cadillac" or the "Company") is publicly traded on the CNQ under the symbol CDEX.Currently, in addition to the joint venture on the Burnt Hill Project, Cadillac also holds the New Alger Projectwhich encompasses the historic New Alger Mine, located in the highly prospective Cadillac Break MiningCamp. The New Alger Mine has been sporadically productive but has not been fully explored or exploited.The property is situated contiguous to the O’Brien Mine and approximately 300 m to the SE of the LaRondeMine.

Cadillac is a development stage company, as defined by AcG 11 of the Canadian Institute of CharteredAccountants' Handbook ("CICA Handbook"). The Company is in the business of mineral exploration and thecontinued operations of the Company and the recoverability of amounts shown for mineral properties isdependent upon the existence of a deposit and upon future profitable production, or alternatively, upon theCompany's ability to recover its costs through a disposition of its interest. The amounts shown for mineralproperties represent costs to date, less amounts written off, and do not necessarily represent the futurevalue. Changes in future conditions could require a material change in the amount recorded for mineral

properties.

These consolidated financial statements are prepared using Canadian generally accepted accountingprinciples ("GAAP") that are applicable to a going concern which assumes the Company will continue tooperate throughout the next twelve months subsequent to May 31, 2008. The use of these principles may beinappropriate since there is significant doubt regarding the appropriateness of this assumption. Significantdoubt exists because there has been substantial operating losses in the current and prior years and theCompany has no operating assets. The future of the Company is currently dependent upon its ability to obtainsufficient cash from external financing, and/or related parties to fund the Company's ongoing operations andexpenditures on the property.

These statements do not include any adjustments which would be necessary if the going concern assumptionwas not used.

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The preparation of these financial statements in conformity with Canadian generally accepted accountingprinciples requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statementsand reported amounts of revenues and expenses during the reporting period. Actual results could differ fromthose estimates.

- 7 -




2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

The significant accounting policies are as follows:

(a) ConsolidationThese consolidated financial statements include the accounts of the Company and its wholly ownedsubsidiary, Chilly-Bin Inc. ("Chilly-Bin")

(b) Cash and cash equivalentsCash and cash equivalents include cash on hand, balances with banks and money marketinvestments with original maturities of three months or less and which are readily convertible intocash.

(c) Mining propertyMining property is recorded at cost. The costs relating to the acquisition and exploration of thisproperty are capitalized until the commencement of commercial activities. If economically profitable

ore reserves are developed, the capitalized costs are amortized using the unit of production method. If it is determined that the acquisition and exploration costs are not recoverable over the estimateduseful life of the property, or if the project is abandoned, the properties are written down to their netrealizable value. The mining property is reviewed for impairment whenever events or circumstancesindicate that its carrying amount may not be recoverable.

(d) Quebec refundable tax credits and mining duties receivableThe Company is entitled to a credit on duties refundable for loss under the Mining Duties Act. Thiscredit on duties refundable for loss on exploration costs incurred in the Province of Quebec at the rateof 12% has been applied against the costs incurred (Note 4).Furthermore, the Company is entitled to a refundable tax credit for resources for mining companies onqualified expenditures incurred. The refundable tax credit for resources may reach 35% or 38.75% of qualified expenditures incurred. This tax credit has been applied against the costs incurred (Note 4).

(e) Income taxesThe company follows the asset and liability method of accounting for income taxes. Under thismethod, income taxes are recognized for the future income tax consequences attributed todifferences between the financial statement carrying values and their respective income tax bases.Future income tax assets and liabilities are measured using substantially enacted income tax ratesexpected to apply when the asset is realized or the liability is settled. The effect on future income taxassets and liabilities of a change in tax rates is included in income in the period that includes theenactment date. Future income tax assets are evaluated and if realization is not considered "morelikely than not", a valuation allowance is provided.

(f) Flow-through sharesThe Company has financed a portion of its exploration activities through the issue of flow-through

shares which transfer the tax deductibility of exploration expenditures to the investor. Proceedsreceived on the issue of such shares have been credited to share capital and the related explorationcosts have been charged to mining and resource properties. When the renunciation is made, the taximpact of the renunciation is recorded as a future income tax liability and charged against share

- 8 -





(f) Flow-through shares (Continued)capital. Where the Company has sufficient tax loss carry-forwards or other temporary deductibledifferences a future income tax asset is recognized and an income tax recovery is recorded in thestatement of operations.

(g) Stock based compensationThe Company has a stock-based compensation plan which is described in Note 5(d) and accountedfor using the recommendations in Section 3870 of the CICA Handbook, "Stock-based Compensationand Other Stock based Payments". These recommendations state that all stock-based awards bemeasured and recognized at the date of grant using the fair value method. The estimated fair value of the stock options is recorded as compensation expense over the vesting period or at the date of grantif the options vest immediately, with the offset recorded in contributed surplus. Any consideration paidto the company with respect to the exercise of stock options is credited to share capital along with anyrelated contributed surplus.

(h) Share issue costs and restructuring costsShare issue costs are recorded as a reduction of share capital. Restructuring costs are charged todeficit.

(i) Asset retirement obligationThe Company recognizes the fair value of a liability for an asset retirement obligation in the year inwhich it is incurred when a reasonable estimate of fair value can be made. The carrying amount of themining property is increased by the same amount as the liability. Changes in the liability due to thepassage of time will be recognized as an increase to the liability and a charge to the statement of operations and deficit. As at May 31, 2008 the Company has determined that it does not have materialasset retirement obligations. Accordingly, no such liability has been reflected in these financialstatements.

(j) GoodwillGoodwill is the excess of the consideration paid over the net amounts assigned to assets acquiredand liabilities assumed. Goodwill is not amortized. It is tested for impairment annually, or morefrequently, if events or changes in circumstances indicate that it is impaired.

(k) Accounting changesIn July 2006, the Accounting Standards Board ("AcSB") issued a replacement of CICA HandbookSection 1506, Accounting Changes. The new standard allows for voluntary changes in accountingpolicy only when they result in the financial statements providing reliable and more relevantinformation, requires changes in accounting policy to be applied retrospectively unless doing so isimpracticable, requires prior period errors to be corrected retrospectively and calls for enhanced

disclosures about the effects of changes in accounting policies, estimates and errors on the financialstatements. The impact that the adoption of Section 1506 will have on the Company's results of operations and financial condition will depend on the nature of future accounting changes.

- 9 -





(l) Accounting Policy Choice for Transaction CostsOn June 1, 2007, the Emerging Issues Committee of the CICA issued Abstract No. 166, AccountingPolicy Choice for Transaction Costs (EIC-166). This EIC addresses the accounting policy choice of expensing or adding transaction costs related to the acquisition of financial assets and financialliabilities that are classified as other than held-for-trading. Specifically, it requires that the sameaccounting policy choice be applied to all similar financial instruments classified as other than held-for-trading, but permits a different policy choice for financial instruments that are not similar. TheCompany has adopted EIC-166 effective November 30, 2007 and requires retroactive application toall transaction costs accounted for in accordance with CICA Handbook Section 3855, FinancialInstruments - Recognition and Measurement. The Company has evaluated the impact of EIC-166 anddetermined that no adjustments are currently required.

(m) Financial Instruments, comprehensive loss and hedgesOn June 1, 2007, the Company adopted CICA Handbook Sections 1530, "Comprehensive Income",

Section 3251 "Equity", Section 3855, "Financial Instruments - Recognition and Measurement", Section3861, "Financial Instruments - Disclosure and Presentation" and Section 3865, "Hedges." Section1530 establishes standards for reporting and presenting comprehensive income, which is defined asthe change in equity from transactions and other events from non-owner sources. Other comprehensive income refers to items recognized in comprehensive income that are excluded fromnet income calculated in accordance with GAAP.

Section 3861 establishes standards for presentation of financial instruments and non-financialderivatives, and identifies the information that should be disclosed about them. Under the newstandards, policies followed for periods prior to the effective date generally are not reversed andtherefore, the comparative figures have not been restated except for the requirement to restatecurrency translation adjustments as part of other comprehensive income.

Section 3865 describes when and how hedge accounting can be applied as well as the disclosurerequirements. Hedge accounting enables the recording of gains, losses, revenues and expensesfrom derivative financial instruments in the same period as for those related to the hedged item.Section 3855 prescribes when a financial asset, financial liability or non-financial derivative is to berecognized on the balance sheet and at what amount, requiring fair value or cost-based measuresunder different circumstances.

Under Section 3855, financial instruments must be classified into one of these five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are measured in the balance sheetat fair value except for loans and receivables, held to maturity investments and other financialliabilities which are measured at amortized cost. Subsequent measurement and changes in fair valuewill depend on their initial classification, as follows: held-for-trading financial assets are measured at

fair value and changes in fair value are recognized in net earnings; available-for-sale financialinstruments are measured at fair value with changes in fair value recorded in other comprehensiveincome until the investment is de-recognized or impaired at which time the amounts would berecorded in net earnings.

- 10 -





(m) Financial Instruments, comprehensive loss and hedgesThe Company has evaluated the impact of these new standards on its consolidated financialstatements and determined that no adjustments are currently required.

(n) Future accounting changes - Capital Disclosures and Financial Instruments – Disclosures andPresentationOn December 1, 2006, the CICA issued three new accounting standards: Handbook Section 1535,Capital Disclosures, Handbook Section 3862, Financial Instruments – Disclosures, and HandbookSection 3863, Financial Instruments – Presentation. These new standards are effective for interim andannual financial statements for the Company's reporting period beginning on June 1, 2008.

Section 1535 specifies the disclosure of (i) an entity’s objectives, policies and processes for managingcapital; (ii) quantitative data about what the entity regards as capital; (iii) whether the entity hascomplied with any capital requirements; and (iv) if it has not complied, the consequences of such non-compliance.

The new Sections 3862 and 3863 replace Handbook Section 3861, Financial Instruments —Disclosure and Presentation, revising and enhancing its disclosure requirements, and carrying forwardunchanged its presentation requirements. These new sections place increased emphasis ondisclosures about the nature and extent of risks arising from financial instruments and how the entitymanages those risks.

The Company is currently assessing the impact of these new accounting standards on itsconsolidated financial statements.

(o) Future accounting changes - International Financial Reporting Standards [“IFRS”]In January 2006, the CICA’s Accounting Standards Board ["AcSB"] formally adopted the strategy of

replacing Canadian GAAP with IFRS for Canadian enterprises with public accountability ["PAEs"]. Thecurrent conversion timetable calls for financial reporting under IFRS for accounting periodscommencing on or after January 1, 2011. On February 13, 2008 the AcSB confirmed that the use of IFRS will be required in 2011 for publicly accountable profit-oriented enterprises. For these entities,IFRS will be required for interim and annual financial statements relating to fiscal years beginning onor after January 1, 2011. A calendar year end public company will be required to have prepared, intime for its first quarter 2011 filing, comparative financial statements in accordance with IFRS for thethree months ended March 31, 2010.

The Company is currently assessing the impact of these new accounting standards on itsconsolidated financial statements.

- 11 -




3. CASH RESTRICTED FOR FLOW-THROUGH EXPENDITURES

Flow-through common shares require the Company to pay an amount equivalent to the proceeds of the issueon prescribed resource expenditures. If the Company does not incur the committed resource expenditures, itwill be required to indemnify the holders of the shares for any tax and other costs payable by them as a resultof the Company not making the required resource expenditures. As at May 31, 2008, the Company'sremaining commitment with respect to unspent resource expenditures under flow-through common shareagreements is $428,000. The Company has until December 31, 2008 to spend these funds.

4. MINERAL PROPERTIES

Cumulativefrom date

of inception of the


New Alger Property, Quebec (1)Balance, beginning of period $ 541,556 $ 277,842 $ -

Acquisition cost - - 75,000Assays 7,999 202 8,201Claim maintenance 9,833 13,156 33,675Drilling 542,621 - 542,621IP Surveys 4,032 136,722 140,754Geological 91,421 75,000 166,421Consulting 15,247 1,658 16,905

Line cutting - 30,690 30,690Goodwill - - 183,419Management fees 2,862 3,089 5,951Travel and related costs 26,312 - 26,312Other 54,793 3,197 69,163

Total expenditures 755,120 263,714 1,299,112

Less: Quebec refundable tax creditsand mining duty refunds (385,026) - (387,462)

370,094 263,714 911,650


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4. MINERAL PROPERTIES (continued)

Cumulativefrom dateof inception of

thedevelopment


Burnt Hill Property, New Brunswick (2)Balance, beginning of period $ 75,000 $ - $ -

Acquisition costs 2,520,750 75,000 2,595,750Lab Analysis 68,353 - 68,353Drilling 77,456 - 77,456

IP Surveys 21,784 - 21,784Geological 36,587 - 36,587Management fees 15,448 - 15,448Travel and related costs 14,112 - 14,112Other 22,887 - 22,887

Total expenditures 2,777,377 75,000 2,852,377

Balance, end of period $ 2,852,377 $ 75,000 $ 2,852,377

Total mineral properties $ 3,764,027 $ 616,556 $ 3,764,027

(1) The New Alger Property, a gold property, consists of a single mining concession in the Township of Cadillac in the Province of Quebec. On January 31, 2005 Chilly-Bin acquired 100% of the property from Alfer Inc. ("Alfer") in exchange for 5,000,000 Chilly-Bin common shares and $19,589. Alfer also retained a 1% netsmelter returns production royalty from the sale of all minerals produced from the New Alger Property.

On April 28, 2006 the Company acquired 100% of Chilly-Bin by issuing a total of 5,000,000 common sharesof the Company to the shareholders of Chilly-Bin in exchange for all of the outstanding common shares of Chilly-Bin.

As a result of the share exchange, the Company acquired control of Chilly-Bin, a private Ontario corporation,which holds as its main asset the New Alger Property located in Cadillac Township, Quebec.

- 13 -




4. MINERAL PROPERTIES (continued)

(2) On April 4, 2007, the Company was assigned an option agreement on the Burnt Hill tungsten andmolybdenum project located in New Brunswick. This property is wholly owned by Noront Resources Inc.(“Noront”). The Company is assuming the obligations under the option agreement for the right to earn aninitial 51% interest. These obligations include the payment of $100,000 in cash to Noront, the issuance of 2,500,000 shares in the capital of the Company to Noront, and a work commitment of $1,500,000, all of theseobligations must be met prior to October 27, 2009.

On June 11, 2007 the Company and Noront have agreed to amend the option agreement on the Burnt HillProject. Under the terms of this amendment Noront immediately commenced a $1,500,000 explorationprogram on the Burnt Hill project. The Company would issue to Noront, on or prior to December 31, 2007,$1,500,000 worth of common shares of the Company to be valued at no more than $1.00 per share, or at thesame price as a proposed financing comtemplated by the Company to be completed in the future. TheCompany would remain the operator of the program during this time. On September 21, 2007 the Companyissued 2,500,000 common shares for a value of $1,333,250 to Noront.

On March 18, 2008, the Company issued 1,875,000 common shares for a value of $1,087,500 to comply withone of the conditions of the Burnt Hill Property (the "Property") agreement to earn an initial 51% interest in theProperty. The value of the common shares issued is based on the market price of the Company's commonshares over a 2-day period before and after the announcement date of the transaction and is estimated at$0.58 per each common share.

On April 2, 2008, the Company announced that Cadillac has earned a 51% ownership interest in the BurntHill Project from Noront Resources Ltd. Cadillac has satisfied the conditions which included the payment of atotal of $100,000 in cash to Noront, the issuance of 2,500,000 common shares of Cadillac, and completion of a work commitment of $1,500,000.

Cadillac has the option to acquire a further 14% interest in the Burnt Hill Project for the payment of $500,000

in either cash or common shares of the Company.

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5. SHARE CAPITAL

(a) AUTHORIZED

Unlimited number of non-participating, redeemable, voting Class B preference sharesUnlimited number of Class C preference shares issuable in seriesUnlimited number of common shares

(b) COMMON SHARES ISSUEDSHARES VALUE

Balance, April 28, 2006 and May 31, 2006 13,164,280 2,394,498Private placement (i) 1,562,500 125,000Warrant valuation (i) - (84,375)Private placement - flow-through shares (ii) 2,400,000 144,000Private placement (iii) 2,523,331 378,500Warrant valuation (iii) - (285,116)Private placement - flow-through shares (iv) 1,860,714 651,250Warrant valuation (iv) - (494,950)Private placement (v) 1,025,999 615,600Shares issuance on exercise of warrants (vi) 564,665 84,700Valuation of exercised warrants - 25,410Tax affect of flow-through renunciation (ii)(iv) - (287,244)Share issue costs - cash - (30,799)

Balance, May 31, 2007 23,101,489 $ 3,236,474

Shares issued for property (note 4(2)) 4,375,000 2,420,750Private placement (vii) 4,894,250 3,240,400Exercise of options 100,000 10,000

Fair value of exercise of options - 16,500Exercise of warrants 100,000 10,000Fair value of exercise of warrants - 5,400Effect of flow-through renunciation (viii) - (156,716)Share issue costs - (13,410)

Balance, May 31, 2008 32,570,739 $ 8,769,398

(i) On June 14, 2006 the Company completed a private placement financing under which it issued1,562,500 units of the Company at a price of $0.08 per unit for aggregate gross proceeds of $125,000. Eachunit consists of one common share and one common share purchase warrant exercisable for 2 years at$0.10.

The fair value of the warrants was estimated using the Black Scholes pricing option model. The assumptionsused for the valuation of the respective warrants were: Dividend yield 0%, expected volatility 147%, risk freeinterest rate of 4.22% and an expected life of two years. Value assigned to 1,562,500 warrants was $84,375.

- 15 -




5. SHARE CAPITAL (continued)

(b) COMMON SHARES ISSUED (continued)

(ii) On October 4, 2006 the Company completed a private placement financing under which it issued2,400,000 flow-through shares of the Company at a price of $0.06 per share for aggregate gross proceeds of $144,000.

Exploration expenditures of $144,000 were renounced during the year which created a future income taxlliability of approximately $52,013, which has been allocated as a cost of issuing the flow-through shares.

(iii) On December 5, 2006 and December 8, 2006 the Company completed two private placements whichit issued 2,523,331 units at a price of $0.15 per share for aggregate gross proceeds of totalling $378,500.Each unit is comprised of one common share of the Company and one common share purchase warrantwhich entitles the holder thereof to purchase one common share of the Company at a price of $0.20 for aperiod of 24 months from the date of closing.

The fair value of the warrants was estimated using the Black Scholes pricing option model. The assumptionsused for the valuation of the respective warrants were: Dividend yield 0%, expected volatility 173%, risk freeinterest rate of 3.82% and an expected life of 2 years. Value assigned to 2,523,331 warrants was $285,116.

(iv) On December 29, 2006 the Company completed a private placement which it issued 1,860,714 flow-through units of the Company at a price of $0.35 per unit for gross proceeds of $651,250. Each unit iscomprised of one flow-through common share and one purchase warrant which entitles the holder thereof topurchase one common share of the Company at a price of $0.45 for a period of two years from the date of closing.

The fair value of the warrants was estimated using the Black Scholes pricing option model. The assumptionsused for the valuation of the respective warrants were: Dividend yield 0%, expected volatility 173%, risk free

interest rate of 4.02% and an expected life of 2 years. Value assigned to 1,860,714 warrants was $494,950.

Exploration expenditures of $651,250 were renounced during the year which created a future income taxliability of approximately $235,231, which has been allocated as a cost of issuing the flow-through shares.

(v) On May 30, 2007 the Company completed two private placements in which it issued 1,025,999common shares at a price of $0.60 per share for aggregate gross proceeds totalling $615,600.

(vi) The Company received proceeds of $84,700 resulting from the exercise of 564,665 common sharepurchase warrants with an expiry date of December 30, 2006. The remaining 333 warrants expired. Thewarrants were consolidated 5 for 1 and the exercise price was increased on the same basis resulting in anexercise price of $0.15.

- 16 -





(b) COMMON SHARES ISSUED (continued)

(vii) On December 31, 2007, the Company completed a private placement financing under which it issued675,500 flow through shares of the Company at a price of $0.80 per share for aggregate gross proceeds of $540,400.

On April 29, 2008, the Company completed a private placement financing under which it issued 4,218,750shares of the Company at a price of $0.64 per share for aggregate gross proceeds of $2,700,000. TrafiguraBeheer B.V. Amsterdam ("Trafigura") was the sole subscriber under the financing. Following closing,Trafigura held approximately 14.9% of the issued and outstanding shares of Cadillac.

(viii) During the period from January 1, 2007 to December 31, 2007, the Company issued an aggregate of 675,500 flow-through common shares for total proceeds of $540,400. Exploration expenditures of $540,400were renounced effective December 31, 2007. The renunciation created a future income tax recovery of

approximately $156,716, which was allocated as a cost of issuing the flow-through shares.

- 17 -





(c) WARRANTS

The following is a continuity of warrants for the period:NUMBER OF FAIRWARRANTS VALUE

Balance, May 31, 2006 564,998 25,425Private placement (Note 5(b)(i)) 1,562,500 84,375Private placement (Note 5(b)(iii)) 2,523,331 285,116Private placement (Note 5(b)(iv)) 1,860,714 494,950Exercised (Note 5(b)(vi)) (564,665) (25,410)Expired(Note 5(b)(vi)) (333) (15)

Balance, May 31, 2007 5,946,545 $ 864,441

Exercised (100,000) (5,400)

Balance, May 31, 2008 5,846,545 $ 859,041

The following table summarizes the warrants outstanding at May 31, 2008 and 2007:

NUMBER OF WARRANTS

EXERCISE PRICE OUSTANDING AT MAY 31PER SHARE ($) EXPIRY DATE 2008 2007

0.10 June 14, 2008 1,462,500 1,562,5000.20 December 5, 2008 2,256,664 2,256,6640.20 December 8, 2008 266,667 266,6670.45 December 29, 2008 1,860,714 1,860,714

5,846,545 5,946,545

- 18 -





(d) STOCK OPTIONSUnder the Company's 2006 Stock Option Plan, the Company may grant options to its employees, officers anddirectors to purchase common shares from the Company at a fixed price not less than the fair market valueof the stock on the day preceding the grant date. The options are fully vested upon issuance. The maximumterm of these stock options is five years.

The following table sets out the changes in the stock options for each of the years ended May 31, 2008 and2007:

2008 2007Weighted Weightedaverage average

No. of exercise No. of exercise

options price options price

Outstanding, beginning of year 2,200,000 $ 0.17 - $ -Granted 985,000 0.72 2,200,000 0.17

Expired (100,000) (0.10) - -Cancelled (160,000) (0.85) - -

Outstanding, end of year 2,925,000 $ 0.32 2,200,000 $ 0.17

Options exercisable at year end 2,925,000 0.32 2,200,000 0.17

Weighted average fair value of options granted during the year $ 0.52 $ 0.16

- 19 -




5. Share capital (continued)

(d) STOCK OPTIONS (continued)

As of May 31, 2008, the following stock options were outstanding and exercisable:

Options outstanding Options exercisableWeightedaverage Weighted Weighted

remaining average averageNumber contractual exercise Number exercise

Expiry Date of Options life price of Options price

December 4, 2011 (i) 1,600,000 3.51 years $ 0.10 1,600,000 $ 0.10

April 17, 2012 (ii) 500,000 3.88 0.40 500,000 0.40

October 22, 2012 (iii) 200,000 4.39 0.72 200,000 0.72

May 9, 2013 (iv) 625,000 4.94 0.68 625,000 0.68

2,925,000 4.59 years $ 0.32 2,925,000 $ 0.32

During the year, 825,000 (2007 - 2,200,000) stock options were granted to directors, officers, and consultantsof the Company. These options vested immediately and were expensed in the statement of operations anddeficit and credited to contributed surplus. For the year ended May 31, 2008, the following options wereexpensed.

Number of options AmountOption grant date expensed expensed

October 22, 2007 (iii) 200,000 $ 111,400May 9, 2008 (iv) 625,000 317,500

825,000 $ 428,900

- 20 -





(d) STOCK OPTIONS (continued)In addition, the Company issued incentive stock options to a consultant of the Company, totaling 160,000options at $0.85 with a expiry date of October 22, 2012. The fair value of the 160,000 optiond was estimatedon the date of grant using the Black-Scholes option pricing model with the following assumptions: dividendyield of 0%; expected volatility of 102.59%; risk-free interest rate of 4.21% and an expected life of 5 years.The estimated value of $86,880 will be classified as stock-based compensation and credited to contributedsurplus as the options vest. The options vest over one year as to one-quarter after three months, one-quarter after six months, one-quarter after nine months and one-quarter after twelve months. During the year, thestock options have been cancelled, the impact on expenses is $Nil for the year ended May 31, 2008.

(i) On December 4, 2006, the Company issued incentive stock options to directors and consultants of theCompany, totaling 1,700,000 options at $0.10 with a expiry date of December 4, 2011. The fair value of the1,700,000 options was estimated on the date of grant using the Black-Scholes option pricing model with the

following assumptions: dividend yield of 0%; expected volatility of 180%; risk-free interest rate of 3.75% andan expected life of 5 years. The options were valued at $280,500. The options vested immediately on thedate of grant.

(ii) On April 17, 2007, the Company issued incentive stock options to directors and consultants of theCompany, totaling 500,000 options at $0.40 with a expiry date of April 17, 2012. The fair value of the500,000 options was estimated on the date of grant using the Black-Scholes option pricing model with thefollowing assumptions: dividend yield of 0%; expected volatility of 167%; risk-free interest rate of 4.15% andan expected life of 5 years. The options were valued at $73,000. The options vested immediately on the dateof grant.

- 21 -





(e) Basic and diluted (loss) per shareThe following table sets forth the computation of basic and diluted (loss) per share:

2008 2007

Numerator:(Loss) for the year $ (717,216) $ (423,428)

Numerator for basic and diluted (loss)per share $ (717,216) $ (423,428)

Denominator:Weighted average number of common

shares 25,912,883 18,886,635

Denominator for basic (loss) per share 25,912,883 18,886,635Effect of dilutive securities:Stock options (i) - -Share purchase warrants (i) - -Denominator for diluted (loss) per share 25,912,883 18,886,635

Basic (loss) per share $ (0.03) $ (0.02)

Diluted (loss) per share $ (0.03) $ (0.02)

(i) The stock options and share purchase warrants were not included in the computation of diluted loss

per share as their inclusion would be anti-dilutive.

- 22 -





(f) Contributed surplus

The following is a continuity of contributed surplus:

Amount

Balance, May 31, 2006 $ 1,035Stock-option compensation 353,500Expired warrants 15

Balance, May 31, 2007 $ 354,550

Stock-option compensation 428,900Fair value of options exercised (16,500)

Balance, May 31, 2008 $ 766,950

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6. INCOME TAXES

Future income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for tax purposes.

The Company has one future income tax liability which arose as a result of issuing flow-through shares toinvestors. Since the expenditures generated by the flow-through shares are renounced to the investors thislowers the tax bases of the resource properties and results in a future income tax liability.

2008 2007

Future tax liability:Resource property $ (436,421) $ (348,467)

Future tax asset:Non-capital losses used to reduce

the future income tax liability 436,421 348,467

Net future income tax liability $ - $ -

In accordance with CICA Handbook EIC 146, the benefit of non-capital losses carried forward has been usedto reduce the futures income tax liability.

The Company has the following future tax assets:2008 2007

Non-capital losses carried forward $ 526,579 $ 525,339Exploration expenditures 44,267 22,533Deferred financing costs 8,588 9,119

Cumulative eligible capital 9,520 11,858

Total future tax assets 588,954 568,849Non-capital losses transferred to future income tax liability (436,421) (348,467)Valuation allowance for future tax assets (152,533) (220,382)

Net future tax assets $ - $ -

The Company provided a valuation allowance equal to the future tax asset because it is not more likely thannot that the future tax asset will be realized.

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6. INCOME TAXES (continued)

The Company's income tax recovery for each of the years ended May 31, 2008 and 2007 is as follows:

2008 2007

Current income tax expense $ - $ -Future income tax expense (recovery) (156,716) (287,244)

Total income tax expense (recovery) $ (156,716) $ (287,244)

The Company's actual income tax expense for each of the years ended is made up as follows:

2008 2007

(Loss) before income taxes $ (873,932) $ (710,672)

Income taxes recovery at combined federal and provincialrate of 35.03% and 36.12% (306,081) (256,695)

Stock-option compensation 150,244 127,684Non-deductible meals and entertainment 678 182Share issue costs written off over five years (3,168) (2,298)Renunciation of flow-through shares (156,716) (287,244)Taxable benefit not recognized 158,327 131,127

Actual income tax expense (recovery) $ (156,716) $ (287,244)

As at May 31, 2008 the Company has non-capital losses available for carry forward of approximately$1,815,000 and Canadian exploration and development expenditures of approximately $3,063,000 available

to be applied against taxable income in future years. No benefit from these amounts has been recorded inthese financial statements.

The non-capital losses expire as follows:

Year of Expiry Amount

2009 $ 603,0002010 141,0002014 90,0002015 68,0002026 98,0002027 363,0002028 452,000

$ 1,815,000

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7. RELATED PARTY TRANSACTIONS

The Company has engaged Billiken Management Services Inc. ("Billiken") to manage the New Alger Property. Billiken charges a fee based on a percentage of expenses incurred on behalf of the Company.The former President/CEO, corporate secretary and director of the Company holds a 15% ownership interestin Billiken through a private company. For the year ended May 31, 2008, the fee totaled $72,891 (2007 -$3,089). As at May 31, 2008, there was a balance owing of $43,885 owing to Billiken from the Company (Asat May 31, 2007, $11,439 was due to the Company from Billiken).

During the year, consulting fees paid/payable to the former President/CEO, corporate secretary and director of the Company amounted to $26,000 (2007- $43,000).

During the year, consulting fees of $60,000 were paid to a company controlled by the President/CEO of theCompany (2007 - $90,000).

During the year, management fees of $22,500 were paid to the CFO of the Company (2007 - $Nil).

As at May 31, 2008, pursuant to the financing disclosed in Note 5(b)(i), the following related parties of theCompany participated in the private placement by purchasing offered units: Nominex Ltd. (of which NeilNovak, a director of the Company) - 62,500 units; Nicole Brewster, the former Secretary and a former director of the Company - 62,500 units; Jim Voisin, the former President/CEO, corporate secretary and a director of the Company - 62,500 units; and Norm Brewster, the President/CEO of the Company - 250,000 units.

These transactions have been measured at the exchange amount.

8. SEGMENTED INFORMATION

The Company's operations comprise a single reporting segment engaged in resource exploration. As theoperations comprise a single reporting segment, amounts disclosed in the financial statements for (loss) andcomprehensive (loss) for the period and (loss) per share also represent segment amounts.

All of the Company's operations and assets are located in Canada.

9. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform to the current year's basis of presentation.

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10. SUBSEQUENT EVENTS

On July 3, 2008, the Company issued incentive stock options to a consultant of the Company, totaling200,000 options exercisable at $0.57 per common share with a expiry date of July 1, 2013. The fair value of the 200,000 options was estimated on the date of grant using the Black-Scholes option pricing model with thefollowing assumptions: dividend yield of 0%; expected volatility of 98.25%; risk-free interest rate of 3.45% andan expected life of 5 years. The estimated value of $85,600 will be classified as stock-based compensationand credited to contributed surplus as the options vest. The options vest over the period of one year as toone-quarter after three months, one-quarter after six months, one-quarter after nine months and one-quarter after twelve months.

Cadillac Ventures Inc. – Management’s Discussion and Analysis Fiscal

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