Bunker Hill Mining Corp. - Quarter Report: 2011 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2011

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

Commission File Number: 333-150028

LIBERTY SILVER CORP.

 (Exact name of registrant as specified in its charter)

Nevada		32-0196442
(State or other jurisdiction of incorporation)		(IRS Employer Identification Number)
181 Bay Street, Suite 2330 Toronto ,Ontario, Canada, M5J 3T3
(Address of principal executive offices)
416-369-3978
Registrant’s telephone number, including area code:

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 shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  [ X ] Yes   [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ X ] Yes   [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting Company.  See the definitions of “large accelerated filer,” “accelerated filer” and smaller reporting Company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]  (Do not check if a smaller reporting Company)	Smaller reporting Company [ X ]

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

As of November 10, 2011 the Issuer had 70,933,334 shares of common stock issued and outstanding.

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PART I-FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

The financial statements of Liberty Silver Corp., (“We”, “Us”, the “Company”, or the “Registrant”) a Nevada corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company in the Company's Form 10-K for the fiscal year ended June 30, 2011, and all amendments thereto.

LIBERTY SILVER CORP.

(A DEVELOPMENT STAGE COMPANY)

INTERIM FINANCIAL STATEMENTS

PERIOD ENDED SEPTEMBER 30, 2011

INDEX TO FINANCIAL STATEMENTS:	Page
Balance Sheets	3
Statements of Operations	4
Statements of Cash Flows	5-6
Notes to Unaudited Financial Statements	7-10

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

3

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

4

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

5

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

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Liberty Silver Corp.

Exploration Stage Company

Notes to Interim Financial Statements

For the Three Months Ended September 30, 2011

Note 1 – Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, stockholders’ deficit or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.  The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the year ended June 30, 2011. The interim results for the period ended September 30, 2011 are not necessarily indicative of the results for the full fiscal year.

Note 2 – Nature of Operations

Nature of Operations

The Company was incorporated in the State of Nevada on February 20, 2007. The Company is considered an exploration stage company since its formation, and the Company has not yet realized any revenues from its planned operations.  The Company is primarily focused on the exploration, acquisition and development of mining and mineral properties.  Upon the location of commercially minable reserves, the Company plans to prepare for mineral extraction and enter the development stage.

On May 24, 2007, the Company had acquired a mineral property located in Elko County, within the state of Nevada. The Company was not able to determine whether this property contains reserves that are economically recoverable. The Company has ceased their attempts at developing this property.

On February 11, 2010, the Company amended its articles of incorporation. The articles of incorporation were amended for the purposes of (1) changing the name of the registrant to Liberty Silver Corp, and (2) increasing the authorized shares of the Company from 75,000,000 shares of $0.001 par value common stock to 200,000,000 shares of $0.001 par value common stock.

On March 29, 2010, the Company entered into an Exploration Earn-In Agreement (the “Agreement”) with AuEx Ventures, Inc., a Nevada corporation.

The Agreement relates to the Trinity Silver property (the “Property”) located in Pershing County, Nevada which consists of a total of approximately 10,600 acres, including 5,700 acres of fee land and 240 unpatented mining claims.

The Company is reviewing other potential acquisitions in the resource and non-resource sectors. While the Company is in the process of completing due diligence reviews of several

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Liberty Silver Corp.

Exploration Stage Company

Notes to Interim Financial Statements

For the Three Months Ended September 30, 2011

opportunities, there is no guarantee that we will be able to reach any agreement to acquire such assets.

Note 3 - Mineral Property

    

On March 29, 2010, the Company entered into an Exploration Earn-In Agreement (the “Agreement”) with AuEx Ventures, Inc., a Nevada corporation. The Agreement relates to the Trinity Silver property (the “Property”) located in Pershing County, Nevada which consists of a total of approximately 10,600 acres, including 5,700 acres of fee land and 240 unpatented mining claims.

Under the Agreement, the Company may earn-in a 70% undivided interest in the Property during a 6-year period in consideration of (1) a signing payment of $25,000, which has been made and has been capitalized, (2) an expenditure of a cumulative total of $5,000,000 in exploration and development expenses on the Property by March 29, 2016, and (3) completion of a bankable feasibility study on the Property on or before the 7^th anniversary date of the Agreement.

The Company has begun financing to be in compliance with terms of the agreement. No actual mining has begun at this point.

Note 4 – Capital Stock

Authorized

The total authorized capital is 200,000,000 common shares with a par value of $0.001 per common share.

Issued and outstanding

On July 27, 2011, the Company issued 200,000 shares of our common stock for cash at CDN $0.55 per unit or US$0.58 per unit. Each unit includes one share of common stock and onehalf warrant to purchase an additional share of common stock (each whole such warrant, a “Warrant”). Each whole Warrant entitles the holder thereof to acquire one common share of the Company (a “Warrant Share”) at a price of CDN$0.75 or US$0.79 until the date which is 60 months following the closing date of the private placement offering (the “Warrant Term”), provided, however, that the Company may accelerate the Warrant Term under certain conditions.  

On August 4, 2011, the Company issued 1,000,000 shares of our common stock for cash at CDN $0.55 per unit or US$0.57 per unit. Each unit includes on common stock and one half of one Share purchase warrant (each whole such warrant, a “Warrant”). Each Warrant entitles the holder thereof to acquire one common share of the Company (a “Warrant Share”) at a price of CDN$0.75 or US$0.78 until the date which is 60 months following the closing date of the private placement offering (the “Warrant Term”), provided, however, that the Company may accelerate the Warrant Term under certain conditions.  

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Liberty Silver Corp.

Exploration Stage Company

Notes to Interim Financial Statements

For the Three Months Ended September 30, 2011

Note 5 – Going Concern

These financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $3,064,961 and further losses are anticipated in the development of its business. This raises substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

Management has plans to seek additional capital through a private placement and public offering of its common stock. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and develop the mineral properties and the discovery, development, and sale of reserves.

These factors, among others raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 6 – Subsequent Events

Subsequent to the period ended September 30, 2011, as reported on a Form 8-K filed by the Company on November 10, 2011, on November 10, 2011, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with Look Back Investments, Inc. (“Investor”), pursuant to which Investor acquired a Subscription Receipts (“Subscription Receipts”) for U.S. $0.50 per Subscription Receipt for gross proceeds of U.S. $3,250,000; the gross proceeds of U.S. $3,250,000 (the “Escrow Proceeds”) are being held in escrow pursuant to the terms of the Subscription Receipt.  Each Subscription Receipt entitles the Investor to receive one unit (a "Unit") from the Company without payment of any additional consideration upon conditional approval by the Toronto Stock Exchange for the listing of the common shares of the Company (the “Escrow Release Condition”).  Each Unit consists of one share of common stock of the Company and one common stock purchase warrant (a “Warrant”).  Each whole Warrant entitles the holder to acquire one share of common stock at a price of U.S. $0.65 for a period of two years following the date of listing with the Toronto Stock Exchange.  

If the Escrow Release Condition is not satisfied on or before 5:00 p.m. (Toronto time) on December 31, 2011, the Subscription Receipts will immediately become null and void and of not further force and effect and within five (5) business days thereafter the Escrow Proceeds will be returned to Investor by the escrow agent, Capital Transfer Agency, Inc.

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Liberty Silver Corp.

Exploration Stage Company

Notes to Interim Financial Statements

For the Three Months Ended September 30, 2011

In conjunction with the entry into the Subscription Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Investor, pursuant to which the Company has agreed, immediately following the conditional approval by the Toronto Stock Exchange, to file a registration statement on Form S-1 with the Securities and Exchange Commission which registers the common stock and common stock underlying the Warrants acquired by the Investor for resale.  If the registration statement does not become effective on or before six months from the date of conditional approval by the Toronto Stock Exchange for the listing of the common stock of the Company, Investor shall receive an additional common share and Warrant for, respectively, each ten (10) common shares and each ten (10) Warrants held by the Investor.  

The foregoing descriptions of the Subscription Agreement, Subscription Receipt, and Registration Rights Agreement are qualified in their entirety by the contents of the respective agreements which were filed as Exhibits 10.12, 10.13, and 10.14, respectively to a Form 8-K filed by the Company on November 10, 2011.

The Company has evaluated subsequent events for the period September 30, 2011 through the date the financial statements were issued, and, aside from the foregoing, has concluded there were no other events or transactions occurring during this period that required recognition or disclosure in its financial statements.

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ITEM 2.

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-Q AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.

Background and Overview

Liberty Silver Corp. was incorporated on February 20, 2007 under the laws of the state of Nevada under the name Lincoln Mining Corp. We were incorporated for the purpose of engaging in mineral exploration activities, and on May 24, 2007, purchased the Zone Lode mining claim located in Elko County, Nevada, for a purchase price of $10,000.  Our objective was to conduct mineral exploration activities on the Zone Lode claim to assess whether it contained economic reserves of copper, gold, silver, molybdenum or zinc.  We were not able to determine whether this property contained reserves that were economically recoverable and have ceased our attempts at developing this property.

As disclosed on a Form 8-K filed by the Company on April 5, 2010, on March 29, 2010, the Company entered into an Exploration Earn-In Agreement relating to the Trinity Silver property located in Pershing County, Nevada (the “Property”).  

The Trinity Property consists of a total of approximately 10,600 acres, including 5,700 acres of fee land and 240 unpatented mining claims.  Under the Agreement, the Registrant may earn-in a 70% undivided interest in the Property during a 6-year period in consideration of (1) a signing payment of $25,000, which has been made, (2) an expenditure of a cumulative total of $5,000,000 in exploration and development expenses on the Property by March 29, 2016, including a minimum of $500,000 which must be expended within one year from the effective date of the

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Agreement, and (3) completion of a bankable feasibility study on the Property on or before the 7^th anniversary date of the Agreement.   Our business operations are currently focused on efforts to develop the Property. During 2010, the previously completed data was organized into an accessible data base. This database includes the results of 384 drill holes, five geophysical surveys, all of the historic geochemical sampling, metallurgical reports, engineering reports, production records, and reclamation reports. A NI 43-101 compliant technical report was initiated along with a NI 43-101 compliant resource estimate. Work leading to obtaining permits necessary for the development of the future mine was initiated. The compilation of a GIS database was initiated containing the drilling, geochemical, and geophysical data. A magneto-telluric geophysical survey was completed of the covered areas of the project site was completed.

Current Operations

Overview

The Registrant presently has one property, the Trinity silver mine described below. Operations at the Trinity silver mine will consist of (i) an effort to expand the known resource through drilling, (ii) permitting for operation, if deemed economically viable, (iii) metallurgical studies aimed at enhancing the recovery of the silver and by-product lead and zinc, (iv) engineering design related to potential construction of a new mine, and (v) complete feasibility studies relating to possible re-opening the historic mine. Exploration of the property will be conducted simultaneously with the mine development in order to locate additional resources.

Products

The Registrant’s anticipated product will be precious and base metal-bearing concentrates and/or precious metal bullion produced from ores from mineral deposits which it hopes to discover and exploit through exploration and acquisition.

Property location

The Trinity silver mine is situated approximately 25 road miles north-northwest of Lovelock, Nevada, in Pershing County, Nevada, on the northwest flank of the Trinity Range, in the Trinity mining district.  It is located about 25 mi northwest of the Rochester silver mine, one of the largest silver mines in the United States.  The latitude-longitude coordinates of the mine site are 40^o 23’ 47” N, 118^o 36’ 38” W; it is situated in sections 2, 3, 4, 5, 9, 10, 11, 15, 16, and 17, Township 29 North, Range 30 East, MDB&M and sections 26-28, 34, and 35, Township 30 North, Range 30 East, MDB&M.

Land; Land Status; Property Rights; Licensing

The Trinity silver mine property includes located public and leased/subleased fee land consisting of the following:

1)

240 unpatented lode mining claims, the Seka 1-6, 8-16, 61-64, 73-76, 95-112, TS 1-18 claims, Elm1-18, and XXX 1-6 totaling approximately 4900 acres, located in sections 2, 4, 10, and 16,  Township 29 North, Range 30 East, and section 34 and 35, Township 30 North, Range 30 East.  The claims are located on public land open to mineral entry, currently valid, and subject to Bureau of Land Management regulations.

         

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(2)      4,396.44 acres of fee land leased by Newmont Mining Corp. from Southern Pacific Land Co., and its successors, and from Santa Fe Pacific Minerals Corporation, and its successors located in sections 3, 5, 11, and 17, Township 29 North, Range 30 East, and sections 27, 33, and 35, Township 30 North, Range 30 East.

 

(3)     1280 acres of fee land owned by Newmont Mining Corp located in sections 9 and 15, Township 29 North, Range 30 East.  

The Registrant’s joint venture area of interest is currently sections 2-5, 8-11, 14-17, Township 29 North, Range 30 East, MDB&M, and sections, 26-28, 32-35, Township 30 North, Range 30 East, MDB&M.  The Registrant’s rights, which apply to all of the above properties include exploration, development, and production of valuable minerals except geothermal, hydrocarbons, and sand/gravel, and also include the authority to apply for all necessary permits, licenses and other approvals from the United States of America, the State of Nevada or any other governmental or other entity having regulatory authority over any part of the Property.

Mining history

     

The Trinity mining district had limited, intermittent production of silver, gold, lead and zinc from 1865 to 1942.  In the early 1980s Santa Fe Pacific Gold identified and developed significant silver and base metal mineralization on the western side of the Trinity mining district.  In 1987, an oxidized resource, with a grade of approximately 7 ounces per ton of silver, was put into production by U.S. Borax and joint venture partner Santa Fe Pacific Mining Inc., as an open-pit, cyanide-heap-leach operation.  This mine operated for approximately 2 years and, based on production records, reportedly produced 5 million ounces of silver from 1.1 million short tons of oxide ore.  

    

Since the mine shut down in 1989 a number of explorers have examined the property by drilling and further increased the silver and base metal resource.

Economic geology

The oldest rocks exposed in the Trinity mine area are Triassic to Jurassic marine sedimentary rocks which have been intruded by Cretaceous granodiorite stocks and dikes. These rocks are overlain by Miocene to Pliocene fine-grained rhyolite volcanic and volcaniclastic units which are principle hosts for silver and base metal mineralization.  Unconformably overlying these rocks are Quaternary pediment gravels.  The general mine area is dominated by high-angle, northeast-aligned Basin and Range faulting accompanied by secondary north- to northwest-aligned fault sets.

The Miocene to Pliocene rocks were invaded by hydrothermal solution which deposited metal sulfides as fine disseminations, veinlets and breccia fillings and altered the rock by silicification, sericitization, and argillization.  The sulfides include silver-bearing freibergite and pyrargyrite, sphalerite, galena, pyrite, arsenopyrite, chalcopyrite, pyrrhotite, and stannite. Over time the nearest-surface mineralization oxidized and resulting in the near surface economic deposit that was mine by U.S. Borax.   

The unmined, underlying sulfide mineralization, as defined by extensive drilling, covers an area of over 3000 ft by 4000 ft.  The mineralization is still open along strike and at depth.

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Infrastructure

The Trinity silver deposit is situated in western Nevada, a locale which is host to many metal mines, mining equipment companies, drilling companies, mining and metallurgical consulting expertise, and experienced mining personnel.  Its location is accessible by all-weather road through an area of very sparse population.

Government Regulation and Approval

The following permits will be necessary to put the mine into production.

Environmental Issues

The historic mining and reclamation by U.S. Borax was done in compliance with all permits. The mine has been officially closed and reclaimed and there are no legacy issues. The permitting process on the historic mine did not identify any threatened or endangered species.  Pershing County is a mining friendly county with several ongoing mining operations. The following environmental permits are necessary:

§

Permit for Reclamation

§

Water Pollution Control Permit  

§

Air Quality Operating Permit

§

Industrial Artificial pond permit

§

Water Rights

The Registrant is currently beginning the programs necessary to obtain these permits. The cost, timing, and work schedules are not yet available.

Results of Operations

The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our results of operation and financial condition for the three months ended September 30, 2011 as compared to the three months ended September 30, 2010.  

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Results of Operations for the three months period ended September 30, 2011 compared to the three months period ended September 30, 2010.

Revenue

          

During the three months period ended September 30, 2011 and 2010, no revenue was generated by the Company.

Expenses.

During the three months period ended September 30, 2011, the Company experienced total operating expenses of $699,572 as compared to $227,973 during the three month period ended September 30, 2010, an increase of $471,599, or approximately 207%.   The increase in operating expenses is primarily due to increases experienced by the Company in stock compensation, financing cost associated with valuation of warrants, exploration expense, consulting fees, and operation and administration expense.   The increases in these expenses are all primarily attributable to the Company efforts to explore and develop the Trinity Silver property located in Pershing County, Nevada.

Net Loss

The Company had a net comprehensive loss of $727,228 for the three months ended September 30, 2011, as compared to a net loss of $227,500 for the three months ended September 30, 2010, a change of $499,728 or approximately 220%.  The change in net loss experienced by the Company was primarily attributable to the fact that the Company experienced an increase in operating expenses and foreign currency adjustment during the three months ended September 30, 2011.

Analysis of Financial Condition

Liquidity and Capital Resources

Management has established an estimated operating budget for the fiscal year commencing July 1, 2011. The remaining total estimated expenses are $1,625,633 for the year ended June 30, 2012.  The estimated budget is as follows:

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Management currently believes that the Company will be able to raise additional working capital needed to meet its current budget, and that the best option for doing so will be through the private placement offering and sale of equity securities.  However, there is no assurance that the required working capital will be available, or will be available on terms acceptable to the Company.

On September 8, 2011, the Company concluded a private placement offering, pursuant to which the Company raised a total of Cdn$660,000 through the sale of 1,200,000 Units at a purchase price of Cdn$0.55 per Unit.  Each Unit consists of one common share in the capital of the Company (each, a “Share”) and one half of one Share purchase warrant (each whole such warrant, a “Warrant”). Each Warrant entitles the holder thereof to acquire one common share of the Company (a “Warrant Share”) at a price of Cdn$0.75 until the date which is 60 months following the closing date of the private placement offering (the “Warrant Term”), provided, however, that the Company may accelerate the Warrant Term under certain conditions.  For the above share issuances, the shares were not registered under the Securities Act of 1933 (the “Securities Act”) in reliance upon the exemptions from registration contained in Regulation S of the Securities Act.

As identified in Note 6 in the notes to the financial statements contained here, subsequent to the period ended September 30, 2011, on November 10, 2011, the Company conducted a private placement offering.  

Current Assets and Total Assets

As of September 30, 2011, our unaudited balance sheet reflects that the Company had: i) total current assets of $228,676, as compared to total current assets of $27,017 at June 30, 2011, an increase of $201,659, or approximately 746%; and ii) total assets of $355,952, as compared to total assets of $124,528 at June 30, 2011, an increase of $231,424 or approximately 186%.  The increase in total current assets and total assets experienced by the Company was primarily attributable to the proceeds from Company issuance of common stock.

 

Total Current Liabilities and Total Liabilities

As of September 30, 2011, our unaudited balance sheet reflects that we have total current liabilities and total liabilities of $570,991, as compared to total current liabilities of $578,320 at September 30, 2010, a decrease of $7,329 or approximately 1%.  This decrease was primarily attributable to a decrease in accounts payable and accrued expenses by the Company.

Cash Flow

During the three months ended September 30, 2011 cash was primarily used to fund operations. We had a net increase in cash during the three months ended September 30, 2011 as compared to September 30, 2010.  See below for additional discussion and analysis of cash flow.

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During the three months ended September 30, 2011, net cash used in operating activities was $491,366, compared to net cash used in operating activities of $294,373 during the three months ended September 30, 2010.  This increase in net cash used in operating activities is due to stock compensation, exploration expense, consulting and operation and administration expense.

During the three months ended September 30, 2011, net cash used by investing activities was $29,765, compared to net cash used by investing activities of $0 during the three months ended September 30, 2010. The increase in net cash used by investing activities was attributable to Company acquiring additional mining interest.

During the three months ended September 30, 2011, net cash provided by financing activities was $688,639, compared to net cash provided by financing activities of $0 during the three months ended September 30, 2010.  The increase in net cash provided by financing activities was attributable to proceeds from issuance of the Company’s common during the period ended September 30, 2011.

During the three months ended September 30, 2011, no officer or director advanced money to the Company.

  

As discussed herein we realized a net comprehensive loss from operations of $727,228 during the three months ended September 30, 2011, compared to $227,500 during the three months ended September 30, 2010. This was due to stock compensation, exploration expense, consulting and operation and administration expense and foreign currency adjustment.

Off Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

ITEM 3.

          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT     MARKET  RISK.

Not Applicable.

ITEM 4.

CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a Company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods

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specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.  

Changes in Internal Control over Financial Reporting

There was no change in the Company's internal control over financial reporting during the period ended September 30, 2011, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II-OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

None

ITEM 1A.

 RISK FACTORS.

Not Applicable.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

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ITEM 4.

(REMOVED AND RESERVED).

ITEM 5.    

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

(a)

The following exhibits are filed herewith:

31.1

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.

SCH XBRL Schema Document.

101.

CAL XBRL Taxonomy Extension Calculation Linkbase Document.

101.

LAB XBRL Taxonomy Extension Label Linkbase Document.

101.

PRE XBRL Taxonomy Extension Presentation Linkbase Document.

101.

DEF XBRL Taxonomy Extension Definition Linkbase Document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

By: /s/ John Pulos

John Pulos, Chief Financial Officer

Date:  November 14, 2011

By: /s/ Geoff Browne

Geoff Browne, Chief Executive Officer

Date:  November 14, 2011

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