Mexus Gold US - Quarter Report: 2010 December (Form 10-Q)

form10q.htm

U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

		For the quarterly period ended December 31, 2010

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

For the transition period from ___________ to _____________

MEXUS GOLD US

Nevada	000-52413	20-4092640
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification Number)
	1805 N. Carson Street, #150
	Carson City, NV 89701
	(Address of principal executive offices)

	(916) 776 2166
	(Issuer’s Telephone Number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such 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. Yes X 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 Rule12b-2 of the Exchange Act.

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if 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	[ ]
No	[X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court.

Yes	[ ]
No	[ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of December 31, 2010, 154,847,368 shares of our common stock were issued and outstanding.

PART I

ITEM 1.FINANCIAL STATEMENTS

MEXUS GOLD US
(AN EXPLORATION STAGE COMPANY)
	Page

Balance Sheets as of December 31, 2010 and March 31, 2010	F-2

Statements of Operations for the three and nine months ended December 31, 2010 and 2009	F-3
and from inception (September 18, 2009) through December 31, 2010

Statements of Cash Flows for the nine months ended December 31, 2010 and December 31, 2009 and from inception (September 18, 2009) through December 31, 2010.	F-4

Notes to Financial Statements:	F-5

F-1

MEXUS GOLD US
BALANCE SHEETS
(AN EXPLORATION STAGE COMPANY)

			December 31, 2010			March 31, 2010
			(unaudited)			(audited)

ASSETS

Current assets:
	Cash		$	41,920		$	1,022
	Prepaid services			21,750			-
		Total current assets		63,670			1,022

Fixed assets:
	Property and equipment, net			831,874			85,067
		Total fixed assets		831,874			85,067

Other assets:
	Idle Equipment			168,141			66,537
	Mineral properties			53,265			167,281
				221,406			233,818

TOTAL ASSETS			$	1,116,950		$	319,907

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
	Accounts payable and accrued expenses		$	8,149		$	4,566
	Accounts payable to related party			69,238			21,600
	Accrued interest			9,103			639
	Capital lease-current			-			24,225
	Loans payable to related party			36,181			34,434
	Notes payable - current portion			1,097,000			36,000
	Deferred gain equipment sale			-			39,075
		Total current liabilities		1,219,671			160,539

Long term liabilities:
	Notes payable - long-term portion			228,130			-
	Capital lease-long term			-			25,775
		Total liabilities		1,447,801			186,314

STOCKHOLDERS' EQUITY (DEFICIT) (Note 7)
	Preferred stock, 10,000,000 shares authorized, no par value,
		nil issued and outstanding		-			-
	Common stock, 500,000,000 shares authorized, no par value,
		154,847,368 shares issued and outstanding as of December 31, 2010
		144,667,679 shares issued and outstanding as of March 31, 2010		154,847			144,668
	Additional paid-in capital			1,349,798			609,953
	Share subscriptions payable			131,745			20,000
	Accumulated deficit			(515,566	)		(515,566	)
	Deficit accumulated during the exploration stage			(1,451,675	)		(125,462	)

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)				(330,851	)		133,593

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)			$	1,116,950		$	319,907

See notes to the accompanying financial statements.
F-2

MEXUS GOLD US
STATEMENTS OF OPERATIONS
(AN EXPLORATION STAGE COMPANY)

											From Exploration
											Stage Entry
			For the		For the		For the		For the		(September 18, 2009)
			Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended		through
			December 31, 2010		December 31, 2009		December 31, 2010		December 31, 2009		December 31, 2010
			(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)

Revenues:
	Sales	$	-	$	-	$	20,000	$	10,043	$	20,000
Total revenues			-		-		20,000		10,043		20,000

Expenses:
	Cost of goods sold		4,035		8,493		13,693		18,199		13,693
	General and administrative		291,805		75,748		462,773		84,387		581,025
	Expenses on behalf of Mexus Gold Mining S.A.		307,169		-		382,689		-		382,689
	Compensation expense		179,204		-		467,275		109		479,500
	Net gain on sale of equipment		(6,472)		(1,360)		(1,472)		(1,360)		(8,397)
Total operating expenses			775,741		82,881		1,324,958		101,335		1,448,510

Loss from operations			(775,741)		(82,881)		(1,304,958)		(91,292)		(1,428,510)

Other income (expense)
	Interest expense		7,542		-		21,255		-		22,144
	Federal income tax expense		-		-		-		-		1,021
			7,542		-		21,255		-		23,165

NET LOSS		$	(783,283)	$	(82,881)	$	(1,326,213)	$	(91,292)	$	(1,451,675)

Basic loss per common share		$	(0.01)	$	(0.00)	$	(0.01)	$	(0.00)

Weighted average common shares outstanding - Basic			153,550,479		80,991,778		148,485,248		108,412,481

See notes to the accompanying financial statements.

F-3

MEXUS GOLD US
STATEMENTS OF CASH FLOWS
(AN EXPLORATION STAGE COMPANY)

								From Exploration
								Stage Entry
		For the			For the			(September 18, 2009)
		Nine Months Ended			Nine Months Ended			through
		December 31, 2010			December 31, 2009			December 31, 2010
		(unaudited)			(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss	$	(1,326,213	)	$	(91,292	)		(1,451,675	)
	Adjustments to reconcile net loss to net cash
	used in operating activities:
	Depreciation		55,125			1,790			65,233
	Common stock issued for officer compensation		270,449			11,109			363,137
	Stock based financing expense for cancellation of lease		3,000						3,000
	Gain on sale of equipment		(1,472	)		(46,000	)		(40,547	)
	Expenses on behalf of Mexus Gold Mining S.A.		167,281						167,281
	Changes in operating assets and liabilities:
	Accrued interest		12,464			-			12,464
	Receivable from a related party		-			(5,792	)		(4,553	)
	Payable to a related party		47,637			-			47,637
	Increase in prepaid expenses		(11,250	)		-			(11,250	)
	Inventory		-			10,230			8,329
	Accounts payable and accrued expenses		3,584			8,648			17,697

NET CASH USED IN OPERATING ACTIVITIES			(779,395	)		(111,307	)		(823,247	)

CASH FLOWS FROM INVESTING ACTIVITIES
	Equipment purchases		(276,819	)		(78,237	)		(397,884	)
	Purchase of mineral properties		(38,265	)		(60,750	)		(202,445	)
	Proceeds from sale of equipment		27,500			-			27,500
NET CASH USED IN INVESTING ACTIVITIES			(287,584	)		(138,987	)		(572,829	)


CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from loans payable to a related party		1,747			-			40,497
	Proceeds from loan payable		941,530			102,500			1,023,193
	Repayments on loan payable		(42,400	)		-			(42,400	)
	Proceeds from issuance of common shares for cash		207,000			105,000			362,000
	Proceeds from sales and leaseback equipment		-			50,000			50,000


NET CASH PROVIDED BY FINANCING ACTIVITIES			1,107,877			257,500			1,433,290

NET CHANGE IN CASH			40,898			7,206			37,214

CASH BALANCES
	Beginning of period		1,022			3,478			4,706
	End of period	$	41,920		$	10,685		$	41,920

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR:
	Interest	$	3,839		$	213		$	4,727
	Income taxes	$	-		$	-		$	1,021

NON-CASH FINANCING ACTIVITIES
	Property and equipment acquired through issuance of
	common shares	$	308,631		$	-		$	308,631
	Mineral properties acquired through issuance of
	common shares	$	15,000		$	-		$	15,000
	Prepaids acquired through issuance of common stock	$	10,500		$	-		$	10,500
	Property and equipment acquired through issuance of
	notes payable	$	390,000		$	-		$	390,000
	Stock issued for cancellation of lease	$	53,000		$	-		$	53,000

See notes to the accompanying financial statements.
F-5

MEXUS GOLD US

(AN EXPLORATION STAGE COMPANY)

Notes to Financial Statements

(Unaudited)

NOTE 1. ORGANIZATION AND BUSINESS OF COMPANY

Mexus Gold US (the “Company”) was originally incorporated under the laws of the State of Colorado on June 22, 1990, as U.S.A. Connection, Inc. On October 28, 2005, the Company changed its’ name to Action Fashions, Ltd. On September 18, 2009, the Company changed its’ domicile to Nevada and changed its’ name to Mexus Gold US to better reflect the Company’s new planned principle business operations. The Company has a fiscal year end of March 31.

The Company re-entered the exploration stage as of September 18, 2009, as defined by the Financial Accounting Standard Board (FASB) in FASB ASC 915-10, “Development Stage Entities”. The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced. All losses accumulated since re-entry into the exploration stage has been considered part of the Company’s exploration stage activities.

The Company is a mining company engaged in the evaluation, acquisition, exploration and advancement of gold, silver and copper projects in the State of Sonora, Mexico and the Western United States, as well as, the salvage of precious metals from identifiable sources.

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has a limited operating history and limited funds and has an accumulated deficit of $515,566 and an accumulated deficit since entry into the exploration stage of $1,451,675. These factors, among others, may indicate that the Company will be unable to continue as a going concern.

The Company is dependent upon outside financing to continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management’s plans to raise necessary funds via a private placement of its common stock to satisfy the capital requirements of the Company’s business plan. There is no assurance that the Company will be able to raise necessary funds, or that if it is successful in raising the necessary funds, that the Company will successfully operate its business plan.

The financial statements do not include any adjustments relating to the recoverability and classification of assets and/or liabilities that might be necessary should the Company be unable to continue as a going concern. Our continuation as a going concern is dependent upon our ability to meet our obligations on a timely basis, and, ultimately to attain profitability.

NOTE 3. BASIS OF PRESENTATION

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q. They do not include all disclosures required by generally accepted accounting principles in the United States of America. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended March 31, 2010 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. During the current period the Company has determined that disclosure required pursuant to ASC 915-10, “Development Stage Entities,” has been omitted from the Company’s Annual Report on Form 10-K for the year ended March 31, 2010, as well as, from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010. Additionally, the Company has determined that common shares issued for services and equipment purchases have not been valued in accordance with FASB ASC 505-50 “Equity-Based Payments to Non-Employees.” As of the date of this filing, management of the Company has not had sufficient time to determine the impact of these error corrections on financial condition, results of operations or cash flows reported in prior periods. Also, management has not been able to determine whether there are other complex transactions that have not been accounted for correctly. Accordingly, financial condition and results of operations disclosed in prior periods can no longer be relied upon. Therefore, the interim unaudited financial statements should not be read in conjunction with the financial statements included in the Form 10-K for the year ended March 31, 2010. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended December 31, 2010 are not necessarily indicative of the results that may be expected for the year ending March 31, 2011.

NOTE 4. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Management believes that the estimates used are reasonable.

Per Share Data

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share". Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Cash and cash equivalents

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505. The Company implemented this standard during the three months ended September 30, 2010. Common stock issued to non-employees prior to the nine month period ended December 31, 2010 were not accounted for under the provisions of ASC 505. Currently, the Company is in the process of evaluating the impact in prior periods.

Income taxes

The Company accounts for its income taxes in accordance with FASB ASC Topic 740-10, “Income Taxes”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Fair value of financial instruments

The carrying value of cash equivalents and accrued expenses approximates fair value due to the short period of time to maturity.

Revenue Recognition

The Company recognizes revenue on an accrual basis. Revenue is generally realized or realizable and earned when all of the following criteria are met: 1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured.

Impairment of Long-Lived Assets

The Company reviews long-lived assets and certain identifiable intangibles to be held and used for impairment whenever events or changes in circumstances have indicated that the carrying amount of assets might not be recoverable.

Asset Retirement Obligations

In accordance with accounting standards for asset retirement obligations (ASC 410), the Company records the fair value of a liability for an asset retirement obligation (ARO) when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. The associated asset retirement costs are supposed to be capitalized as part of the carrying amount of the related mineral properties. As of December 31, 2010, the Company has not recorded AROs associated with legal obligations to retire any of the Company’s mineral properties as the settlement dates are not presently determinable.

Reclassifications

The Company reclassified $3,101 of Property and equipment as of March 31, 2010 to Mineral properties to conform to the current presentation. The Company also reclassified $20,000 Stock subscriptions payable as of March 31, 2010 from current liabilities to the equity section of the balance sheet to conform to the current presentation. These reclassifications had no impact on the Company’s financial condition, results of operation, or cash flows.

Recently Issued Accounting Prounancements

In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the provisions of ASU 2010-06 to have a material effect on the financial position, results of operations or cash flows of the Company.

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-17 (ASU 2010-17), Revenue Recognition-Milestone Method (Topic 605): Milestone Method of Revenue Recognition. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. If a vendor elects early adoption and the period of adoption is not the beginning of the entity’s fiscal year, the entity should apply the amendments retrospectively from the beginning of the year of adoption. The Company does not expect the provisions of ASU 2010-17 to have a material effect on the financial position, results of operations or cash flows of the Company.

NOTE 5. RELATED PARTY TRANSACTIONS

On September 4, 2009, the Company entered into a six month Rental Agreement with Mexus Gold International, Inc., a Nevada corporation, to lease a Komatsu P38D Dozer and a PC440 core drill at a rate of $3,850 per month, payable in advance by the 5th day of each month. Payment can be made in cash or in restricted shares of common stock of the Company valued at $.08 per share. Mr. Paul D. Thompson, our sole officer and director, owns a majority interest in Mexus Gold International, Inc. This Rental Agreement expired on February 5, 2010 and was not renewed.

On December 21, 2009, the Company issued 40 million restricted shares of its common stock to Mexus Gold International, Inc. as payment for the following pieces of mining equipment:

Equipment	Serial Number	# Shares

Komatsu Dozer Drill	2NKCLL9X7FM327785	4,000,000
Cone	CONEP282S11709	22,000,000
Jaw Crusher	JAW P12X361209	8,000,000
Serge Tank	PSTF96144	3,000,000
Hydraulic Drum	HYDS12YD	3,000,000

The equipment was valued at $40,000, or par value of $0.001 per share.

Loans Payable to Related Party

On September 30, 2009, the Company made a two year zero interest promissory note payable to Phillip E. Koehnke, APC, our former majority shareholder in the amount $6,038. This is the only remaining note balance to this related party since the Asset Purchase Agreement was executed.

On October 15, 2009, the Company made a Demand Note Agreement with Paul Thompson Sr. in the amount of $10,000 at zero interest.

On February 5, 2010, the Company made a Note Payable with Paul Thompson Sr. in the amount of $3,500 at zero interest related to the acquisition of the Acker drill.

On February 10, 2010, the Company made a Demand Note Agreement with Paul Thompson Sr. in the amount of $6,300 at zero interest.

In March 2010, the Company made a Demand Note Agreement with Paul Thompson Sr. in the amount of $8,596 at zero interest.

On May 1, 2010 the Company made a Demand Note Agreement with Paul Thompson Sr. in the amount of $12,300 at zero interest.

As of December 31, 2010 and March 31, 2010, $36,181 and $34,434, respectively, was outstanding with respect to the above notes.

Accounts Payable to Related Party

The Company had a payable balance due to G.K.’s Gym, Inc., a related party owned by the parents of Phillip E. Koehnke, as of March 31, 2009. At December 31, 2010 and March 31, 2010 the Company owed $9,600 to G.K.’s Gym, Inc. for rent, respectively.

The Company has a payable balance due to Phillip Koehnke APC, Company counsel, for $24,637 at December 31, 2010.

The Company has a payable balance due for rent to Paul Thompson Sr. in the amount of $12,000 and $35,000 as of December 31, 2010 and March 31, 2010, respectively.

Equipment Lease

On December 9, 2009, the Company entered into a sale-leaseback arrangement with Francis and Alice Stadelman, shareholders of the Company, Trustees of the Stadelman Revocable Living Trust in which it sold equipment for $50,000 and immediately leased it back for 24 months. The equipment is one Komatsu Dozer Driller. In November of 2010, before any lease payments were made, the sale-leaseback arrangement was cancelled in exchange for the Company issuing 212,000 shares to the trust. The shares issued were valued at $0.25 per share or $53,000. The Company retained ownership of the equipment and the cash received pursuant to the original agreement. Accordingly, the Company determined that the true nature of the transaction should be reflected. This was done by restoring the equipment to its original basis and removing all effects of the capital lease that was recorded as a result of the sale-leaseback arrangement and there were no gains or losses recognized. The net result of this transaction was an issuance of 212,000 shares for $50,000 in cash and a difference in value of $3,000 which was charged to interest expense.

On December 1, 2009, the Company entered into a 12 month lease agreement with Paul Thompson, Sr., CEO for rent.. On October 1, 2010, the Company entered into a new month-to-month lease with Paul Thompson, Sr., CEO for rent. This agreement canceled the agreement entered into on December 1, 2009. During the three and nine months ended December 31, 2010 and for the period from September 18, 2009 (Exploration Stage Entry) through December 31, 2010, the Company recorded $11,400, $29,400 and $41,400, respectively.

Legal Services

Legal counsel to the Company, Philip Koehnke, APC, is a firm controlled by our former majority shareholder.

NOTE 6.

NOTES PAYABLE

On July 8, 2010, the Company entered into a Project Management Agreement with Powercom Services, Inc. Pursuant to the terms of the Agreement, Powercom will assist the Company with Cable salvaging operations and receive a percent of the profit from the sale of the salvaged cable. In addition, Powercom has agreed to loan the Company up to $1,000,000 for the administration and development of the cable salvaging project. As of December 31, 2010, Powercom has advanced to the Company a total of $800,000. Under the terms, the advance is required to be paid in full without interest out of the proceeds from the first shipment of cable brought to port by Mexus. The advances were for the purpose of funding the installation and cable pulling apparatus on the cable recovery barge operated by the Company.

On October 6, 2010, the Company entered into a unsecured Note Payable Agreement in the amount of $100,000 with William McCreary at 6.5 percent interest for one year. This note may be repaid in Company stock or cash, at the option of the note holder.

On September 1, 2010, the Company entered into a unsecured Promissory Note Agreement with Island Tug & Barge in the amount of $240,000 at six percent with four payments of $60,000 plus accrued interest due on March 1, 2011, September 1, 2011, March 1, 2012 and September 1, 2012.

On August 26, 2010, the Company entered into a unsecured Note Payable Agreement with Brian Farcy in the amount of $150,000 at 4.5 percent interest with monthly payments of $3,000 commencing October 1, 2010. As of December 31, 2010, the Company has made $9,000 in payments towards this note and is current in the scheduled payments.

On March 15, 2010, the Company entered into an unsecured Loan Agreement with Francis Stadelman in the amount of $23,000 at 6.5 percent interest due in six months. The Company has not made the scheduled payments on this note and it is in default.

On February 16, 2010, the Company made an unsecured Promissory Note Agreement with Martin Wisby in the amount of $3,000 at eight percent interest and due on demand.

On February 16, 2010, the Company made an unsecured Promissory Note Agreement with William McCreary in the amount of $2,500 at eight percent interest and due on demand or no later than September 1, 2010. The Company has not made the scheduled payments and is in default on this note.

On February 22, 2010, the Company entered into an unsecured Demand Note Agreement with Roy Riley in the amount of $5,000 due on demand without interest.

During the quarter ended June 30, 2010, the Company entered into an unsecured Promissory Note Agreement with Mr. Williams in the amount of $7,500 due on demand without interest.

NOTE 7.

STOCKHOLDERS’ DEFICIT

The stockholders’ equity section of the Company contains the following classes of capital stock as of December 31, 2010:

Preferred stock, no par value; 10,000,000 shares authorized, zero shares issued and outstanding at December 31, 2010 and March 31, 2010, respectively.

Common stock, no par value; 500,000,000 shares authorized: 154,847,368 and 144,667,679 shares issued and outstanding at December 31, 2010 and March 31, 2010, respectively.

Common Stock Transactions

On April 15, 2010 the Company issued 850,000 shares of S8 stock for consulting with a value of $42,500 or $0.05 per share.

On April 15, 2010 the Company issued 68,750 shares of common stock for the purchase of equipment valued at $2,922 or $0.043 per share.

On April 15, 2010 the Company issued 1,088,612 shares of common stock for the purchase of equipment valued at $46,810 or $0.043 per share.

On April 15, 2010 the Company issued 600,000 shares of S8 stock for consulting with a value of $30,000 or $0.05 per share.

On April 15, 2010 the Company issued 156,250 shares of S8 stock for consulting with a value of $7,813 or $0.05 per share.

On April 15, 2010 the Company issued 43,750 shares of S8 stock for consulting with a value of $2,188 or $0.05 per share.

On April 15, 2010 the Company issued 329,375 shares of S8 stock for the purchase of equipment valued at $13,998 or $0.0425 per share.

On May 13, 2010 the Company issued 400,000 shares of S8 stock for consulting with a value of $18,000 or $0.045 per share.

On May 13, 2010 the Company issued 100,000 shares of S8 stock for consulting with a value of $4,500 or $0.045 per share.

On May 13, 2010 the Company issued 250,000 shares of S8 stock for consulting with a value of $11,250 or $0.045 per share.

On May 13, 2010 the Company issued 500,000 shares of S8 stock for consulting with a value of $22,500 or $0.045 per share.

On May 13, 2010 the Company issued 250,000 shares of S8 stock for consulting with a value of $11,250 or $0.045 per share.

On July 27, 2010 the Company issued 714,285 shares for $25,000 in cash with a value of $0.035 per share.

On September 21, 2010 the Company issued 1,200,000 shares for the purchase of equipment valued at $239,700 or $0.20 per share.

On November 16, 2010 the Company issued 250,000 shares for $10,000 in cash with a value of $0.04 per share.

On November 16, 2010 the Company issued 125,000 shares for $10,000 in cash with a value of $0.08 per share.

On November 16, 2010 the Company issued 1,666,667 shares for $50,000 in cash with a value of $0.03 per share.

On November 16, 2010 the Company issued 250,000 shares for $25,000 in cash with a value of $0.10 per share.

On December 1, 2010 the Company issued 675,000 shares of S8 stock for consulting services rendered with a value of $51,638 or $0.0765 per share.

On December 1, 2010 the Company issued 212,000 shares of stock valued at $53,000 or $.0.25 per share in exchange for the lease cancellation. The difference between the fair value of the shares issued and the amount of the lease obligation totaling $3,000 was charged to interest expense. See note 5 “Equipment Lease” section.

On December 15, 2010 the Company issued 250,000 shares of S8 stock for consulting services rendered with a value of $62,500 or $0.25 per share.

Common Stock Payable Transactions

On June 4, 2010, the Company extended an option agreement by issuing 500,000 shares valued at $0.03 per share or $15,000.

On September 1, 2010, the Company purchased equipment by issuing 75,092 shares valued at $0.08 per share or $5,745.

On September 7, 2010, the Company received $7,000 in cash in exchange for a common stock payable of 28,000 shares or $0.25 per share.

On October 15, 2010, the Company issued 50,000 shares for consulting services valued at $0.28 per share or $14,000. Of this amount, $10,500 has been recorded as a prepaid expense.

On November 24, 2010, the Company received $50,000 in cash in exchange for a common stock payable of 200,000 shares or $0.25 per share.

On December 30, 2010, the Company received $30,000 in cash in exchange for a common stock payable of 150,000 shares or $0.30 per share.

The issuance of securities described above (except those identified as S8 issuances) were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act of 1933 and Regulation D as transactions by an issuer not involving any public offering. The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the share certificates and other instruments issued in such transactions. The sales of these securities were made without general solicitation or advertising.

The Company intends to use the proceeds from sale of the securities for the purchase of equipment for mining operations, mining machinery, supplies and payroll for operations, professional fees, and working capital.

There were no underwritten offerings employed in connection with any of the transactions set forth above.

Preferred Stock TransactionS

None

NOTE 8.

IDLE EQUIPMENT

The following mining equipment is currently being fabricated and modified by the Company and is not presently in use. Idle equipment totaled $168,141 and $66,537 as of December 31, 2010 and March 31, 2010, respectively. Idle equipment at December 31, 2010, consists of the following:

	Cone 1709
	Crusher
	C Labor
	C Parts/Matls
	C Shop/Sup
	Total Crusher
	Hopper
	Hydraulic Drum 12YD
	Jaw Crusher 1209
	Serge Tank 6144
	Automated Cable Puller

NOTE 9.

OTHER EVENTS

Restatement

The Company intends to restate its financial statements for the period ending June 30, 2010 and March 31, 2010, to correct items relating to consulting expense and equipment values. Accordingly, our previously filed financial statements for the period ending June 30, 2010 cannot be relied upon.

Option Agreement with Mexus Gold Mining, S.A. de C.V.

On October 20, 2009, the Company entered into a 180 day option agreement with Mexus Gold Mining, S.A. de C.V. pursuant to which the Company acquired the right to acquire 99% of the capital stock of Mexus Gold Mining, S.A. The option price is 20 million restricted shares of the Company’s common stock and the exercise price is 20 million restricted shares of the Company’s common stock. The agreement is conditioned upon Mexus Gold Mining, S.A. de C.V. obtaining an audit of its financial records by public accountants acceptable to the standards required for financial reporting purposes in the United States of America. The term of the option may be extended by the Company for such reasonable time as is required by Mexus Gold Mining, S.A. de C.V. to complete its audit.

Mexus Gold Mining, S.A. de C.V. represents that it owns or has claim to certain lands which are either patented land ownership or concession agreements in the State of Sonora, Mexico. In addition, Mexus Gold Mining, S.A. de C.V. owns equipment suitable for exploring for precious mineral deposits or extracting and processing mineral ores for the purpose of sale of such refined product, and has agreed to maintain the equipment in good working order and free of any lien, assessment or claim of indebtedness of any kind or nature.

As of December 31, 2010 the agreement has been extended in anticipation of an audit being completed on the financial statements of Mexus Gold Mining, S.A. de C.V. The Company anticipates this to be complete by March of 2011. In anticipation of the merger being completed, the Company has paid operating expenses on behalf of Mexus Gold Mining, S.A. The Company has paid $307,169 and $382,687 in such operating expenses for the three and nine months ended December 31, 2010, respectively. These amounts paid have been expensed due to the fact that the Company does not expect to be repaid and there are no assurances that the merger will ever be completed.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Cautionary Statement Concerning Forward-Looking Statements

The following discussion and analysis should be read in conjunction with our unaudited interim financial information and related notes included in this report. This report contains “forward-looking statements.” The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements based on current expectations and assumptions.

Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from expectations include, but are not limited to, those set forth under the section “Risk” set forth in this report.

The forward-looking events discussed in this report, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. For these statements, we claim the protection of the “bespeaks caution” doctrine. All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

The Company

Mexus Gold US is an exploration stage mining company engaged in the evaluation, acquisition, exploration and advancement of gold, silver and copper projects in the State of Sonora, Mexico and the Western United States. Mexus Gold US is dedicated to protect the environment, provide employment and education opportunities for the communities that it operates in.

Our President and CEO, Paul Thompson, brings over 40 years experience in mining and mining development to Mexus Gold US. Mr. Thompson is currently recruiting additional management personnel for its Mexico, Nevada, and submarine Cable Recovery operations to assist in growing the company.

Our executive offices are located at, 1805 N. Carson Street, #150, Carson City, Nevada 89701. Our telephone number is (916) 776 2166.

We were originally incorporated under the laws of the State of Colorado on June 22, 1990, as U.S.A. Connection, Inc. On October 28, 2005, we changed our name to Action Fashions, Ltd. On September 18, 2009, we changed our domicile to Nevada and changed our name to Mexus Gold US to better reflect our new business operations. Our fiscal year end is March 31st.

Description of the Business of Mexus Gold US

Mexus Gold US is engaged in the evaluation, acquisition, exploration and advancement of gold exploration and development projects in the state of Nevada and Mexico, as well as, the salvage of precious metals from identifiable sources. Our main activities in the near future will be comprised of our mining opportunity, completion of the acquisition of Mexus Gold S.A. de C.V. and the cable salvage opportunity.

Our mining opportunity located in the state of Nevada and the completion of the acquisition and merger of Mexus Gold S.A. de C.V. which holds properties in the state of Sonora, Mexico will provide us with projects to recover gold, silver, cooper and other precious metals. The cable salvage opportunity involves principally the recovery of copper and lead from abandoned cable previously utilized for communications purposes. Each of these opportunities are discussed further herein.

In addition, our management will look for opportunities to improve the value of the gold projects that we own or may acquire knowledge of or may acquire control through exploration drilling, introduction of technological innovations or acquisition with the goal of developing those properties into operating mines. We expect that emphasis on gold project acquisition and development will continue in the future.

Business Strategy

Our business plan was developed with the overriding goal of maximizing shareholder value through the exploration and development of our mineral properties, utilizing the extensive mining-related background and capabilities of our management and employees, and also through strategic partnerships. To achieve this goal, our business plan focuses on five strategic areas:

Lida Mining District, Nevada

We believe the Nevada properties represent the potential to provide the company with a viable project with the addition of additional geologic evaluation and the drilling of prospective areas. Our strategy for this project is to utilize geological data acquired through prior studies, confirm prior drilling results, expand the delineation of the possible ore body and identify reserves through our own geological evaluations.

Mexus Gold S.A. de C.V.

Our main objective is to complete the acquisition and merger of Mexus Gold S.A. de C.V. We expect that we will have to provide funding to the operation in Mexico in order to finalize the transaction. Once the transaction is completed, we expect to begin shipping raw materials from the mining areas for bulk processing and further analysis. We also expect to initialize an exploration drilling program to further identify the extent of the possible reserves now identified.

Cable Salvage Operation

We have determined that instituting a salvage operation offshore Alaska initially for the smaller diameter cable will provide us with the knowledge and experience to proceed forward with this project.

Other Exploration Properties

Our Other Exploration Properties comprise earlier-stage exploration properties. We are currently conducting a number of activities in connection with our earlier-stage exploration properties. During 2009, additional unpatented mining claims were staked in Esmeralda County, Nevada. The evaluation includes compilation of all geologic data and land information for the properties in a geological information system data base. We also staked additional claims in the State of Sonora, Mexico in areas of interest to the company.

Mergers and Acquisitions

We will routinely review merger and acquisition opportunities. An appropriate merger and acquisition opportunity must be accretive to the overall value of Mexus Gold US. Our primary focus will be on those opportunities involving precious metal production or near-term production with a secondary focus on other resource-based opportunities. Potential acquisition targets would include private and public companies or individual properties. Although our preference would be for candidates located in the United States and Mexico. Mexus Gold US will consider opportunities located in other countries where the geopolitical risk is acceptable.

Mining Operations

We classify our mineral properties into three categories: “Development Properties”, “Advanced Exploration Properties”, and “Other Exploration Properties”. Development Properties are properties where a decision to develop the property into a producing mine has been made. Advanced Exploration Properties are those properties where we retain a significant ownership interest or joint venture and where there has been sufficient drilling and analysis to identify and report proven and probable reserves or other mineralized material. We currently do not have a Development Property or Advanced Exploration Property. Other Exploration Properties are those that do not fall into the other categories. Please see below for information about our Other Exploration Properties.

Other Exploration Properties

Our Other Exploration Properties consist of the following:

Mining Properties located in the state of Nevada

Lida Mining District

We have entered into agreements on lands located in Esmeralda County, Nevada. We hold an option on 150 acres of patented lands, 14 mining claims and two mill sites with water rights. We have also staked additional claims as a result of our initial geological evaluations.

The lands are situated in an area of previous exploration and evaluation for precious metals. Past mine engineering reports have established indicated reserves through drilling and show both underground and open pit mining potential. Our plans are to conduct a drilling program to confirm the data presented in prior geological reports. Based on the results of our geological evaluation we will determine our future course of exploration and evaluation.

There have been several geological reports over the years regarding the properties. The following reports are under evaluation:

1. A 1977 report by Andrew J. Zinkle, Mining Engineer, the property was given 52,946 tons proven, 99,500 tons probable and 278,000 tons possible mineral bearing ore with grades estimated at 20 ounces per ton silver and .05 ounces per ton gold.

2. A report dated 1981 by E.R. Kruchowski, Mine Engineer gives the property 136,089 proven tons ore and 272,178 probable tons ore at average grades of 7.63 ounces silver per ton and .05 ounces gold per ton.

The previous Engineering reports mentioned are reported to us as covering only one third of the patented property. Additional patented claims have been included in the option agreement representing approximately 100 acres. The additional lands have no current geological evaluation ,however, there are historical reports prior to 1939.

Mining Properties Located in Mexico

The following properties are located in Mexico and owned by Mexus Gold S.A. de C.V.:

Ocho Hermanos

The main feature is a sulfide zone composed primarily of galena with some pyrite and arsenopyrite. Above this zone there is an oxide zone composed of iron and lead oxides. Recent grab samples taken indicate that values over 5,000 grams per ton of silver were encountered. These samples may not reflect the average grade. However, grab sample results indicate silver values over 3,000 grams per ton appear to be not unusual. Gold in the samples ranged from 1 gram per ton to over 5 grams per ton.

370 Area

This zone is composed of a sedimentary sequence (limestone, quartzite, shale) intruded by dacite and diorite as well as rhyolite. The docite exhibits argillic alterations as well as silicification (quartz veins). The entire area is well oxidized on the surface. This is an area of classic disseminated low grade gold and silver mineralization. Surface grab sample assays show 0.14 grams per ton to as high as 29.490 grams per ton gold. This area is an important area for potentially defining an open pit heap leach project.

El Scorpion Project Area

This area has several shear zones and veins which show copper and gold mineralization’s. Recent assays of a 84’ drill hole shows 2,887 grams per ton to 1,139 grams per ton of copper and 3.971 grams per ton to 0.072 grams per ton of gold. Another assay of rock sample from the area shows greater than 10,000 grams per ton copper. This land form distribution appears to be snonymous to the ideal porphyry deposit at Baja La Alumbrera, Argentina.

Los Laureles

Los Laureles is a vein type deposit mainly gold with some silver and copper. Recent assays from grabsamples show gold values of 67.730 grams per ton gold, 38.4 grams per ton silver, 2,800 grams per ton copper.

Cable Salvage Operation

Our examination of the information provided to us and our accumulation of data has identified the most prospective area to begin our salvage operations is the near coast areas of Alaska. The initial recovery operations will be comprised of acquiring two and one-half inch diameter cable with a weight of eight and one-half pounds. We are satisfied that we will be able to comply with all permits and notifications to the appropriate governmental authorities regarding the salvage operations.

On October 29, 2010, our tugboat, the "Caleb", and our 230 foot barge arrived in Ketchikan, Alaska. The boats are equipped with automated cable pulling equipment and underwater electrical equipment, magtonetor, underwater cable identifier, remote cameras and a high definition scanning sensor, and a cable left buoy marking system. As of the date of this report, we have begun cable pulling operations, weather permitting.

Employees

Mexus Gold US has no employees at this time. Consultants with specific skills are utilized to assist with various aspects of the requirements of activities such as project evaluation, property management, due diligence, acquisition initiatives, corporate governance and property management. If we complete our planned activation of the Nichols Property Exploration and Drilling Program, Cable Salvage Operations and completion of the Acquisition of Mexus Gold S.A. de C.V. Program, our total workforce will be approximately 30 persons. Mr. Paul D. Thompson is our sole officer and director.

Competition

Mexus Gold US competes with other mining companies in connection with the acquisition of gold properties. There is competition for the limited number of gold acquisition opportunities, some of which is with companies having substantially greater financial resources than Mexus Gold US. As a result, Mexus Gold US may have difficulty acquiring attractive gold projects at reasonable prices.

Management of Mexus Gold US believes that no single company has sufficient market power to affect the price or supply of gold in the world market.

Legal Proceedings

There are no legal proceedings to which Mexus Gold US or Mexus Gold S.A. de C.V. are a party or of which any of our properties are the subject thereof.

Property Interests, Mining Claims and Risk

Property Interests and Mining Claims

Our exploration activities are conducted in the state of Nevada. Mineral interests may be owned in this state by (a) the United States, (b) the state itself, or (c) private parties. Where prospective mineral properties are owned by private parties, or by the state, some type of property acquisition agreement is necessary in order for us to explore or develop such property. Generally, these agreements take the form of long term mineral leases under which we acquire the right to explore and develop the property in exchange for periodic cash payments during the exploration and development phase and a royalty, usually expressed as a percentage of gross production or net profits derived from the leased properties if and when mines on the properties are brought into production. Other forms of acquisition agreements are exploration agreements coupled with options to purchase and joint venture agreements. Where prospective mineral properties are held by the United States, mineral rights may be acquired through the location of unpatented mineral claims upon unappropriated federal land. If the statutory requirements for the location of a mining claim are met, the locator obtains a valid possessory right to develop and produce minerals from the claim. The right can be freely transferred and, provided that the locator is able to prove the discovery of locatable minerals on the claims, is protected against appropriation by the government without just compensation. The claim locator also acquires the right to obtain a patent or fee title to his claim from the federal government upon compliance with certain additional procedures.

Mining claims are subject to the same risk of defective title that is common to all real property interests. Additionally, mining claims are self-initiated and self-maintained and therefore, possess some unique vulnerabilities

not associated with other types of property interests. It is impossible to ascertain the validity of unpatented mining claims solely from an examination of the public real estate records and, therefore, it can be difficult or impossible to confirm that all of the requisite steps have been followed for location and maintenance of a claim. If the validity of a patented mining claim is challenged by the BLM or the U.S. Forest Service on the grounds that mineralization has not been demonstrated, the claimant has the burden of proving the present economic feasibility of mining minerals located thereon. Such a challenge might be raised when a patent application is submitted or when the government seeks to include the land in an area to be dedicated to another use.

Reclamation

We may be required to mitigate long-term environmental impacts by stabilizing, contouring, re-sloping and re-vegetating various portions of a site after mining and mineral processing operations are completed. These reclamation efforts will be conducted in accordance with detailed plans, which must be reviewed and approved by the appropriate regulatory agencies.

Risk

Our success depends on our ability to recover precious metals, process them, and successfully sell them for more than the cost of production. The success of this process depends on the market prices of metals in relation to our costs of production. We may not always be able to generate a profit on the sale of gold or other minerals because we can only maintain a level of control over our costs and have no ability to control the market prices. The total cash costs of production at any location are frequently subject to great variation from year to year as a result of a number of factors, such as the changing composition of ore grade or mineralized material production, and metallurgy and exploration activities in response to the physical shape and location of the ore body or deposit. In addition costs are affected by the price of commodities, such as fuel and electricity. Such commodities are at times subject to volatile price movements, including increases that could make production at certain operations less profitable. A material increase in production costs or a decrease in the price of gold or other minerals could adversely affect our ability to earn a profit on the sale of gold or other minerals. Our success depends on our ability to produce sufficient quantities of precious metals to recover our investment and operating costs.

Distribution Methods of the Products

The end product of our operations will usually be doré bars. Doré is an alloy consisting of gold, silver and other precious metals. Doré is sent to refiners to produce bullion that meets the required market standard of 99.95% pure gold. Under the terms of refining agreements we expect to execute, the doré bars are refined for a fee and our share of the refined gold, silver and other metals are credited to our account or delivered to our buyers who will then use the refined metals for fabrication or held for investment purposes.

General Market

The general market for gold has two principal categories, being fabrication and investment. Fabricated gold has a variety of end uses, including jewelry, electronics, dentistry, industrial and decorative uses, medals, medallions and official coins. Gold investors buy gold bullion, official coins and jewelry. The supply of gold consists of a combination of current production from mining and the draw-down of existing stocks of gold held by governments, financial institutions, industrial organizations and private individuals.

Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts, including duration;

We do not have any designs or equipment which are copyrighted, trademarked or patented.

Effect of existing or probable governmental regulations on the business

Government Regulation

Mining operations and exploration activities are subject to various national, state, provincial and local laws and regulations in the United States, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We have obtained or have pending applications for those licenses, permits or other authorizations currently required to conduct our exploration and other programs. We believe that Mexus Gold US is in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder in the Nevada and United States and in any other jurisdiction in which we will operate. We are not aware of any current orders or directions relating to Mexus Gold US with respect to the foregoing laws and regulations.

Environmental Regulation

Our gold projects are subject to various federal and state laws and regulations governing protection of the environment. These laws are continually changing and, in general, are becoming more restrictive. It is our policy to conduct business in a way that safeguards public health and the environment. We believe that the actions and operations of Mexus Gold US will be conducted in material compliance with applicable laws and regulations. Changes to current state or federal laws and regulations in Nevada, where we operate currently, or in jurisdictions where we may operate in the future, could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of our projects.

Research and Development

We do not foresee any immediate future research and development costs.

Costs and effects of compliance with environmental laws

Changes to current state or federal laws and regulations in Nevada, where we operate currently, or in jurisdictions where we may operate in the future, could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of our projects.

Critical Accounting Policies

Revenue Recognition

Stock-based compensation

ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505. The Company implemented this standard during the three months ended September 30, 2010. Common stock issued to non-employees prior to the six month period ended September 30, 2010 were not accounted for under the provisions of ASC 505. Currently, the Company is in the process of evaluating the impact in prior periods.

Impairment of Long-Lived Assets

Asset Retirement Obligations

Results of Operations

The following management’s discussion and analysis of operating results and financial condition of Mexus Gold US for the three and nine month periods ended December 31, 2010 and for the period from September 18, 2009 (development stage entry) through December 31, 2010, has been prepared based on information available to us as of February 14, 2011. During the current period the Company has determined that disclosure required pursuant to ASC 915-10, “Development Stage Entities,” has been omitted from the Company’s Annual Report on Form 10-K for the year ended March 31, 2010, as well as, from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010. Additionally, the Company has determined that common shares issued for services and equipment purchases have not been valued in accordance with FASB ASC 505-50 “Equity-Based Payments to Non-Employees.” As of the date of this filing, management of the Company has not had sufficient time to determine the impact of these error corrections on financial condition, results of operations or cash flows reported in prior periods. Also, management has not been able to determine whether there are other complex transactions that have not been accounted for correctly. Accordingly, financial condition and results of operations disclosed in prior periods can no longer be relied upon. Therefore, the interim unaudited financial statements should not be read in conjunction with the financial statements included in the Form 10-K for the year ended March 31, 2010. All amounts herein are in U.S. dollars.

Three and nine Months Ended December 31, 2010 Compared with three and nine Months Ended December 31, 2009 and September 18, 2009 (Exploration Stage Entry) through December 31, 2010

Mexus Gold US had a net loss during the three months ended December 31, 2010 of $783,283 compared to a net loss of $82,881 during the same period in 2009. The Company had a net loss during the nine months ended December 31, 2010 of $1,326,213 compared to a net loss of $91,292 during the same period in 2009. The Company had a cumulative net loss of $1,451,675 for the period from September 18, 2009 (Exploration Stage Entry) through December 31, 2010. These increases in net loss are attributable to the change of business direction of the Company to pursue opportunities in the mining and salvage industry.

Revenue

For the three months ended December 31, 2010, we had revenues of $0 compared to $0 for the three months ended December 31, 2009. For the nine months ended December 31, 2010, we had revenues of $20,000 compared to $10,043 for the nine months ended December 31, 2009. The Company recorded revenues of $30,043 for the cumulative period from September 18, 2009 (Development Stage Entry) through December 31, 2010. The revenues of $20,000 for the nine months ended December 31, 2010, are the first revenues we have received from our mining and salvage operations.

Operating Expenses

Total operating expenses increased to $775,741 during the three months ended December 31, 2010 compared to $82,881 for the three months ended December 31, 2009. Total operating expenses increased to $1,324,958 during the nine months ended December 31, 2010, compared to $101,335 for the nine months ended December 31, 2009. Total operating expenses for the period from September 18, 2009 (Exploration Stage Re-entry) through December 31, 2010 were $1,448,510. The increase in operating expenses for each of these periods was due to the Company’s expansion into the mining industry through the development process of its properties. In addition, the Company has had substantial expenses relating to its submarine cable salvage operations.

Interest Expense

The Company incurred $7,542 of interest expense during the three months ended December 31, 2010 compared to $0 during the same period in 2009. Mexus Gold US incurred $21,255 of interest expense during the nine months ended December 31, 2010 compared to $0 during the same period in 2009. The increase is attributable to the Company’s borrowings during the nine months ended December 31, 2010 to further and establish its operations.

Provision for Income Taxes

For the three and nine months ended December 31, 2010 and 2009, no income tax benefit recognized. During the period from September 18, 2009 (Exploration Stage Re-entry) through September 30, 2010, $1,021 in federal income tax expense was recorded.

Liquidity and Capital Resources

At December 31, 2010, we had cash of $41,920 compared to $1,022 at March 31, 2010. This increase in cash is due to loans received.

Our fixed assets increased to $831,874 at December 31, 2010, compared to $85,067 at March 31, 2010. Of this amount $811,397 was spent for a barge and tug boat for our cable pulling operations off the Alaskan coast.

Idle equipment increased to $168,141 at December 31, 2010, compared to $66,537 at March 31, 2010. Our mineral properties decreased to $53,265 at December 31, 2010, compared to $167,281 at March 31, 2010. This decreased was caused by a re-classification of expenditures made in regards to our plans to merge with Mexus Gold Mining, S.A. These expenditures were re-classed from assets to expenses once management determined that the repayment of the amounts was not expected and that there are no assurances that the merger will be completed. Our idle equipment represents our process of fabricating and modifying equipment relating to mining and salvage operations. Our idle equipment may be used to perform bulk sampling projects on our exploration properties or will have the capacity of being placed into a production process pending a determination by management as to the most beneficial application of the equipment.

Total assets increased to $1,116,950 at December 31, 2010, compared to $319,907 at March 31, 2010. The majority of the increased assets related to the purchase of our tug-boat and barge during the nine months ended December 31, 2010.

Our total liabilities increased to $1,447,801 at December 31, 2010, compared to $186,314 as of March 31, 2010. This total includes current liabilities of $1,219,671 and long-term liabilities of $228,130 as of December 31, 2010. At March 31, 2010, current liabilities totaled $160,539 and long-term liabilities totaled $25,775.

In addition to anticipated revenues from operations, we believe that we have sufficient available cash and available loans from our sole officer and director and other individual sources to satisfy our working capital and capital expenditure requirements during the next 12 months. There can be no assurance, however, that cash and cash from loans will be sufficient to satisfy our working capital and capital requirements for the next 12 months or beyond.

Future goals

The Company is currently in the process of obtaining governmental approval of its acquisition of Mexus Gold S.A. de C.V. in Mexico. We have also begun our cable salvage operation in Alaska and plan on continuing salvage operations in early spring weather permitting. We also intend to acquire a large vessel to begin cable salvage operations in open waters.

In the next 12 months, our goal is to begin mining operations in Mexico and to continue our cable salvage operations in Alaska and along the west coast of the United States.

Foreign Currency Transactions

None.

Off-balance Sheet Arrangements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

ITEM 4(T). CONTROLS AND PROCEDURES

We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report.

Based on this evaluation, our chief executive officer and chief financial officer concluded that as of the evaluation date our disclosure controls and procedures were not effective. Our procedures were designed to ensure that the information relating to our company required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure. Management is currently evaluating the current disclosure controls and procedures in place to see where improvements can be made.

ITEM 5. OTHER INFORMATION

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the framework in “Internal Control Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon this evaluation, management has concluded that our internal control over financial reporting was not effective as of December 31, 2010 to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Steps that the Company believes it must undertake is to retain a consulting firm to, among other things, design and implement adequate systems of accounting and financial statement disclosure controls during the current fiscal year to comply with the requirements of the SEC. We believe that the ultimate success of our plan to improve our disclosure controls and procedures will require a combination of additional financial resources, outside consulting services, legal advice, additional personnel, further reallocation of responsibility among various persons, and substantial additional training of those of our officers, personnel and others, including certain of our directors such as our committee chairs, who are charged with implementing and/or carrying out our plan.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as required in Rule 13a-15(b). We are conducting an evaluation to design and implement adequate systems of accounting and financial statement disclosure controls. We expect to complete this review during 2011 to comply with the requirement of the SEC. We believe that the ultimate success of our plan to improve our internal control over financial reporting will require a combination of additional financial resources, outside consulting services, legal advice, additional personnel, further reallocation of responsibility among various persons, and substantial additional training of those of our officers, personnel and others, including certain of our directors such as our Chairman of the Board and Chief Financial Officer, who are charged with implementing and/or carrying out our plan. It should also be noted that the design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting, or any system we design or implement in the future, will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control

There have not been any changes in our internal control over financial reporting during the nine month period ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not subject to any legal proceedings responsive to this Item Number.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We have sold the following unregistered securities to accredited investors for the quarter ended December 31, 2010:

On November 16, 2010, we issued 250,000 restricted shares of our common stock for cash with a value of $0.04 per share.

On November 16, 2010, we issued 125,000 restricted shares of our common stock for cash with a value of $0.08 per share.

On November 16, 2010, we issued 1,666,667 restricted shares of our common stock for cash with a value of $0.03 per share.

On November 16, 2010, we issued 250,000 restricted shares of our common stock for cash with a value of $0.10 per share.

On December 1, 2010, we issued 675,000 restricted shares of our common stock for consulting services rendered with a value of $0.765 per share.

On December 1, 2010, we issued 212,000 restricted shares of our common stock for cash with a value of $0.236 per share

On December 15, 2010, we issued 250,000 restricted shares of our common stock for consulting services rendered with a value of $0.25 per share

The issuance of securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act of 1933 and Regulation D as transactions by an issuer not involving any public offering. The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the share certificates and other instruments issued in such transactions. The sales of these securities were made without general solicitation or advertising.

There were no underwritten offerings employed in connection with any of the transactions set forth above.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Statements

Balance Sheets at December 31, 2010 and March 31, 2010

Statements of Operations for the nine and three months ended December 31, 2010 and 2009 and the period from September 18, 2009 (Exploration Stage Entry) through December 31, 2010

Statements of Cash Flows for the nine months ended December 31, 2010 and December 31, 2009 and for the period from September 18, 2009 (Exploration Stage Entry) through December 31 , 2010

Notes to Financial Statements

Schedules

All schedules are omitted because they are not applicable or the required information is shown in the Financial Statements or notes thereto.

	Exhibit	Form	Filing	Filed with
Exhibits	#	Type	Date	This Report

Articles of Incorporation filed with the Secretary of State of Colorado on June 22, 1990	3.1	10-SB	1/24/2007

Articles of Amendment to the Articles of Incorporation filed with the Secretary of State of Colorado on October 17, 2006	3.2	10-SB	1/24/2007

Articles of Amendment to Articles of Incorporation filed with the Secretary of State of the State of Colorado on January 25, 2007	3.3	10KSB	6/29/2007

Amended and Restated Bylaws dated December 30, 2005	3.3	10-SB	1/24/2007

Code of Ethics	14.1	10-KSB	6/29/2007

Certification of Paul D. Thompson, pursuant to Rule 13a-14(a)	31.1			X

Certification of Paul D. Thompson pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	32.1			X

Signatures

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

February 21, 2010

/s/ Paul D. Thompson

Paul D. Thompson

Chief Executive Officer

Chief Financial Officer

Principal Accounting Officer

Director