Can Cal Resources 10K 2008 Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2008

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

Commission file number 000-26669

CAN-CAL RESOURCES LTD.

(Exact name of registrant as specified in its charter)

Nevada		86-0865852
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2500 Vista Mar Drive
Las Vegas, Nevada	89128
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (702) 243-1849

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act:	Common Stock, $0.001 par value
	Preferred Stock, $0.001 par value, 5% cumulative

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

¨ Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

¨ Yes x No

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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 ¨ No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $9,119,599.90 based on a share value of $0.43.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 24,587,753 shares of common stock, $0.001 par value, outstanding on April 8, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).

None.

CAN-CAL RESOURCES LTD.

FORM 10-K

TABLE OF CONTENTS

		Page

PART I		2
	ITEM 1. BUSINESS (AND INFORMATION FOR ITEM 2 ON PROPERTIES)	2
	ITEM 1A. RISK FACTORS	4
	ITEM 1B. UNRESOLVED STAFF COMMENTS	9
	ITEM 2. PROPERTIES	9
	ITEM 3. LEGAL PROCEEDINGS	27
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	27

PART II		27
	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	27
	ITEM 6. SELECTED FINANCIAL DATA	29
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS	30
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	32
	ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	33
	ITEM 9A(T). CONTROLS AND PROCEDURES	33
	ITEM 9B. OTHER INFORMATION	35

Part III		35
	ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	35
	ITEM 11. EXECUTIVE COMPENSATION	38
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	39
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	40
	ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	41

Part IV		42
	15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	42

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made. You should, however, consult further disclosures we make in this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

deterioration in general or regional economic, market and political conditions;

our ability to diversify our operations;

actions and initiatives taken by both current and potential competitors;

inability to raise additional financing for working capital;

the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;

adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

inability to efficiently manage our operations;

inability to achieve future operating results;

the unavailability of funds for capital expenditures;

our ability to recruit and hire key employees;

the inability of management to effectively implement our strategies and business plans; and

the other risks and uncertainties detailed in this report.

In this form 10-K references to “Can-Cal”, “the Company”, “we,” “us,” “our” and similar terms refer to Can-Cal Resources Ltd.

AVAILABLE INFORMATION

Can-Cal files annual, quarterly and special reports and other information with the SEC. You can read these SEC filings and reports over the Internet at the SEC’s website at www.sec.gov or on our website at www.can-cal.com. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt to of a written request to us at Can-Cal Resources Ltd., 2500 Vista Mar Drive, Las Vegas, Nevada 89128.

PART I

ITEM 1. BUSINESS (AND INFORMATION FOR ITEM 2 ON PROPERTIES).

Business Development

Can-Cal Resources Ltd. is a Nevada corporation incorporated on March 22, 1995 under the name of British Pubs USA, Inc. as a wholly owned subsidiary of 305856 B.C., Ltd. d/b/a N.W. Electric Carriage Company (“NWE”), a British Columbia, Canada company (“NWE”). On April 12, 1995, NWE exchanged shares of British Pubs USA, Inc. for shares of NWE held by its existing shareholders, on a share for share basis. NWE changed its name to Can-Cal Resources Ltd. on July 2, 1996.

In January 1999, the company sold its wholly-owned Canadian subsidiary, Scotmar Industries, Inc., which was engaged in the business of buying and salvaging damaged trucks from insurance companies for resale of guaranteed truck part components. The subsidiary was sold for a profit and the proceeds used to acquire and explore mineral properties, as the Company determined that the subsidiary would lose money in the vehicle salvage business unless more capital was obtained specifically for that business.

Business of Issuer

The Company is an exploration company. Since 1996, we have examined various mineral properties prospective for precious metals and minerals and acquired those deemed promising. We own, lease or have mining interest in four mineral properties in the southwestern United States (California and Arizona, as follows: Wikieup, Arizona; Cerbat, Arizona; Owl Canyon, California; and Pigsah, California).

Prior to 2003, we performed more than 1,000 “in-house” assays on mineral samples from our properties in the United States. An assay is a test performed on a sample of minerals to determine the quantity of one or more elements contained in the sample. The in-house work was conducted with our equipment by persons under Can-Cal contract who are experienced in performing assays, but who were not independent of us. We also sent samples of materials from which we obtained the most promising results to outside independent assayers to confirm in-house results.

All the United States properties are considered “grass roots” because they are not known to contain reserves of precious metals or other minerals (a reserve is that portion of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination). None of these properties is in production.

In 2005, we sold $11,500 of volcanic cinder materials from the Pisgah, California property to industrial users. As of June 1, 2005, we have discontinued sales of volcanic cinder materials.

In 2003, the Company incorporated a wholly owned subsidiary in Mexico, Sierra Madre Resources S.A. de C.V. (“SMR”), to be an operating entity for mining-related acquisitions and activities in Mexico. In February 2004, SMR acquired a 100 % interest in a gold-silver mineral concession, in Durango State, Mexico. In July 2004, SMR applied to the Mexican Government for a gold-silver concession, also in Durango State, Mexico. These were exploration stage properties, referred to in previous Company reports as “Arco Project” and “Arco 2 Project”. In November 2004, SMR applied to Mexico’s Director of Mines for three grass roots, gold-silver exploration concessions located in the State of Chihuahua, Mexico. These applications were subsequently cancelled in February 2005 due to incomplete application filings. SMR may reapply for one or more of these concessions in the future, but has currently ceased operations in Mexico.

The Company’s current focus has changed from Mexico to the United States with present emphasis on the Pisgah Mountain material and Wikieup material. The Company has presently engaged an independent consultant who is “qualified” under the British Columbia Securities law to perform mineral resource testing on Pisgah and Wikieup.

To the extent that financing is available, we intend to explore, develop, and, if producible and warranted, bring into production precious metals properties for our own account or in conjunction with joint venture partners (in those instances where we acquire less than a 100% interest in a property). However, either due to a combination of a lack of available financing, the number of properties which merit development, and/or the scope of the exploration and development work of a particular property being beyond the Company’s financial and administrative capabilities, the Company may contract out one or more of its properties to other mining companies.

Executive offices are located at 2500 Vista Mar Drive, Las Vegas, Nevada 89128 (tel. 702.243.1849; fax 702.243.1869).

ITEM 1A. RISK FACTORS.

In the course of conducting our business operations, we are exposed to a variety of risks that are inherent to our industry. The following discusses some of the key inherent risk factors that could affect our business and operations, as well as other risk factors which are particularly relevant to us in the current period of significant economic and market disruption. Other factors besides those discussed below or elsewhere in this report also could adversely affect our business and operations, and these risk factors should not be considered a complete list of potential risks that may affect us.

Losses to Date and General Risks Faced by the Company.

We are an exploration stage company engaged in the acquisition and exploration of precious metals mineral properties. To date, we have no producing properties. As a result, we have had minimal sources of operating revenue and we have historically operated and continue to operate at a loss. For the year ended December 31, 2008, the company recorded a net loss of $1,016,661 and had an accumulated stockholders’ deficit of $9,087,174 at that date. Our ultimate success will depend on our ability to generate profits from our properties.

We lack operating cash flow and rely on external funding sources. If we are unable to continue to obtain needed capital from outside sources, we will be forced to reduce or curtail our operations.

Further, exploration and development of the mineral properties in which we hold interests depends upon our ability to obtain financing through:

Bank or other debt financing,

Equity financing, or

Other means.

As a mineral exploration company, our ability to commence production and generate profits is dependent on our ability to discover viable and economic mineral reserves. Our ability to discover such reserves are subject to numerous factors, most of which are beyond our control and are not predictable.

Exploration for gold is speculative in nature, involves many risks and is frequently unsuccessful. Any gold exploration program entails risks relating to:

The location of economic ore bodies,

Development of appropriate metallurgical processes, - Receipt of necessary governmental approvals, and

Construction of mining and processing facilities at any site chosen for mining.

The commercial viability of a mineral deposit is dependent on a number of factors including:

The price of gold,

Exchange rates,

The particular attributes of the deposit, such as its size, grade and proximity to infrastructure, financing costs, taxation, royalties, land tenure, land use, water use, power use, and foreign government regulations restricting importing and exporting gold and environmental protection requirements.

All of the mineral properties in which we have an interest or right are in the exploration stages only and are without reserves of gold or other precious metals minerals. We cannot assure that current or proposed exploration or development programs on properties in which we have an interest will result in the discovery of gold or other mineral reserves or will result in a profitable commercial mining operation.

The audit report on the financial statements at December 31, 2008 has a “going concern” qualification, which means we may not be able to continue operations unless we obtain additional funding and are successful with our strategic plan.

The Company has experienced losses since inception. The extended period over which losses have been experienced is principally attributable to the fact that a lot of money has been spent on exploring grass roots mineral properties to determine if precious metals might be present in economic quantities. In order to fund future activities the Company must identify and verify the presence of precious metals in economic quantities which is currently ongoing “In House” in addition to independent third party testing. If economic results are identified, the Company then would either seek to raise capital itself, to put the Pisgah property and the Wikieup into production, or sell the properties to another company, or place the properties into a joint venture with another company.

Attaining these objectives will require capital, which the Company will have to obtain principally by selling stock in the company. We have no definitive arrangements in place to raise the necessary capital to continue operations; however, positive analytical reports by independent third parties would possibly assist in raising capital to sustain operations

As an exploration company, we are subject to the risks of the minerals business.

The exploration for minerals is highly speculative and involves risks different from and in some instances greater than risks encountered by companies in other industries. Most exploration programs do not result in the discovery of mineralization, which is economic to mine, and most exploration programs never recover the funds invested in them. Without extensive technical and economic feasibility studies, no one can know if any property can be mined at a profit. Even with promising reserve reports and feasibility studies, profits are not assured.

The British Columbia Securities Commission has required us to obtain a report by an independent consultant qualified under the standards of the BCSC.

The British Columbia Securities Commission (“BCSC”) has required the Company to obtain a report by an independent consultant qualified under the standards of the BCSC. Under British Columbia securities laws, all disclosure of scientific or technical information, including disclosure of a mineral resource or mineral reserve must be based on information prepared by or under the supervision of an independent third party who is “qualified” under the terms of that law. The Company is under order to supply such verification by a “qualified” third party consultant, and its stock may not trade in British Columbia until such verification is accepted by the BCSC. The BCSC has also requested documentation regarding all subscribers to the Company stock who are residents in British Columbia. The Company has retained such a “qualified” third party consultant who is in the process of preparing and filing the necessary reports with the BCSC. There can be no assurance that the reports will satisfy the BCSC or that the Company’s stock will regain trading status in British Columbia. Further investigatory proceedings by the BCSC will require the Company to expend funds on legal fees, and there is no assurance that the Company would be able to continue as a going concern if it cannot afford to pay such legal fees.

We have not systematically drilled and sampled any of our properties to confirm the presence of any concentrations of precious metals, and drilling and sampling results to date have been inconclusive.

A limited amount of the sample test work was conducted by independent parties; most of that kind of work, and the drilling and other exploration work, was conducted by consultants or persons employed by us. Can-Cal is currently conducting “In House” evaluations of the material in addition to testing by an independent third party consultant.

There is substantial risk that such testing on the United States properties would show limited concentrations of precious metals, and such testing may show a lack of precious metals in the properties. Any positive test results will only confirm the presence of precious metals in the samples, and it cannot be assumed that precious metals-bearing materials exist outside of the samples tested.

Policy Changes.

Changes in regulatory or political policy could adversely affect our exploration and future production activities. Any changes in government policy, in the United States or other countries where properties are or may be held, could result in changes to laws affecting ownership of assets, land tenure, mining policies, taxation, environmental regulations, and labor relations.

Environmental costs.

Compliance with environmental regulations could adversely affect our exploration and future production activities. There can be no assurance that future changes to environmental legislation and related regulations, if any, will not adversely affect our operations.

Future reserve estimates.

All of the mineral properties in which we have an interest or right are in the exploration stages only and are without reserves of gold or other minerals. If and when we can prove such reserves, reserve estimates may not be accurate. There is a degree of uncertainty attributable to any calculation of reserves or resources. Until reserves or resources are actually mined and processed, the quantity of reserves or resources must be considered as estimates only. In addition, the quantity of reserves or resources may vary depending on metal prices. Any material change in the quantity of reserves, resource grade or stripping ratio may affect the economic viability of our properties. In addition, there can be no assurance that mineral recoveries in small-scale laboratory tests will be duplicated in large tests under on-site conditions or during production.

Because our common stock is deemed a low-priced “Penny” stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment even if and when a market develops for the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

Deliver to the customer, and obtain a written receipt for, a disclosure document;

Disclose certain price information about the stock;

Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

Send monthly statements to customers with market and price information about the penny stock; and

In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

If we fail to remain current on our reporting requirements, our common stock could be removed from the OTC Bulletin Board, which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. More specifically, FINRA has enacted Rule 6530, which determines eligibility of issuers quoted on the OTC Bulletin Board by requiring an issuer to be current in its filings with the Commission. Pursuant to Rule 6530(e), if we file our reports late with the Commission three times in a two-year period or our securities are removed from the OTC Bulletin Board for failure to timely file twice in a two-year period then we will be ineligible for quotation on the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. We have not been late in any of our SEC reports through December 31, 2008.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and 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 of the Company; (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 of the Company are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

We have a limited number of personnel that are required to perform various roles and duties as well as be responsible for monitoring and ensuring compliance with our internal control procedures. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES.

GENERAL

We own or have interests in four United States properties. They are:

Pisgah, San Bernadino County, California

Owl Canyon, California

Cerbat, Arizona

Wikieup, Arizona

A summary of important features about each of these properties is set forth in Exhibit 99.1 to our Form 10-KSB/A filed on March 11, 2009, and investors should take care to review this summary.

On September 26, 2006, the Company signed a letter of intent with E.R.S. Ltd., an Israeli owned Cyprus corporation with offices located in Tel Aviv. The letter of intent was to expand testing by E.R.S. on material from Can-Cal’s Pisgah property. The Company and E.R.S. did not enter into a definitive agreement in 2007. As of January 8, 2008, E.R.S. advised the Company that it wished to continue negotiations for a definitive agreement.

In May and June 2006, Can-Cal acquired an additional 66 20-acre lode claims for the filing cost of $1,200. This increased the Company’s property holding to 1,900 acres or 2.97 square miles of 95 lode claims.

In April, June, July and September 2006, the Company conducted further surface sampling and rock wall sampling on its Wikieup, Arizona property. These samples were shipped to ALS Chemex, an internationally recognized assayer for fire assays (process of testing the original head ore material at high temperatures to determine the recoverability of precious metals) and I.C.P. tests. The preliminary assay results were encouraging and the Company will continue with further surface sampling from various areas of the approximate six square miles of claimed land.

On August 28, 2006, Can-Cal acquired an additional 1,800 acres from the Rose Trust in exchange for 1,000,000 restricted shares of its common stock. This increased the Company’s property holding on its Wikieup, Arizona property to 3700 acres or approximately six square miles of 185 lode claims. The area is accessed by gravel road just off highway 93 approximately eight miles from the town of Wikieup, Arizona.

Adits (A type of entrance to underground mine shafts), tunnels and open pit locations following what may be a trend (direction that an ore body may follow) or vein structure (faults and cracks caused by shifts in the earth that had filled in with silica fluids and other magma volcanics which solidified leaving minerals behind) over a large region have been found on the property. The legacy of previous mining activity including; abandoned equipment, stone built homes, a cement water reservoir and numerous tailings piles, or piles of dirt left over from previous mining operations, can be seen from various locations.

The geology of the Wikieup area claims is comprised of Precambrian ganoids and gneiss. Outcrop is extensive on the property and rock units include diorite, gabbro and granitic dikes. The Company is continuing the surface sampling program and plans to hire an independent geologist for continued exploration.

In the United States, one property is owned (patented mining claims on a volcanic cinders property at Pisgah, California), one is leased with an option to purchase (the Cerbat property in Mohave County, Arizona), and two properties are groups of unpatented mining claims located on federal public land and managed by the United States Bureau of Land Management (the “BLM”): the Owl Canyon property (23 miles northeast of Baker, California); and the Wikieup property (in Mohave County, Arizona).

In the United States, unpatented claims are “located” or “staked” by individuals or companies on federal public land. Each placer claim covers 160 acres and each lode claim covers 20 acres. The Company is obligated to pay a maintenance fee of $125 per claim per year to the BLM and file an Affidavit of Assessment Work with the County showing labor and improvements of at least $100 for each claim yearly.

If the statutes and regulations for the location and maintenance of a mining claim in the United States are complied with, the locator obtains a valid possessory right, or claim, to the contained minerals. Failure to pay such fees or make the required filings may render the mining claim void or voidable. We believe we have valid claims, but, because mining claims are self-initiated and self-maintained, it is impossible to ascertain their validity solely from public real estate records. If the government challenges the validity of an unpatented mining claim, we would have the burden of proving the present economic feasibility of mining minerals located on the claims.

PISGAH, CALIFORNIA PROPERTY

GENERAL TESTING. In 1997 we acquired fee title to a “volcanic cinders” property at Pisgah, San Bernardino County, California, for $567,000. The cinders material resulted from a geologically recent volcanic eruption.

The property is privately owned and is comprised of approximately 120 acres located 10 miles southwest of Ludlow, California, with a very large hill of volcanic cinders, accessible by paved road from Interstate 40. An independent survey service hired by the Company reported that there are approximately 13,500,000 tons of volcanic cinders above the surface. Approximately 3,500,000 tons of the cinders have been screened and stockpiled, the result of prior operations by Burlington Northern Railroad Co. It processed the cinders from the hill for railroad track ballast, taking all cinders above about one inch diameter and leaving the rest on the ground surface within one-quarter mile of the hill. The remaining material in the hill and the material left over from Burlington’s operations, can easily be removed by front end loaders and loaded into dump trucks for hauling. The Cinder and Cinder #2 patented mining claims contain morphologically young alkali basalt and hawaiite lava flows and cinder (rock types created by volcanic activity). The cinder and spatter cone is about 100 meters high and has a basal diameter (circumference area at the base of the volcanic material) of about 500 meters, and was formed by the splattering of lava into a cone shape during volcanic activity. The volcanic cone and crater consists of unsorted basalis tephra (volcanic material), ranging from finest ash, through scoriascious cinders and blocks, or slag like structures born from igneous rock, to dense and broken bombs up to two meters in dimension.

The Company owns equipment which was acquired with the property, and is located on the property: a ball mill used for crushing cinders, truck loading pads, two buildings, large storage tanks, conveyors to load trucks, material silos and screening equipment.

The Pisgah property consists of patented claims we own; no fees have to be paid to the BLM or work performed on the claims to retain title to the property.

Electrical power was previously available onsite and could be reinitiated by running a new power line. The Company has reinstated testing over the past nine months and is currently conducting additional tests.

From 2000 through 2002, the Company ran numerous tests on the volcanic cinders property to determine if the material contains precious metals. Although the program indicated precious metals might exist in material taken from the Pisgah property, overall the program results were inconclusive.

Pisgah Property - Mining Lease

To generate working capital, as of May 1, 1998, we signed a Mining Lease Agreement for the Pisgah property with Twin Mountain Rock Venture, a California general partnership (“Twin Mountain,”). The Agreement is for an initial term of 10 years, with an option to renew for an additional ten-year term. Twin Mountain has the right to take 600,000 tons of volcanic cinders during the initial term, and 600,000 more tons during the additional term, for processing and sale as decorative rock. The material would be removed from the original cinder deposit, not the stockpiled material. Twin Mountain has not removed any material to date.

The agreement provides that Twin Mountain will pay minimum annual rental payments of $22,500 for the initial term and $27,500 per year for the additional term. Twin Mountain is also obligated to pay us a monthly production royalty for all material removed from the premises: The greater of 5% of gross sales f.o.b. Pisgah, or $.80 per ton for material used for block material; plus 10% of gross sales f.o.b. Pisgah for all other material. Against these payments, Twin Mountain will be credited for minimum royalty payments previously made.

Twin Mountain is current in payments, which are pledged to service company debt. Twin Mountain has not yet removed any material from the property and has not indicated when it would do so. Twin Mountain does not have the right to remove or extract any precious metals from the property; it does have the right to remove cinder material, which could contain precious metals (and Twin Mountain would have title to the removed cinder material), but it cannot process the materials for precious metals either on or off site.

Mining and reclamation permits, and an air quality permit have been issued by the California regulatory agencies in the names of both Twin Mountain and the Company. We posted a cash bond in the amount of $1,379 (1% of the total bond amount) and Twin Mountain has posted the remainder of the $137,886 bond. If Twin Mountain defaults, we would be responsible for reclamation of the property, but reclamation costs incurred in that event would be paid in whole or part by the bond posted by us and Twin Mountain. Reclamation costs are not presently determinable.

Pisgah Property - Debt Transactions

At December 31, 2007, we owed a second private lender (First Colony Merchant) a total of $652,500 including accrued interest, on three notes payable secured by a deed of trust and assignment of rents (payments under the Twin Mountain lease) on the Pisgah property. For additional consideration for part of the amounts loaned, the Company granted the lender a five-year option to purchase 300,000 restricted shares of common stock, at the lower of $0.65 per share or 50% of the lowest trading price during the month before exercise, payable in cash. The option was exercised in 2000 at $0.52 per share. Also, in fiscal year 2000, as further consideration, we issued 45,000 restricted shares of common stock to a corporate affiliate of the lender as a loan placement fee. As of the filing date of this Annual Report, the Company is in default of principal and interest payments totaling $707,446 and has initiated forbearance on collection with the lender.

Location and Access

The Pisgah Project is located in San Bernardino County, 72 kilometers (45 miles) east of the city of Barstow, California, and 307 kilometers (192 miles) south-southeast of Las Vegas, Nevada, United States. Barstow lies near the southwest border of California, east of the junction of Interstate 15, Interstate 40 and U.S. Route 66. The Project is centered at Latitude 34o 44’ 47” North, Longitude 116o 22’ 29” West (See Figures 1, 2 and 3), or UTM (metric) co-ordinates 55700 E/384500 N in Zone 11, datum point NAD 27. It lies within the NW ¼ of Section 32, Township 8 North, Range 6 East from San Bernardino Meridian and has an area of 48.4 hectares (120.2 acres).

Access to the Pisgah Project is by the paved 2-lane paved road. From the junction of Interstate 15 and Interstate 40 just east of Barstow, California travel east along Interstate 40 for 52 kilometers (32.5 miles). Take the Hector Rd. Exit and turn right onto Hector Rd. From here turn left onto Historic Route 66 for 7.4 kilometers (4.6 miles), and then turn right (south) onto the Pisgah Crater road. Follow this road for 3.2 kilometers (2.0 miles) to the Pisgah Crater workings.

Pisgah Project

General Location Map

Pisgah Project

Regional Location Map

Pisgah Project

Township Location Map

Pisgah Project

Topography Map

OWL CANYON - S & S JOINT VENTURE

In 1996, the Company entered into a Joint Venture Agreement with the Schwarz family covering approximately 425 acres of unpatented placer and lode mining claims in the Silurian Hills of California, known as Owl Canyon (“ the S&S Joint Venture.”) The S & S Joint Venture has since reduced its holdings to 160 acres of lode claims and a five-acre mill site claim. These claims are prospective for precious metals and some base metals. The property is located approximately 23 miles northeast of Baker, California, accessible by 23 miles of paved and dirt road. The Company and the Schwarz family each have a 50% interest in the venture which is operated by a management committee, comprised of Ronald Sloan, a director of the company, and Ms. Robin Schwarz.

Holding costs are approximately $160 per year for county and BLM filing fees for each of the eight lode claims, in accordance with filings under provisions of the “Small Miner Waiver”. Work must be performed on the property each year to keep title to the claims.

Pursuant to the Joint Venture Agreement, we are funding the venture’s operations. Any income from the venture will first be paid to the Company to repay funds advanced to the venture or spent on its account, with any additional income divided 50% to the Company and 50% to the Schwarz family.

As the acquisition price of its 50% interest in the S & S Joint Venture, in 1996 the Company issued 500,000 restricted shares of common stock to the Schwarz family.

The venture owns miscellaneous drilling, milling, assay, and facilities, all of it stored at the property. The equipment is used but operational.

Prior to 2003, the Company conducted extensive preliminary testing and assaying on the Owl Canyon property. Results indicate precious metals are present in material located on the Owl Canyon property, and further exploration is warranted. Upon conclusion of the trenching program conducted by Geochemist, Bruce Ballantyne, the assay results confirmed that the “Papa Hill” section of Owl Canyon should be a designated drill target in the future.

Geology Of Owl Canyon

Mineralization on the property migrates along north/south oriented faulting and at the contact point between metamorphic and dolomite rocks. Metalliferous deposits, or deposits filled with fine metal particles, along these fractures are prevalent near the central area of Owl Canyon. Along the southern side of the property, fault contact areas exhibit localized zone alteration from migrating hydrothermal fluids, or areas altered from hot lava and hydrothermal fluids due to volcanic activity, producing a mineralized vein ranging in width from approximately 18 to 36 inches.

We have performed external and in-house fire assays on material from the Owl Canyon property, sending both trench and rock samples to independent laboratories. Approximately 15 tons of material was removed to a depth of 3 to 4 feet to expose a continuation of one of the veins. An independent laboratory analyzed samples from this material.

A detailed structural and geologic mapping survey has been completed on the property, indicating some zones in certain areas are suitable exploration targets. Currently, work on this property has been suspended. This property is without known reserves and future work would be exploratory in nature. There was no significant activity on this property in 2007.

Location

The Silurian Hills are located in the Silurian Hills 15-minute quadrangle. The property is located in the northeastern corner of the 7.5 minute series topographic map entitled North of Bank Quadrangle California - San Bernardino County in Section 9, Township 16N, Range 9E. It is centered along the topographic feature known as Owl Canyon.

The area lies within the California Desert Conservation Area administered by the Bureau of Land Management. This agency identified the Silurian Hills as having high mineral potential for silver (1980) which led the County of San Bernardino to zone the area for mining and mineral exploration.

Access

From Interstate 15 at Baker, California, access is via California State Highway 127 for a distance of nine miles north of the service center town of Baker. At the Powerline Road junction turn right and travel on a USGS class 3 road generally under the Power Transmission Line for a further 9 miles. At this point turn to the left and head north to the Silurian Hills until metal gates are reached after 5 miles of slow, track-road, travel. This is the eastern boundary of the Owl Canyon Mineral Property.

Topography

Relief at the Owl Canyon Mineral Property area ranges from 650 meters to about 775 meters (elevation 2,000 to 3,000 feet above sea level). Locally, topographic relief is on the order of 1,000 feet in less than one half a mile along the Owl Canyon topographic feature.

CERBAT PROPERTY

On March 12, 1998, we signed a Lease and Purchase Option Agreement covering six patented mining claims in the Cerbat Mountains, Hualapai Mining District, and Mohave County, Arizona. The patented claims cover approximately 120 acres. We paid $10,000 as the initial lease payment and are obligated to pay $1,500 per quarter as minimum advance royalties. The Company has the option to purchase the property for $250,000, less payments already made. In the event of production before purchase, we will pay the lessor a production royalty of 5% of the gross returns received from the sale or other disposition of metals produced. Except for limited testing and evaluation work performed in mid- 2002, no work has been performed on this property since 1999. Access is north 15 miles from Kingman, Arizona on Highway 93, east from the historical market to Mill Ranch, then left three miles to a locked gate.

The country rock is pre-Cambrian granite, gneiss and schist complex. It is intruded by dikes of minette, granite porphyry, diabase, rhyolite, basalt and other rocks, some of which are associated with workable veins and are too greatly serieitized (altered small particles within the material) for determination. The complex is also flanked on the west by masses of the tertiary volcanic rocks, principally rhyolite. The mineralized body contains principally gold, silver and lead. They occur in fissure veins, which generally have a north-easterly trend and a steep north-easterly or south-westerly dip. Those situated north of Cerbat wash are chiefly gold bearing while those to the south principally contain silver and lead. The gangue (material that is considered to have base metals that are not precious or worth recovering for market value) is mainly quartz and the values usually favor the hanging wall. The Company has been informed by the owner that the property contains several mine shafts of up to several hundred feet in depth and tailings piles containing thousands of tons of tailings. The property has not produced since the late 1800’s.

The buildings on the property are practically valueless, owing to being in disuse for so many years.

We conducted (in late June and July 2002) a limited number of preliminary tests and assays on material taken from mine dumps (material left on the property from mining by others many years ago). It was anticipated that this material could be economically processed. However, the dump material tonnage will not support a small-scale operation without being supplemented with additional underground ore. We are considering selling or farming out the property, as there have been expressions of interest in the property from time to time. There was no significant activity on Cerbat in 2007.

Location and Access

The Cerbat Group of claims is located in the Hualapai Mining District about 15 miles north from Kingman which is the nearest railroad and supply point. The state highway from Kingman to Boulder Dam and Las Vegas passes within 4 miles of the property and a good County road connects the highway with the mining site. The County road passes through the Rolling Wave and Red Dog claims making transportation available to the lower workings. An old road connects the New Discovery shaft with the Cerbat workings near the crest of the hill. This group of claims is favorably situated for trucking and transportation purposes.

WIKIEUP PROPERTY

The Wikieup property consists of 2400 acres or approximately 3.8 square miles of 120 lode claims. The lode claims are accessed via gravel road approximately eight miles just off Highway 93 at the town of Wikieup, Arizona.

Holding costs are approximately $155 per year for county and BLM filing fees, and work must be performed on the property each year to keep title to the claims.

The geology of the area is comprised of Precambrian ganoids and gneiss. Outcrop is extensive on the property and rock units include diorite, gabbro and granitic dikes. The Company has kept the claims in good standing by submission of the required rental fees. During the past nine months, the Company has conducted surface sampling of the rock units on the property for “In House” and independent third party companies’ analytical evaluation and assay tests. We are currently holding the property for further exploration. At the present time the property is without known reserves.

Location and Access

The Wikieup Project is located in southern Mohave County, 88 kilometers (55 miles) south of the city of Kingman, Arizona, and 253 kilometers (158 miles) southeast of Las Vegas, Nevada, United States. Wikieup lies on Interstate 93. It occurs at Latitude 34o 44’ 47” North, Longitude 116o 22’ 29” West, the site of Wikieup, and west from there for approximately 19 kilometres (12 miles; Figures 1, 2 and 3). The Project is located 37 kilometers (23 miles) northwest of the mining camp of Bagdad, Arizona and 25 kilometers (16 miles) northwest of the mining camp of Bagdad, Arizona.

Access to the Wikieup Project is by the paved 2-lane Interstate 93 from the village of Wikieup. A few claims straddle the highway at Wikieup, but the main body of mining claims is accessed by heading west from the junction of Interstate 93 at Wikieup onto Chicken Springs Road and following various secondary and tertiary gravel and sand roads. Many of the tertiary roads require a 4-wheeldrive vehicle for access.

Wikieup Project

General Location Map

Wikieup Project

Regional Location Map

Wikieup Project

District Location Map

Wikieup Project

Geology Map

(b)(2) Distribution methods of products or services. Not applicable.

(b)(3) The Company has not publicly announced any new product(s) or service(s).

(b)(4) The evaluation and acquisition of precious metals, mining properties and mineral properties is competitive; as there are numerous companies involved in the mining and minerals business.

Exploration for and production of minerals is highly speculative and involves greater risks than exist in many other industries. Many exploration programs do not result in the discovery of mineralization and any mineralization discovered may not be of a sufficient quantity or quality to be profitably mined. Also, because of the uncertainties in determining metallurgical amenability of any minerals discovered, the mere discovery of mineralization may not warrant the mining of the minerals on the basis of available technology.

The Company’s decision as to whether any of the mineral properties it now holds, or which it may acquire in the future, contain commercially mineable deposits, and whether such properties should be brought into production, will depend upon the results of the exploration programs and independent feasibility analysis and the recommendation of engineers and geologists. The decision will involve the consideration and evaluation of a number of significant factors, including, but not limited to: 1. The ability to obtain all required permits; 2. Costs of bringing the property into production, including exploration and development or preparation of feasibility studies and construction of production facilities; 3. Availability and costs of financing; 4. Ongoing costs of production; 5. Market prices for the metals to be produced; and 6. The existence of reserves or mineralization with economic grades of metals or minerals. No assurance can be given that any of the properties the Company owns, leases or acquires contain (or will contain) commercially mineable mineral deposits, and no assurance can be given that the Company will ever generate a positive cash flow from production operations on such properties.

(b)(5) The Company has processed and tested mineralized materials and produced very small amounts of precious metals on a testing basis. These have come primarily from testing material from the Pisgah Mountain, Wikieup, Cerbat and the Owl Canyon properties.

(b)(6) The Company is not dependent upon one or a few major customers.

(b)(7) The Company holds no patents, trademarks, licenses, franchises, concessions, and has no labor contracts.

(b)(8) Exploration and mining operations in the United States are subject to statutory and agency requirements which address various issues, including: (i) environmental permitting and ongoing compliance, including plans of operations which are supervised by the Bureau of Land Management (“BLM”), the Environmental Protection Agency (“EPA”) and state and county regulatory authorities and agencies (e.g., state departments of environmental quality) for water and air quality, hazardous waste, etc.; (ii) mine safety and OSHA generally; and (iii) wildlife (Department of Interior for migratory fowl, if attractive standing water is involved in operations). See (b)(11) below. The Company has been added by San Bernardino County as a party to the Approved Mining/ Reclamation Plan and related permits, which have been issued for the Pisgah property. See Item 2, Description of Properties - Pisgah, California - Pisgah Property Mining Lease.

(b)(9) Because any exploration (and future mining) operations of the Company would be subject to the permitting requirements of one or more agencies, the commencement of any such operations could be delayed, pending agency approval (or a determination that approval is not required because of size, etc.), or the project might even be abandoned due to prohibitive costs.

Generally, the effect of governmental regulations on the Company cannot be determined until a specific project is undertaken by the Company.

(b)(10) The Company has expended a significant amount of funds on consulting, geochemical analytical testing, metallurgical processing and extracting, and precious metal assaying of material, however, the Company does not consider those activities as research and development activities. All those expenses are borne by the Company.

(b)(11) Federal, state and local provisions regulating the discharge of material into the environment, or otherwise relating to the protection of the environment, such as the Clean Air Act, Clean Water Act, the Resource Conservation and Recovery Act, and the Comprehensive Environmental Response Liability Act (“Superfund”) affect mineral operations. For exploration and mining operations, applicable environmental regulation includes a permitting process for mining operations, an abandoned mine reclamation program and a permitting program for industrial development. Other non- environmental regulations can impact exploration and mining operations and indirectly affect compliance with environmental regulations. For example, a state highway department may have to approve a new access road to make a project accessible at lower costs, but the new road itself may raise environmental issues. Compliance with these laws, and any regulations adopted there under, can make the development of mining claims prohibitively expensive, thereby frustrating the sale or lease of properties, or curtailing profits or royalties which might have been received there from. In 1997, the S & S Joint Venture spent approximately $32,000 to clean up areas of the Owl Canyon properties as requested by the BLM. The Company cannot anticipate what the further costs and/or effects of compliance with any environmental laws might be. The BLM approved the S&S Joint Venture trenching program at Owl Canyon without a requirement for bonding. The BLM approved the reclamation of this trenching program in 2000. BLM demanded further clean up of the mill site and surrounding area, and the Joint Venture complied with their request in 2000.

(b)(12) The Company presently has two full-time employees and relies on outside subcontractors, consultants and agents, to perform various administrative, legal and technical functions, as required.

OTHER FINANCING TRANSACTIONS

During the twelve months ended December 31, 2007, we sold 1,238,167 restricted common shares to 72 Canadian residents and 4 US residents for a total of $375,533 and issued warrants to purchase 492,795 restricted common shares, exercisable between $0.35 to $0.65 per share. These securities were issued in private transactions, with respect to the Canadian residents, in reliance on the exemption from registration with the SEC provided by Regulation S, and with respect to the U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act.

The common stock was rendered to a U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act. The shares were valued at a total of $22,000. In addition to monthly cash payments of $3,500 per month for twelve months, the Company has recorded debt forgiveness of $147,419 in accordance with the terms of the settlement agreement. Due to the related party nature of the transaction the gain has been recorded to additional paid in capital, therefore, there was no impact on the Company’s net loss.

During the first quarter of the Fiscal Year Ended December 31, 2008, the Company sold 32,500 shares of restricted common stock and 32,500 warrants to purchase 32,500 shares of common stock to an accredited Canadian investor and one United States investor for a total of $8,125. The warrants are exercisable at a price of $0.35 per share and expire two years from the date of issuance. These securities were issued in private transactions, with respect to the Canadian resident, in reliance on the exemption from registration with the SEC provided by Regulation S and with respect to the United States investor, in reliance upon the exemption from registration provided under Section 4(2) of the 1933 Securities Act.

ITEM 3. LEGAL PROCEEDINGS.

The Company is not currently a party to litigation. The British Columbia Securities Commission has recently required the Company to obtain a report by an independent consultant qualified under the standards of the BCSC. Under British Columbia securities laws, all disclosure of scientific or technical information, including disclosure of a mineral resource or mineral reserve must be based on information prepared by or under the supervision of an independent third party who is “qualified” under the terms of that law. The Company is under order to supply such verification by a “qualified” third party consultant, and its stock may not trade in British Columbia until such verification is accepted by the BCSC. The BCSC has also requested documentation regarding all subscribers to the Company stock who are resident in British Columbia. The Company has retained such a “qualified” third party consultant who is in the process of preparing and filing the necessary reports with the BCSC.

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

We did not submit any matters to a vote of our security holders during the fourth quarter of 2008.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a) Market Information

Our Common Stock trades sporadically on the over-the-counter bulletin board market (OTC:BB) under the symbol CCRE. Our common stock has traded infrequently on the OTC:BB, which limits our ability to locate accurate high and low bid prices for each quarter within the last two fiscal years. Therefore, the following table lists the quotations for the high and low bid prices as reported by a Quarterly Trade and Quote Summary Report of the OTC Bulletin Board for the fiscal years 2008 and 2007. The quotations from the OTC Bulletin Board reflect inter-dealer prices without retail mark-up, markdown, or commissions and may not represent actual transactions.

	2008		2007
	High	Low	High	Low
1st Quarter	$0.28	$0.11	$0.71	$0.30
2nd Quarter	$0.51	$0.11	$0.70	$0.38
3rd Quarter	$0.51	$0.20	$0.56	$0.30
4th Quarter	$0.25	$0.11	$0.40	$0.18

(b) Holders of Common Stock

As of April 8, 2009, there were approximately 534 holders of record of our Common Stock and 24,587,753 shares outstanding.

In the future we intend to follow a policy of retaining earnings, if any, to finance the growth of the business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on the Common Stock will be the sole discretion of board of directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant.

(d) Securities Authorized for Issuance under Equity Compensation Plans

STOCK OPTION PLANS

THE CAN-CAL 2003 QUALIFIED INCENTIVE STOCK OPTION PLAN: The 2003 Qualified Incentive Stock Option Plan was established by the Board of Directors in June 2003 and approved by shareholders in October 2003. A total of 1,500,000 shares of common stock are reserved for issuance under this plan, which will be used to compensate senior executives and mid-level employees in the future. An option on 500,000 shares had been granted to Mr. Ciali under this plan. These options expired unexercised in 2006. An option on 300,000 shares had been granted to Anthony F. Ciali when he was appointed an officer of the company in March 2003. These options expired unexercised in 2006.

An option on 500,000 shares has been granted to Mr. Ronald Sloan with an exercise price of $0.20 in June 2006 under this plan. This option was exercisable upon issuance and expires in 2011. An option on 125,000 shares has been granted to Mr. James Dacyszyn with an exercise price of $0.20 in June 2006 under this plan. This option was exercisable upon issuance and expired in June 2008. An option on 125,000 shares has been granted to Mr. John Brian Wolfe with an exercise price of $0.20 in June 2006 under this plan. This option was exercisable upon issuance and expired in June 2008.

THE CAN-CAL 2003 NON-QUALIFIED STOCK OPTION PLAN FOR SENIOR EXECUTIVES, OUTSIDE DIRECTORS, AND CONSULTANTS: The 2003 Non-Qualified Option Plan was established by the Board of Directors in June 2003 and approved by shareholders in October 2003. A total of 1,500,000 shares of common stock are reserved for issuance under this plan. An option on 300,000 shares had been granted to Anthony F. Ciali, a former officer of the Company, when he was appointed an officer of the company in March 2003. These options expired unexercised in 2006. An option on 100,000 shares had been granted to Luis Vega when he signed a consulting agreement with the company in April 2003. Mr. Vega’s options expired unexercised in 2006.

The total number of options issued and outstanding at any time, under both the Qualified and Non-Qualified Stock Option Plans will not exceed 10% of the company’s issued and outstanding common stock, calculated on a pro forma basis.

Recent Sales of Unregistered Securities

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the year ended December 31, 2008.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS.

(A) PLAN OF OPERATION.

Can-Cal Resources Ltd. is a public company engaged in seeking the acquisition and exploration of metals mineral properties. As part of its growth strategy, the Company will focus its future activities in the USA, with an emphasis on the Pisgah Mountain, California property and the Wikieup, Arizona property.

The Company has discontinued all industrial sales for the volcanic materials located on the Pisgah property in California subject to the finalization of the current analytical program.

At December 31, 2008, we had approximately $46,000 cash available to sustain operations. Accordingly we are uncertain as to whether the Company may continue as a going concern. While we may seek additional investment capital, or possible funding or joint venture arrangements with other mining companies, we have no assurance that that such investment capital or additional funding and joint venture arrangements will be available to the Company.

(B) MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following should be read together with the financial statements included in this report.

LIQUIDITY AND CAPITAL RESOURCES AT DECEMBER 31, 2008 COMPARED WITH DECEMBER 31, 2007, AND RESULTS OF OPERATIONS FOR THE TWO YEARS ENDED DECEMBER 31, 2008 AND 2007:

	Year ended December 31
	2008			2007
Material sales	$	-		$	-
Cost of sales		-			-
Gross profit		-			-

Depreciation		10,452			10,225

Exploration costs		123,798			200,427
General & administrative expenses		316,210			254,626
General & administrative, related party		120,000			124,176
Other (income) expenses		3,677			15,459
Impairment of operating assets		442,524			-
Net (loss)	$	(1,016,661	)	$	(604,913	)

The following table summarizes working capital, total assets, accumulated deficit, and shareholders’ deficit.

	Year ended December 31
	2008			2007

Working capital	$	(1,291,723	)	$	(736,162	)

Total assets	$	106,587		$	619,602

Accumulated (deficit)	$	(9,087,174	)	$	(8,070,513	)

Shareholders’ (deficit)	$	(1,231,084	)	$	(222,547	)

The Company raised $352,624 in financing activities from a sale of 32,500 shares of common stock and the net proceeds from the sale of notes.

We recorded a net loss from operations in 2008 of $1,016,661 compared to a net loss from operations of $604,913 in 2007.

Unless we can establish the economic viability of the Company’s exploration properties, we will continue writing off the expenses of exploration and testing. Therefore, losses will continue until such time, if ever, as we establish the economic viability of the properties. If viability is established for a property, some of the expenses related to that property would be capitalized instead of expensed.

We have no material commitments for capital expenditures.

Default Upon Senior Securities

The Company is in default on a note payable for $300,000 and its semi-annual interest payments of $328,000 for the years ended 2002 - 2008. The Company is currently negotiating forbearance on collection of the principal and interest.

The Company is also in default on two notes payable to a stockholder, which matured in January 2008 and February 2008, respectively. The principal amount of each note is $25,114 and $35,436, with accrued interest of $2,860 and $4,036, respectively. Each note bears interest at 8.0% per annum and is secured by real property. The Company is currently negotiating forbearance on collection of the principal and interest of each note.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Financial Statements

	Page
Reports of Independent Registered Public Accounting Firms	F-1
Balance Sheets at December 31, 2008 and 2007	F-3
Statements of Operations for the Years Ended December 31, 2008 and December 31, 2007	F-4
Statements of Stockholders’ (Deficit) for the Years Ended December 31, 2008 and December 31, 2007	F-5
Statements of Cash Flows for the Years Ended December 31, 2008 and December 31, 2007	F-8
Notes to Financial Statements	F-10

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Can-Cal Resources LTD

Las Vegas, Nevada

We have audited the accompanying balance sheet of Can-Cal Resources LTD (an exploration stage company) as of December 31, 2008, and the related statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2008 and for the period from March 22, 1995 (Inception) to December 31, 2008. Can-Cal Resources LTD’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of Can-Cal Resources LTD from March 22, 1995 (Inception) to December 31, 2007. Such statements are included in the cumulative inception to December 31, 2008 totals of the statements of operations, stockholders’ deficit and cash flows. Those consolidated statements were audited by other auditors whose report dated March 20, 2008 has been furnished to us and our opinion, insofar as it relates to amounts for the period from March 22, 1995 (Inception) to December 31, 2007 included in the cumulative totals, is based solely upon the report of the other auditors.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Can-Cal Resources LTD as of December 31, 2008, and the results of its operations and its cash flows for the year then ended and for the period from March 22, 1995 (Inception) to December 31, 2008, in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses from operations and current liabilities exceed current assets, all of which raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ L.L. Bradford & Company, LLC

April 13, 2009

Las Vegas, Nevada

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Can-Cal Resources Ltd.

Las Vegas, Nevada

We have audited the accompanying balance sheet of Can-Cal Resources Ltd. as of December 31, 2007, and the related statements of operations, stockholders' deficit, and cash flows for the years ended December 31, 2007 and 2006 and from inception (March 22, 1995) to December 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

In our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the financial position of Can-Cal Resources Ltd. as of December 31, 2007, and the results of its operations and cash flows for the years ended December 31, 2007 and 2006 and from inception (March 22, 1995) to December 31, 2007, in conformity with accounting principles generally accepted in the United States.

As discussed in Note 3 to the financials statements, the Company’s total assets and total stockholders’ deficit, for the year ended December 31, 2006 reported as $491,400 and ($546,100), respectively, should have been $872,900 and ($164,600), respectively.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered losses from operations and current liabilities exceed current assets, all of which raise substantial doubt about its ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ De Joya Griffith & Company, LLC

Henderson, NV

March 20, 2008, except for Note 3, as to which is dated September 5, 2008

F-2

Can-Cal Resources Ltd. (an Exploration Stage Company)
Balance Sheets

	December 31,
	2008			2007
Assets

Current assets:
Cash	$	45,848		$	105,987
Other current assets		100			-
Total current assets		45,948			105,987

Property, plant and equipment (net accumulated depreciation of $136,347 and $125,894)		57,496			67,948

Other assets:
Capitalized mineral rights		1,248			443,772
Deposits		1,895			1,895
		3,143			445,667

Total assets	$	106,587		$	619,602

Liabilities and Stockholders’ (Deficit)

Current liabilities:
Accounts payable and accrued liabilities	$	33,356		$	50,252
Accrued interest		376,118			311,320
Accrued officer salary		211,689			110,652
Notes payable - related parties		446,550			360,550
Notes payable		258,500			-
Unearned revenues		11,458			9,375
Total current liabilities		1,337,671			842,149

Commitments and contingencies		-			-

Stockholders’ (deficit):
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding		-			-
Common stock, $0.001 par value, 100,000,000 shares
authorized, 24,587,753 and 24,555,253 shares issued and outstanding
as of December 31, 2008 and December 31, 2007, respectively		24,588			24,555
Additional paid in capital		7,831,502			7,823,411
Accumulated (deficit)		(9,087,174	)		(8,070,513	)
Total stockholders’ (deficit)		(1,231,084	)		(222,547	)

Total liabilities and stockholders’ (deficit)	$	106,587		$	619,602

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

F-3

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Statements of Operations

	For the years ended						March 22, 1995 (Inception) to
	December 31,			December 31,			December 31,
	2008			2007			2008

Material sales	$	-		$	-		$	245,500

Cost of sales		-			-			263,400

Gross profit		-			-			(17,900	)

Expenses:
Exploration costs		123,798			200,427			492,325
Depreciation		10,452			10,225			230,777
General and administrative expenses		316,210			254,626			6,073,236
Officer compensation		120,000			124,176			731,176
Impairment of operating assets		442,524			-			442,524
Total operating expenses		1,012,984			589,454			7,970,038

Loss from operations		(1,012,984	)		(589,454	)		(7,987,938	)

Other income (expense):
Other income from legal judgment		-			-			47,200
Interest income		126			10,338			52,914
Rental revenue		62,217			24,400			294,217
Gain (loss) on sale of fixed assets		-			7,001			26,801
Interest expense		(66,020	)		(57,248	)		(1,046,768	)
Total other income (expense)		(3,677	)		(15,459	)		(625,636	)

Loss before provision for income taxes		(1,016,661	)		(604,913	)		(8,613,574	)
Provision for income taxes		-			-			-

Net loss from continuing operations		(1,016,661	)		(604,913	)		(8,613,574	)

Income from discontinued operations
Income (loss) from discontinued operations		-			-			116,400
Gain (loss) on disposal of operations (net of taxes)		-			-			(590,000	)
Net loss	$	(1,016,661	)	$	(604,913	)	$	(9,087,174	)

Basic loss per common share	$	(0.04	)	$	(0.03	)

Basic weighted average common shares outstanding		24,586,315			24,191,015

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

F-4

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Statements of Changes in Stockholders’ Deficit

	Common Stock								Foreign
	Number of Shares		Amount		Additional Paid-in Capital		Unamortized		Currency Translation Adjustment			Accumulated (Deficit)			Total S tockholders’ (Deficit)
Balance, March 22, 1995 (Unaudited)		-	$	-	$	-	$	-		-		$	-		$	-
Common shares issued for services		-		-		-		-		-			-			-
Net loss		-		-		-		-		-			(1,000	)		(1,000	)

Balance, December 31, 1995		-		-		-		-		-			(1,000	)		(1,000	)

Common shares issued for services		3,441,217		3,400		625,000		-		-			-			628,400
Prior period adjustment, investment in joint venture		-		-		-		-		-			497,900			497,900
Net loss		-		-		-		-		-			(497,000	)		(497,000	)

Balance, December 31, 1996		3,441,217		3,400		625,000		-		-			(100	)		628,300

Common shares issued for services		3,006,435		3,000		1,051,400		-		-			-			1,054,400
Net loss		-		-		-		-		-			(1,044,700	)		(1,044,700	)

Balance, December 31, 1997		6,447,652		6,400		1,676,400		-		-			(1,044,800	)		638,000

Common shares issued for cash		557,509		600		211,200		-		-			-			211,800
Foreign currency translation adjustment		-		-		-		-		8,500			-			8,500
Net loss		-		-		-		-		-			(353,000	)		(353,000	)

Balance, December 31, 1998		7,005,161		7,000		1,887,600		-		8,500			(1,397,800	)		505,300

Common shares issued for cash		1,248,621		1,200		572,600		-		-			-			573,800
Foreign currency translation adjustment		-		-		-		-		(11,800	)		-			(11,800	)
Realized foreign currency translation loss		-		-		-		-		3,300			-			3,300
Prior period Adjustment		-		-		-		-		-			15,000			15,000
Elimination of subsidiary upon disposal		-		-		-		-		-			116,400			116,400
Net loss		-		-		-		-		-			(1,038,500	)		(1,038,500	)

Balance, December 31, 1999		8,253,782		8,200		2,460,200		-		-			(2,304,900	)		163,500

Common shares issued for cash		1,119,009		1,200		948,400		-		-			-			949,600
Net loss		-		-		-		-		-			(962,500	)		(962,500	)

Balance, December 31, 2000		9,372,791		9,400		3,408,600		-		-			(3,267,400	)		150,600

Common shares issued for cash		785,947		800		81,500		-		-			-			82,300
Net loss		-		-		-		-		-			(704,500	)		(704,500	)

F-5

	Common Stock									Foreign
	Number of Shares		Amount		Additional Paid-in Capital		Unamortized			Currency Translation Adjustment		Accumulated (Deficit)			Total Stockholders’ (Deficit)
Balance, December 31, 2001		10,158,738		10,200		3,490,100		-			-		(3,971,900	)		(471,600	)

Common shares issued for cash		1,093,280		1,100		269,900		-			-		-			271,000
Common shares issued for services		92,292		100		23,800		-			-		-			23,900
Options granted for services		-		-		7,100		-			-		-			7,100
Common shares issued for repayment of note payable, related party in the amount of $119,800, including accrued interest of $71,800		309,677		300		119,500		-			-		-			119,800
Warrants granted for loan fees on convertible notes payable, related party		-		-		16,700		(16,700	)		-		-			-
Common shares issued for loan fees on convertible notes payable, related party		30,000		-		13,500		(13,500	)		-		-			-
Deemed interest on beneficial conversion feature of notes payable, related party		-		-		20,500		-			-		-			20,500
Amortization of loan fees		-		-		-		8,200			-		-			8,200
Net loss		-		-		-		-			-		(709,300	)		(709,300	)

Balance, December 31, 2002		11,683,987		11,700		3,961,100		(22,000	)		-		(4,681,200	)		(730,400	)

Common shares issued for cash		823,410		800		163,900		-			-		-			164,700
Common shares issued for services		381,260		400		63,800		-			-		-			64,200
Options granted for services		-		-		61,300		-			-		-			61,300
Common shares issued for repayment of note payable, related party in the amount of $78,300, including accrued interest of $43,300		364,305		400		77,900		-			-		-			78,300
Deemed interest on beneficial conversion feature of notes payable, related party		-		-		38,300		-			-		-			38,300
Amortization of loan fees		-		-		-		15,000			-		-			15,000
Net loss		-		-		-		-			-		(711,100	)		(711,100	)

Balance, December 31, 2003		13,252,962		13,300		4,366,300		(7,000	)		-		(5,392,300	)		(1,019,700	)

Common shares issued for cash		1,564,311		1,600		306,400		-			-		-			308,000
Common shares issued for exercise of warrants		701,275		700		124,900		-			-		-			125,600
Common shares issued for services		390,224		400		73,800		-			-		-			74,200
Warrants granted for services		-		-		12,200		-			-		-			12,200
Interest expense for warrants granted		-		-		280,200		-			-		-			280,200
Common shares issued in satisfaction of accounts payable and accrued liabilities in the amount of $229,400		917,747		900		228,500		-			-		-			229,400
Common shares issued for repayment of note payable in the amount of $99,700, including accrued interest of $14,700		702,760		700		99,000		-			-		-			99,700
Common shares issued for repayment of note payable, related party in the amount of $82,700		330,747		300		82,400		-			-		-			82,700
Deemed interest on beneficial conversion feature of notes payable, related party		-		-		17,600		-			-		-			17,600
Amortization of loan fees		-		-		-		7,000			-		-			7,000
Net loss		-		-		-		-			-		(1,030,500	)		(1,030,500	)

Balance, December 31, 2004		17,860,026		17,900		5,591,300		-			-		(6,422,800	)		(813,600	)

F-6

	Common Stock								Foreign
	Number of Shares		Amount		Additional Paid-in Capital		Unamortized		Currency Translation Adjustment		Accumulated (Deficit)			Total Stockholders’ (Deficit)
Common shares issued for cash		762,500		800		152,700		-		-		-			153,500
Common shares issued for exercise of warrants		349,545		300		69,500		-		-		-			69,800
Net loss		-		-		-		-		-		(421,800	)		(421,800	)

Balance, December 31, 2005 (Audited)		18,972,071		19,000		5,813,500		-		-		(6,844,600	)		(1,012,100	)

Common shares issued for cash		2,448,213		2,400		642,100		-		-		-			644,500
Common warrants exercised for cash		174,000		200		43,300		-		-		-			43,500
Common shares issued for services		19,500		-		5,000		-		-		-			5,000
Common shares issued in satisfaction of accounts payable and accrued liabilities		385,714		400		80,600		-		-		-			81,000
Common shares issued in satisfaction of notes payable, related parties		56,821		100		11,800		-		-		-			11,900
Common shares issued in satisfaction of convertible debenture, (including accrued interest of $1,895)		206,767		200		41,700		-		-		-			41,900
Common shares issued for asset acquisition		1,000,000		1,000		399,000		-		-		-			400,000
Option granted to officers and directors		-		-		123,500		-		-		-			123,500
Warrants granted for services		-		-		2,200		-		-		-			2,200
Warrants granted in satisfaction of accounts payable and accrued liabilities		-		-		65,400		-		-		-			65,400
Warrants granted in satisfaction of notes payable, related parties		-		-		9,600		-		-		-			9,600
Warrants granted in satisfaction of convertible debenture		-		-		40,000		-		-		-			40,000
Net loss		-		-		-		-		-		(621,000	)		(621,000	)

Balance, December 31, 2006		23,263,086		23,264		7,277,735		-		-		(7,465,600	)		(164,600	)

Common shares issued for cash		492,795		492		188,698		-		-		-			189,190
Common warrants exercised for cash		745,372		745		185,598		-		-		-			186,343
Common shares issued for services		4,000		4		2,010		-		-		-			2,014
Common shares issued in satisfaction of accrued wages of $22,000, related party		50,000		50		21,950		-		-		-			22,000
Debt forgiveness, related party		-		-		147,419		-		-		-			147,419
Net loss		-		-		-		-		-		(604,913	)		(604,913	)

Balance, December 31, 2007		24,555,253		24,555		7,823,410		-		-		(8,070,513	)		(222,547	)

Common shares issued for cash		32,500		33		8,092		-		-		-			8,124
Net loss		-		-		-		-		-		(1,016,661	)		(1,016,661	)

Balance, December 31, 2008		24,587,753	$	24,588	$	7,831,502	$	-	$	-	$	(9,087,174	)	$	(1,231,084	)

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

F-7

Can-Cal Resources Ltd. (an Exploration Stage Company)
Statements of Cash Flows
	For the years ended								March 22, 1995 (Inception) to
	December 31,				December 31,				December 31,
	2008				2007				2008
Cash flows from operating activities:
Net loss		$	(1,016,661	)		$	(604,913	)	$	(9,087,174	)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization			10,452				10,225			247,777
Bad debts			-				-			207,100
(Gain) loss on sale of fixed assets			-				(7,001	)		(6,501	)
Stock based compensation			-				24,014			532,814
Stock issued for financing and interest			-				-			523,200
Beneficial conversion feature on convertible debenture			-				-			25,200
Loss on disposal of investment property			-				-			938,600
Undistributed earnings of affiliate			-				-			(174,300	)
Gain on discontinued operations			-				-			(116,400	)
Loss on foreign currency translation			-				-			8,500
Impairment of operating assets			442,524				-			442,524
Decrease (increase) in assets:
Accounts receivable			(100	)			3,600			(100	)
Other current assets			-				-			(90,700	)
Other assets			-				-			(1,895	)
Increase (decrease) in liabilities:
Accounts payable			3,678				(5,801	)		32,077
Accrued interest			64,798				48,820			376,118
Accrued officer salary			101,037				(67,614	)		211,689
Accrued payroll taxes			(20,574	)			(2,562	)		1,279
Unearned revenues			2,083				(25	)		11,458
Net cash used by operating activities			(412,763	)			(601,257	)		(5,918,734	)

Cash flows from investing activities:
Purchase of investment property			-				-			(1,083,600	)
Proceeds from sale of investment property			-				-			319,300
Purchase of property, equipment and mineral interests			-				(79,239	)		(768,644	)
Proceeds from sale of property, equipment and mineral interests			-				12,000			26,100
Net cash used by investing activities			-				(67,239	)		(1,506,844	)

Cash flows from financing activities:
Proceeds from notes payable			258,500				-			948,400
Principal payments on notes payable			-				-			(689,900	)
Proceeds from notes payable, related parties			126,000				-			813,800
Principal payment on notes payable, related parties			(40,000	)			(20,750	)		(367,250	)
Proceeds from issuance of common stock			8,124				375,533			6,766,376
Net cash provided by financing activities			352,624				354,783			7,471,426

Net increase (decrease) in cash			(60,139	)			(313,713	)		45,848
Cash, beginning of period			105,987				419,700			-
Cash, end of period		$	45,848			$	105,987		$	45,848

Supplemental disclosure of cash flow information:
Cash paid for income taxes		$	-			$	-		$	-
Cash paid for interest		$	-			$	-		$	-
Accrued interest added to principal on notes payable – related party		$	-			$	2,400
Issuance of common stock for satisfaction of accounts payable and accrued liabilities		$	-			$	22,000
Issuance of common stock for services		$	-			$	2,014

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

F-8

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES

Description of business - Can-Cal Resources Ltd. (hereinafter referred to as the “Company”) was incorporated in the State of Nevada on March 22, 1995. The Company is engaged in the exploration for precious metals, with gold exploration projects located in California and Arizona.

Presentation of Financial Statements - The Company rounded the figures on the 2006 financial statements to the nearest hundred.

Cash and Cash Equivalents - The Company considers all highly liquid investments purchased with maturities of three months or less to be cash equivalents.

Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Revenue and expense recognition - Precious metals and other materials sales are recognized when delivery has occurred, title passes and pricing is either fixed or determinable. Rental revenue is recognized over the term of the rental agreement. Expenses are recognized when they are incurred. Mine exploration costs other than the acquisition of mining properties are expensed as incurred.

Fixed assets - Fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 5 to 15 years. The amounts of depreciation provided are sufficient to charge the cost of the related assets to operations over their estimated useful lives. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable property, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income.

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

F-9

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

Mineral Property Costs - The Company has been in the exploration stage since its formation on March 22, 1995 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property acquisition and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations

Advertising costs - The Company recognizes advertising expenses in accordance with Statement of Position 93-7 “Reporting on Advertising Costs.” Accordingly, the Company expenses the costs of producing advertisements at the time production occurs, and expenses the costs of communicating advertisements in the period in which the advertising space or airtime is used. Advertising costs for the years ended December 31, 2008 and 2007 were $782 and $1,088, respectively.

Income taxes - The Company accounts for its income taxes in accordance with Statement of Financial Accounting Standards No. 109, 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 operations in the period that includes the enactment date.

Credit Risks - Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At December 31, 2008 and 2007, the Company had approximately $0 in excess of FDIC insured limits, respectively.

Stock-based compensation - The Company applies SFAS No. 123 (revised 2004). Share-Based Payment, which is a revision of SFAS No. 123, Accounting for Stock- Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.

Net loss per common share - The Company computes net loss per share in accordance with SFAS No. 128, “Earnings per Share” (SFAS 128) and SEC Staff Accounting Bulletin No. 98 (SAB 98). Under the provisions of SFAS 128 and SAB 98, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is antidilutive. For the years ended December 31, 2008 and 2007, no options and warrants were excluded from the computation of diluted earnings per share because their effect would be antidilutive.

F-10

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

Recent accounting pronouncements - In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”). SFAS No. 159 allows the company to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS 159 is not expected to have a material impact on the Company’s financial position, results of operation or cash flows.

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements”. This statement amends ARB 51 to establish accounting and reporting standards for the non-controlling (minority) interest in a subsidiary and for the de-consolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is equity in the consolidated financial statements. SFAS No. 160 is effective for fiscal years and interim periods beginning after December 15, 2008. The adoption of SFAS 160 is not expected to have a material impact on the Company’s financial position, results of operation or cash flows.

In December 2007, the FASB issued SFAS No. 141 (Revised), “Business Combinations”. SFAS 141 (Revised) establishes principals and requirements for how an acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree. This statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The guidance will become effective for the fiscal year beginning after December 15, 2008

In December 2007, the Securities and Exchange Commission (the “SEC”) issued Staff Accounting Bulletin No. 110 (“SAB 110”). SAB 110 amends and replaces Question 6 of Section D.2 of Topic 14, Share-Based Payment. SAB 110 expresses the views of the staff regarding the use of the “simplified” method in developing an estimate of expected term of “plain vanilla” share options in accordance with FASB Statement No. 123(R), “Share Based Payment”. The use of the “simplified” method was scheduled to expire on December 31, 2007. SAB 110 extends the use of the “simplified” method for “plain vanilla” awards in certain situations. The Company currently uses the “simplified” method to estimate the expected term for share option grants as it does not have enough historical experience to provide a reasonable estimate due to the limited period the Company’s shares have been traded. The Company will continue to use the “simplified” method until it has enough historical experience to provide a reasonable estimate of expected term in accordance with SAB 110. SAB 110 is effective for options granted after December 31, 2007.

F-11

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133,” (SFAS “161”) as amended and interpreted, which requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. Disclosing the fair values of derivative instruments and their gains and losses in a tabular format provides a more complete picture of the location in an entity’s financial statements of both the derivative positions existing at period end and the effect of using derivatives during the reporting period.

Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Early adoption is permitted.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” which identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP. SFAS No. 162 is effective 60 days following the Security and Exchange Commission’s (“SEC”) approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with GAAP.” The Company does not expect the adoption of SFAS No. 162 to have an impact on its financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

2. GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has incurred a net loss of $1,016,661 for the year ended December 31, 2008 and had a working capital deficit of $1,291,723 at December 31, 2008. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities. Management has plans to seek additional capital through private placements and public offerings of its common stock. The 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.

F-12

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.

3. FIXED ASSETS

Fixed assets consist of the following as of December 31:

	2008			2007
Machinery and equipment	$	140,023		$	140,023
Transportation equipment		39,084			39,084
Furniture and fixtures		14,736			14,736
		193,843			193,843
Less: accumulated depreciation		(136,347	)		(125,895	)
Fixed assets, net	$	57,496		$	67,948

Depreciation expense for the years ended December 31, 2008 and 2007 was $10,452 and $10,225, respectively.

4. INCOME TAXES

At December 31, 2008 and 2007, the Company had a federal operating loss carry forward of $7,246,975 and $6,672,838, respectively.

The provision for income taxes consisted of the following components for the years ended December 31:

	2008			2007
Current:
Federal	$	-		$	-
State		-			-
Deferred:		(2,536,476	)		(2,343,893	)
	$	(2,536,476	)	$	(2,343,893	)

Components of net deferred tax assets, including a valuation allowance, are as follows at December 31:

	2008			2007
Deferred tax assets:
Net operating loss carryforward	$	2,381,593		$	2,335,493
Stock-based compensation		-			8,400
Asset impairment		154,883			-
Total deferred tax assets		2,536,476			2,343,893
Less: Valuation Allowance		(2,536,476	)		(2,343,893	)
Net Deferred Tax Assets	$	-		$	-

F-13

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

The valuation allowance for deferred tax assets as of December 31, 2008 and 2007 was $2,536,476 and $2,343,893, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would be realized as of December 31, 2008 and 2007.

Reconciliation between the statutory rate and the effective tax rate is as follows at December 31:

	2008			2007
Federal statutory tax rate		(35.0	)%		(35.0	)%
Permanent difference and other		35.0	%		35.0	%
Effective tax rate		0	%		0	%

5. UNEARNED REVENUE

On May 1, 1998, we entered into an agreement with Twin Mountain Rock Venture (“Twin Mountain”) to lease our property located in San Bernardino County, California for a period of ten years. Further, we will make available to Twin Mountain a minimum of 600,000 tons of finished material during the term of the agreement in exchange for a minimum annual royalty payment in the amount of $22,500. The initial agreement expired on April 30, 2008. Twin Mountain elected to utilize the renewal option for an additional ten year period with an increased minimum annual royalty of $27,500. As of December 31, 2008 and 2007, we had unearned revenue from this agreement totaling $11,458 and $9,375, respectively.

6. NOTES PAYABLE AND ACCRUED LIABILITIES-RELATED PARTIES

Notes payable consisted of the following as of December 31, 2008 and 2007, respectively:


	2008		2007
Note payable to a stockholder, secured by real property, bearing interest at 16.0% per annum, interest only payments payable in semi-annual payments, maturing November 2005 (Note: The Company is in default of interest payments totaling $340,000 and principal total of $ 300,000 but is currently negotiating forbearance on collection of the interest)	$	300,000	$	300,000

Note payable to a stockholder, secured by real property, bearing interest at 8.0% per annum, maturing July 2008		25,114		25,114

Note payable to a stockholder, secured by real property, bearing interest at 8.0% per annum, maturing June 2008		35,436		35,436

Note payable to an officer, unsecured bearing interest at 8.0% per annum, maturing December 2009		86,000		-

Note payable, unsecured, bearing interest at 8.0% per annum, maturing June 2008		7,500		-

Note payable, unsecured, bearing interest at 8.0% per annum, maturing March, 2009		24,000		-

Note payable, unsecured, bearing interest at 8.0% per annum, maturing June 2009		30,000		-

Note payable, unsecured, bearing interest at 8.0% per annum, maturing June 2009		50,000		-

Note payable, unsecured, bearing interest at 8.0% per annum, maturing June 2009		75,000		-

Note payable, unsecured, bearing interest at 8.0% per annum, maturing June 2009		72,000		-

Current portion (amounts due within one year)	$	705,050	$	360,550

F-14

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

The Company is in default of its semi-annual interest payment of $24,000 for 2002 through 2008 (a total of $340,000) and the principal on a note payable of $300,000. It is currently negotiating forbearance on collection of the interest and principal.

In 2006, we agreed to pay our CEO an annual salary of $120,000. As of December 31, 2008 and 2007, we had accrued salaries due to our CEO in the amount of $211,689 and $110,652, respectively.

7. CHANGES IN SECURITIES

1996

During 1996 the Company issued 3,441,217 shares of Can-Cal common stock to various investors resulting in cash proceeds of $628,400.

1997

On January 15, 1997 the Company issued 500,000 shares of Can-Cal common stock along with a cash payment of $100,000 in exchange for a 50% interest in S&S Joint Venture. Additionally, the Company agreed to loan the joint venture up to $48,000.

F-15

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

On February 13, 1997 the Board approved the acquisition of Scotmar Industries, Inc. 200,000 shares of Can-Cal common stock were issued in return for all of the issued and outstanding stock of the acquired company.

On October 27, 1997 the Board approved the issuance of 2,181,752 restricted common shares to ARUM, LLC to repay an existing debt of approximately $315,045.98 and to purchase a property located in San Bernadino County, California, known as the Pisgah property.

During November, 1997 the Board approved the sale of 124,683 restricted common shares to various investors.

During December, 1997 the Board approved the issuance of 42,000 restricted common shares in return for services rendered.

1998

In July, 1998 the Board approved the issuance 122,000 restricted common shares to various investors.

In October, 1998 the Board approved the sale of 172,450 restricted common shares to various investors.

During December, 1998 the Board approved the sale of 263,059 restricted common shares to various investors.

1999

On February 1, 1999, the Board of Directors approved the Sale of 62,500 shares of Can-Cal common stock to a Board member.

On February 8, 1999 the Board approved the sale of 70,000 shares of Can-Cal common stock to a Board member.

On March 1, 1999 the Board approved the issuance of 32,121 shares of Can-Cal common stock in return for services rendered.

On March 15, 1999 the Board approved the sale of 86,000 shares of Can-Cal common stock to various investors.

On March 17, 1999 the Board approved the issuance of 40,000 shares of Can-Cal common stock in return for equipment.

On March 10, 1999 the Board approved the sale of 295,500 shares of Can-Cal common stock to various investors.

F-16

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

On April 1, 1999 the Board approved the sale of 1,000 restricted common stock in return for equipment.

On July 21, 1999 the Board approved the sale of 357,500 shares of common stock to various investors.

On August 24, 1999 the Board approved the sale of 274,000 shares of common stock to various investors.

On September 7, 1999 the Board approved the sale of 20,000 shares of common stock to an investor.

On November 9, 1999 the board approved the issuance of 10,000 shares of common stock to an investor.

2000

On February 27, 2000, the Board of Directors approved the sale of 500,000 shares of common stock to three of its directors (all of whom reside in Canada), an offshore trust and another person affiliated with the Company.

On July 3, 2000, the Board of Directors exercised the option to acquire technology related to the extraction and processing of ore and, in accordance with the agreement with the two owners of that technology, issued 200,000 shares of Can-Cal’s common stock to them.

On November 24, 2000, the Company borrowed $300,000 from a lender. As part of the transaction, the Company issued 45,000 shares of its common stock as a loan placement fee and granted the lender an option to purchase up to 300,000 shares of its common stock. On November 24, 2000, the lender exercised its option in full and purchased 300,000 shares of Can-Cal’s common stock.

In July 2000 the Board of Directors authorized the sale of 74,009 shares of its common stock to eight persons, all of whom reside outside the United States. During the third quarter 46,670 shares were sold and the remaining 27,339 shares were sold during the fourth quarter. All of those shares were issued on December 15, 2000.

2001

In September, 2001, the Board of Directors authorized the sale of 20,000 shares of its common stock to an individual.

During October, 2001 the company signed an Investment Agreement with two funds (Dutchess Private Equities Fund LP and DRH Investment Company LLC) to sell to those funds up to $8,000,000 in common stock of the company, for a period of three years. In connection with the Investment Agreement, the company issued 606,059 shares of restricted common stock to Dutchess Fund and its advisor, and to a broker-dealer firm, for services valued at $400,000, to induce those entities to enter into the Investment Agreement and perform services contemplated under such agreement. The company also issued 37,000 shares of restricted common stock to the attorney for Dutchess Fund.

F-17

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

On November 2, 2001 the Board of Directors approved the sale of 82,888 shares of restricted common stock.

On December 12, 2001 the Board of Directors approved the sale of 40,000 shares of restricted common stock.

2002

On January 8, 2002, we sold 36,000 restricted common shares to three investors (one Canadian resident, and two private companies controlled and owned by Canadian residents) for $12,600 cash ($0.35 per share, representing a discount of approximately 50% from market price). These investors also were issued warrants to purchase 36,000 additional restricted shares, at a price of $0.35 per share; the warrants will expire January 8, 2004.

On February 11, 2002, 10,000 restricted common shares were sold to one investor (a Canadian resident) for $3,500 cash ($0.35 per share, representing a discount of approximately 50% from market price). This investor also was issued warrants to purchase 10,000 additional restricted shares, at a price of $0.35 per share; the warrants will expire February 11, 2004. Complete information about the company was provided to these investors. These shares and warrants were sold pursuant to the exemption provided by Regulation S of the 1933 Act. No commissions were paid.

On January 31, 2002, we issued 309,677 restricted common shares to a lender (First Colony Merchant) for payment of past due and current interest on debt, $119,800. No commissions were paid.

From March 1, 2002 through June 3, 2002, 369,600 restricted common shares were issued to 48 investors (all Canadian residents or companies controlled and owned by Canadian residents) for $92,400 cash ($0.25 per share, representing discounts ranging from 0% to approximately 50% from market prices at the time of issuance). These investors also were issued warrants to purchase 369,600 additional restricted shares, at a price of $0.25 per share; the warrants will expire two years from the date of issuance. No commissions were paid.

On June 21, 2002, 40,000 restricted common shares were issued to Financial Communications Corp. for public relations services, valued at approximately $14,000.

From July 1, 2002 through December 24, 2002, 609,720 restricted common shares were issued to 20 investors (19 whom are Canadian residents or companies controlled and owned by Canadian residents, and one who is a resident of Great Britain) for $152,400 cash ($0.25 per share, representing prices that ranged from 22% over market to approximately 40% below market prices at the time of issuance). The investors also were issued warrants to purchase a total of 609,720 additional restricted shares, at a price of $0.25 per share; the warrants will expire two years from the date of issuance. No commissions were paid.

F-18

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

During September 2002, the Company issued 32,281 shares of the Company’s common stock for $5,500 in cash related to the Dutchess Private Equities Fund, net of offering costs of $200, and issued 30,000 shares to Joseph B. LaRocco, attorney for Dutchess Fund and DRH Investment Company, LLC for legal services to such entities.

During October 2002, the Company issued 35,679 shares of the Company’s common stock for $4,600 in cash related to the Dutchess Private Equities Fund, net of offering costs of $700.

In November 2002, the Company issued 52,292 restricted common shares to four individuals in exchange for various services, valued at approximately $9,900.

2003

During 2003, 673,410 restricted common shares were issued to 19 Canadian residents or companies controlled and owned by Canadian resident investors for $134,682 and 150,000 restricted common shares were issued to 12 U.S. resident investors for $30,000 (all shares were priced at $0.20 per share, representing premiums of up to 25% and discounts ranging from 0% to approximately 25% from market prices at the time of issuance). With respect to 237,410 restricted common shares, the investors were also issued warrants to purchase 474,820 additional restricted common shares and with respect to 473,500 restricted common shares, the investors were also issued warrants to purchase 473,500 additional restricted common shares; all warrants were priced at $0.20 per share and will expire two years from the date of issuance. With respect to 112,500 restricted common shares, the investors were also issued 112,500 warrants to purchase additional restricted common shares, at a price of $0.25 per share for a period of two years from the date of issuance. The shares and warrants were sold to Canadian investors pursuant to the exemption provided by Regulation S of the 1933 Act, and the shares and warrants sold to U.S. investors were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2003, 364,305 restricted common shares were issued in conversion of $35,000 principal and interest on a debenture held by Dutchess Fund. The conversion prices were $0.099 for 50,710 shares ($5,000 of the debenture); $0.112 for 44,643 shares ($5,000 of the debenture); $0.061 for 81,433 shares ($5,000 of the debenture); $0.067 for 75,075 shares ($5,000 of the debenture); and $0.1334 for 112,444 shares ($15,000 of the debenture). All of the prices were determined by the conversion formula in the debenture (80% of the average bid prices for the three lowest (out of 15) trading days before conversion. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2003, 205,166 restricted common shares in payment of $31,500 of services by Luis Vega, consulting geologist. The per share price was determined by dividing the amount owed by the average closing price of the company’s stock for each day’s service. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

F-19

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

On March 14, 2003, 24,960 restricted common shares were issued to Catherine Nichols, a Canadian resident, for marketing services amounting to $5,000. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

During the period from July 15 to December 31, 2003, 112,326 restricted common shares in payment of $22,250 of investor relations services by Jeffrey Whitford, a Canadian resident who is a consultant to the company. The price per share was based on the average monthly closing share prices for the period. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

33,600 restricted common shares were issued to pay $4,200 of legal services provided by Stephen E. Rounds, outside company counsel. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

On December 30, 2003, 5,208 restricted common shares were issued to Terry Brown, a Mexican resident, for technical consulting services amounting to $1,250. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

2004

During 2004, 2,255,586 restricted common shares were issued to 107 Canadian residents or companies controlled and owned by Canadian resident investors for $431,425 and 10,000 restricted common shares were issued to one U.S. resident investor for $2,000 (245,000 shares were priced at $0.18 per share, 1,620,131 shares were priced at $0.20 per share, 261,200 shares were priced at $0.25 per share, and 139,255 shares were issued as a 25% premium on the conversion of warrants, representing premiums of up to 25% and discounts ranging from 0% to approximately 25% from market prices at the time of issuance). With respect to 1,319,308 of these restricted common shares, the investors were also issued warrants to purchase 1,259,308 additional restricted common shares at $0.25 per share and 60,000 additional restricted common shares at $0.20 per share. With respect to 245,000 restricted common shares, the investors were also issued warrants to purchase 245,000 additional restricted common shares at $0.25, and with respect to another 245,000 restricted common shares, the investors were also issued warrants to purchase 245,000 additional restricted common shares at $0.50 per share. Of these, we also sold 5,000 shares to a director of the Company for proceeds of $1,000 and issued warrants to purchase 5,000 restricted common shares, exercisable at $0.25 per share for a two year period. All warrants will expire two years from the date of issuance. The shares and warrants were sold to Canadian investors pursuant to the exemption provided by Regulation S of the 1933 Act, and the shares and warrants sold to U.S. investors were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2004, 702,760 restricted common shares were issued in conversion of $99,657 principal and interest on a debenture held by Dutchess Fund. The conversion prices were $0.216 for 92,593 shares ($20,000 of the debenture); $0.160 for 31,250 shares ($5,000 of the debenture); $0.144 for 34,722 shares ($5,000 of the debenture); $0.128 for 544,195 shares ($69,657 of the debenture). All of the prices were determined by the conversion formula in the debenture (80% of the average bid prices for the three lowest (out of 15) trading days before conversion). These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

F-20

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

During 2004, 215,336 restricted common shares were issued in payment of $40,932 of services by Luis Vega, consulting geologist. The price per share was determined by dividing the amount owed by the average closing price of the company’s stock for each day’s service. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

On February 4, 2004, 10,000 restricted common shares were issued to Yvonne St. Pierre, a Canadian resident, for computer-related services, in the amount of $2,500. These shares were issued pursuant to the exemption provided by Regulation S of the 1933 Act.

Between February 10 and March 31, 2004, 75,000 restricted common shares were issued to Jeff Whitford, a Canadian resident, for investor relation services, in the amount of $15,000. In addition, Mr. Whitford received 50,000 warrants at an exercise price of $0.20 per share; the warrants will expire between February 2006 and March 2006. The warrants were valued at $12,200 utilizing the Black Scholes model. These shares were issued pursuant to the exemption provided by Regulation S of the 1933 Act.

On December 22, 2004, 2,500 restricted common shares were issued to Karen Barra, a U.S. resident, for services amounting to $500. The price per share was $0.20 based on private placement offering for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

During 2004, 15,367 restricted common shares were issued in payment of accounts payable amounting to $3,842. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

During 2004, 87,388 restricted common shares were issued to Terry Brown, a Mexican resident, for technical consulting services amounting to $15,247. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

On March 1, 2004, in connection with the conversion of $82,687 in notes payable and $225,595 in accrued officers’ salary payable, we issued 1,233,127 restricted common shares at $0.25 per share and 1,233,127 warrants, with an exercise price of $0.30 and expiring on March 1, 2006, to two officers, two directors, and a former director and his insurance agency. These persons and the insurance agency are accredited investors.

F-21

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

2005

During the twelve months ended December 31, 2005, we sold 712,500 restricted common shares to 21 Canadian residents for a total of $142,500, and issued warrants to purchase 712,500 restricted common shares, exercisable at $0.25 per share. These securities were issued in private transactions in reliance on the exemption from registration with the SEC provided by Regulation S.

A prior U.S. shareholder exercised other warrants, at exercise prices ranging from $0.22, for proceeds of $11,000, which resulted in the issuance of 50,000 restricted common shares. These securities were issued in private transactions in reliance on the exemption available under Section 4(2) of the 1933 Act.

We also issued, for services, 349,545 restricted common shares for a total value of $69,800 valued at fair market value at date of issuance and granted 13,575 warrants (exercisable for two years at $0.25 per share) valued at fair market value at date of issuance. These securities were issued to two Canadian residents, and one Mexican Corporation in reliance on the exemption from registration available under Regulation S, and one U.S. resident, in reliance on the exemption provided by Section 4(2) of the 1933 Act.

2006

During the twelve months ended December 31, 2006, we sold 2,622,213 restricted common shares to 76 Canadian residents, 8 US residents, 5 Israeli Nationals and 1 Swiss National for a total of $688,000, and issued warrants to purchase 2,348,213 restricted common shares, exercisable between $0.25 to $.45 per share. These securities were issued in private transactions, with respect to the Canadian residents, in reliance on the exemption from registration with the SEC provided by Regulation S, and with respect to the U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act.

We also issued, for services, 8,500 restricted common shares for a total value of $2,325 and these securities were issued to one U.S. resident in reliance on the exemption provided by Section 4(2) of the 1933 Act.

On July 3, 2006, the Company issued 2,200 shares of its par value common stock for services received by an individual. As of September 30, 2006, the Company recorded consulting expense in the amount of $462, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase 2,200 shares of the Company’s common stock at an exercise price of $0.25 for a period of 2 years. The Company recorded an expense in the amount of $373, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

On July 3, 2006, the Company issued 8,800 shares of its par value common stock for services received from an individual. As of September 30, 2006, the Company recorded consulting expense in the amount of $2,200, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase up to 8,800 shares of the Company’s common stock at an exercise price of $0.25 for a period of 2 years. The Company recorded an expense in the amount of $1,812, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

F-22

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

On July 3, 2006, an officer of the Company elected to convert half of his accrued salary in exchange for 385,714 shares of common stock valued at $81,000, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase up to 385,714 shares of the Company’s common stock at an exercise price of $0.25 for a period of two years. The Company recorded an expense in the amount of $65,418, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

On July 3, 2006, the Company issued 56,821 shares of its common stock for conversion of a note in the amount of $11,932 from a shareholder of the Company. Additionally, the Company granted a warrant to purchase up to 56,821 shares of the Company’s common stock at an exercise price of $0.25 for a period of two years. The Company recorded an expense in the amount of $9,637, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

On July 11, 2006, the Company issued 206,767 shares of its par value common stock pursuant to the convertible debenture agreement entered into on January 24, 2006 whereby the Company received a $40,000 convertible at a rate of $0.20 per share bearing interest of 10% per annum. The note holder elected to convert all accrued interest totaling $1,895 into 6,767 shares of the Company’s par value common stock.

On August 22, 2006, the Company entered into an agreement to purchase mining claims located in Mohave County, Arizona in exchange for 1,000,000 shares of the Company’s par value common stock. The Company recorded an asset totaling $400,000, the fair value of the underlying shares.

2007

During the twelve months ended December 31, 2007, we sold 1,238,167 restricted common shares to 72 Canadian residents and 4 US residents for a total of $375,534 and issued warrants to purchase 492,795 restricted common shares, exercisable between $0.35 to $.65 per share. These securities were issued in private transactions, with respect to the Canadian residents, in reliance on the exemption from registration with the SEC provided by Regulation S, and with respect to the U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act.

On April 30, 2007, the Company also issued 50,000 shares of restricted common stock as part of a settlement agreement with a former officer of the Company for compensation of accrued salaries. The common stock was rendered to a U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act. The shares were valued at a total of $22,000. In addition to monthly cash payments of $3,500 per month the Company has recorded debt forgiveness of $147,419 in accordance with the terms of the settlement agreement. Due to the related party nature of the transaction the gain has been recorded to additional paid in capital, therefore there has been no impact on the Company’s net loss.

F-23

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

On June 29, 2007, the Company also issued 4,000 shares of restricted common stock for services rendered to a U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act. The shares were valued at a total of $2,000.

2008

During the year ended December 31, 2008, the Company issued 32,500 shares of common stock and warrants to purchase 32,500 shares common stock for cash totaling $8,124. The warrants are fully vested upon grant, expire in two years and have an exercise price of $0.35 per share.

8. OPTIONS AND WARRANTS

Options granted for employee and consulting services - The 2003 Non-Qualified Option Plan was established by the Board of Directors in June 2003 and approved by shareholders in October 2003. A total of 1,500,000 shares of common stock are reserved for issuance under this plan.

In June 2006, the Company granted options to buy 750,000 shares of the Company’s common stock at an exercise price of $0.20 with terms ranging from two to five years from the date of issuance to the Directors of the Company. Additionally, the Company granted options to purchase 250,000 shares of the Company’s common stock at an exercise price of $0.20 with a term of three years from the date of issuance to an unrelated consultant.

In accordance with FASB 123R (revised 2004) “Share-based Payment”, the Company recognized the fair value of the options in the statement of operations on the date of grant. Fair value was determined using the Black-Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 86%; risk free interest rate: 4.92% to 5.16%. The determined fair value recognized in the current period was $123,475

The following table summarizes the Company’s option activity related to employees and consultants:

	Options Outstanding		Weighted Average Exercise Price
Balance, January 1, 2007		1,000,000	$	0.20
Granted		-
Cancelled		-
Exercised		-
Expired		-
Balance, December 31, 2007		1,000,000		0.20
Granted		-		-
Cancelled		-		-
Exercised		-		-
Expired		-
Balance, December 31, 2008		1,000,000	$	0.20

F-24

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

Warrants related to the sale of common stock - During fiscal years 2008, and 2007, the Company granted 32,500 and 492,795 stock warrants, respectively, with an exercise price ranging from $0.25 to $0.65 per share for its common stock. These stock warrants were granted in connection with common stock sold during fiscal years 2008 and 2007. These stock warrants were exercisable upon issuance and expire at various times throughout 2010 and 2009. The following table summarizes the Company’s warrant activity related to the sale of common stock:

	Warrants Outstanding		Weighted Average Exercise Price
Balance, January 1, 2007		3,060,713	$	0.31
Granted		492,795		0.59
Cancelled		-		-
Exercised		745,372		0.25
Expired		50,000		0.25
Balance, December 31, 2007		2,758,136		0.31
Granted		32,500		0.35
Cancelled		-		-
Exercised		-		-
Expired		-		-
Balance, December 31, 2008		2,790,636	$	0.31

The following table summarizes the Company’s warrant activity not related to the sale of common stock:

	Warrants Outstanding		Weighted Average Exercise Price
Balance, January 1, 2007		627,110	$	0.25
Granted		-		-
Cancelled		-		-
Exercised		-		-
Expired		173,575		0.25
Balance, December 31, 2007		453,535		0.25
Granted		-		-
Cancelled		-		-
Exercised		-		-
Expired		-		-
Balance, December 31, 2008		453,535	$	0.25

F-25

Can-Cal Resources Ltd.

(an Exploration Stage Company)

Notes to Financial Statements

9. COMMITMENTS AND CONTINGENCIES

Mining claims - The Company has a lease and purchase option agreement covering six patented claims in the Cerbat Mountains, Hualapai Mining District and Mohave County Arizona. The Company pays $1,500 per quarter as minimum advance royalties. The Company has the option to purchase the property for $250,000 plus interest at a rate of 8% compounded annually from and after the date of its exercise of the option to purchase the property. If the Lessee exercises its option to purchase, all funds paid to Lessors shall be credited toward the purchase price as of the date the payments were made.

Rental payments - The Company operates a leased facility in Nevada under a month to month operating lease. The lease calls for a monthly base rent of approximately $1,500.

10. CAPITALIZED MINERAL COSTS

Mineral rights are recorded at cost of acquisition. When there is little likelihood of a mineral right being exploited; the value of mineral rights have diminished below cost, or the economic feasibility of extraction is limited, a write-down is affected against income in the period that such determination is made. As of December 31, 2008, the Company recorded a write down in the amount of $442,524. Non-mining assets are recorded at cost of acquisition. These assets include the assets of the mining operation not included in the previous categories and all the assets of the non-mining operations. Mining assets, including mine development and infrastructure costs and mine plant facilities, are recorded at cost of acquisition. Expenditure incurred to evaluate and develop new ore bodies, to define mineralization in existing ore bodies, to establish or expand productive capacity, is capitalized until commercial levels of production are achieved, at which time the costs will be amortized.

F-26

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On March 17, 2009 (the “Dismissal Date”), Can-Cal Resources Ltd. (“Can-Cal” or the “Company”) confirmed its dismissal of DeJoya Griffith & Company, LLC, (“DeJoya”), from its engagement as independent auditor of the Company, in connection with the engagement of L.L. Bradford, LLC, Certified Public Accountants, as the new independent public accounting firm for the Company (“L.L. Bradford”).

DeJoya’s reports on the Company’s 10-KSBs for the years ended December 31, 2007 and 2006, and all subsequent interim periods up and until the Dismissal Date, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, other than reflecting an uncertainty as to the Company’s ability to continue as a going concern.

During each of the two (2) years ended December 31, 2007 and 2006, and all subsequent interim periods up and until the Dismissal Date, there were no disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to DeJoya’s satisfaction would have caused them to make reference in connection with their opinion to the subject matter of the disagreement.

On March 19, 2009, the Company engaged L.L. Bradford as its independent registered public accounting firm to audit the Company’s financial statements. During each of the two (2) years ended December 31, 2007 and 2006, and all subsequent interim periods up and until the Dismissal Date, the Company did not consult L.L. Bradford on any matters described in Item 304(a)(2)(i) of Regulation S-B. During each of the two (2) years ended December 31, 2007 and 2006, and all subsequent interim periods up and until the Dismissal Date, the Company did not consult L.L. Bradford on any matters described in Item 304(a)(2)(ii) of Regulation S-B

ITEM 9A(T). CONTROLS AND PROCEDURES.

Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

-	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and

-	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on the financial statements.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. It is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. It also can be circumvented by collusion or improper management override.

Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process certain safeguards to reduce, thought not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over our financial reporting. To avoid segregation of duty due to management accounting size, management had engaged an outside Consulting firm to assist in the financial reporting.

Our Chief Executive Officer, Ron Sloan has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on the evaluation, Mr. Sloan concluded that our disclosure controls and procedures are effective in timely alerting him to material financial information relating to us which is required to be recorded, processed, summarized and reported in our periodic SEC filings.

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are likely to materially affect, our internal control over financial reporting.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Securities Exchange Act of 1934. These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and overriding of controls. Consequently, an effective internal control system can only provide reasonable, not absolute, assurance, with respect to reporting financial information.

Management has used the framework set forth in the report entitled Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. Based upon this assessment, management has concluded that our internal control over financial reporting was effective as of and for the year ended December 31, 2008.

As a part of our year end review of our disclosure controls and procedures, we determined that several of our procedures require additional documentation and sufficient testing was not able to be conducted. We are implementing additional documentation and testing procedures in order to provide a more comprehensive analysis. We plan to rectify these deficiencies by implementing an independent board of directors and audit committee to provide oversight and review of our financial reporting and audit processes. In addition, we plan to hire a consulting firm to assist in improving the Company’s internal control system based on the COSO framework. Furthermore, we also intend to hire qualified personnel in an effort to implement the necessary segregations of duties as the required resources become available.

The Company’s management believes that its financial statements included in this report fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods presented and that this report does not contain any untrue statement of a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. (b) Report of Independent Registered Public Accounting Firm: This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting pursuant to Smaller Reporting Company rules of the Securities and Exchange Commission.

The Company is not an “accelerated filer” for the 2008 fiscal year because it is qualified as a “small business issuer”. Hence, under current law, the internal controls certification and attestation requirements of Section 404 of the Sarbanes-Oxley act will not apply to the Company. This Annual report on Form 10-K does not include an attestation report of our registered public accounting regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities Exchange Commission that permit us to provide only management’s report in this Annual Report on Form 10-K.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Officers and directors of the Company are listed below. Directors are elected to hold offices until the next annual meeting of shareholders and until their successors are elected or appointed and qualified. Officers are appointed by the board of directors until a successor is elected and qualified or until resignation, removal or death.

Name	Age	Position and Tenure

Ronald D. Sloan	67	President and Chief Executive Officer since May 10, 2005, upon the resignation of Anthony Ciali. He was also CEO and President from May 1996 to March 2003; Treasurer, and Chief Financial Officer since May 1996; Chairman of the Board since January 2001.

John Brian Wolfe	56	Secretary and a Director since May, 1996

James Dacyszyn	76	Director since February, 1999

RONALD D. SLOAN. Mr. Sloan is founder, CEO and President of the Company, and has recently served as such since May 2005. He is also Chairman of the Board of Directors and Treasurer (and Chief Financial Officer). During the past twenty five years , Mr. Sloan has been an entrepreneur as an owner and operator of several companies including: Atlas Insurance Adjusters Ltd, partner/president from 1977 to 1978; United Auto Parts, senior manager, parts sales and distribution, approximate staff of 100 from 1979 to 1984; Save-On Auto Parts Ltd., shareholder, president, secretary, parts sales and distribution, approximate staff of 40 from 1985 to 1989; Knight Auto Recyclers Ltd., owner/president, parts sales and distribution from 1990 to 1995; Scotmar Industries Ltd., D.B.A. Truck City Inc., senior management, parts sales and distribution from 1990-1995. Mr. Sloan spends his full time on the Company’s business. Mr. Sloan has no professional or technical credentials in the metals mining industry. Mr. Sloan also served as President, Treasurer and CEO from May 2, 1996 until March, 2003. Mr. Sloan then again took over the positions of President and CEO upon the resignation of Mr. Ciali on May 10, 2005.

JOHN BRIAN WOLFE. Since 1984, Mr. Wolfe has owned Wolfe & Associates Appraisal Services, which appraises damages sustained by vehicles, recreation vehicles, motorcycles and equipment for insurance companies throughout North America. From 1980 to 1984 he appraised damages to automobiles for ICBC (Insurance Corporation of British Colombia). Mr. Wolfe also managed McLaughlin Motors and Brasso Lincoln, both automotive companies where he was in charge of their full operation and payroll from 1977 to 1980. Mr. Wolfe has no direct metal mining experience, or any professional or technical credentials in the metals mining industry, however, he has experience in management affairs.

JAMES DACYSZYN. Mr. Dacyszyn is a Canadian citizen who is semi-retired. He owns and operates several concrete transit mix plants and gravel operations in central Alberta, Canada. He has no precious metal mining experience, or any professional credentials in the metals mining industry, but he does have extensive experience in Materials Engineering and holds a bachelor’s degree in Civil Engineering. From 1954 to 1971, he managed a laboratory, which tested gravels, asphalts, paints and coordinating quality control tests on earthwork. Mr. Dacyszyn also drilled and evaluated more than 500 gravel deposits in the Province of Alberta and has vast knowledge in crushing rock. From 1982 to 1995, he managed several concrete mixing plants and gravel operations, also producing aggregates as owner/operator. His son, a professional engineer, is now managing the companies and Mr. Dacyszyn is retained in a consulting capacity.

DIRECTOR COMPENSATION

The directors do not currently have any annuities, pension, retirement incentive, deferred compensation or any arrangements whereby they have been paid or may receive compensation.

Our present director, Ron Sloan, who also acts as CEO and President, does not receive additional compensation for acting as a director or attending meetings of directors. In the past, the Company has not compensated outside (non-employee) directors for service but has reimbursed them for travel costs to attend Board meetings. In the future, the Board of Directors may issue non- qualified options to non-executive directors. The terms of such options to be granted have not yet been established.

(b) Identification of Certain Significant Employees and Consultants

None.

Not applicable.

(d) Involvement in Certain Legal Proceedings.

During the past five years, no director, person nominated to become a director, or executive officer of the Company:

(1) has filed or had filed against him, a petition under the federal bankruptcy law or any state insolvency law, nor has any court appointed a receiver, fiscal agent or similar officer by or against any business of which such person was a general partner, or any corporation or business association of which he was an executive officer within two years before the time of such filing;

(2) was convicted in a criminal proceeding or is the named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring or suspending him from, or otherwise limiting his involvement in, any type of business, securities or banking activities, or

(4) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended or vacated.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based upon a review of Forms 3 and 4 furnished to the company pursuant to Rule 16a-3(a) and written representations referred to in Item 405(b) (2)(i) of Regulation S-K, no directors, officers, beneficial owners of more than 10% of the company’s common stock, or any other person subject to Section 16 of the Exchange Act failed for the period from January 1, 2008 through December 31, 2008 to file on a timely basis the reports required by Section 16(a) of the Exchange Act.

CODE OF ETHICS

The Company has adopted a Code of Ethics. A copy of the Code of Ethics will be provided to any person, without charge, upon written request addressed to Ronald D. Sloan, President/Chairman, 2500 Vista Mar Drive, Las Vegas, Nevada 89128.

ITEM 11. EXECUTIVE COMPENSATION.

The following table sets forth summary compensation information for the years ended December 31, 2008 and 2007 for our chief executive officer, who we refer to throughout this report as our named executive officer. We did not have any other executive officers whose total compensation exceeded $100,000 during the years ended December 31, 2008 and 2007.

Summary Compensation Table

Name and Principal Position	Fiscal Year	Salary ($)	Bonus ($)	Option Awards ($)	All Other Compen-sation ($)	Total ($)

Ronald D. Sloan	2008	$120,000(1)	--	--	--	$120,000
Chief Executive Officer/President	2007	$120,000(1)	--	--	4,176	$120,000

(1)

From April 2006 to present accrued at the rate of $10,000 per month. As of December 31, 2008, Mr. Sloan was owed $211,689.

Grants of Plan-Based Awards in Fiscal 2008

We did not grant any plan-based awards to our named executive officer during the fiscal year ended December 31, 2008.

Outstanding Equity Awards at 2008 Fiscal Year-End

The following table lists the outstanding equity incentive awards held by our named executive officer as of December 31, 2008.

	Option Awards
	Number of Securities Underlying Unexercised Options Exercisable	Number of Securities Underlying Unexercised Options Unexercisable	Option Exercise Price	Option Expiration Date

Ronald D. Sloan	500,000	-	$1.00	12/31/11

Option Exercises for 2008

There were no options issued or exercised by our named executive officer in fiscal 2008.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table presents information, to the best of Can-Cal’s knowledge, about the ownership of Can-Cal’s common stock on April 8, 2009 relating to those persons known to beneficially own more than 5% of Can-Cal’s capital stock and by Can-Cal’s directors and executive officers. The percentage of beneficial ownership for the following table is based on 24,587,753 shares of common stock outstanding.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the shareholder has sole or shared voting or investment power. It also includes shares of common stock that the shareholder has a right to acquire within 60 days after April 8, 2009 pursuant to options, warrants, conversion privileges or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options or warrants into shares of Can-Cal’s common stock.

Name and Address of Beneficial Owner, Officer or Director(1)	Number of Shares	Percent of Outstanding Shares of Common Stock(2)
Ronald D. Sloan, Chief Executive Officer, President and Director (3)	2,260,785(4)	9.2%
John Brian Wolfe, Director(3)	1,018,211(5)	4.1%
James Dacyszyn, Director(3)	1,018,050(6)	4.1%

Directors, Officers and Beneficial Owners as a Group	4,297,046	17.4%


	(1)	As used in this table, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security).

(2)

Figures are rounded to the nearest tenth of a percent.

(3)

The address of each person is care of Can-Cal: 2500 Vista Mar Drive, Las Vegas, Nevada 89128.

(4)

Includes 500,000 shares underlying options.

(5)

Includes 53,890 shares underlying warrants and 125,000 shares underlying options.

(6)

697,550 shares (including 113,775 shares covered by warrants) are owned directly by Mr. Dacyszyn and 195,500 shares are owned by a family company. Mr. Dacyszyn exercises investment and dispositive powers over 60,000 shares (31%) of those owned by the family company. The balance of shares in the family company is controlled by an adult son, who manages the family company and has a 25% pecuniary interest in these shares. Also includes 125,000 shares underlying options.

Equity Compensation Plan Information

The following table sets forth information as of December 31, 2008 regarding outstanding options granted under the plans, warrants issued to consultants and options reserved for future grant under the plan.

Plan Category	Number of shares to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a) (c)
Equity compensation plans approved by stockholders		900,000	$	0.20		600,000

2003 Qualified ISOP (1,500,000 shares)						1,500,000

Equity compensation plans not approved by stockholders		--		--		--
Total		900,000	$	0.20		2,100,000

Total shares underlying unexercised options (both plans) cannot exceed 10% of the Company’s total issued and outstanding shares of common stock, calculated on a pro forma basis.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Other than as set forth below, we were not a party to any transactions or series of similar transactions that have occurred during fiscal 2008 in which:

•

The amounts involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years ($3,631); and

•

A director, executive officer, holder of more than 5% of our common stock or any member of their immediate family had or will have a direct or indirect material interest.

CONVERSION OF SALARIES OWED TO OFFICERS AND LOANS OWED TO DIRECTORS

On July 3, 2006, Ron Sloan, CEO of the Company, elected to convert half of his accrued salary in exchange for 385,714 shares of common stock valued at $81,000, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase up to 385,714 shares of the Company’s common stock at an exercise price of $0.25 for a period of 2 years. The Company recorded an expense in the amount of $65,418, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

The company owed Robin Schwarz, an unaffiliated shareholder, $12,424 at December 31, 2005 consisting of unsecured loans in various amounts made in 2001 and 2002, at various dates, and interest ranging from 13.24% to 27.99%, due on demand. On July 3, 2006, the Company issued 56,821 shares of its common stock for conversion in full of these loans. Additionally, the Company granted Ms. Schwarz a warrant to purchase 56,821 shares of the Company’s common stock at an exercise price of $0.25 for a period of 2 years. The Company recorded an expense in the amount of $9,637, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(5)(i) The Board of Directors has not established an audit committee. However, the Board of Directors, as a group, carries out the responsibilities, which an audit committee would have. In this respect the Board of Directors has the responsibility of reviewing our financial statements, exercising general oversight of the integrity and reliability of our accounting and financial reporting practices, and monitoring the effectiveness of our internal control systems. The Board of Directors also recommends selection of the auditing firm and exercises general oversight of the activities of our independent auditors, principal financial and accounting officers and employees and related matters.

The Board of Directors delegates to management of Mr. Sloan and the Board of Directors, the terms of engagement, before we engage independent auditor for audit and non-audit services, except as to engagements for services outside the scope of the original terms, in which instances the services have been provided pursuant to pre-approval policies and procedures, established by management. These pre-approval policies and procedures are detailed as to the category of service and the Board of Directors is kept informed of each service provided.

(7) L.L. Bradford & Company was retained as our new auditing firm by the Board of Directors for the fiscal year ended December 31, 2008. L.L. Bradford & Company and De Joya Griffith & Company, LLC billed us as follows for the years ended December 31, 2008 and 2007, respectively:

	For the Fiscal Years Ended December 31,
	2008			2007

Audit Fees (a)		$	13,500		$	23,000
Audit-Related Fees (b)			-0-			-0-
Tax Fees (c)			-0-			1,000
All Other Fees (d)			-0-			-0-
Total fees paid or accrued to our principal accountants		$	13,500		$	24,000

(a)

Includes fees for audit of the annual financial statements and review of quarterly financial information filed with the Securities and Exchange Commission.

(b)

For assurance and related services that were reasonably related to the performance of the audit or review of the financial statements, which fees are not included in the Audit Fees category. The company had no Audit-Related Fees for the periods ended December 31, 2008, and 2007, respectively.

(c)

For tax compliance, tax advice, and tax planning services, relating to any and all federal and state tax returns as necessary for the periods ended December 31, 2008 and 2007, respectively.

(d)

For services in respect of any and all other reports as required by the SEC and other governing agencies.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following information required under this item is filed as part of this report:

(a) 1. Financial Statements

		Page
Management’s Report on Internal Control Over Financial Reporting		34
Report of Independent Registered Public Accounting Firm		F-1
Balance Sheets		F-3
Statements of Operations		F-4
Statements of Stockholders Deficit		F-5
Statements of Cash Flows		F-8

(b) 2. Financial Statement Schedules

None.

Incorporated by reference

Exhibit

Exhibit Description

Filed herewith

Form

Period ending

Exhibit

Filing date

31.1

Certification of Ronald B. Sloan pursuant to Section 302 of the Sarbanes-Oxley Act

31.2

Certification of Ronald B. Sloan pursuant to Section 302 of the Sarbanes-Oxley Act

32.1

Certification of Ronald B. Sloan pursuant to Section 906 of the Sarbanes-Oxley Act

99.1

Summary of Significant Details Regarding Pigsah, Wikeiup, Cerbat and the Owl Canyon Properties

10-KSB/A

12/31/07

99.1

03/11/09

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CAN-CAL RESOURCES LTD.

By:	/s/ Ronald D. Sloan
	Ronald D. Sloan, President and Chief Executive Officer

Date: April 14, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the Registrant and in the capacities and on the dates indicated have signed this report below.

Name	Title	Date

/s/ Ronald D. Sloan	Chief Executive Officer, President & Director (Principal Executive Officer and Principal Financial Officer)	April 14, 2008
Ronald D. Sloan

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	8th grade Avg

Can Cal Resources (CCRE) 10-K2008 FY Annual report

Content analysis