Quincy Energy 10QSB 2004 Q3 Quarterly report (small business)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedJanuary 31, 2004

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

Commission File number000-31501

QUINCY RESOURCES INC.
(Exact name of small business issuer as specified in charter)

Nevada	98 0218264
(State or other jurisdiction of	(I.R.S. Employer
Incorporation or organization)	Identification No.)

309 Centre Street
Hancock MI, 49930 2107
(Address of principal executive offices) (Zip Code)

906 482 4695
(Issuers telephone number)

N/A
(Former name, address, and fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports) Yesx No ¨ and (2 ) has been subject to filing requirements for the past 90 days. Yes x No ¨

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuers classes of common equity, as of the last practicable date.

Class	Outstanding as of March 11, 2004
Common Stock, $0.001 per share	19,526,670

Transitional Small Business Disclosure Format (Check one): Yes ¨ No x

TABLE OF CONTENTS

PART 1 FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying consolidated balance sheets of Quincy Resources Inc. (a pre-exploration stage company) and subsidiary at January 31, 2004 and April 30, 2003 and the consolidated statement of operations and consolidated statement of cash flow for the three and nine months ended January 31, 2004 and 2002, and for the period from May 5, 1999 (date of inception) to January 31, 2004 have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating results for the three and nine months ended January 31, 2004, are not necessarily indicative of the results that can be expected for the year ending April 30, 2004.

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
CONSOLIDATED BALANCE SHEETS

	January 31, 2004		April 30, 2003
	(Unaudited)		(Audited)
	$		$

ASSETS
Cash	364,858		58,868
Total Current Assets	364,858		58,868

Database net of amortization (note 6)	9,473		10,599

TOTAL ASSETS	374,331		69,467

LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES
Due to a related party	28,013		1,814
Accounts payable and accrued liabilities	86,749		20,507
Total Current Liabilities	114,762		22,321

STOCKHOLDERS EQUITY (DEFICIT)
Common stock
200,000,000 shares authorized, at $0.001 par
value; 19,526,670 shares issued and outstanding	19,527		16,903
Capital in excess of par value	864,326		211,053
Deficit accumulated during the pre-exploration stage	(624,284	)	(180,810	)

Total Stockholders Equity (Deficit)	259,569		47,146

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY	374,331		69,467

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

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

		Three Months			Three		Nine months		Nine months		Inception to
		Ended			Months		Ended		Ended		January 31,
		January 31,			Ended		January 31,		January 31,		2004
		2004			January 31,		2004		2003
					2003
SALES	$	0		$	0	$	0	$	0	$	0
Accounting		4,539			565		18,913		1,565		41,234
Amortization		375			53		1,126		53		1,619
Bank charges		607			106		1,089		154		1,864
Consulting		24,075			0		47,575		0		48,575
Filing fees		2,002			0		3,257		0		7,300
Geology reporting		5,150			0		26,596		0		28,546
Incorporation costs		0			0		0		0		670
Legal fees		13,109			5,879		71,333		13,238		110,513
Executive compensation		15,000			1,500		27,500		4,500		53,000
Office		5,004			158		7,563		183		10,776
Rent		(316	)		0		1,187		900		12,887
Staking fees and exploration		111,489			5,000		165,203		5,000		200,812
costs
Telephone		2,461			300		5,477		600		10,042
Shareholder Information		30,807			1,775		31,245		1,970		40,933
Travel and promotion		13,232			8,602		35,410		8,602		55,513

NET LOSS		227,534			23,938		443,474		36,765		624,284
Deficit beginning of period		396,750			77,653		180,810		64,826		0
Deficit end of period	$	624,284		$	101,591	$	624,284	$	101,591	$	624,284

NET LOSS PER COMMON SHARE
Basic	$	0.01		$	0.01	$	0.02	$	0.01
AVERAGE OUTSTANDING SHARES
Basic		19,335,710			13,293,167		18,214,576		13,293,167

(Diluted loss per share has not been presented as the result is anti dilutive.)

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

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)

	Three Months		Three		Nine months		Nine months		Inception to
	Ended		Months		Ended		Ended		January 31,
	January 31,		Ended		January 31,		January 31,		2004
	2004		January 31,		2004		2003
			2003
	$		$		$		$		$

CASH FLOWS FROM	(227,534	)	(23,938	)	(443,474	)	(36,765	)	(624,284	)
OPERATING
ACTIVITIES:
Net loss
Adjustments to reconcile net
loss to net cash provided by
operating
activities:
Capital contribution expense	0		1,800		0		6,000		38,400
Property payment - shares	0		0		12,500		0		12,500
Amortization	375		53		1,126		53		1,619
Increase in accounts payable	28,561		1,149		66,242		(11,898	)	86,749
Net cash from operations	(198,598	)	(20,936	)	(363,606	)	(42,610	)	(485,016	)

CASH FLOWS FROM
FINANCING
ACTIVITIES:
Proceeds from stock issuances	182,980		65,000		643,397		80,000		784,861
Advance from a related party	(426	)	11,165		26,199		32,798		65,013
Share subscriptions received	(100,000	)	0		0		0		0
Net cash from financing
activities	82,554		76,165		669,596		112,798		849,874

Net Increase (Decrease) in
Cash	(166,044	)	55,229		305,990		70,188		364,858

Cash at Beginning of period	480,902		15,000		58,868		41		0

CASH AT END OF PERIOD	364,858		70,229		364,858		70,229		364,858

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

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2004 (Unaudited)

1. NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS

The Company was incorporated under the laws of the State of Nevada on May 5, 1999 with authorized common stock of 200,000,000 shares with $0.001 par value.

The Company was organized for the purpose of acquiring and developing mineral properties. At the report date mineral claims, with unknown reserves, had been acquired. The Company has not established the existence of a commercially mineable ore deposit.

The Company is in the pre-exploration stage and will be in the pre-exploration stage until it commences significant exploration activities. The Company will be in the exploration stage until it achieves significant revenues from operations. In an exploration stage company, management devotes most of its activities in acquiring and developing mineral properties. The ability of the Company to emerge from the exploration stage with respect to its planned principal business activity is dependent upon its ability to attain profitable operations. There is no guarantee that the Company will be able to identify, acquire or develop mineral properties that will produce profitability. Moreover, if a potential mineral property is identified which warrants acquisition or participation, additional funds may be required to complete the acquisition or participation, and the Company may not be able to obtain such financing on terms which are satisfactory to the Company. There is substantial doubt regarding the Company’s ability to continue as a going concern.

Principles of Consolidation

The consolidated financial statements include the accounts of Quincy Resources Inc and its wholly owned subsidiary Atlas Database Corp. All intercompany transactions have been eliminated.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Accounting

These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States and are presented in US dollars.

b) Fiscal Year

The Company’s fiscal year end is April 30.

c) Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2004 (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –continued

d) Income Taxes

As at January 31, 2004, the Company had a net operating loss carry forward of $597,284. The tax benefit of approximately $179,185 from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful since the Company has no operations. The net operating loss carry forward will begin to expire in 2015 and will fully expire in 2024.

e) Basic and Diluted Net Income (Loss) Per Share

The Company computes net income (loss) per share in accordance with SFAS no. 128, “Earnings per Share (SFAS 128). SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. Diluted EPS excludes all dilutive potential common shares if their effect is anti dilutive. Loss per share information does not include the effect of any potential common shares, as their effect would be anti dilutive.

f) Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.

g) Interim Financial Statements

These interim unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future periods.

h) Financial Instruments

The carrying amounts of financial instruments including cash and accounts payable, are considered by management to be their estimated fair values.

i) Comprehensive Loss

SFAS No. 130, “Reporting Comprehensive Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at January 31, 2004, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2004 (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –continued

j) Mining Claim Costs

Costs of acquisition, exploration, carrying, and retaining unproven properties are expensed as incurred.

k) Environmental Requirements

At the report date environmental requirements related to the mineral leases acquired are unknown and therefore an estimate of any future cost cannot be made.

l) Recent Accounting Pronouncements

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock Based Compensation – Transition and Disclosure”, which amends SFAS No. 123 to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock based employee compensation. In addition, SFAS No. 148 expands the disclosure requirements of SFAS No. 123 to require more prominent disclosures in both annual and interim financial statements about the method of accounting for stock based employee compensation and the effect of the method used on reported results. The transition provisions of SFAS 148 are effective for financial statements for interim periods beginning after December 15, 2002. The Company does not expect adoption of this standard to have a material effect on the Company's results of operations or financial position.

3. ACQUISITION OF MINERAL PROPERTIES

a) Silver Bow

In February, 2003, the Company optioned 73 unpatented lode mining claims in Nye County, Nevada. The Company must make advanced royalty payments of $165,000 by the fifth anniversary date. The owner maintains a 3% Net Smelter Return (NSR) of which the Company has the right to purchase two thirds of the NSR for $1,500,000 and the final third for an additional $2,000,000.

b) AG

In March 2003, the Company staked 43 lode mining claims in Humboldt County, Nevada.

c) Lantern

On July 31,2003, the Company entered into a mining lease with Newmont Mining Corporation for unpatented mining claims totaling 1,083.06 acres, and also received a quit claim deed for 340 acres consisting of 17 unpatented mining claims. The property is known as the Lantern Property. Platoro West Incorporated, a corporation controlled by one of our shareholders, namely William Sheriff, is also a party to the Mining Lease.

Under the lease agreement the Company is required to spend $50,000 on exploration and assessment work per year for the first five years and $100,000 per year after that. The lease is subject to a maximum 4% NSR.

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2004 (Unaudited)

d) Quartz Mountain

Pursuant to the terms of an Option Agreement made as of October 15, 2003 with Seabridge Gold Corporation the Company acquired an exclusive option to earn a 50% interest in 67 unpatented mining claims located in Lake County, Oregon known as the Quartz Mountain Property.

Pursuant to the terms of the Option Agreement, in order to maintain our option and earn the 50% interest we must:

incur cumulative exploration expenditures of $1,500,000 on or before October 15, 2008 as follows
     by October 15, 2004, $100,000,
     by October 15, 2005, $250,000,
     by October 15, 2006, $500,000, and
     by October 15, 2008, $1,500,000;
issue to Seabridge 250,000 shares of our common stock as follows
     50,000 shares on execution of the Option Agreement (which shares have been issued), and
     200,000 shares with 30 days of satisfying the expenditure obligations described above.

The above claims have not been proven to have commercially minable ore reserves and therefore all costs of exploration and retaining the properties have been expensed.

e) Empire Property

On December 15, 2003 the Company entered into a Mining Lease and Agreement with Nevada Contact Inc., in respect of 22 unpatented mineral claims (except oil and gas) situated in Owhee County, Idaho (the “Empire Claims”) and certain additional lands (except oil and gas) comprising 552 acres, more or less, also located in Owhee County, Idaho pursuant to a State of Idaho Department of Lands Mineral Lease (the “Empire Lease”).

In order to maintain the lease on the Empire Claims and the Empire Lease the Company is required to make an annual advance royalty payment of $10,000 on December 15 of each year beginning December 15, 2003.

The Empire Claims are subject to a 3% net smelter return royalty (which shall be reduced to 1% after Nevada Contact Inc. has received total compensation of $1,000,000) and the Empire Lease is subject to a 1% net smelter return royalty.

4. COMMON STOCK

Since inception the Company completed Regulation D and Regulation S offerings of 13,137,003 shares of its capital stock for $556,525, 191,667 shares upon the exercise of previously issues share purchase warrants, 148,000 shares for payment of debt, 6,000,000 shares for the purchase of all outstanding shares of Atlas Database Corp. and 50,000 shares for the acquisition of the Quartz Mountain Property option.

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2004 (Unaudited)

4. COMMON STOCK –continued

	Shares	Common Stock	Capital in Excess of	Accumulated Deficit
			Par Value
Balance April 30,
2002	10,026,500	10,027	35,023	(64,826	)
Issuance of common
stock for cash @
$0.15	533,333	533	79,467
Issuance of common
stock for a data base
(note 6)	6,000,000	6,000	5,092
Contributions to
capital expenses –
related parties			6,000
Issuance of common
stock for cash at
$0.25 – April 2003	195,250	195	48,618
Issuance of common
stock for payment of
debt at $0.25 – April
2003	148,000	148	36,852
Net loss for the year
ended April 30, 2003				(115,984	)
Balance April 30,
2003	16,903,083	16,903	211,052	(180,818	)
Exercise of warrant
for cash at $0.25 –
September, 2003	141,667	142	35,275
Issuance of common
stock for a property
payment at $0.25	50,000	50	12,450
Issuance of common
stock for cash at
$0.25 – October,
2003	1,700,000	1,700	423,300
Issuance of common
stock for cash at
$0.25 – November,
2003	681,920	682	169,798
Exercise of warrant
for cash at $0.25 –
January, 2004	50,000	50	12,450
Net loss for the
period ended January
31, 2004				(443,474	)
Balance January 31,
2004	19,526,670	19,527	864,326	(624,284	)

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2004 (Unaudited)

5. RELATED PARTY TRANSACTIONS / BALANCES

An officer and director of the Company who holds 22% of the Company’s common stock charged fees of $27,500 for the nine month period ended January 31, 2004. In August and September of 2003 this related party advanced $28,013 to the Company. These advances are unsecured, do not bear interest and are repayable upon demand.

6. PURCHASE ACQUISITION

On January 8, 2003 the Company incorporated Atlas Database Acquisition Corp (subsidiary), for the purpose of acquiring Atlas Database Corp (Atlas). Atlas’s sole asset was a gold exploration database. The Company acquired all of the issued and outstanding shares of Atlas Database Corp. in a tax free exchange pursuant to an Agreement and Plan of Merger dated January 17, 2003, between Atlas Database Corp. and Atlas Database Acquisition Corp. Pursuant to the terms of the Agreement and Plan of Merger, the subsidiary acquired all the issued and outstanding shares of capital stock of Atlas in exchange for 6,000,000 newly issued shares of the Company. Concurrent with the Acquisition, the Subsidiary was merged with and into Atlas. The transaction was recorded as a purchase and as a result no Goodwill was recorded. The share consideration represented 36.23% of the issued and outstanding common shares. The only asset held by Atlas was a database as out lined below. The stock of Atlas acquired by the Company was valued at $11,092, the remaining book value of the database. The operations of the subsidiary are included in the consolidated statement of operations starting January 24, 2003. There were no contingent terms as part of the acquisition agreement.

In June 2000, Atlas Database Corp purchased the database for $15,000. The database contains information on the natural resources exploration developed during the period 1982 through 1997. The majority of the information contained in the database relates to research on bulk mineable precious mineralized material in the western United States.

The database is being amortized over ten years starting from the date of purchase.

7. STOCK OPTION PLAN

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to employees of the Company under its 2003 Key Employee Stock Option Plan.

Options Outstanding			Options Exercisable
Exercise	Number	Weighted Average	Number	Weighted Average
prices:	Outstanding	Remaining	Exercisable	Exercise Price
		Contractual Life
		(Years)

$0.25	1,670,000	5.0	417,500	0.25
$0.67	225,000	5.0	0	0.67

F10

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2004 (Unaudited)

7. STOCK OPTION PLAN –continued

Transactions involving stock options issued to employees are summarized as follows:

	Number of	Weighted
	Shares	Average Exercise
		Price
Outstanding at April 30, 2003	0	$	N/A
Granted	1,895,000		0.30
Exercised	-		-
Cancelled	-		-
Outstanding at December 31, 2003	1,895,000	$	0.30

If the Company recognized compensation cost for the 2003 Key Employee Stock Option Plan in accordance with SFAS No. 123, the Company’s pro forma net loss and net loss per share would have been $(451,474) and $(0.03) per share for the period ended January 31, 2004 and $(64,826) and $(0.01) per share for the period ended January 31, 2003, respectively.

8.SUBSEQUENT EVENTSa) Miller Property

In January, 2004 the Company entered into a Mining Lease and Agreement with Pacific Intermountain Gold Corporation pursuant to which the Company leased 21 unpatented lode claims located in Esmeralda County, Nevada known as the “Miller Property”. Our largest shareholder holds a minority (25%) interest in Pacific Intermountain Gold Corporation. Under the Mining Lease and Agreement the Company has paid an advance royalty of $5,000 and is required to complete a $20,000 work commitment by January 23, 2005. In order to maintain the lease the Company is required to make the following additional advance royalty payments and exploration expenditures:

Date	Advance Royalty Payment	Exploration Expenditure
January 23, 2004 (paid)	$5,000	Nil
January 23, 2005	$7,500	$20,000
January 23, 2006	$10,000	$30,000
January 23, 2007	$15,000	$50,000
January 23, 2008	$30,000	$70,000
January 23, 2009 and every January 23 thereafter	$50,000	$100,000, until commencement of commercial production

Pursuant to the Mining Lease and Agreement the Miller Property is subject to a sliding scale net smelter returns royalty ranging from 2% for gold prices under $300.00/oz to 5% for gold prices in excess of $500.00/oz. Advance royalty payments are credited against the sliding scale net smelter returns royalty.

F11

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2004 (Unaudited)

8. SUBSEQUENT EVENTS–continued

b) Seven Troughs Property

In March, 2004 the Company acquired a perpetual lease of certain mineral properties located in Pershing County, Nevada and known as the Seven Troughs Property from Newmont Capital Limited (the “Seven Troughs Agreement”). The Seven Troughs Property consists of three claim groups which are owned, leased or optioned by Newmont Capital Limited. Certain of the claims are subject to underlying net smelter returns royalties of 1% to 1.5%.

The Company is required to satisfy all obligations under the leases for Seven Troughs Property which include reimbursing Newmont for an advance minimum royalty payment of $25,000 as well as making the following advance royalty payments:

$50,000 on or before January 1, 2005;
an additional $75,000 on or before January 1, 2006; and
an additional $100,000 on or before January 1 of each year thereafter

The advance royalty payments will be credited against a 1% new smelter returns royalty payable to the Lessor in respect of certain of the Leases.

Pursuant to the terms of the Seven Troughs Agreement, in order to keep its lease in good standing the Company is required to make a total of $5,000,000 in exploration expenditures as follows:

$500,000 on or before September 1, 2005;
an additional $650,000 on or before September 1, 2006;
an additional $850,000 on or before September 1, 2007;
an additional $1,250,000 on or before September 1, 2008; and
an additional $1,750,000 on or before September 1, 2009.

The $500,000 of exploration expenditures required on or before September 1, 2005 is a firm commitment by the Company.

c)Private Placement

The Company has undertaken a private placement pursuant to which it is offering for sale up to 4,285,714 units (“the “Units”) at a price of $0.70 per Unit for gross proceeds to the Registrant of up to $3,000,000. Each unit consists of one share of the Registrant’s common stock and one half of one non-transferable share purchase warrant (a “Warrant”) pursuant to the exemptions from registration provided by Regulation D and Regulation S promulgated under the United States Securities Act of 1933. Each whole Warrant will entitle the holder thereof to purchase an additional share of the Registrant’s common stock at a price of $1.00 for a period of eighteen months from the date of issuance. The proceeds of the private placement are to be used to pay the $500,000 firm commitment required to be paid pursuant to the Seven Troughs Agreement, to fund the exploration costs in respect of the Registrant’s mineral properties and for general working capital purposes. Pursuant to the terms of the private placement, the Registrant will grant to the purchasers registration rights.

F12

QUINCY RESOURCES INC. (and Subsidiary)
(Pre-exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2004 (Unaudited)

8. SUBSEQUENT EVENTS–continued

d)Engagement Letter

The Company has executed an Engagement Letter with a broker-dealer pursuant to which it has appointed the broker-dealer as its agent to sell, on a reasonable efforts basis and by way of private placement, $8,000,000 worth of units, each unit consisting of one share and one warrant. The pricing of the issue and the terms of the warrants have not been determined. In connection with the private placement, the Company will be applying for a listing on the Toronto Stock Exchange.

9. GOING CONCERN

These financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, there is substantial doubt about the Company’s ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through contributions from officers, additional equity funding, and long term financing, which will enable the Company to operate in the coming year.

Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

F13

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Description of Business

We were incorporated under the laws of the State of Nevada on May 5, 1999 with authorized common stock of 200,000,000 shares with $0.001 par value.

We were organized for the purpose of acquiring and developing mineral properties. At the report date seven series of mineral claims, with unknown reserves, had been acquired: the Silver Bow Property, the AG Property, the Lantern Property, the Quartz Mountain Property, the Empire Property, the Miller Property and the Seven Troughs Property, all of which are discussed below. We have not commenced significant exploration activities and we have not established the existence of a commercially minable ore deposit and therefore have not reached the exploration or development stages and are considered to be in the pre-exploration stage.

We are in the pre-exploration stage and will be in the pre-exploration stage until we commence significant exploration activities. We will be in the exploration stage until we achieves significant revenues from operations. In an exploration stage company, management devotes most of its activities in acquiring and developing mineral properties. Our ability to emerge from the exploration stage with respect to our planned principal business activity is dependent upon our ability to attain profitable operations. There is no guarantee that we will be able to identify, acquire or develop mineral properties that will produce profitability. Moreover, if a potential mineral property is identified which warrants acquisition or participation, additional funds may be required to complete the acquisition or participation, and we may not be able to obtain such financing on terms which are satisfactory to us. There is substantial doubt regarding our ability to continue as a going concern. Managements plans for our continuation as a going concern include financing our operations through sales of our unregistered common stock. If we are not successful with our plans, investors could then lose all or a substantial portion of their investment.

Managements’ Plan of Operation

When used in this discussion, the words “believe”, “anticipates”, “expects” and similar expressions are intended to identify forward looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward looking statements, that speak only as of the date hereof. We undertake no obligation to republish revised forward looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures made by us that attempt to advise interested parties of factors which affect our business, in this report, as well as our periodic reports on Forms 10 KSB and 10 QSB filed with the Securities and Exchange Commission.

Summary

Since the change in control of the Company in August, 2002, we have raised approximately $725,000 in equity capital pursuant to private placements, acquired a natural resource mineral exploration database, acquired or staked seven additional mineral properties located in Nevada, Idaho and Oregon, added depth of experience to our board of directors and have been granted a symbol for our common stock to trade on the over-the-counter Bulletin Board operated by NASDR, Inc. The next steps in our plans are to continue to locate, assess and acquire natural resource properties and to conduct preliminary exploration work on our properties.

Atlas Database

On January 17, 2003 we acquired Atlas Database Corp, the owner of a natural resource exploration database developed by Atlas Minerals Inc. during the period 1982 through 1997. The majority of the information contained in the database relates to research on bulk mineable precious mineralized material in the western United States, particularly sediment hosted disseminated gold deposits and volcanic hosted disseminated hot springs gold mineralized material. Our management intends to utilize this database to further its stated business objective of locating, acquiring and exploring mineral natural resource properties.

Atlas Database Corp. was acquired pursuant to an Agreement and Plan of Merger between ourselves, Atlas Database Acquisition Corp., our wholly owned subsidiary, Atlas Database Corp., Platoro West Incorporated (“Platoro”) and William M. Sheriff. Mr. Sheriff is the sole Shareholder of Platoro which was, in turn, the sole shareholder of Atlas Database Corp. Pursuant to the terms of the Agreement and Plan of Merger, 6,000,000 shares of our common stock were issued to Platoro West Incorporated in exchange for all of the issued and outstanding shares of Atlas Database Corp., Atlas Database Acquisition Corp. merged with and into Atlas Database Corp. and its separate existence ceased. As a result of the foregoing, Atlas Database Corp. is now our wholly owned subsidiary.

The purchase price for the Atlas Database of 6,000,000 shares of our common stock was determined through arms length negotiations between ourselves and Platoro.

Atlas Database Corp. was formed in January, 2003 and was assigned all of Platoro's right, title and interest in and to the Atlas Database in exchange for $15,000 cash. Prior to the Agreement and Plan of Merger, Platoro was the sole shareholder of Atlas Database Corp. and therefore its parent company.

Platoro’s interest in the Atlas Database was acquired pursuant to a Bill of Sale and Letter Agreement between Platoro and Atlas Minerals Inc. dated June 10, 2000. The purchase price paid by Platoro to Atlas Minerals Inc. was $15,000 cash. As required by the Letter Agreement, we have agreed to comply with the terms thereof. Accordingly, we are required to allow Atlas Minerals Inc. access to the data contained in the Atlas Database for competitive purposes, provided that Atlas Minerals Inc. provides reasonable notice. To date, Atlas Minerals Inc. has not requested access to the data. The Letter Agreement does not provide for sales of any of the data contained in the Atlas Database by Atlas Minerals Inc. to third parties, it only requires that we grant access to the data for competitive purposes. However, it does not specifically prohibit such sales. We have not obtained a legal opinion on whether or not Atlas Minerals Inc. has the right to sell any of the data contained in the Atlas Database to third parties. However, we are of the view that such sales would be a violation of the terms of the Letter Agreement and would take steps to prevent such sales. We can give no assurance that we would be successful in this regard. Pursuant to the terms of the Letter Agreement, Atlas Minerals Inc. is entitled to access the Atlas Database for the purpose of competing directly with us. Pursuant to the terms of the Letter Agreement, in the event we sell any of the data to a third party we are required to pay Atlas Minerals Inc. 25% of the proceeds of the sale. We do not require the consent of Atlas Minerals Inc. to sell any of the data to a third party.

Pursuant to the terms of the Agreement and Plan of Merger we have granted Platoro the option to repurchase from us the Atlas Database on an “as is, where is” basis, provided that (i) during the 365 day period prior to the exercise of the option we have not made commercial use of the Atlas Database and (ii) we have no commercially reasonable plans for use of the Atlas Database. The exercise price of the option is the payment by Platoro of 6,000,000 shares of our common stock. Accordingly, the option exercise price is the same as the purchase price. In the event that we sell the Atlas Database to an arms length third party the option granted to Platoro will terminate.

Mineral Properties

Silver Bow Property

Pursuant to the terms of a Mining Lease and Agreement made the 21^st day of February, 2003 between ourselves and Donald K. Jennings and Renegade Exploration (the “Owners”), we acquired the exclusive right to explore and mine ores and minerals of any kind (except oil and gas) on 73 unpatented lode mining claims in Nye County, Nevada known as the Silver Bow Property.

The lease is subject to a 3% Net Smelter Return (NSR) royalty in favor of the Owners. We have the right to purchase two thirds of the NSR for $1,500,000 and the final third for an additional $2,000,000. The lease has a term of 15 years, provided that the following advance royalty payments are made to the Owners:

     $10,000 upon signing (paid);
     $15,000 on February 21^st, 2004 (paid);
     $20,000 on February 21^st, 2005;
     $30,000 on February 21^st, 2006;

     $40,000 on February 21^st, 2007;
     $50,000 on February 21^st, 2008; and
     $50,000 on each February 21^st thereafter.

Pursuant to the terms of the Mining Lease and Agreement we have also agreed with the Owners that, in the event that we locate any additional unpatented mining claims within an “Area of Interest” surrounding the Silver Bow Property, such claims will be subject to the Mining Lease and Agreement and, as a result, we will be obligated to pay a 3% NSR royalty referred to above to the Owners in respect of such claims. In the event that any claims we locate are inside the “Area of Interest” and are subject to a royalty payable to a third party, the 3% NSR royalty payable to the Owners will be reduced on a dollar for dollar basis. The “Area of Interest” is defined by specific boundaries and encompasses 1,887 hectares located around the Silver Bow Property.

There are no known reserves on the Silver Bow Property and any proposed program by us is exploratory in nature. We have not conducted any exploration activities on the Silver Bow Property. Subject to obtaining sufficient financing we plan to review these mineral claims and, if warranted, undertake further exploration activities. We are presently in the pre-exploration stage and there is no assurance that a commercially viable mineral deposit, a reserve, exists in the Silver Bow Property until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.

AG Property

In March 2003, we staked 44 lode mining claims in Humboldt County, Nevada known as the AG Property. The AG Property is located approximately 32 miles northwest of the town of Orovada in Humboldt County, Nevada. The Property lies within the Bilk Creek Mountains and encompasses a small hill.

There are no known reserves on the AG Property and any proposed program by us is exploratory in nature. We have not conducted any exploration activities on the AG property. Subject to obtaining sufficient financing we plan to review these mineral claims and, if warranted, undertake further exploration activities. We are presently in the pre-exploration stage and there is no assurance that a commercially viable mineral deposit, a reserve, exists in the AG Property until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.

Lantern Property

On July 31, 2003, we entered into a mining lease with Newmont Mining Corporation for unpatented mining claims totaling 1,083.06 acres, and also received a quit claim deed for 340 acres consisting of 17 unpatented mining claims. The property is known as the Lantern Property. Platoro West Incorporated, a corporation controlled by one of our shareholders, namely William M. Sheriff, is also a party to the Mining Lease. Specifically excluded from the agreement are 22 unpatented mining claims under lease to Romios Gold Resources, Inc. a Canadian corporation.

Platoro began negotiating with Newmont in 2002 to acquire the Lantern Property and made certain maintenance fee payments in respect of the claims comprising the Lantern Property in contemplation of a definitive agreement being reached with Newmont. In 2003, as part of these negotiations, Platoro proposed to Newmont that Platoro would lease the Lantern Property from Newmont and, in turn, sublease the Lantern property to us. Newmont requested instead that both Platoro and ourselves be party to the mining lease agreement. We have agreed with Platoro that we will reimburse Platoro for all out of pocket costs incurred by it in respect of maintaining the Lantern Property prior to the date of the mining lease agreement and that, in the event that we do not elect to conduct exploration work on the Lantern Property, we will transfer the Lantern Property to Platoro, subject to the terms of the mining lease agreement. We are of the view that this arrangement does not give rise to a conflict of interest as neither Mr. Sheriff nor Platoro are directors or officers of ours.

The Lantern Property is located in Pershing County, Nevada, about 62 miles from Winnemuca, Nevada. Access to the property is from the town of Lovelock located on Interstate Highway No. 80 over Nevada State Route 399 for 15 miles and then an additional 35 miles to the north over unimproved gravel roads.

Under the lease agreement, we are required to spend the following amounts on exploration and assessment work:

     $25,000 during the 12 month period ended July 31, 2005
     $25,000 during the 12 month period ended July 31, 2006
     $50,000 during the 12 month period ended July 31, 2007
     $50,000 during the 12 month period ended July 31, 2008
     $50,000 during the 12 month period ended July 31, 2009
     $100,000 during the 12 month period ended July 31, 2010 and each July 31 thereafter as long as the agreement is in effect.

The lease is subject to a maximum 4 % Net Smelter Return (NSR) royalty in favor of Newmont Mining Corporation. Newmont Mining Corporation also retained a preferential ore processing right. We are required to undertake a feasibility study.

We are also responsible for all taxes and federal maintenance fees for the property. Newmont also has the option to create a joint venture with us. We can terminate the Agreement at any time after spending $100,000 on exploration and assessment work.

Newmont has told us that the current owner of the property, Nevada Land and Resource Company LLC, has filed a lawsuit challenging the validity of leases for the Lantern Property. A July 12, 2002, trial court decision rejected Nevada Land and Resource Company claims. That decision is now on appeal to the Nevada Supreme Court.

There are no known reserves on the Lantern Property and any proposed program by us is exploratory in nature. We have not conducted any exploration activities on the Lantern property. Subject to obtaining sufficient financing we plan to review these mineral claims and, if warranted, undertake further exploration activities. We are presently in the pre-exploration stage and there is no assurance that a commercially viable mineral deposit, a reserve, exists in the Lantern Property until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.

Quartz Mountain Property

Pursuant to the terms of an Option Agreement made as of October 15, 2003 with Seabridge Gold Corporation (a wholly-owned subsidiary of Seabridge Gold Inc.) (“Seabridge”) we acquired an exclusive option to earn a 50% interest in 67 unpatented mining claims located in Lake County, Oregon known as the Quartz Mountain Property, subject to certain exclusions.

Pursuant to the terms of the Option Agreement, in order to maintain our option and earn the 50% interest we must:

incur cumulative exploration expenditures of $1,500,000 on or before October 15, 2008 as follows

by October 15, 2004, $100,000,
by October 15, 2005, $250,000,
by October 15, 2006, $500,000, and
by October 15, 2008, $1,500,000;

issue to Seabridge 250,000 shares of our common stock as follows

50,000 shares on execution of the Option Agreement (which shares have been issued), and
200,000 shares with 30 days of satisfying the expenditure obligations described above.

If those conditions are satisfied, we will be deemed to have exercised the option and earned our 50% interest in the Quartz Mountain Property, at which time we will be deemed to have entered into a Joint Venture Agreement with Seabridge.

We may also increase our interest in the Quartz Mountain Property from 50% to 62.5% by (i) funding 100% of a feasibility study on the Quartz Mountain Property within three years; and (ii) issuing 250,000 shares at the completion of the feasibility study.

We are required to make the first $100,000 of expenditures and to pay all fees required to keep the Quartz Mountain Property in good standing. Once we have made the first $100,000 of expenditures we may terminate the Option Agreement on 60 days written notice to Seabridge.

We have also agreed with the Seabridge that, if the parties to the Option Agreement acquire any additional mineral properties with two miles of the outer boundaries of the Quartz Mountain Property, such properties will immediately be subject to the Option Agreement.

The Option Agreement is subject to two Royalty Agreements, the first of which is between Seabridge and William M. Sheriff, our largest shareholder (the “Sheriff Royalty”) pursuant to a Royalty Agreement dated December 18, 2001, and the second of which is between Seabridge and Quartz Mountain Resources Ltd. (the “QMR Royalty”) pursuant to an Asset Purchase and Sale and Royalty Agreement dated December 17, 2001. Pursuant to the Sheriff Royalty, Sheriff is entitled to a 0.5% net smelter returns royalty from all ore mined on the Quartz Mountain Property, and pursuant to the QMR Royalty, Quartz Mountain Resources Ltd. is entitled to a 1% net smelter returns royalty from all ore mined on the Quartz Mountain Property.

There are no known reserves on the Quartz Mountain Property and any proposed program by us is exploratory in nature. We have not conducted any exploration activities on the Quartz Mountain Property. Subject to obtaining sufficient financing we plan to review these mineral claims and, if warranted, undertake further exploration activities. We are presently in the pre-exploration stage and there is no assurance that a commercially viable mineral deposit exists in the Quartz Mountain Property (other than the 2.744 million ounce low-grade gold resource which has been identified by previous exploration activities on the Quartz Mountain Property and which is specifically excluded from our rights to the Quartz Mountain Property) until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.

Empire Property

On December 15, 2003 we entered into a Mining Lease and Agreement with Nevada Contact Inc., in respect of 22 unpatented mineral claims (except oil and gas) situated in Owhee County, Idaho (the “Empire Claims”) and certain additional lands (except oil and gas) comprising 552 acres, more or less, also located in Owhee County, Idaho pursuant to a State of Idaho Department of Lands Mineral Lease (the “Empire Lease”).

In order to maintain the lease on the Empire Claims and the Empire Lease we are required to make an annual advance royalty payment of $10,000 on December 15 of each year beginning December 15, 2003.

There are no known reserves on the Empire Claims or the Empire Lease and any proposed program by us is exploratory in nature. We have not conducted any exploration activities on the Empire Claims or the Empire Lease Subject to obtaining sufficient financing we plan to review these mineral claims and, if warranted, undertake further exploration activities. We are presently in the pre-exploration stage and there is no assurance that a commercially viable mineral deposit, a reserve, exists in the Empire Claims or the Empire Lease until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.

Miller Property

In January, 2004 the Company entered into a Mining Lease and Agreement with Pacific Intermountain Gold Corporation pursuant to which the Company leased 21 unpatented lode claims located in Esmeralda County, Nevada known as the “Miller Property”. Our largest shareholder holds a minority (25%) interest in Pacific Intermountain Gold Corporation. Under the Mining Lease and Agreement the Company has paid an advance royalty of $5,000 is required to complete a $20,000 work commitment by January 23, 2005. In order to maintain the lease the Company is required to make the following additional advance royalty payments and exploration expenditures:

Date	Advance Royalty Payment	Exploration Expenditure
January 23, 2004 (paid)	$5,000	$Nil
January 23, 2005	7,500	$20,000

January 23, 2006	10,000	$30,000
January 23, 2007	15,000	$50,000
January 23, 2008	30,000	$70,000
January 23, 2009 and every January 23 thereafter	$50,000	$100,000, until commencement of commercial production

There are no known reserves on the Miller Property and any proposed program by us is exploratory in nature. We have not conducted any exploration activities on the Miller Property. Subject to obtaining sufficient financing we plan to review these mineral claims and, if warranted, undertake further exploration activities. We are presently in the pre-exploration stage and there is no assurance that a commercially viable mineral deposit, a reserve, exists in the Miller Property until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.

Seven Troughs Property

We have acquired a perpetual lease of certain mineral properties located in Pershing County , Nevada and known as the Seven Troughs Property from Newmont Capital Limited (“Newmont”) pursuant to the terms of a Minerals Lease, Sublease and Agreement dated and effective March 1, 2004 (the “Agreement”) between the Registrant and Newmont.

The Seven Troughs Property consists of three sets of claims as follows:

34 patented lode mining claims (6 of which are subject to a 1.5% net smelter returns royalty) and 8 unpatented lode mining claims situate in Sections 12, 13, 23-26, 35 and 36, Township 30 North, Range 28 East, and Section 7 and 19, Township 30 North, Range 29 East, MDB&M, Pershing County, State of Nevada (the “Owned Claims”);
5 patented lode mining claims situate in Sections 25 and 36, Township 30 North, Range 28 East, MDB&M, Pershing County, State of Nevada which are subject to the Option and Purchase Agreement dated effective April 15, 1999, between Western United Mines, Inc., a Utah corporation, and Seven Troughs Joint Venture, a Nevada Joint Venture among Franco-Nevada Mining Corporation, Inc. and Euro-Nevada Mining Corporation, Inc. (the “Optioned Claims”); and
76 unpatented and 64 patented lode mining claims and leased 162 unpatented claims situate in Sections 12, 13, 23-26, 35 and 36, Township 30 North, Range 28 East; and Sections 18, 19, 30 and 31 of Township 40 North, Range 29 East, MDB&M, Pershing County, State of Nevada (the “Leased Claims”).

Pursuant to the terms of the Agreement, we have been assigned Newmont’s rights to the agreement between Newmont and Western United Mines, Inc. (“Western”) in respect of the Optioned Claims (the “Option Agreement”). Pursuant to the Option Agreement, we are required to pay the sum of $9,000 to Western on or before April 15, 2004 and the sum of $9,000 to Western on or before April 15, 2005. We will thereafter be required to exercise the option to purchase the Optioned Claims on or before April 15, 2006 by paying to Western the sum of $300,000.

In addition, we are required to satisfy all obligations under the leases for the Leased Claims (the “Leases”). These obligations include reimbursing Newmont for the advance minimum royalty payment paid by Newmont to the lessor of certain of the Leases (the “Lessor”) $25,000 (which sum has been paid by the Registrant), as well as making the following advance royalty payments to the Lessor:

$50,000 on or before January 1, 2005;

an additional $75,000 on or before January 1, 2006; and
an additional $100,000 on or before January 1 of each year thereafter.

The advance royalty payments will be credited against a 15% net profits interest payable to the Lessor in respect of certain of the Leases. In addition, certain of the Leased Claims are subject to an additional 1% net smelter returns royalty.

Pursuant to the terms of the Agreement, in order to keep its lease in good standing we are required to make a total of $5,000,000 in exploration expenditures as follows:

$500,000 on or before September 1, 2005;
an additional $650,000 on or before September 1, 2006;
an additional $850,000 on or before September 1, 2007;
an additional $1,250,000 on or before September 1, 2008; and
an additional $1,750,000 on or before September 1, 2009.

The $500,000 of exploration expenditures required on or before September 1, 2005 is a firm commitment by the Registrant.

Once we have expended $2,500,000 of exploration expenditures on the Seven Troughs Property (but prior to commencement of production) we are required to provide a positive feasibility study (a “Completion Notice”).

Prior to delivery of the positive feasibility study, and upon payment to us of 30% of the exploration expenditures made by us to that date, Newmont has the right to require us to enter into a joint venture on the Seven Troughs Property with Newmont having a 51% interest and us a 49% interest. Newmont will also be required to pay all expenditures by the joint venture up to an amount equal to 150% of the exploration expenditures made by us to that date. Newmont may also require us to enter into a joint venture on the Seven Troughs Property within 120 days of the delivery of the Completion Notice by paying to us 100% of the exploration expenditures made by us to that date, in which case Newmont will also be required to pay all expenditures by the joint venture up to an amount equal to 150% of the exploration expenditures made by us to that date

In lieu of electing to enter into a joint venture, and once we have expended $2,500,000 of exploration expenditures on the Seven Troughs Property, Newmont may elect to receive a cash payment equal to 85% of the exploration expenditures made by us to that date (to a maximum of $5,500,000) following which Newmont will transfer its interest in the Seven Troughs Property to us, subject to a net smelter returns royalty on precious metals (gold, silver and platinum) as follows:

Monthly Average	Net Smelter
Gold Price (U.S.$/ounce)	Return Percentage
Less than $300	2.5%
$300 up to $399.99	3.5%
$400 up to $499.99	4.5%

Pursuant to the terms of the Agreement all lands within one-half mile of the boundaries of the Seven Troughs Property acquired by us will become part of the Seven Troughs Property and subject to the Agreement.

We have undertaken a private placement in order to finance the $500,000 firm commitment. However, as at the date hereof the Registrant does not have adequate capital to fund this commitment, no such financing has been arranged and there is no guarantee that such financing will be available on terms acceptable to the Registrant, if at all.

The Seven Troughs district has recorded historical production of 150,000 tons grading 1.2 ounces of gold and 4.0 ounces of silver. The district is underlain by a bimodal suite of mid-Miocene volcanic rocks composed of basalt and rhyolite. Large through-going northerly, northwesterly and northeasterly structures form a complex zone of extensional tectonics with resulting horst and graben blocks. An area approximately 5 miles long and 2.5 miles

wide has been variably altered by shallow level hydrothermal solutions. Argillic alteration is the most widespread, but silicification and propylitic alteration is also present. Gold and silver mineralization is hosted in banded quartz veins as well as in sheared gouge zones. The historic mining exploited spotty but very high grade ore bodies primarily in two areas at the Coalition and Fairview mines respectively. There are no known reserves on the Seven Troughs Project to be acquired by the Registrant and any proposed program by us will be exploratory in nature.

There are no known reserves on the Seven Troughs Property and any proposed program by us is exploratory in nature. We have not conducted any exploration activities on the Seven Troughs Property. Subject to obtaining sufficient financing we plan to review these mineral claims and, if warranted, undertake further exploration activities. We are presently in the pre-exploration stage and there is no assurance that a commercially viable mineral deposit exists in the Seven Troughs Property until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.

Liquidity and Capital Resources

There is limited historical financial information about our company upon which to base an evaluation of our performance. We are a pre-exploration stage company and have not generated any revenues from operations.

Our continued existence and plans for future growth depend on our ability to obtain the capital necessary to operate, through the generation of revenue and the issuance of additional debt or equity. We will need to raise additional capital to fund normal operating costs and exploration efforts. If we are not able to generate sufficient revenues and cash flows or obtain additional or alternative funding, we will be unable to continue as a going concern. Our recurring losses and negative cash flow from operations raise substantial doubt about our ability to continue as a going concern.

At January 31, 2004 we had cash of $364,858 as compared to $58,868 at April 30, 2003 and a working capital surplus of $250,096 as compared to $36,547 at April 30, 2003. The increase in working capital is attributable to current fund raising.

Total liabilities as of January 31, 2004 were $114,762 as compared to $22,321 at April 30, 2003.

Net cash used in operating activities in the nine month period ended January 31, 2004 was $363,606 compared to $42,610 in the nine month period ended January 31, 2003. Net cash from financing activities in the nine month period ended January 31, 2004 was $669,596 (2002 - $112,798). The increases are attributable to the increase in our business activities, as we were dormant in the previous period.

With the exception of our $500,000 exploration commitment on the Seven Troughs Property, we have sufficient working capital to pay our administrative and general operating expenses and to make the advance royalty payments required on our properties through December 2004, and to conduct preliminary exploration programs. We will need to obtain additional funds (presumably through equity offerings and/or debt borrowing) in order, if warranted, to fund our general and administrative expenses, make the additional advance royalty payments required on our properties and conduct exploration programs on our properties. To fund our operations we have undertaken a private placement of up to 4,285,714 units (“the “Units”) at a price of $0.70 per Unit for gross proceeds to us of up to $3,000,000. Each unit consists of one share of our common stock and one half of one non-transferable share purchase warrant (a “Warrant”) pursuant to the exemptions from registration provided by Regulation D and Regulation S promulgated under the United States Securities Act of 1933. Each whole Warrant will entitle the holder thereof to purchase an additional share of our common stock at a price of $1.00 for a period of eighteen months from the date of issuance. The proceeds of the private placement are to be used to pay the $500,000 firm commitment required to be paid pursuant to the Seven Troughs Agreement, to fund the exploration costs in respect of our mineral properties and for general working capital purposes. Pursuant to the terms of the private placement, we will grant to the purchasers registration rights.

We have also executed an Engagement Letter with a broker-dealer pursuant to which it has appointed the broker-dealer as its agent to sell, on a reasonable efforts basis and by way of private placement, $8,000,000 worth of units, each unit consisting of one share and one warrant. The pricing of the issue and the terms of the warrants have not been determined. In connection with the private placement, the Company proposes to apply for a listing on the

Toronto Stock Exchange. The broker-dealer is currently conducting its due diligence on our business and our properties.

Failure to obtain additional financing will result in the loss by us of our interests in our mineral properties. We have no agreements or understandings with any person for additional financing save as stated above.

None of our properties has commenced commercial production and we have no history of earnings or cash flow from our operations. While we may attempt to generate additional working capital through the operation, development, sale or possible joint venture development of our properties, there is no assurance that any such activity will generate funds that will be available for operations.

We have not declared or paid dividends on our shares since incorporation and do not anticipate doing so in the foreseeable future.

Results of Operations

During the nine month period ended January 31, 2004 our activities were focused on the acquisition and maintenance of our interests in our mineral properties, the completion of our registration statement filing with the Securities and Exchange Commission and obtaining a symbol from NASDR, Inc. In addition, we determined to abandon our interest in the Quincy Property in order to focus our efforts on natural resource mineral properties located in the western United States (in particular Nevada, Idaho and Oregon).

Expenses related to the preparation of Geology Reports and Staking Fees and Exploration Costs increased from $Nil and $5,000, respectively, during the nine month period ended January 31, 2003 to $26,596 and $165,203, respectively, during the nine month period ended January 31, 2004, reflecting our increased business activity.

As a result of our registration statement filing and the acquisition of the additional mineral properties, legal fees increased to $71,333 during the nine month period ended January 31, 2004 as compared to $13,238 for the nine month period ended January 31, 2003.

Accounting fees for the nine month period ended January 31, 2004 also increased substantially to $18,913 from $1,565 in the same period in 2003 due to the increased costs associated with the increase in our business activity.

Executive compensation of $27,500 was paid in the nine month period ended January 31, 2004 to Daniel Farrell, our President, Chief Financial Officer, Secretary and director as compared to $4,500 in 2003.

Travel and promotion during the nine month period ended January 31, 2004 of $35,410 increased from $8,602 in 2003 due to the travel requirements to our new properties in Nevada and Oregon.

Shareholder communications costs increased substantially from $1,970 for the nine month period ended January 31, 2003 to $31,245 for the nine month period ended January 31, 2004. The increase in costs was related to the establishment of our website,www.quincyresources.com and the production and printing of shareholder communications materials.

No donated executive compensation was recorded for the nine month period ended January 31, 2004.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not exposed to foreign currency risk due to the Company’s revenue transactions being conducted in U.S. dollars.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive and its Chief Financial Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules l3a 14(c) and 15d 14(c) as of a date within 90 days of the filing date of this quarterly report on Form 10 QSB (the "Evaluation Date"), have concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures were adequate and effective to ensure that material information relating to the Company would be made known to it by others within the Company, particularly during the period in which this quarterly report on Form 10 QSB was being prepared.

Changes in Internal Controls

There were not significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s disclosure controls and procedures subsequent to the Evaluation Date, nor any significant deficiencies or material weaknesses in such disclosure controls and procedures requiring corrective actions.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Other than as disclosed above under the heading “Lantern Property”, our management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving the Company or its mineral claims. No director, officer or affiliate of the Company is (i) a party adverse to the Company in any legal proceedings, or (ii) has an adverse interest to the Company in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against the Company or its mineral claims.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

As at April 30, 2003 the Company had outstanding 16,903,083 shares of common stock and share purchase warrants entitling the holders thereof to purchase an additional 266,667 shares.

During the nine month period ended January 31, 2004 the following changes in our securities occurred:

On September 4, 2003 we issued 75,000 shares of our common stock to 2 persons upon the exercise of 75,000 previously issued share purchase warrants at a price of $0.25 per share for gross proceeds to us of $18,750. These securities were issued in reliance upon the exemption from registration provided by Regulation S as the purchasers were not U.S. Persons as that term is defined in Regulation S.

On September 15, 2003 we issued 66,667 shares of our common stock to 1 person upon the exercise of 66,667 previously issued share purchase warrants at a price of $0.25 per share for gross proceeds to us of $16,666. These securities were issued in reliance upon the exemption from registration provided by Regulation S as the purchasers were not U.S. Persons as that term is defined in Regulation S.

On October 15, 2003 we issued 50,000 shares of our common stock to Seabridge Gold Corporation pursuant to the terms of an Option Agreement dated October 15, 2003 between ourselves and Seabridge. These securities were issued in reliance upon the exemption from registration provided by s. 4(2) of the Securities Act.

On October 29, 2003 we accepted subscriptions from ten investors and issued 1,700,000 shares at a price of $0.25 per share for gross consideration of $425,000. These securities were issued in reliance upon the exemption from registration provided by Regulation S as the purchasers were not U.S. Persons as that term is defined in Regulation S.

On November 15, 2003 the remaining 25,000 warrants issued on November 15, 2002 expired unexercised.

On November 20, 2003 we accepted subscriptions from six investors and issued 681,920 shares at a price of $0.25 per share for gross consideration of $170,480. These securities were issued in reliance upon the exemption from registration provided by Regulation S as the purchasers were not U.S. Persons as that term is defined in Regulation S.

On December 3, 2003 the Company granted options to acquire a total of 1,670,000 shares of our common stock at a price of $0.25 per share. These options vest over a period of two years beginning as follows: 25% on January 1, 2004; 25% on July 1, 2004; 25% on January 1, 2005; and 25% on July 1, 2005.

On January 13, 2004 the Company granted options to acquire a total of 225,000 shares of our common stock at a price of $0.67 per share. These options vest over a period of two years beginning as follows: 25% on July 13, 2004; 25% on January 13, 2005; 25% on July 13, 2005 and 25% on January 13, 2006.

On January 15, 2004 we issued 50,000 shares of our common stock to 1 person upon the exercise of 50,000 previously issued share purchase warrants at a price of $0.25 per share for gross proceeds to us of $12,500. These securities were issued in reliance upon the exemption from registration provided by Regulation S as the purchaser was not a U.S. Person as that term is defined in Regulation S.

On January 15, 2004 the remaining 50,000 warrants issued on January 15, 2003 expired unexercised.

Accordingly, as at March 11, 2003 the Company had outstanding 19,526,670 shares of common stock and options entitling the holders to acquire 1,895,000 shares of common stock.

On November 24, 2003 the Company’s common shares were approved for listing on the over-the-counter Bulletin Board operated by NASDR, Inc. and are trading under the symbol “QCYR.

Other than the above, there have been no changes in securities since the Company’s fiscal year end.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

No report is required.

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

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8 K

(a) Exhibits required to be attached by Item 601 of Regulation S B are listed below and are incorporated herein by this reference.

Exhibit 31.1 Certificate pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2 Certificate pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Certificate pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8 K.

Form 8-K

Private Placement – Final Closing and Issuance of Trading Symbol, November 20, 2003. This reported on the closing of the final trance of the private placement announced October 14, 2003 and the issuance of a trading symbol by NASDR, Inc. for the Company’s common stock. On November 20, 2003 the Company accepted subscriptions for a total of 681,920 shares of its common stock for gross proceeds of US$170,480. For details pertaining to the private placement refer to the Company’s Current Report filed on Form 8-K dated November 20, 2002 which can be viewed on the Securities and Exchange Commission website (SEC file no. 000-31501).

Form 8-K

Change of Auditor, January 30, 2004. This reported on the merger of our former auditors, Sellers & Andersen LLC, with Madsen and Associates to create a new entity being Madsen & Associates, CPA's Inc. For details pertaining to the change of auditor refer to the Company’s Current Report filed on Form 8-K dated January 30, 2004 which can be viewed on the Securities and Exchange Commission website (SEC file no. 000-31501).

SIGNATURE

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

QUINCY RESOURCES INC.

March 19, 2003

/s/ Daniel Farrell
Daniel Farrell
President, Chief Financial Officer, Secretary and Director

Quincy Energy (QCYR) Inactive 10QSB2004 Q3 Quarterly report (small business)