White Mountain Titanium (WMTM) 10-Q/A 2009 Q2 Quarterly report (amended)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A-2

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

For the quarterly period ended June 30, 2009

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from to 

Commission File Number 333-129347

WHITE MOUNTAIN TITANIUM CORPORATION

(Name of small business issuer in its charter)

NEVADA	87-0577390
(State of incorporation or	(IRS Identification No.)
organization)

Enrique Foster Sur 20, Piso 19

Las Condes, Santiago

Chile

(Address of principal executive offices)

(56 2) 231-5780

(Issuer’s telephone number)

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

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

Large Accelerate 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

34,404,043 shares of the issuer’s common stock, $.001 par value, were outstanding at July 20, 2009.

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

EXPLANATORY NOTE

The purpose of this Amendment No. 2 is to respond to comments by the staff of the Commission in a letter dated September 3, 2009, and a subsequent letter dated November 9, 2009.

Item 1, FINANCIAL STATEMENTS, has been amended to account for the effects of EITF 07-05 with respect to 7,175,000 warrants previously issued, and which had their exercise price reduced due to anti-dilution provisions, as freestanding derivatives.  Also, a new Note 5 to the financial statements has been added to provide the disclosure related to the fair value measurement of the stock warrants as required by paragraphs 32 through 35 of SFAS 157.  In addition, the columns in the financial statements which have been restated have been so designated.  Further, a new Note 6 has been added describing the restatement and the comparative figures.

In addition, Item 2, MANAGEMENT’S DISCUSSION AND ANALYSIS, has been amended to reflect the changes to the accounting for the warrants.

This Amendment No. 2 continues to speak as of the date of the original Form 10-Q for the quarter ended June 30, 2009, and the Company has not updated or amended the disclosures contained in the amended items to reflect events that have occurred since the filing of the original Form 10-Q, or modified or updated those disclosures in any way other than as described in the preceding paragraph.  Accordingly, this Amendment No. 2 should be read in conjunction with the Company’s filings made with the SEC subsequent to the filing of the original Form 10-Q on August 10, 2009.

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)

Consolidated Balance Sheet

(US Funds)

	June 30,			December 31,
	2009			2008
	Unaudited Restated (Note 6)
Assets
Current
Cash and cash equivalents	$	1,586,727		$	1,475,460
Prepaid expenses		52,822			54,530
Receivables		18,176			15,646
Total Current Assets		1,657,725			1,545,636
Property and Equipment (Note 3)		64,516			86,019
Mineral Properties		651,950			651,950
Total Assets	$	2,374,191		$	2,283,605
Liabilities
Current
Accounts payable and accrued liabilities	$	28,000		$	35,777
Total Current Liabilities		28,000			35,777
Other Liabilities – warrants (Note 3(d))		2,786,837			-
Total Liabilities		2,814,837			35,777
Stockholders’ Equity
Capital Stock (Note 4)
Preferred Stock and Paid-in Capital in Excess of $0.001 Par Value
20,000,000  Shares authorized
625,000  Shares issued and outstanding		500,000			500,000
Common Stock and Paid-in Capital in Excess of $0.001 Par Value
100,000,000  Shares authorized
34,404,042  (December 31, 2008 – 32,004,042) shares issued and outstanding		20,305,332			17,930,947
Deficit Accumulated During the Exploration Stage		(21,245,978	)		(16,183,119	)
Total Stockholders’ Equity		(440,646	)		2,247,828
Total Liabilities and Stockholders’ Equity	$	2,374,191		$	2,283,605

See notes to the unaudited consolidated condensed financial statements

2

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)

Consolidated Condensed Statement of Operations

(US Funds)

	Three months ended June 30						Six months ended June 30						Cumulative From Inception November 13,
	2009 Unaudited Restated (Note 6)			2008 Unaudited			2009 Unaudited Restated (Note 6)			2008 Unaudited			2001 through June 30, 2009 Unaudited Restated
Expenses
Advertising and promotion	$	2,555		$	9,992		$	17,651		$	26,699		$	198,613
Amortization		5,173			6,483			11,561			11,488			107,141
Bank charges and interest		617			1,454			1,701			3,211			24,504
Consulting fees		255,947			47,114			294,438			113,704			2,225,060
Consulting fees – directors and officers		310,945			120,492			563,980			196,192			3,441,023
Exploration		82,335			651,137			215,963			952,898			4,358,596
Filing fees		2,591			-			3,988			2,499			51,855
Insurance		18,030			16,340			26,718			31,980			219,183
Investor relations		694,875			-			694,875			-			768,673
Licenses and taxes		8,619			38,183			18,206			95,082			379,558
Management fees		34,800			34,800			69,600			69,600			1,465,990
Office		3,900			10,344			8,533			18,564			158,021
Professional fees		40,164			93,903			64,891			131,253			1,436,120
Rent		18,102			22,582			34,681			52,778			352,687
Telephone		2,876			6,127			5,886			11,990			79,985
Transfer agent fees		825			21			1,465			1,353			12,688
Travel and vehicle		17,929			58,124			54,555			88,163			919,588
Loss before other items		(1,500,283	)		(1,117,096	)		(2,088,692	)		(1,807,454	)		(16,199,285	)
Gain (loss) on sale of marketable securities		-			-			-			-			87,217
Adjustment to market for marketable securities		-			-			-			-			(67,922	)
Gain on Foreign exchange		11,170			(16,978	)		18,123			16,467			(178,851	)
Loss on sale of assets		-			-			(7,465	)		-			(19,176	)
Dividend income		-			-			-			-			4,597
Interest income		638			8,306			1,012			27,116			346,387
Change in fair value of warrants		(1,994,150	)		-			(1,901,462	)		-			(1,901,462	)
Financing agreement penalty		-			-			-			-			(330,000	)
Net loss and comprehensive loss for the period		(3,482,625	)		(1,125,768	)		(3,978,484	)		(1,763,871	)		(18,258,495	)
Preferred stock dividends								-			-			(1,537,500	)
Net Loss Available for Distribution	$	(3,482,625	)	$	(1,125,768	)	$	(3,978,484	)	$	(1,763,871	)	$	(19,795,995	)
Loss per Common Share	$	(0.10	)	$	(0.04	)	$	(0.12	)	$	(0.06	)		-
Weighted average number of Common Shares Outstanding		33,626,262			29,189,133			32,971,999			29,189,133			-

See notes to the unaudited consolidated condensed financial statements

3

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)

Consolidated Condensed Statements of Stockholders’ Equity

(US Funds)

	Shares		Common Stock and Paid-In Capital in Excess of Par Value		Shares of Preferred Stock		Preferred Stock and Paid-in Capital in Excess of Par Value		Subscriptions Receivable		Subscriptions Received		Accumulated Deficit			Total Stockholders’ Equity
Balance, December 31, 2007		29,189,133	$	15,918,522		625,000	$	500,000	$	-	$	-	$	(13,007,211	)	$	3,411,311
Stock-based compensation		-		45,339		-		-		-		-		-			45,339
Shares issued for cash Private placement		2,814,909		1,967,086		-		-		-		-		-			1,967,086
Net loss for the year		-		-		-		-		-		-		(3,175,908	)		(3,175,908	)
Balance, December 31, 2008		32,004,042	$	17,930,947		625,000	$	500,000	$	-	$	-	$	(16,183,119	)	$	2,247,828
Stock-based compensation				1,011,585													1,011,585
Warrants exercised		2,000,000		999,800													999,800
Reduction in warrant liability on exercise				199,000													199,000
Bonus shares		400,000		164,000													164,000
Cumulative effect of EITF 07-5 application														(1,084,375	)		(1,084,375	)
Net loss for the period														(3,978,,484	)		(3,978,484	)
Balance, June 30, 2009		34,404,042	$	20,106,332		625,000	$	500,000	$	-	$	-	$	(21,245,978	)	$	(440,646	)

See notes to the unaudited consolidated condensed financial statements

4

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)

Consolidated Condensed Statements of Cash Flows

(US Funds)

							Cumulative
							From Inception
							November 13,
							2001 through
	Six months ended June 30						June 30
	2009			2008			2009
	Unaudited Restated (Note 6)			Unaudited			Unaudited Restated
Operating Activities
Net loss for period	$	(3,978,484	)	$	(1,763,871	)	$	(18,258,495	)
Items not involving cash
Amortization		11,561			11,488			107,141
Stock-based compensation		1,011,585			42,792			3,175,674
Common stock issued for services		164,000			-			2,121,630
Change in fair value of warrants		1,702,462			-			1,702,462
Common stock adjustment  - FV of warrants		199,000			-			199,000
Financing agreement penalty		-			-			330,000
Adjustment to market – securities		-			-			67,922
Gain on sale of marketable securities		-			-			(87,217	)
Loss on sale of assets		7,465			-			19,176
Non-cash resource property expenditures		-			-			600,000
Changes in Non-Cash Working Capital
Receivables		(2,530	)		(23,657	)		(18,176	)
Marketable securities		-			-			19,295
Accounts payable and accrued liabilities		1,708			385,100			(52,822	)
Prepaid expenses		(7,777	)		(7,648	)		28,000
Cash Used in Operating Activities		(891,010	)		(1,355,796	)		(10,046,410	)
Investing Activities
Addition to property and equipment		(4,153	)		(79,666	)		(197,463	)
Mineral property acquisition costs		-						(651,950	)
Cash Used in Investing Activities		(4,153	)		(79,666	)		(849,413	)
Financing Activities
Repayment of long-term debt		-			-			(100,000	)
Issuance of Preferred Stock								5,000,000
Issuance of common stock		999,800			-			7,344,749
Stock subscriptions received		-			104,030			120,000
Stock subscriptions receivable		-			-			111,000
Sale of surplus assets		6,630			-			6,630
Working capital acquired on acquisition		-			-			171
Cash Provided by Financing Activities		1,006,430			104,030			12,482,550
(Outflow) Inflow of Cash and equivalents		111,267			(1,331,432	)		1,586,727
Cash and equivalents, begining of period		1,475,460			2,678,652			-
Cash and Cash Equivalents, End of Period	$	1,586,727		$	1,347,220		$	1,586,727
Supplemental Cash Flow Information
Income tax paid	$	-		$	-		$	-
Interest paid	$	-		$	-		$	-
Shares Issued for
Warrants exercised	$	999,800		$	-		$	999,800
Settlement of debt	$	-		$	-		$	830,000
Services	$	164,000		$	-		$	2,121,630
Penalty	$	-		$	-		$	187,500

See notes to the unaudited consolidated condensed financial statements

5

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

White Mountain Titanium Corporation (the “Company”) currently has no ongoing operations.  Its principal business is to advance exploration and development activities on the Cerro Blanco rutile (titanium dioxide) property (“Cerro Blanco”) located in Region III of northern Chile.  The Company is considered an exploration stage company and its financial statements are presented in a manner similar to a development stage company as defined in Statement of Financial Accounting Standards (“SFAS”) No. 7.

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at June 30, 2009 and 2008 and for the periods then ended have been made.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2008 audited financial statements included in the Company’s 2008 annual report on Form 10-K filed with the SEC.  The results of operations for the periods ended June 30, 2009 and 2008 are not necessarily indicative of the operating results for the full year.

2. RECENT ACCOUNTING CHANGES

In April 2009, the FASB issued three FASB Staff Positions (FSP’s) that are intended to provide additional application guidance and enhance disclosures about fair value measurements and impairments of securities. FSP No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4), clarifies the objective and method of fair value measurement even when there has been a significant decrease in market activity for the asset being measured. FSP No. 115-2 and FSP No. 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments”, (FSP 115-2 and FSP 124-2), establish a new model for measuring other-than-temporary impairments for debt securities, including criteria for when to recognize a write-down through earnings versus other comprehensive income. FSP No. 107-1 and APB 28-1, “Interim Disclosures About Fair Value of Financial Instruments”, expand the fair value disclosures required for all financial instruments within the scope of SFAS, No. 107, “Disclosures about Fair Value of Financial Instruments” (FSP 107-1 and APB 28-1) to interim periods. All of these FSP’s are effective for interim and annual periods ending after June 15, 2009, our quarter ended June 30, 2009. The adoption of these FSP’s will not have a material impact on our consolidated results of operations and financial condition. However, adoption of FSP 107-1 and APB 28-1 during the quarter ended June 30, 2009 resulted in increased disclosures in our consolidated financial statements.

In May 2009, The Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 165, Subsequent Events (“SFAS 165”). This Statement establishes the accounting for, and disclosure of, material events that occur after the balance sheet date, but before the financial statements are issued. In general, these events will be recognized if the condition existed at the date of the balance sheet, and will not be recognized if the condition did not exist at the balance sheet date. Disclosure is required for nonrecognized events if required to keep the financial statements from being misleading. The guidance in this Statement is very similar to current guidance provided in auditing literature and, therefore, will not result in significant changes in practice. Subsequent events have been evaluated through the date our interim financial statements were issued—the filing time and date of our second-quarter 2009 Quarterly Report on Form 10-Q.

In June 2009, the FASB issued SFAS No. 168, “The Hierarchy of Generally Accepted Accounting Principles”. The new standard replaces SFAS 162 and establishes the “FASB Accounting Standards Codification” as the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with US GAAP. The Statement shall be effective for financial statements issued for interim and annual periods ending after September 15, 2009.

6

2. PROPERTY AND EQUIPMENT

	June 30, 2009 Unaudited
			Accumulated
	Cost		Amortization		Net
Vehicles	$	54,153		34,624	$	19,530
Office furniture		2,704		2,068		636
Office equipment		5,417		3,274		2,143
Computer equipment		8,197		4,396		3,801
Computer software		1,142		549		593
Field equipment		60,340		22,526		37,814
	$	131,953		67,437	$	64,516

	December 31, 2008
			Accumulated
	Cost		Amortization		Net
Vehicles	$	70,534		32,050	$	38,484
Office furniture		2,704		1,846		858
Office equipment		5,417		2,829		2,588
Computer equipment		7,553		3,631		3,922
Computer software		1,142		436		706
Field equipment		62,419		22,958		39,461
	$	149,769		63,750	$	86,019

7

3.           CAPITAL STOCK

(a) Common stock

The Company’s authorized:

i) Common stock with a par value of $0.001 is 100,000,000 shares.

ii) Preferred stock with a par value of $0.001 is 20,000,000 shares.

(b) Stock options

During the six months ended June 30, 2009, no stock options were granted.  The portion of the 165,000 stock options granted in the second quarter of 2008 to two new independent directors vested.  As a result, $23,271 of unrecognized stock-based compensation related to unvested options was recognized during the current period. During the quarter ended June 30, 2009, 250,000 options were cancelled.

The Black-Scholes option pricing model  calculated compensation based on the following assumptions:

	2009		2008
Expected life (years)		N/A		5
Interest rate		N/A		3.52	%
Volatility		N/A		57.12	%
Dividend yield		N/A		0	%

	Period ended
	June 30, 2009 Unaudited					December 31, 2008
				Weighted				Weighted
				Average				Average
	Number			Exercise		Number		Exercise
	of Options			Price		of Options		Price
Outstanding - beginning of period		3,140,000		$	0.57		2,975,000	$	0.50
Granted		-		$	0.00		165,000	$	1.00
Cancelled		(250,000	)	$	0.50		-		-
Outstanding – end of period		2,890,000		$	0.58		3,140,000	$	0.57
Exercisable  - end of period		2,869,375		$	0.58		3,078,125	$	0.57

At the quarter ended June 30, 2009, the following director and consultant stock options were outstanding:

	Exercise		June 30,		December 31,
Expiry Date	Price		2009		2008
August 1, 2009	$	2.00		100,000		100,000
April 5, 2010	$	0.50		-		250,000
January 31, 2011	$	0.50		400,000		400,000
May 31, 2011	$	0.50		600,000		600,000
August 1, 2011	$	0.50		200,000		200,000
August 31, 2011	$	0.50		350,000		350,000
August 31, 2012	$	0.50		1,075,000		1,075,000
June 23, 2013	$	1.00		165,000		165,000
				2,890,000		3,140,000

8

3. CAPITAL STOCK

(b) Stock options (continued)

The shares under option at June 30, 2009 were in the following exercise price ranges:

		Options Outstanding
Exercise Price		Weighted Average Exercise Price		Number of Shares Under Option		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life in Years
$	0.50	$	0.50		2,625,000	$	28,750		2.28
$	1.00	$	1.00		165,000		-		3.98
$	2.00	$	2.00		100,000		-		0.08
		$	0.58		2,890,000	$	28,750		2.42

		Options Exercisable
Exercise Price		Weighted Average Exercise Price		Number of Shares Under Option		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life in Years
$	0.50	$	0.50		2,625,000	$	28,750		2.28
$	1.00	$	1.00		144,375		-		3.98
$	2.00	$	2.00		100,000		-		0.08
		$	0.58		2,869,375	$	28,750		2.45

(c) Stock-based compensation

During the six months ended June 30, 2009, the total stock-based compensation recognized under the fair value method was $1,011,585.

Stock based compensation was reported in the first quarter with respect to 400,000 shares issued two officers and directors of the Company upon attaining previously determined milestones as established by the Compensation committee.  A fair value of $164,000 (2008: $nil) was attributed to these shares based on a fair market value of $0.41 per share and was charged to Consulting fees – directors and officers.

During the six months ended June 30, 2009, $216,310 was charged to consulting/directors and officers fees (2008: $42,792), and $77,130 (2008: $nil) related to the warrants issued during the period (note 4(d)), and $694,875 (2008: $nil) was charged to investor relations as a result of an extension of the expiry date of 4,250,000 warrants (Note 4(d)).  All amounts were determined using the Black-Scholes option pricing model (Note 4 (b)).  During the six months ended June 30, 2009, $23,271 (2008: $45,339) was charged to Consulting fees in relation to unvested stock options issued in a prior period (note 4(b)).

The total stock-based compensation recognized under the fair value method to various parties was as follows:

	June 30,		Dec 31,		Dec. 31,
	2009		2008		2007
Investor relations	$	694,874	$	-	$	-
Consulting fees - directors   and officers		239,581		45,339		359,227
Consulting fees		77,130		-		248,507
Management fees		-		-		110,450
Compensation - options	$	1,011,585	$	45,339	$	718,184

The total compensation cost related to non-vested options not yet recognized is $12,537.

9

4. CAPITAL STOCK

(d) Warrants

Details of stock purchase warrant activity is as follows:

	June 30, 2009 (Unaudited)					December 31, 2008 (Audited)
	Number of Shares			Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Outstanding - beginning of period		13,022,600		$	0.54		13,022,600	$	0.54
Issued		485,000		$	0.58		-		-
Exercised		(2,000,000	)	$	0.50		-		-
Expired		-		$	0.00		-		-
Outstanding - end of period		11,507,600		$	0.55		13,022,600	$	0.54

During the quarter ended June 30, 2009, two million warrants were exercised by a European institutional investor.  The balance of 4.25 million warrants held by the investor had their expiry date extended from July 11, 2009 to April 1, 2011.  A cashless exercise provision was added to the warrants in the event the Company fails to reasonably maintain an effective registration statement for the shares issuable upon exercise of the warrants.

Also during the quarter 150,000 warrants having an exercise price of $0.75 and an expiry date of June 30, 2011 we issued to a consultant for services.  An additional 335,000 warrants having an exercise price of $0.50 and an expiry date of June 30, 2012 were issued to two independent directors in lieu of stock options.  Stock based compensation totaling $293,440 was recorded with respect to these issuances.

As at June 30, 2009 the following share purchase warrants were outstanding:

Expiry Date	Exercise Price		June 30, 2009		December 31, 2008
July 11, 2009	$	0.50		300,000		6,550,000
April 1, 2011	$	0.50		4,250,000		-
September 7, 2009	$	0.50		625,000		625,000
August 10, 2010	$	0.60		5,847,600		5,847,600
June 30, 2011	$	0.75		150,000		-
June 30, 2012	$	0.50		335,000		-
				11,507,600		13,022,600

In June 2008, the FASB ratified the consensus reached on Emerging Issues Task Force (EITF) Issue No. 07-05, Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock. EITF Issue No. 07-05 clarifies the determination of whether an instrument (or an embedded feature) is indexed to an entity’s own stock, which would qualify as a scope exception under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. We adopted EITF Issue No. 07-05 as of January 1, 2009. During the year ended 2007, the Company repriced previously issued warrants for 6,875,000 shares of our Common Stock in a private placement to an institutional investor. These warrants were reassessed under EITF 07-5 and due to a price adjustment clause included in these warrants, such warrants are no longer deemed to be indexed to our stock and therefore, no longer meet the scope exception of FAS 133. Therefore, these warrants were reclassified to a liability and will be adjusted to fair value on a quarterly basis going forward. As a result, we recorded a cumulative catch up adjustment of $1,084,375 to accumulated deficit on January 1, 2009.

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The fair value of these warrants decreased to $991,687 as of March 31, 2009. As such, the $92,688 change in fair value was recorded in the statement of operations for the three months ended March 31, 2009. During the quarter ended June 30, 2009 2,000,000 warrants were exercised, as such the fair value of $199,000 attributed to these warrants was transferred to Additional paid in capital. The fair value of the remaining warrants increased to $2,786,837 as of June 30, 2009. As such, the $1,994,150 change in fair value was recorded in the statement of operations for the three months ended June 30, 2009.

5. FAIR VALUE OF MEASUREMENTS

The Company’s financial instruments consist of cash and cash equivalents, receivables, and accounts payable and accrued liabilities.  The carrying amounts of these instruments approximate their respective fair values because of the short maturities of those instruments.

Liabilities measured at market value on a recurring basis include warrant liability resulting from our recent equity financing.  In accordance with the guide which is now ASC 815-40 (formally EITF (Emerging Issues Task Force) 00-19, Accounting for Derivative Financial Instruments Indexed and Potentially Settled in a Company’s Own Stock), the warrant liabilities are being marked to market each quarter-end until they are completely settled.  The warrants are valued using a Black-Scholes method, using assumptions consistent with our application of ASC 718 (previously SFAS 123R).  The gain or loss resulting from the marked to market calculation is shown on the Consolidated Condensed Statements of Operations as Change in fair value of warrants.  The Company recognized a gain of $988,012 during the quarter.

The Company adopted new guidance which is now part of ASC 820-10 (formerly Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157), Fair Value Measurements (“FAS 157”), effective January 1, 2008.  SFAS 157 does not require any new fair value measurements; instead it defines fair value, establishes a framework for measuring fair value in accordance with existing generally accepted accounting principles and expands disclosure about fair value measurements.  The adoption of SFAS 157 for our financial assets and liabilities did not have an impact on our financial position or operating results.  Beginning January 1, 2008, assets and liabilities recorded at fair value in consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value.  Level inputs, as defined by SFAS 157, are as follows:

· Level 1 - quoted prices in active markets for identical assets or liabilities

· Level 2 - other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date

· Level 3 - significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

The following table summarizes fair value measurement by level at September 30, 2009 for assets and liabilities measured at fair value on a recurring basis.

	Level I		Level II		Level III		Total
Cash and cash equivalents	$	1,586,727	$	-	$	-	$	1,586,727
Receivables		18,176						18,176
Accounts payable and accrued liabilities		28,000		-		-		28,000
Other liabilities - warrants		-		2,786,837		-		2,786,837

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6. RESTATEMENT AND COMPARATIVE FIGURES

We adopted Emerging Issues Task Force (EITF) Issue No. 07-05, Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock. as of January 1, 2009. During the year ended 2007, the Company repriced previously issued warrants for 6,875,000 shares of our Common Stock in a private placement to an institutional investor. These warrants were reassessed under EITF 07-5 and due to a price adjustment clause included in these warrants, such warrants are no longer deemed to be indexed to our stock and therefore, no longer meet the scope exception of FAS 133. Therefore, these warrants were reclassified to a liability and will be adjusted to fair value on a quarterly basis going forward.

As at March 31, 2009 the restatement of the consolidated balance sheet resulted in changes to the previously reported carrying values of Other Liabilities – Warrants, Shareholders Equity and Deficit as follows:

	Previously Reported			Correction			Restated
Other Liabilities – Warrants	$	-		$	(991,687	)	$	(991,687	)
Total liabilities		(50,705	)		(991,687	)		(1,042,392	)
Deficit		(16,771,666	)		(991,687	)		(17,763,353	)

For the six months ended June 30, 2009 comparative consolidated condensed statement of operations, the restatement resulted in changes to the previously reported amounts as follows:

	Previously Reported			Correction			Restated
Change in value of warrants	$	-			(1,901,462	)		(1,901,462	)
Net loss for the period		(2,077,022	)		(1,901,462	)		(3,978,484	)
Loss per common share		(0.06	)		(0.06	)		(0.12	)

For the six months ended June 30, 2009 comparative consolidated condensed statement of cash flow, the restatement resulted in changes to the previously reported amounts as follows:

	Previously Reported			Correction			Restated
Net loss for the period	$	(2,077,022	)	$	(1,901,462	)	$	(3,978,484	)
Change in fair value of warrants		-			1,702,462			1,702,462
Common stock adjustment – fair value of warrants		-			199,000			199,000

Certain of the prior periods figures have been reclassified to conform to the financial statement presentation adopted for the current period ended June 30, 2009

7. SUBSEQUENT EVENTS

Subsequent events have been evaluated through August 10, 2009, the date these financial statements were issued.  No events required disclosure.

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Item 2. Management’s Discussion and Analysis

The following discussion should be read in conjunction with our unaudited consolidated financial statements and related notes thereto as filed with this report.

Background

We are a mineral exploration company.  We hold mining concessions composed of 33 registered mining exploitation concessions, and 5 exploration concessions, over approximately 8,225 hectares located approximately 39 kilometers west of the City of Vallenar in the Atacama, or Region III, geographic region of northern Chile (hereinafter referred to as “Cerro Blanco”).  We are in the exploration stage, which means we are engaged in the search for mineral deposits or reserves which could be economically and legally extracted or recovered.  Our primary expenditures at this stage consist of acquisition and exploration costs and general and administration expenses.  We have produced no revenues, have achieved losses since inception, have no operations, and currently rely upon the sale of our securities to fund our operations.

Plan of Operation

We completed the acquisition of an undivided interest in Cerro Blanco in September 2005.  Exploration drilling by us and the previous owner has defined rutile mineralization.  Metallurgical test work performed by Lakefield Research has demonstrated that this mineralization can be concentrated to a level meeting buyer specifications and can be produced using a conventional milling and flotation process.

Over the next twelve to twenty-four months we have two principal objectives: to advance the project towards a final engineering feasibility level and to secure off-take contracts for the planned rutile concentrate output.  We also continue to investigate the commercial viability of producing a feldspar co-product.  The feldspar could find applications in the glass and ceramics industries.

Marketing

We commenced a marketing and market awareness program in 2007 directed at potential buyers of rutile, and have engaged a consultant with extensive experience in the international pigments business, to evaluate and advise on the market.  The marketing program includes provision for testing of samples of Cerro Blanco rutile concentrates at the buyers’ operations and, subject to technical acceptability, will end with the negotiation of off-take contracts.

In April 2008 executive management and our marketing team attended the Industrial Minerals Conference in Athens Greece.  At this event we also met with buyers of high grade rutile concentrate.  We received considerable interest in our projects, with questions concentrating on tonnage as opposed to pricing, a major change in perspective from past conferences.

In March 2009, the Company’s marketing consultant attended the Intertech Titanium Conference held in Rome.  He advised management that the consensus view held by most titanium industry experts is that the combination of firm demand together with limited new supply of high quality titanium ores such as natural and synthetic rutile will result in ore prices continuing to firm. This is a significant reversal to the view held 5 years ago that largely as a consequence of increasing quantities of chloride slag from several new Southern African producers, titanium ores would be in oversupply and that ore prices would weaken.  Over the last 5 years, chloride slag has grown at a slower rate, several new projects have been cancelled or deferred and existing operations, rationalised.  In contrast titanium pigment production has grown steadily and metal manufacture has taken off, leading to a tightening market for titanium ores and rising prices.  For example, one major pigment producer at the conference indicated that for 2009 they expect their average price for rutile to increase by in excess of 6% to US$ 525-550 per tonne for bulk tonnage deliveries, and US$ 650-700 for smaller volumes. Our consultant concluded that titanium pigment producers are now demanding and buyers are paying premium prices for high quality ores, particularly those with a high concentration of TiO2 and low levels of radioactivity.

During the quarter, several one kilogram samples of the high grade titanium concentrate obtained as a result of Stage 1 of the pilot plant program were sent to various potential customers for evaluation.

Based on these discussions and preliminary marketing results, we continue to believe that demand for our products will meet or exceed the planned capacity of the currently anticipated proposed physical plant.  The market for TiO2 feedstock, particularly high grade rutile, appears to be entering a growth period, with increased demand coming not only from the paint and pigment industries, but also from welding rod manufacturers and metal producers.  Our ability to enter this market, however, is subject to significant risk factors, including our ability to raise sufficient funds to meet the engineering plans noted above, as well as the successful completion of pilot plant operations which produce product that meets purchaser’s specifications.

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Geology and Engineering

Geology and Mineralization

Management believes the Cerro Blanco property contains a large and possibly unique type of titanium mineralization.  Nevertheless, we are still in the exploration stage of development and there are no known reserves on the property.  The titaniferous mineral located on the property is clean red-brown and black rutile which occurs disseminated with the tonalitic suite of an alkalic diorite-gabbro-pyroxenite intrusive.  Its uniformly disseminated nature and associated alteration endow it with strong similarities to porphyry copper deposits.  Natural rutile concentrates such as found on this property would be the preferred feed stock for both titanium metal and pigment grade titanium dioxide production.

Exploration and Project Development Plans

In January, 2008 the Company retained Thomas A. Henricksen, PhD. and a qualified person under Canadian National Instrument 43-101 to prepare a NI 43-101 compliant technical report on the Cerro Blanco property (the “Technical Report”).  The Technical Report, which was dated February 25, 2008, was based on extensive geological mapping, surface sampling, 14,078 meters of drilling and a geological model developed by the Company.  In his report, Dr. Henricksen confirmed a current estimate of rutile resources under CIM classifications at the Las Carolinas and La Cantera prospects of measured and indicated resources of 32.9 million tonnes grading 2.23% TiO2.

Following completion of the Technical Report, the Company retained Dr. Henricksen to compile a NI 43-101 compliant preliminary assessment of the Cerro Blanco project (the “Assessment”). The Assessment, which was dated May 30, 2008, incorporated by reference the Technical Report as well as reports prepared for the Company by other independent experts in their fields.  The latter reports include preliminary process engineering and costing report prepared by AMEC-Cade dated March, 2008, a preliminary pit design report prepared by NCL Ingenieria y Construccion dated May 2008, various metallurgical reports prepared by SGS Lakefield, an environmental base line study prepared by Arcadis Geotecnica dated December 2004 and titanium marketing information provided by the Company’s marketing consultant.

For engineering design purposes, the Assessment adopted a base case set of assumptions, the major assumptions being the construction of an open pit mine, processing plant and ancillary facilities capable of producing 100,000 tonnes per year of high grade rutile concentrate grading plus 94.5% TiO2 at start up, scaling to 130,000 tonnes per year in production Year 4 at an assumed undiluted head grade to the plant of 2.3% TiO2.  Mining would commence on the Las Carolinas prospect and feed would be conveyed downhill to a processing plant located less than two kilometers to the northeast.  Within the plant, the process flow sheet consisted of a semi-autogenous grinding mill, gravity pre-concentration and column flotation circuits and high intensity magnetic separation with process water sourced from a desalination plant constructed at the port of Huasco. AMEC-Cade assumed that mining would be done under contract at a cost of US$1.20 per tonne mined and that the price of high grade rutile concentrates would be US$500 per tonne FOB port.

Based on these assumptions AMEC-Cade, our internationally recognized engineering contractor, designed a processing plant with an initial operating capacity of approximately 5.1 million tonnes per year, increasing to approximately 6.1 million tonnes per year by Year 4.  They estimated a cost to construct the plant and ancillary facilities of US$117 million in direct costs and US$42 million in indirect costs, for a total of US$159 million.  To this figure, and as this was a preliminary study, AMEC-Cade added a 20% contingency to arrive at a total estimated cost of US$190 million. With respect to processing plant operating costs, AMEC-Cade estimated site and transportation costs to port of US$3.60 per tonne processed (US$184 per tonne of rutile concentrate) in Year 1, dropping to US$3.50 per tonne processed (US$180 per tonne of rutile concentrate) in Year 4. The anticipated reduction in operating costs is attributed to increased volumes as well as increased efficiencies from the gravity pre-concentration circuit.  Electric power consumption was the highest single cost item, comprising approximately 31% of the total estimated unit operating costs. AMEC-Cade recommended that the Company proceed to the pilot stage and investigate two possibilities for reducing capital costs: the use of sea water rather than desalinated water in the processing plant and siting the plant elsewhere on the property to lower the installed cost of the conveyor. Two alternate sites were identified.

On April 8, 2009 we reported the completion of Stage 1 of the pilot plant program. Following the extraction of approximately 500 tonnes of mineralized rock representative of the Cerro Blanco Las Carolinas deposit (the “bulk sample”), our engineering team undertook Stage 1 with the assistance of technical consultants Centro de Investigacion Minera y Metalurgica Tecnologia y Servicios, Cytec Chile Limitada  and AMEC-Cade.  The objective of the program was to produce a high grade titanium concentrate from small quantities of the bulk sample, using a conventional metallurgical flow sheet comprised of gravity pre-concentration followed by flotation.

Stage 1 succeeded in producing a high grade rutile concentrate even without high intensity magnetic separation. Process recovery was over 92% and concentrate grade, over 94% TiO2 . This result was obtained using normal water, at a neutral pH (acidity).  Tests with sea water returned equally good product grades, but the process recoveries were lower.  Test work on the use of sea water as the aqueous medium in flotation is on-going.

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On July 8, 2009 we entered into an agreement with SGS Lakefield ("SGS") to complete the Stage 2 pilot plant test work program.  A 280 tonne bulk representative sample from the Las Carolinas deposit of the Company's Cerro Blanco titanium project was bagged for container transport to Lakefield, Ontario.  As of the date of this report, the shipment had just left Chile by container ship, and is expected arrive in Canada in approximately four weeks time with test work scheduled to be completed three months from receipt of the sample. Under the agreed scope of work, for Stage 2 SGS will process the bulk sample in a series of runs, each continuous and based on variations of a flow sheet developed in Stage 1 test work.  The main steps in the flow sheet involve grinding, gravity pre-concentration, flotation and final product purification using magnetic separation.

Management believes the Stage 2 piloting will provide valuable process data, which will be incorporated in the final feasibility study.  Using the rutile concentrate from the bulk sampling, our marketing team intends to supply potential customers with bulk material for evaluation in commercial chlorinators for pigment use and for titanium sponge metal applications.  We are also evaluating the economics of feldspar production and its potential impact on the project.

We now have a considerable body of engineering design and process engineering work completed, both by us and previous owners, for the development of a large open pit mine and milling operation.  The extent to which this engineering work could be incorporated into a feasibility study will depend on factors such as optimal plant sizing and configuration based on product volumes and specifications set out in off-take contracts and process design, the latter to be determined by refinements coming out of this year’s planned metallurgical test work and pilot scale testing.  With off-take contracts in hand, we would undertake a program of drilling to provide data for mine planning and design, for an environmental impact assessment and permitting program, and to commission a feasibility study.  As some of these activities would be undertaken in tandem, we believe a feasibility study could be completed within twelve to fourteen months of us receiving off-take contracts, subject to the availability of funds, personnel and equipment.  We estimate the cost to take the project to the point of commissioning a final engineering feasibility study at approximately $3,408,000.  This figure includes a 20 per cent contingency but excludes general and administrative expenses.  As of August **, 2009, our cash position was approximately $1,***,000.  We currently do not have sufficient capital to complete this plan and estimate that we will require additional financing to do so.

Also, as an exploration stage company, our work is highly speculative and involves unique and greater risks than are generally associated with other businesses.  We cannot know if our mining concessions contain commercially viable ore bodies or reserves until additional exploration work is done and an evaluation based on such work concludes that development of and production from the ore body is technically, economically, and legally feasible.

If we proceed to development of a mining operation, our mining activities could be subject to substantial operating risks and hazards, including environmental hazards, industrial accidents, labor disputes, encountering unusual or unexpected geologic formations or other geological or grade problems, encountering unanticipated ground or water conditions, pit-wall failures, flooding, rock falls, periodic interruptions due to inclement weather conditions or other unfavorable operating conditions and other acts of God.  Some of these risks and hazards are not insurable or may be subject to exclusion or limitation in any coverage which we obtain or may not be insured due to economic considerations.

Results of Operations

We recorded a loss for the three months ended June 30, 2009 of $3,482,625 ($0.10) per weighted average common share outstanding compared to a loss of $1,125,768 ( ($0.04) per share) for the comparable interim period in 2008.  On a year to date basis, for the six months ended June 30, 2009 the loss was $3,978,484 ($0.12 per share) compared to $1,763,871 ($(0.06) per share) for the comparable period in 2008.

Generally most expenses continue to be comparable or lower this quarter than in the comparable quarter of 2008 and on a year to date basis due to our ongoing cost control efforts.  The most significant items are:

· The adoption of EITF 07-5 effective January 1, 2009 resulted in a cumulative adjustment of $1,084,375 to accumulated deficit as of January 1, 2009 and a fair value change of $1,994,150 for the quarter ($1,901,462 year to date).  There were no effects in previous years.  See Note 3(d) for a more detailed discussion.

· Excluding the effects of EITF 07-5, the increase in the current quarter compared to the same quarter last year is a direct result of $694,875 (2008: $NIL) of stock based compensation, recognized as investor relations expense, resulting from the extension of warrants held by the European institutional investor who exercised two million warrants during the quarter.

· Excluding EITF 07-5 and stock based compensation, we had a 28% decrease in loss in the current quarter primarily attributable to lower exploration expense of $82,335 (2008: $651,137).  This was due primarily to the ongoing transition from field work and drilling last year to laboratory analysis utilizing consultants as we progress with our piloting program this year.

· As anticipated last quarter, consulting expense rose in the current quarter to $255,947 (YTD - $294,438) compared to $47,114 (YTD - $113,704) in 2008 primarily due to the payment of the first installment on Stage 2 of the piloting program.  There will be additional expenditures in this area in the coming quarters.

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· Consulting fees – directors and officers was $310,945 (YTD - $563,980) compared to 2008 expense of $120,492 (YTD - $196,192).

· Interest revenue at $638 (YTD - $1,012) was down significantly from 2008 at $8,306 (YTD - $27,116) due to lower funds on deposit and much lower US dollar denominated deposit interest rates.

Recent Accounting Pronouncements

In September 2006, FASB issued SFAS No. 157, “Fair Value Measurements”.  SFAS No. 157 provides guidance for using fair value to measure assets and liabilities.  It clarifies that for items that are not actively traded, such as certain kinds of derivatives, fair value should reflect the price in a transaction with a market participant, including adjustment for risk, not just the company’s mark-to-model value.  Statement No. 157 also requires expanded disclosure of the effect on earnings for items measured using unobservable data.  Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts.   Statement No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007.  The Company performed a detailed analysis of the assets and liabilities and determined it has no instruments that are subject to SFAS No. 157.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (SFAS 141(R)), which replaces SFAS 141. SFAF 141(R) requires assets and liabilities acquired in a business combination, contingent consideration and certain acquired contingencies to be measured at their fair values as of the date of acquisition. SFAS 141(R) also requires that acquisition-related costs and restructuring costs be recognized separately from the business combination. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008 and is effective for business combinations entered into after January 1, 2009.  There is no impact on the Company’s consolidated financial statements.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”. The new standard establishes general standards of accounting for disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. The Statement is applicable to interim or annual financial periods ending after June 15, 2009.

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets”. The new standard is intended to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. This standard addresses the practices that developed since the issuance of FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, that are not consistent with the original intent and key requirements of that Statement and the concerns of financial statement users that many of the financial assets (and related obligations) that have been de-recognized should continue to be reported in the financial statements of transferors. The Statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009 for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”. The new standard is to improve financial reporting by enterprises involved with variable interest entities. SFAS 167 addresses the effects on certain provisions of FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” (“Interpretation 46(R)”), as a result of the elimination of the qualifying special-purpose entity concept in FASB Statement No. 166, “Accounting for Transfers of Financial Assets”, and constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. The Statement shall be effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter.

In June 2009, the FASB issued SFAS No. 168, “The Hierarchy of Generally Accepted Accounting Principles”. The new standard replaces SFAS 162 and establishes the “FASB Accounting Standards Codification” as the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with US GAAP. The Statement shall be effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company is currently evaluating the impact of adoption of SFAS 168 but does not expect adoption to have a material impact on results of operations, cash flows or financial position.

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Forward Looking Statements

The statements contained in this report that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information.  Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position, potential growth opportunities, potential operating performance improvements, ability to retain and recruit personnel, the effects of competition and the effects of future legislation or regulations.  Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “will,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct.  Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.  Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report.  While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, the cyclicality of the titanium dioxide industry, global economic and political conditions, global productive capacity, customer inventory levels, changes in product pricing, changes in product costing, changes in foreign currency exchange rates, competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities).  Mining operations are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air and water quality standards, pollution and other environmental protection controls, all of which are subject to change and are becoming more stringent and costly to comply with.  Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those expected.  We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

PART II.  OTHER INFORMATION

Item 6. Exhibits

The following exhibits are furnished with this amended report:

31.1  Rule 15d-14(a) Certification by Principal Executive Officer

31.2  Rule 15d-14(a) Certification by Chief Financial Officer

32.1 Section 1350 Certification of Principal Executive Officer

32.2 Section 1350 Certification of Chief Financial Officer

SIGNATURES

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

	White Mountain Titanium Corporation
Date:  December 1, 2009	By	/s/ Michael P. Kurtanjek
		Michael P. Kurtanjek, President
		(Principal Executive Officer)
Date:  December 1, 2009	By	/s/ Charles E. Jenkins
		Charles E. Jenkins, Chief Financial Officer
		(Principal Financial Officer)

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