Raven Gold 10QSB 2008 Q1 Quarterly report (small business)

INTERIM FINANCIAL STATEMENTS

ACCOUNTANTS AND ADVISORS

MOORE & ASSOCIATES, CHARTERED

PCAOB REGISTERED

Report of Independent Registered Public Accounting Firm

To the Board of Directors

Raven Gold Corp.

(formerly Riverback Resources Inc.)

(An Exploration Stage Co.)

We have reviewed the accompanying balance sheet of Raven Gold Corp. as of July 31, 2007, and the related statements of operations, retained earnings, and cash flows for the three months then ended, in accordance with the standards of the Public Company Accounting Oversight Board (United States). All information included in these financial statements is the representation of the management of Raven Gold Corp.

A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles.

/s/ Moore & Associates, Chartered

Moore & Associates, Chartered

Las Vegas, Nevada

September 11, 2007

2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NEVADA 89146 (702) 253-7499 Fax: (702)253-7501

July 31, 2007 and April 30, 2007

INTERIM BALANCE SHEETS

	July 31,			April 30,
ASSETS	2007			2007

Current
Cash and Equivalents	$	97,994		$	321,671
Prepaid Expenses		1,500			-
		99,494			321,671

Investment in Joint Venture		500,000			500,000

Mineral Properties		2,225,000			1,625,000

	$	2,824,494		$	2,446,671

LIABILITIES

Current
Accounts Payable	$	37,055		$	24,739
Advances from Related party		3,100			3,100
Accrued Interest		56,577			-
Loans Payable		2,480,000			2,075,000

		2,576,732			2,102,839

STOCKHOLDERS’ EQUITY (DEFICIENCY)

Capital stock
Preferred stock, $0.001 par value, 1,000,000 shares authorized,
None issued and outstanding. Common stock, $0.001 par value,
500,000,000 authorized, 75,240,000 shares issued and outstanding
As of July 31, 2007 and as of April 30, 2007		75,240			75,240
Additional paid-in capital		481,380			481,380
Deficit accumulated during the exploration stage		(308,858	)		(212,788	)

		247,762			343,832

	$	2,824,494		$	2,446,671

INTERIM STATEMENTS OF OPERATIONS

for the three months ended July 31, 2007 and 2006 and

for the period from February 9, 2005 (Date of Inception) to July 31, 2007

							February 9, 2005
							(Date of
	Three months ended						Inception) to
	July 31,						July 31,
	2007			2006			2007
Expenses
Exploration costs and expenses	$	6,286		$	-		$	36,036
Professional fees		11,904			6,227			90,436
General and administrative		10,712			31			51,880
Listing and filing		5,509			420			38,174
Investor relations		5,000			-			29,947
Total expenses		39,411			6,678			246,473

Loss before other items		(39,411	)		(6,678	)		(246,473	)

Other Income and Expenses
Interest Expense		(56,577	)		-			(56,577	)
Impairment (loss) of Mineral Rights		-			-			(3,000	)
Foreign Currency transaction (loss)		(82	)		-			(2,808	)


Net loss for the period	$	(96,070	)	$	(6,678	)	$	(308,858	)

Basic and diluted loss per share – continuing operations	$	(0.00	)	$	(0.00	)

Weighted average number of shares outstanding		75,240,000			37,120,000

INTERIM STATEMENTS OF CASH FLOWS

for the three months ended July 31, 2007 and 2006 and

for the period from February 9, 2005 (Date of Inception) to July 31, 2007

							February 9, 2005
							(Date of
	Three months ended						Inception) to
	July 31,						July 31,
	2007			2006			2007

Operating Activities
Net loss for the period	$	(96,070	)	$	(6,678	)	$	(308,858	)
Adjustments to reconcile net loss to net cash used in operating activities:
Prepaid expenses		(1,500	)		-			(1,500	)
Accounts payable and expenses		14,758			3,674			39,497

Cash used in operating activities		(82,812	)		(3,004	)		(270,861	)

Investing Activities
Investment in Joint Venture		-			-			(500,000	)
Purchase of mineral rights		(600,000	)		(425,000	)		(2,225,000	)

Cash used in investing activities		(600,000	)		(425,000	)		(2,725,000	)

Financing Activities
Issuance of common stock		-			-			556,620
Accrued Inteest		56,577						56,577
Issuance of promissory notes payable		405,000			425,000			2,480,000
Due to related party		-			3,100			3,100
Bank overdraft		(2,442	)		-			(2,442	)

Cash from financing activities		459,135			428,100			3,093,855

Increase (decrease) in cash during the period		(223,677	)		96			97,994

Cash, beginning of the period		321,671			-			-

Cash, end of the period	$	97,994		$	96		$	97,994

INTERIM STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

from February 9, 2005 (Date of Inception) to July 31, 2007

											Deficit
											Accumulated
											During the
	Common Shares				Paid-in			Additional			Development
	*Number		*Par Value		Capital			Stage			Total

Capital stock issued for cash: - at $0.00001		64,200,000	$	64,200	$	(57,780	)	$	-		$	6,420
- at $0.005		10,040,000		10,040		40,160			-			50,200
Net loss for the period February 9, 2005 (inception) to April 30, 2005		-		-		-			(7,290	)		(7,290	)
Balance, as at April 30, 2005		74,240,000		74,240		(17,620	)		(7,290	)		49,330

Net loss for the year		-		-		-			(50,917	)		(50,917	)
Balance, as at April 30, 2006		74,240,000		74,240		(17,620	)		(58,207	)		(1,587	)

Stock issued for investment in Joint Venture at $0.50/share		1,000,000		1,000		499,000			-			500,000
Net loss for the year		-		-		-			(154,581	)		(154,581	)
Balance, as at April 30, 2007		75,240,000		75,240		481,380			(212,788	)		343,832
Net loss for the period		-		-		-			(96,070	)		(96,070	)
Balance, as at July 31, 2007		75,240,000	$	75,240	$	481,380		$	(308,858	)	$	(247,762	)

The Company was incorporated in the State of Nevada on February 9, 2005 under the name of Riverbank Resources , Inc.

Note 1

Interim Reporting

The information presented in the accompanying interim three months financial statements is unaudited. The information includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. These interim financial statements follow the same accounting policies and methods of their application as the Company’s April 30, 2007 annual financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s April 30, 2007 annual financial statements.

Note 2

Basis of Presentation

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At July 31, 2007, the Company had not yet achieved profitable operations, has accumulated losses of $308,858 since its inception, has a working capital deficiency of $2,477,238 (April 30, 2007 - $2,031,168) and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.

Note 3

Summary of Significant Accounting Policies

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates, which have been made using careful judgement. Actual results may vary from these estimates.

The financial statements have, in management’s opinion been properly prepared within the framework of the significant accounting policies summarized below:

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

Note 3

Summary of Significant Accounting Policies– (cont’d)

a) Use of estimates

b) Cash and Cash Equivalents

For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchaser to be cash equivalent.

c) Mineral Interest

Pursuant to SFAS No. 141 and SFAS No. 142, as amended by EITF 04-02, mineral interest associated with other than owned are classified as tangible assets. The Company had capitalized $3,000 related to the mineral rights acquired in 2005 and which were impaired as of April 30, 2007.

d) Long-lived Assets

The Company accounts for long-lived assets under the statements of Financial Accounting Standards Nos. 142 and 144 “Accounting for Goodwill and Other Intangible Assets” and “Accounting for Impairment or Disposal of Long-lived Assets” (“SFAS No. 142 and 144”). In accordance with SFAS No. 142 and 144, long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, goodwill and intangible assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets.

e) Foreign Currency Translation

The Company’s functional currency is the United States dollar as substantially all of the Company’s operations were in the United States. The Company uses the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission (“SEC”) and in accordance with the SFAS No. 52.

e) Foreign Currency Translation – (cont’d)

Note 3

Summary of Significant Accounting Policies– (cont’d)

Assets and liabilities dominated in a foreign currency were translated at the exchange rate in effect at the period end and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments arising from the use of difference exchange rates from period to period were included in the cumulative effect of foreign currency translation adjustment account in stockholders’ equity.

Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses are included in the Statement of Operations.

f) Income Taxes

The Company accounts for income taxes under the Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“Statement 109”). Under Statement 109, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

g) Loss Per Share

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by Financial Accounting Standards No. 128, “Earnings Per Share.” As of July 31, 2007, there were no dilutive securities outstanding.

h) Business Segments

The Company operates in one segment and therefore segment information is not presented

Note 4

Acquisition of mineral Rights

On April 26, 2005, the Company acquired the mining rights to two claims collectively known as the Big Mike Border Gold property located in the Skeena Mining District of British Columbia, Canada, for a purchase price of $3,000. The Company received rights to all minerals contained in the Big Mike Border Gold property.

On August 23, 2006 the Company entered into an agreement with Tara Gold Resources Corp., for the La Currita Property, which was effective as of May 30, 2006. According to the agreement the Company was to make payments of $50,000 on the 25^th day of each month commencing June 2006 and ending April 2007. A final payment of $25,000 is to be made May 25, 2007. Furthermore, according to the agreement on October 26, 2006, the Company issued and delivered to Tara Gold Resources Corp. 250,000 restricted shares of common stock. The Company has not made payments according to the scheduled required payments and has only paid a total of $150,000 against the scheduled required payments. An amount owing of $425,000 for the agreement is owing.

Note 4

Acquisition of mineral Rights–(cont’d)

On August 23, 2006 the Company also entered into an agreement with Tara Gold Resources Corp., for the Las Minitas Property, which was effective as of June 1, 2006. According to the agreement the Company was to make payments of $75,000 on the date of the agreement, $225,000 by August 1, 2006, and a final payment of $300,000 was to be made November 1, 2006. Furthermore, according to the agreement on October 26, 2006, the Company issued and delivered to Tara Gold Resources Corp. 250,000 restricted shares of common stock. Upon payment of the balance, the Company will retain a 20% interest in this property.

In May 2007, the Company wire transferred $505,000 to Tara Gold Resources Corp. for a further interest in the La Currita Property.

In June 2007 the Company wire transferred an additional $95,000 to Tara Gold Resources Corp. for an additional further interest in the La Currita Property.

Note 5

Loans

In May of 2006, the Company received $3,000 in advances from its former president. The balance is non-interest bearing and due on demand

On May 25, 2006 the Company borrowed funds in the amount of $75,000 from Paradisus Investment Corp. The Company wired $75,000 on the same date to Tara Gold Resources Corp. as part of a purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp. for “Las Minitas” property.

On May 26, 2006 the Company borrowed funds in the amount of $75,000 from Paradisus Investment Corp. The Company wired $75,000 on the same date to Tara Gold Resources Corp. as part of a purchase agreement between Raven Gold Corp and Tara Gold Resources Corp for “La Currita” property.

On June 25, 2006 the Company borrowed $50,000 from RPMJ Corporate Communications Ltd. The Company wired $50,000 on the same date to Tara Gold Resources Corp. as part of the purchase agreement between Raven Gold Corp and Tara Gold Resources Corp for “La Currita” property.

Note 5

Loans – (cont’d)

On June 27, 2006 the Company borrowed $175,000 from Zander Investment Limited. The Company wired $175,000 on the same date to Tara Gold Resources Corp. as part of the purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp. for “Las Minitas” property.

On July 27, 2006 the Company borrowed $50,000 from Zander Investment Limited. The Company wired $50,000 on the same date to Tara Gold Resources Corp. as part of the purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp for “La Currita” property.

On August 23, 2006 the Company borrowed $50,000 from Paradisus Investment Corp. The Company wired $50,000 on the same date to Tara Gold Resources Corp. as part of the purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp for “Las Minitas “property.

On September 21, 2006 the Company borrowed $100,000 from Coach Capital, LLC. The Company wired $100,000 on the same date to Tara Gold Resources Corp. as part of the purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp for “Las Minitas “property.

On October 3, 2006 the Company borrowed $200,000 from 1230144 Alberta Ltd., a private corporation.

On October 5, 2006 the Company borrowed $500,000 from Coach Capital, LLC. The Company wired $500,000 on the same date to Tara Gold Resources Corp. as part of the purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp., $75,000 for the “Las Minitas” and $425,000 for the “la Currita” properties.

On October 12, 2006 the Company borrowed $500,000 from Coach Capital, LLC. The company wired $500,000 on the same date to Tara Gold Resources Corp. to invest in the Start-Up Capital to be repaid from 60% of the net operating revenue derived from “La Currita” property.

On January 25, 2007 the Company wired $50,000 to Tara Gold Corp. as part of the purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp for “La Currita” property.

On May 15, 2007 the Company borrowed $205,000 from Coach Capital, LLC. The company wired $205,000 on the same date to Tara Gold Resources Corp. as part of the purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp for “La Currita” property.

On June 13, 2007 the Company borrowed $100,000 from Coach Capital, LLC. The company wired $100,000 on the same date to Tara Gold Resources Corp. as part of the purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp for “La Currita” property.

Note 5

Loans – (cont’d)

On July 26, 2007 the Company borrowed $100,000 from Coach Capital, LLC. The company wired $100,000 on the same date to Tara Gold Resources Corp. as part of the purchase agreement between Raven Gold Corp. and Tara Gold Resources Corp for “La Currita” property.

At July 31, 2007 the Company had promissory notes outstanding totalling $2,480,000 which are unsecured, bear interest at 10% per annum and are due on demand. These notes are due from companies who are shareholders of the Company. The Company has recorded interest of $56,577 as interest expense on the promissory notes.

Note 6

Stockholders’ Equity

During 2005, the Company issued 6,420,000 shares of common stock to its founders for cash of $6,420 ($0.001 per share)

During 2005, the Company issued 1,004,000 shares of common stock for cash of $50,200 ($0.05 per share).

In June 2006 the Company performed a 5:1 forward split of its common stock for a total of 37,120,000 shares issued and outstanding.

On October 6, 2006 the Company entered into an agreement to acquire certain mineral properties from Tara Gold Resources Corp. Terms of the agreement required the Company to issue 500,000 restricted shares of common stock of the Company. On October 6 the Company issued the required restricted common stock of the Company for a stock subscription price of $100,000 ($0.20 per share).

In March 2007 the Company increased the authorized capital of common stock to 500,000,000.

In March 2007 the Company performed a 2:1 forward split of its common stock for a total of 75,240,000 shares issued and outstanding.

Item 2. Management's Discussions and Analysis or Plan of Operation

Forward-Looking Statements

Some of the statements contained in this Quarterly Report on Form 10-QSB (the “Quarterly Report”) that are not historical facts are “forward-looking statements” which can be identified by the use of terminology such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Quarterly Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Some of the factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation the following:

	•		our ability to attract and retain management;

	•		our growth strategies;

	•		anticipated trends in our business;

	•		environmental risks;

	•		exploration and development risks;

	•		competition;

	•		the ability of our management team to execute its plans to meet its goals;

	•		general economic conditions, whether internationally, nationally or in the regional and local market areas in which we are doing business, that may be less favorable than expected; and

	•		other economic, competitive, governmental, legislative, regulatory, geopolitical and technological factors that may negatively impact our businesses, operations and pricing.

All written and oral forward-looking statements made in connection with this Quarterly Report that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Overview

Raven Gold Corp. ("the Company", "we", "us") was incorporated in the state of Nevada on February 9, 2005. On April 26, 2005, we entered into a Purchase and Sale Agreement with Gudmund Lovang, an individual residing in North Vancouver British Columbia, whereby he sold to us a 100% undivided right title and interest in one mineral claim located in the Skeena Mining Division of British Columbia, Canada known as the Big Mike mineral property. We acquired this interest in the Big Mike property by paying $3,000 to Mr. Lovang. During the year ended April 30, 2006 the Company decided to discontinue exploration work on the Big Mike mineral project property and consequently the mineral rights were impaired 100%.

In August of 2006 and effective as of June 1, 2006 we entered an agreement with Tara Gold Resources Corp for the "Las Minitas" property. The Las Minitas Property is located in Sonora, Mexico, approximately 40 air kilometers northwest of the town of Alamos. The property lies at the western edge of the province known as the Sierra Madre Occidental gold-silver belt where a number of successful gold/silver exploration projects are ongoing. Historical information regarding Las Minitas indicates three mineralized zones of interest that contain an estimated of 13,534,398 million tonnes of ore grading 7.58 oz/t silver and 0.0089 oz/t gold. Metallurgical testing indicates that recoveries of 90% for both silver and gold may be achievable by cyanidation alone. We plan to focus our initial efforts on the validation of the previous exploration work that outlined three wide, high-grade, lode-type mineralized bodies: the North, Central, and El Negro zones, with postulated strike lengths of 400, 500, and 700 meters respectively. These three zones are considered to be outstanding precious metal exploration targets and Tara Gold is currently developing a plan to confirm previous findings and conduct a focused sampling and drilling program.

In addition, in August of 2006 and effective as of May 30, 2006 we entered an agreement with Tara Gold Resources Corp for the "La Currita" property. In this agreement Raven Gold Corp. has the option to earn up to 60% interest in the La Currita Groupings by making certain payments to Tara Gold, issuing 750,000 shares, making all remaining property payments and by spending a minimum of $3.5 million over the next 36 months. In addition to the capital investment on exploration and mill expansion, we are required to expand the La Currita Mill to a minimum of 4,000 tons per month before earning 40% and a minimum of 8,000 tons per month before earning 60% interest. The property includes 4 mines, a 150 ton/day operating floatation mill and stockpiled ore. The La Currita mine was in steady production from 1983 until 1998. A diamond drilling exploration program conducted in 1998 indicated 109,000 tons of 2.59 g/t Au and 200 g/t Ag. La Currita Groupings are located in the Sierra Madre Gold-Silver belt.

On February 23, 2007, we filed a Certificate of Amendment to our Articles of Incorporation, as amended, (the “Amendment”) with the Secretary of State of the State of Nevada that was effective as of March 5, 2007, to increase our authorized common stock from 69,000,000 shares to 500,000,000 shares (the “Increase”). In addition, we filed the Amendment to effect a forward split (the “Forward Split”) of all of our shares of common stock issued and outstanding as of the close of business on March 5, 2007 (the “Split Date”), whereby we issued for every 1 share of our common stock issued and outstanding as of the close of business on the Split Date, 1 additional share of our common stock.

Effective as of March 6, 2007, in connection with the Forward Split, our Common Stock commenced trading under the new ticker symbol “RVNG.OB”.

On May 3, 2007, we entered into the La Currita Groupings Agreement (the "Groupings Agreement") with Tara Gold Resources Corp. ("Tara") setting forth the agreements reached by our company and Tara to amend and replace in its entirety the Joint Venture Agreement (the "JV Agreement") dated August 23, 2006, entered into by and among our company, Tara and Corporacion Amermin S.A. de C.V., a 97% owned subsidiary of Tara ("Amermin"), as amended by Amendment No. 1 to JV Agreement dated March 30, 2007, pursuant to which we agreed to acquire certain rights, including but not limited to, the following: (1) to earn an initial 25% undivided interest in La Currita Groupings ("La Currita"), conditional on our company making certain payments to Tara; (2) acquiring the right to increase our interest in La Currita to 40%, by meeting certain notice and payment terms of the Agreement; and (3) acquiring the right to increase our interest in La Currita to 60%, by meeting certain notice and payment terms of the Agreement, all as more fully set forth in the Agreement, a copy of which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the United States Securities and Exchange Commission (the "SEC") on May 9, 2007.

Our financial results depend upon many factors, particularly the price of gold and silver and our ability to market our production. Commodity prices are affected by changes in market demands, which are impacted by overall economic activity, basis differentials and other factors. As a result, we cannot accurately predict future gold and silver prices, and therefore, we cannot determine what effect increases or decreases will have on our capital program, production volumes and future revenues. In addition to production volumes and commodity prices, finding and developing sufficient amounts of gold and silver reserves at economical costs are critical to our long-term success.

Results of Operations

Three Months Ended July 31, 2007 Compared to Three Months Ended July 31, 2006

Revenues for the three months ended July 31, 2007 and the three months ended July 31, 2006 were nil. As such, there is no meaningful comparison for these periods.

For the three months ended July 31, 2007, general and administrative expenses totaled $10,712 compared with $31 for the three months ended July 31, 2006. This represents an increase of $10,681, or 34,445%. The increase in general and administrative expenses is a result of expenditures required to maintain an infra-structure to support increased activity going to the next level of exploration.

Total expenses for the three months ended July 31, 2007 totaled $39,411 compared with $6,678 for the three months ended July 31, 2006. This represents an increase of $32,733, or 490%. The increase in total expenses is a result of expenditures required to maintain an infra-structure to support increased activity going to the next level of exploration.

Interest expense was $56,577 and nil for the three months ended July 31, 2007 and 2006, respectively. This was an increase of $56,577. The reason for this increase is that, in accordance with the terms and conditions of the outstanding promissory notes, interest was to start accruing with effect from May 1, 2007.

Our net loss was $(96,070) for the three months ended July 31, 2007 compared to a net loss of $(6,678) for the three months ended July 31, 2006, an increase of $(89,392), or 1,339%. The increase in the net loss for the three months ended July 31, 2007 was due to accrued interest on promissory notes and the increase in expenses required to maintain an infra-structure to support increased activity going to the next level of exploration.

Liquidity and Capital Resources

As of July 31, 2007 we had total current assets of approximately $99,494 with a cash balance of $97,994. Management plans to use the current cash on hand for operations.

Net cash used in operating activities was $(82,812) for the three months ended July 31, 2007, compared to $(3,004) for the three months ended July 31, 2006, an increase of $(79,808) or 2,657%. The increase in net cash used in operating activities is primarily the result of

Increased operating expenses and accrued interest on promissory notes.

Net cash used in investing activities was $(600,000) for the three months ended July 31, 2007 compared to net cash used in investing activities for the three months ended July 31, 2006 of $(425,000), which is an increase of $(175,000) or 242%. The net cash used in investing activities increased primarily due to purchase of mineral rights

Net cash used in financing activities was $459,135 for the three months ended July 31, 2007 compared to net cash used in financing activities of $428,100 for the three months ended July 31, 2006, which is an increase in net cash provided by financing activities of $31,035 or 6.8%.

Critical Accounting Policies

We have identified the policies outlined below as critical to our business operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management's Plan of Operations where such policies affect our reported and expected financial results. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.

Mineral Interest

Pursuant to SFAS No. 141 and SFAS No. 142, as amended by EITF 04-02, mineral interest associated with other than owned properties are classified as tangible assets. The mineral rights will be amortized using the units-of-production method when production at each project commences.

Going Concern

As reflected in the accompanying financial statements, the Company is in the exploration stage with no operations and has a net loss of $308,858 from inception. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

We currently do not have enough cash to satisfy our minimum cash requirements for the next twelve months. In addition, we will require additional funds to expand operations.

Recent Accounting Pronouncements

Statement of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs - an amendment of ARB No. 43, Chapter 4"" SFAS No. 152, "Accounting for Real Estate Time-Sharing Transactions - an amendment of FASB Statements No. 66 and 67," SFAS No. 153, "Exchanges of Non-monetary Assets - an amendment of APB Opinion No. 29," and SFAS No. 123 (revised 2004), "Share-Based Payment," were recently issued. SFAS No. 151, 152, 153 and 123 (revised 2004) have no current applicability to the Company and have no effect on the financial statements.

Item 3. Controls and Procedures

Our management, which includes our Chief Executive Officer and our principal financial officer, have conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-14(c) promulgated under the Securities and Exchange Act of 1934, as amended) as of a date (the "Evaluation Date") as of the end of the period covered by this report. Based upon that evaluation, our management has concluded that our disclosure controls and procedures are effective for timely gathering, analyzing and disclosing the information we are required to disclose in our reports filed under the Securities Exchange Act of 1934, as amended. There have been no significant changes made in our internal controls or in other factors that could significantly affect our internal controls subsequent to the end of the period covered by this report based on such evaluation.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are currently not a party to any material pending legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. However, from time to time we may be a defendant and plaintiff in various legal proceedings arising in the normal course of our business. In addition, management is not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations. Should any liabilities incurred in the future, they will be accrued based on management's best estimate of the potential loss. As such, there is no adverse effect on our consolidated financial position, results of operations or cash flow at this time. Furthermore, our management does not believe that there are any proceedings to which any of our directors, officers, or affiliates, any owner of record of the beneficially or more than five percent of our common stock, or any associate of any such director, officer, affiliate, or security holder is a party adverse to our company or has a material interest adverse to us.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 3. Defaults Upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information