Royal Mines and Minerals (RYMM) 10-Q 2010 Q1 Quarterly report

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

FORM 10-Q

(Mark One)

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

For the quarterly period endedJuly 31, 2009

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

For the transition period from ________ to ________

COMMISSION FILE NUMBER000-52391

ROYAL MINES AND MINERALS CORP.
(Exact name of registrant as specified in its charter)

NEVADA	20-4178322
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2580 Anthem Village Dr.
Henderson, NV	89052
(Address of principal executive offices)	(Zip code)

(702) 588-5973
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.Yes [X]   No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,
if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(s. 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes[   ]    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 accelerated filer [   ]		Accelerated filer [   ]
Non-accelerated filer [   ]	(Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes[   ]   No [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable
date:As of September 11, 2009, the Registrant had 82,724,852 shares of common stock outstanding.

PART I - FINANCIAL INFORMATION

ITEM 1.            FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months ended July 31, 2009 are not necessarily indicative of the results that can be expected for the year ending April 30, 2010.

As used in this Quarterly Report, the terms “we,” “us,” “our,” “Royal Mines,” and the “Company” mean Royal Mines And Minerals Corp. and its subsidiaries, unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.

2

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
BALANCE SHEET
(Unaudited)

		As of			As of
		July 31, 2009			April 30, 2009
ASSETS
Current assets
Cash and cash equivalents	$	60,072		$	1,819
Prepaid expense		-			-
Total current assets		60,072			1,819
Property and equipment, net (Note 2)		260,016			277,797
Intellectual property, net (Note 3)		180,000			190,000
Mineral properties (Note 4)		29,000			29,000
Other assets		5,500			5,500
Total non-current assets		474,516			502,297
Total assets	$	534,588		$	504,116
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	112,914		$	177,239
Accounts payable - related party (Note 5)		32,000			24,418
NVRM payable (Note 6)		95,000			102,683
Loans payable - related party (Note 7)		770,149			382,569
Accrued interest - related party (Note 7)		78,192			64,626
Deferred revenue		3,333			4,583
Current portion of long-term debt		-			-
Total current liabilities		1,091,588			756,118
Long-term debt		-			-
Total liabilities		1,091,588			756,118
Commitments and contingencies (Note 8)
Stockholders' equity (deficit) (Note 9 and 10)
Common stock, $0.001 par value; 300,000,000 shares
authorized, 75,179,852 and 72,679,852 shares,
respectively, issued and outstanding		75,180			72,680
Preferred stock, $0.001 par value; 100,000,000 shares
authorized, zero shares issued and outstanding		-			-
Additional paid-in capital		7,463,530			7,341,030
Accumulated deficit during exploration stage		(8,095,710	)		(7,665,712	)
Total stockholders' equity (deficit)		(557,000	)		(252,002	)
Total liabilities and stockholders' equity (deficit)	$	534,588		$	504,116

See Accompanying Notes to Financial Statements
F-1

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)

								For the Period
								July 13, 2005
								(Date of Inception)
		For the Three Months Ended						Through
		July 31, 2009			July 31, 2008			July 31, 2009
Revenue	$	41,811		$	-		$	44,011
Operating expenses
Mineral exploration and evaluation expenses		263,484			136,903			2,254,994
General and administrative (Note 10)		148,033			116,704			5,625,047
Depreciation and amortization (Note 2)		46,515			25,000			272,118
Total operating expenses		458,032			278,607			8,152,159
Loss from operations		(416,221	)		(278,607	)		(8,108,148	)
Other income (expense):
Other income		-			-			94,115
Interest income		-			-			4,551
Interest expense		(13,777	)		(13,868	)		(86,228	)
Total other income (expense)		(13,777	)		(13,868	)		12,438
Loss from operations before provision for income taxes		(429,998	)		(292,475	)		(8,095,710	)
Income tax benefit		-			-			-
Net loss	$	(429,998	)	$	(292,475	)	$	(8,095,710	)
Loss per common share - basic and diluted:
Net loss	$	(0.01	)	$	(0.01	)
Weighted average common shares outstanding -
Basic and diluted		73,087,461			46,152,252

See Accompanying Notes to Financial Statements
F-2

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)

								Accumulated
								Deficit During			Total
	Common Stock				Additional			Exploration			Stockholders'
	Shares		Amount		Paid-in Capital			Stage			Equity (Deficit)
Balance, July 13, 2005	-	$	-	$	-		$	-		$	-
Issuance of common stock for cash, $0.001 per share	1,000		1		-			-			1
Net loss	-		-		-			(174,500	)		(174,500	)
Balance, April 30, 2006	1,000		1		-			(174,500	)		(174,499	)
Issuance of common stock for cash, $0.001 per share	12,500,000		12,500		-			-			12,500
Issuance of common stock for cash, $0.01 per share	7,800,000		7,800		70,200			-			78,000
Issuance of common stock for mineral property
options, $0.01 per share	1,050,000		1,050		9,450			-			10,500
Issuance of common stock for cash, $0.10 per share	1,250,000		1,250		123,750			-			125,000
Issuance of common stock for cash,
Reg. S - Private Placement, $0.10 per share	1,800,000		1,800		178,200			-			180,000
Issuance of common stock in acquisition of
intellectual property and equipment, $0.10 per share	2,000,000		2,000		198,000			-			200,000
Net loss	-		-		-			(517,768	)		(517,768	)
Balance, April 30, 2007	26,401,000	$	26,401	$	579,600		$	(692,268	)	$	(86,267	)
Issuance of common stock for cash and subscriptions received,
Reg. S - Private Placement, $0.25 per share	2,482,326		2,482		618,100			-			620,582
Issuance of common stock for cash,
Reg. D - Private Placement, $0.25 per share	3,300,000		3,300		821,700			-			825,000
Issuance of common stock in reverse
acquisition of Centrus Ventures Inc.	13,968,926		13,969		(77,164	)		-			(63,195	)
Issuance of stock options for 4,340,000 shares of common
stock to three officers and five consultants. (Note 10)	-		-		3,583,702			-			3,583,702
Net loss	-		-		-			(5,256,444	)		(5,256,444	)
Balance, April 30, 2008	46,152,252	$	46,152	$	5,525,938		$	(5,948,712	)	$	(376,622	)
Issuance of common stock for cash, Reg. S - Private Placement,
$0.50 per share; with attached warrants exercisable at $0.75 per share	200,000		200		99,800			-			100,000
Issuance of common stock in satisfaction of debt, Reg. S - $0.30 per share;
with attached warrants exercisable at $0.50 per share.	450,760		451		134,777			-			135,228
Issuance of stock options for 5,000,000 shares of common
stock to two officers and nine consultants. (Note 10)	-		-		342,550			-			342,550
Issuace of common stock for cash, $0.05 per share;
with attached warrants exercisable at $0.10 per share.	9,140,000		9,140		447,860			-			457,000

See Accompanying Notes to Financial Statements
F-3

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)

							Accumulated
							Deficit During			Total
	Common Stock				Additional		Exploration			Stockholders'
	Shares		Amount		Paid-in Capital		Stage			Equity (Deficit)
Issuance of common stock in satisfaction of debt, $0.05 per share;
with attached warrants exercisable at $0.10 per share.	13,736,840		13,737		673,105		-			686,842
Issuance of common stock to one officer as compensation
pursuant to the management consulting agreement.	3,000,000		3,000		117,000		-			120,000
Net loss	-		-		-		(1,717,000	)		(1,717,000	)
Balance, April 30, 2009	72,679,852	$	72,680	$	7,341,030	$	(7,665,712	)	$	(252,002	)
Issuance of common stock in satisfaction of debt, $0.05 per share;
with attached warrants exercisable at $0.10 per share.	2,500,000		2,500		122,500		-			125,000
Net loss	-		-		-		(429,998	)		(429,998	)
Balance, July 31, 2009	75,179,852	$	75,180	$	7,463,530	$	(8,095,710	)	$	(557,000	)

See Accompanying Notes to Financial Statements
F-4

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)

								For the Period
								July 13, 2005
								(Date of Inception)
		For the Year Ended						Through
		July 31, 2009			July 31, 2008			July 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(429,998	)	$	(292,475	)	$	(8,095,710	)
Adjustments to reconcile loss from operating
to net cash used in operating activities:
Depreciation and amortization		46,515			25,000			272,118
Stock based expenses (Note 10)		-			-			4,046,252
Changes in operating assets and liabilities:								-
Other current assets and liabilities		(8,933	)		-			(4,350	)
Other assets		-			-			(5,500	)
Accounts payable and accrued interest		(64,325	)		32,157			473,279
Accounts payable and accrued interest- related party		46,148			56,493			122,082
Net cash used in operating activities		(410,593	)		(178,825	)		(3,191,829	)
CASH FLOW FROM INVESTING ACTIVITIES
Cash paid on mineral property claims		-			-			(18,500	)
Cash acquired on reverse merger		-			-			2,306
Purchase of fixed assets		(18,734	)		-			(512,134	)
Net cash used in investing activities		(18,734	)		-			(528,328	)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from stock issuance		-			-			2,398,081
Share subscriptions		-			100,000			-
Proceeds / (Payments) on long-term debt		-			(1,426	)		-
Proceeds / (Payments) on borrowings		487,580			80,012			1,382,148
Net cash provided by financing activities		487,580			178,586			3,780,229
NET CHANGE IN CASH		58,253			(239	)		60,072
CASH AT BEGINNING OF PERIOD		1,819			9,794			-
CASH AT END OF PERIOD	$	60,072		$	9,555		$	60,072
SUPPLEMENTAL INFORMATION
Interest Paid	$	1,093		$	42		$	3,833
Income Taxes Paid	$	-		$	-		$	-
SUPPLEMENTARY DISCLOSURE FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Acquisition of intellectual property for stock	$	-	��	$	-		$	200,000
Acquisition of mineral property for stock	$	-		$	-		$	10,500
Stock issued in reverse acquisition of Centrus Ventures Inc.	$	-		$	-		$	(63,194	)
Stock issued in safisfaction of debt	$	125,000		$	-		$	822,070
Stock issued as compensation	$	-		$	-		$	120,000

See Accompanying Notes to Financial Statements
F-5

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

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

Basis of presentation – These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. The Company’s fiscal year-end is April 30.

Description of Business – The Company is considered an exploration stage company. The Company's primary objectives are to 1) generate ongoing revenues from the licensing of its proprietary, environmentally-friendly lixiviation process, 2) commercially extract and refine precious and base metals from others and its own mining assets, and 3) joint venture, acquire and develop projects in North America. The Company has not yet realized significant revenues from its primary objectives.

History – The Company was incorporated on December 14, 2005 under the laws of the State of Nevada. On June 13, 2007, the Company incorporated a wholly-owned subsidiary, Royal Mines Acquisition Corp., in the state of Nevada.

On October 5, 2007, Centrus Ventures Inc. (Centrus) completed the acquisition of Royal Mines Inc. (“Royal Mines”). The acquisition of Royal Mines was completed by way of a “triangular merger” pursuant to the provisions of the Agreement and Plan of Merger dated September 24, 2007 (the “First Merger Agreement”) among Centrus, Royal Mines Acquisition Corp. (“Centrus Sub”), a wholly owned subsidiary of Centrus, Royal Mines and Kevin B. Epp, the former sole executive officer and director of Centrus. On October 5, 2007, under the terms of the First Merger Agreement, Royal Mines was merged with and into Centrus Sub, with Centrus Sub continuing as the surviving corporation (the “First Merger”).

On October 6, 2007, a second merger was completed pursuant to an Agreement and Plan of Merger dated October 6, 2007 (the “Second Merger Agreement”) between Centrus and its wholly owned subsidiary, Centrus Sub, whereby Centrus Sub was merged with and into Centrus, with Centrus continuing as the surviving corporation (the “Second Merger”). As part of the Second Merger, Centrus changed its name from “Centrus Ventures Inc.” to “Royal Mines And Minerals Corp.”(“the Company”). Other than the name change, no amendments were made to the Articles of Incorporation.

Under the terms and conditions of the First Merger Agreement, each share of Royal Mines’ common stock issued and outstanding immediately prior to the completion of the First Merger was converted into one share of Centrus’ common stock. As a result, a total of 32,183,326 shares of Centrus common stock were issued to former stockholders of Royal Mines. In addition, Mr. Epp surrendered 23,500,000 shares of Centrus common stock for cancellation in consideration of payment by Centrus of $0.001 per share for an aggregate consideration of $23,500. As a result, upon completion of the First Merger, the former stockholders of Royal Mines owned approximately 69.7% of the issued and outstanding common stock.

As such, Royal Mines is deemed to be the acquiring enterprise for financial reporting purposes. All acquired assets and liabilities of Centrus were recorded at fair value on the date of the acquisition, as required by the purchase method of accounting, and the tangible net liabilities were debited against equity of the Company. There are no continuing operations of Centrus from the date of acquisition.

Going Concern - As of July 31, 2009, the Company incurred cumulative net losses of approximately $8,095,710 from operations and has negative working capital of $1,031,516. The Company is still in the exploration stage and has not fully commenced its mining and metals extraction processing operations, raising substantial doubt about its ability to continue as a going concern.

F-6

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	The ability of the Company to continue as a going concern is dependent on the Company raising additional sources of capital and the successful execution of the Company’s objectives. The Company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.
	The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
	Use of Estimates- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
	Cash and Cash Equivalents- The Company considers all investments with an original maturity of three months or less to be a cash equivalent.
	Property and Equipment- Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).
	The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.
	Mineral Property Rights– The Company capitalizes acquisition and option costs of mineral property rights in accordance with Emerging Issues Task Force (EITF) abstract 04-02. The amount capitalized represents the fair value at the time the mineral rights are acquired. The accumulated costs of acquisition for properties that are developed to the stage of commercial production will be amortized using the unit-of-production method.
	Exploration Costs– Mineral exploration costs are expensed as incurred.
	Impairment of Long-Lived Assets– The Company evaluates the carrying value of acquired mineral property rights in accordance with EITF 04-03, “Mining Assets: Impairment and Business Combinations,” using the Value Beyond Proven and Probable (VBPP) method. The fair value of a mining asset generally includes both VBPP and an estimate of the future market price of the minerals.
	The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate the related carrying amounts may not be recoverable. Asset impairment is considered to exist if the total estimated future cash flows, on an undiscounted basis, are less than the carrying amount of the long-lived asset. An impairment loss is measured and recorded based on the discounted estimated future cash flows. Future cash flows are based on estimated quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices, price trends and related factors), production levels and cash costs of production, capital and reclamation costs, all based on detailed engineering life-of-mine plans.

F-7

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	In estimating future cash flows, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. With the exception of other mine-related exploration potential and exploration potential in areas outside of the immediate mine-site, all assets at a particular operation are considered together for purposes of estimating future cash flows. In the case of mineral interests associated with other mine-related exploration potential and exploration potential in areas outside of the immediate mine-site, cash flows and fair values are individually evaluated based primarily on recent exploration results.
	Various factors could impact the Company’s ability to achieve forecasted production schedules from proven and probable reserves. Additionally, commodity prices, capital expenditure requirements and reclamation costs could differ from the assumptions used in the cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically. Material changes to any of these factors or assumptions discussed above could result in future impairment charges to operations.
	Fair Value of Financial Instruments– Statement of Financial Accounting Standards (SFAS) No. 107, “Disclosure about Fair Value of Financial Instruments,” requires the Company to disclose, when reasonably attainable, the fair market value of its assets and liabilities which are deemed to be financial instruments. The carrying amounts and estimated fair value of the Company’s financial instruments approximate their fair value due to the short-term nature. The Company is not exposed to significant interest or credit risk arising from these financial instruments.
	Revenue Recognition– Revenues from processing ore are recognized when services are completed and billed. Revenue from licensing our technology is recognized over the term of the license agreement. Costs and expenses are recognized during the period in which they are incurred.
	Research and Development- All research and development expenditures during the period have been charged to operations.
	Earnings (Loss) Per Share- The Company follows SFAS No. 128, “Earnings Per Share” and SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” which establish standards for the computation, presentation and disclosure requirements for basic and diluted earnings per share for entities with publicly-held common shares and potential common stock issuances. Basic earnings (loss) per share are computed by dividing net income by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities, such as stock options and warrants. Common stock equivalent shares are excluded from the computation if their effect is antidilutive. Common stock equivalents, which include stock options and warrants to purchase common stock, that were not included in the computations of diluted earnings per share because the effect would be antidilutive were 32,216,840 and 4,340,000 on April 30, 2009 and April 30, 2008, respectively
	Income Taxes- The Company accounts for its income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” which requires recognition of deferred tax assets and liabilities for future tax consequences

F-8

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
	On July 13, 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS No. 109, and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under FIN 48, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more- likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than 50% likelihood of being sustained. Additionally, FIN 48 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted the provision of FIN 48 on April 30, 2007, which did not have any impact on the financial statements.
	For acquired properties that do not constitute a business as defined in Emerging Issues Task Force Issue No. 98- 03 (“EITF 98-03”), “Determining Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business”, deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future federal and state income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with EITF 98-11 “Accounting for Acquired Temporary Differences in Certain Purchase Transactions That Are Not Accounted for as Business Combinations” and SFAS 109, and is reflected as an increase to the total purchase price which is then applied to the underlying acquired assets in the absence of there being a goodwill component associated with the acquisition transactions.
	Reclassification- Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation, with no effect on previously reported net loss.
	Expenses of Offering- The Company accounts for specific incremental costs directly to a proposed or actual offering of securities as a direct charge against the gross proceeds of the offering.
	Stock-Based Compensation– On December 16, 2004, the FASB issued SFAS No. 123R, “Share-Based Payment”, which replaces SFAS No. 123, “Accounting for Stock-Based Compensation” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. SFAS No. 123R was to be effective for interim or annual reporting periods beginning on or after June 15, 2005, but in April 2005 the SEC issued a rule that will permit most registrants to implement SFAS No. 123R at the beginning of their next fiscal year, instead of the next reporting period as required by SFAS No. 123R. The pro forma disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition. Under SFAS No. 123R, the Company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at date of adoption. The transition methods include prospective and retroactive adoption option. Under the retroactive option, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The prospective method requires that compensation expense be recorded for all unvested stock options and restricted

F-9

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	stock at the beginning of the first quarter of adoption of SFAS No. 123R, while the retroactive methods would record compensation expense for all unvested stock options and restricted stock beginning with the first period restated. The Company has adopted the requirements of SFAS No. 123R for the fiscal year beginning after April 30, 2006.
	New Accounting Pronouncements– The Financial Accounting Standards Board (FASB) has issued FASB Statement No. 168, The “FASB Accounting Standards CodificationTM” and the Hierarchy of Generally Accepted Accounting Principles. Statement 168 establishes the FASB Accounting Standards CodificationTM(Codification) as the single source of authoritative U.S. generally accepted accounting principles (U.S. GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. Statement 168 and the Codification are effective for financial statements issued for interim and annual periods ending after September 15, 2009.
	The FASB has issued FASB Statement No. 167, “Amendment to FASB Interpretation No. 46(R)”. Statement 167 is a revision to FASB Interpretation No. 46 (Revised December 2003), ‘Consolidation of Variable Interest Entities”, and changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic performance. Statement 167 will require a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity will be required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements. Statement 167 will be effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009, or January 1, 2010, for a calendar year-end entity. Adoption of this statement is not expected to have a material impact on the Company’s financial statements.
	The FASB has issued FASB Statement No. 166, “Accounting for Transfers of Financial Assets”. Statement 166 is a revision to FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”, and will require more information about transfers of financial assets, including securitization transactions, and where entities have continuing exposure to the risk related to the transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity”, changes the requirements for derecognizing financial assets, and requires additional disclosures. Statement 166 enhances information reported to users of financial statements by providing greater transparency about transfers of financial assets and an entity’s continuing involvement in transferred financial assets. Statement 166 will be effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009, or January 1, 2010, for a calendar year-end entity. Adoption of this statement is not expected to have a material impact on the Company’s financial statements.
	The FASB has issued FASB Statement No. 165, “Subsequent Events”. Statement 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet but before financial statements are issued or are available to be issued. Specifically, Statements 165 provides: (i) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. Statement 165 is effective for interim or annual financial periods ending after June 15,

F-10

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	2009, and shall be applied prospectively. The required disclosures of this statement have been incorporated into the Company’s financial statements.
	In April 2009, FASB Staff Position (FSP) No. FAS 107-1 and APB 28-1 was issued to amend SFAS No. 107, “Disclosures about Fair Value of Financial Instruments”, to require disclosures about fair value of financial instruments for interim reporting period as well as in annual financial statements. This FSP also amends APB Opinion No. 28, “Interim Financial Reporting”, to require those disclosures in summarized financial information at interim reporting periods. FSP No. 107-1 and APB 28-1 is effective for interim reporting period ending after June 15, 2009. Adoption of this guidance is not expected to have a material impact on the Company’s financial statements.
	In April 2009, FSP No. FAS 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”, was issued to provide additional guidance for estimating the fair value in accordance with SFAS No. 157, “Fair Value Measurements”, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also provides guidance on identifying circumstances that indicate a transaction is not orderly. FSP No. FAS 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Adoption of this guidance is not expected to have a material impact on the Company’s financial statements.
	In April 2009, FSP No. FAS 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies”. This FSP amends the guidance in FASB Statement No. 141 to require that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably estimated. If fair value of such asset or liability cannot be reasonably estimated, the asset or liability would generally be recognized in accordance with FASB Statement No. 5, “Accounting for Contingencies”, and FASB Interpretation (FIN) No. 14, “Reasonable Estimation of the Amount of a Loss”. This FSP eliminates the requirements to disclose an estimate of the range of outcomes of recognized contingencies at the acquisition date. This FSP also requires that contingent consideration arrangements of an acquiree assumed by the acquirer in a business combination be treated as contingent consideration of the acquirer and should be initially and subsequently measured at fair value in accordance with Statement 141R. This FSP is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The adoption of this statement had little or no effect on the Company’s financial position, results of operations, and disclosures.
	In December 2008, the FASB issued FSP No. FAS 132(R)-1, “Employers’ Disclosures about Post-Retirement Benefit Plan Assets” (“FSP FAS 132(R)-1”), which amends FASB Statement No. 132 “Employers’ Disclosures about Pensions and Other Post-Retirement Benefits” (“FAS 132”), to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other post-retirement plan. The objective of FSP FAS 132(R)-1 is to require more detailed disclosures about employers’ plan assets, including employers’ investment strategies, major categories of plan assets, concentrations of risk within plan assets, and valuation techniques used to measure the fair value of plan assets. FSP FAS 132(R)-1 is effective for the Company’s fiscal year beginning May 1, 2009. Upon initial application, the provisions of this FSP are not required for earlier periods that are presented for comparative purposes. The Company does not currently have a benefit pension or any post-retirement benefit plans and the Company has determined that the adoption of this statement will have little or no effect on the Company’s financial position, results of operations, and disclosures.

F-11

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	In November 2008, the EITF reached consensus on Issue No. 08-6, “Equity Method Investment Accounting Considerations” (“EITF 08-6”), which clarifies the accounting for certain transactions and impairment considerations involving equity method investments. The intent of EITF 08-6 is to provide guidance on (i) determining the initial carrying value of an equity method investment, (ii) performing an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment, (iii) accounting for an equity method investee’s issuance of shares, and (iv) accounting for a change in an investment from the equity method to the cost method. EITF 08-6 is effective for the Company’s fiscal year beginning May 1, 2009 and is to be applied prospectively. The Company is currently evaluating the potential impact of adopting this statement on the Company’s financial position or results of operations.
	In June 2008, the EITF reached consensus on Issue No. 07-5, “Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (“EITF 07-5”). EITF 07-5 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 FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”). EITF 07-5 is effective for the Company’s fiscal years beginning May 1, 2009. Early adoption for an existing instrument is not permitted. The Company does not expect the adoption of EITF 07-5 to have a material impact on the Company’s financial position or results of operations.
	The FASB issued FASB Staff Position (FSP) FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for that Asset Is Not Active”. The FSP clarifies the application of SFAS No. 157, “Fair Value Measurements”, in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. The FSP is effective October 10, 2008, and for prior periods for which financial statements have not been issued. Revisions resulting from a change in the valuation technique or its application should be accounted for as a change in accounting estimate following the guidance in SFAS No. 154, “Accounting Changes and Error Corrections”. However, the disclosure provisions in SFAS No. 154 for a change in accounting estimate are not required for revisions resulting from a change in valuation techniques or its application. The Company has determined that the adoption of this statement will have little or no effect on the Company’s financial position, results of operations, and disclosures.
	In May 2008, the FASB issued SFAS No. 162, “Hierarchy of Generally Accepted Accounting Principles”. This statement is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements of nongovernmental entities that are presented in conformity with GAAP. This statement will be effective 60 days following the U.S. Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendment to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.” The Company is currently evaluating the potential impact, if any, of the adoption of SFAS 162 on its financial statements.
	In May 2008, the FASB issued FSP No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). FSP APB 14-1 applies to convertible debt instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless the embedded conversion option is required to be separately accounted for as a derivative under FAS 133. Convertible debt instruments within the scope of FSP APB 14-1 are not addressed by the existing APB 14. FSP APB 14-1 requires that the liability and equity components of convertible debt instruments within the scope of FSP APB 14-1 be separately accounted for in a manner that reflects the entity’s nonconvertible debt borrowing rate. This requires an allocation of the

F-12

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	convertible debt proceeds between the liability component and the embedded conversion option (i.e., the equity component). The difference between the principal amount of the debt and the amount of the proceeds allocated to the liability component will be reported as a debt discount and subsequently amortized to earnings over the instrument’s expected life using the effective interest method. FSP APB 14-1 is effective for the Company’s fiscal year beginning May 1, 2009 and will be applied retrospectively to all periods presented. The Company does not currently have convertible debt instruments and the Company has determined that the adoption of this statement will have little or no effect on the Company’s financial position, results of operations, and disclosures.
	In April 2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP 142-3”) which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets” (“FAS 142”). The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under FAS 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141, “Business Combinations” (“FAS 141”). FSP 142-3 is effective for the Company’s fiscal year beginning May 1, 2009 and will be applied prospectively to intangible assets acquired after the effective date. The Company does not expect the adoption of FSP 142-3 to have an impact on the Company’s financial position, results of operations or cash flows.
	On March 19, 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” This statement is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has determined that the adoption of this statement will have little or no effect on the Company’s financial position, results of operations, and disclosures.
	In February 2008, the FASB staff issued Staff Position No. 157-2 “Effective Date of FASB Statement No. 157” (“FSP FAS 157-2”). FSP FAS 157-2 delayed the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The provisions of FSP FAS 157-2 are effective for the Company’s fiscal year beginning May 1, 2009. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.
	In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations,” which amends SFAS No. 141, and provides revised guidance for recognizing and measuring identifiable assets and goodwill acquired, liabilities assumed, and any noncontrolling interest in the acquiree. It also provides disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) is effective for the Company’s fiscal year beginning May 1, 2009 and is to be applied prospectively. This statement will impact how the Company accounts for future business combinations and the Company’s future financial position, results of operations and cash flows.
	In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51” which establishes accounting and reporting standards pertaining to ownership interests in subsidiaries held by parties other than the parent, the amount of net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of any retained noncontrolling equity investment when a subsidiary is deconsolidated. SFAS No. 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. SFAS No. 160 is effective for the Company’s fiscal year beginning May 1, 2009.

F-13

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	The Company is evaluating the potential impact of adopting this statement on the Company’s financial position, results of operations and cash flows.
2.	PROPERTY AND EQUIPMENT
	Property and equipment consists of the following:

		As of		As of
		July 31, 2009		April 30, 2009
Process, lab and office equipment	$	366,734	$	348,000
Site Equipment		145,400		145,400
Less: accumulated depreciation		252,118		215,603
	$	260,016	$	277,797

3.	INTELLECTUAL PROPERTY
	On April 2, 2007 the Company entered into a Technology and Asset Purchase Agreement (“NVRM Agreement”) with Robert H. Gunnison and New Verde River Mining Co. Inc. (“NVRM”), whereby the Company acquired equipment and the technology for lixiviation of metals from ore utilizing thiourea stabilization (“Intellectual Property”). The equipment and intellectual property were acquired with the issuance of 2,000,000 shares of the Company’s $0.10 per share common stock and a future cash payment of $300,000, for a purchase price of $500,000. The remaining cash payment balance of $95,000 (NVRM Payable) will be fully paid on or before June 30, 2010. The purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The intellectual property was valued at $200,000 and will be amortized quarterly on a straight-line basis over a 5 year period starting with the recognition of revenue from the licensing of the Company’s technology. The Company recorded $10,000 and zero of amortization expense for the three months ended July 31, 2009 and 2008, respectively.
4.	MINERAL PROPERTIES
	As of July 31, 2009 and April 30, 2008, mineral properties totaling $29,000 and $29,000, respectively, consist of twenty-one (21) mining claims located south of Searchlight, Nevada in the Piute Valley. On January 28, 2007, the Company entered into mineral option agreements to acquire an 87.5% interest in twenty-four (24) mining claims with the issuance of 1,050,000 shares of the Company’s common stock on the date of signing of the option agreement, with the provision that the Company issue an additional 420,000 and 210,000 shares on the fifth anniversary and tenth anniversary, respectively, of the signing of the option agreement if the Company wishes to acquire legal interest to the mining claims. The transaction was valued at an agreed upon price of $10,500. Annual renewal fees are capitalized. Each mining claim is comprised of 160 acres. In August 2008 the Company did not pay the renewal fee on four (4) of the mining claims after confirming title to the claims were void due to not being properly located and being subject to prior segregation.
	On March 16, 2007 the Company entered into a lease agreement of property with one (1) mining claim, for a term of twenty years, for exploration and potential mining production on 20 acres in Searchlight, Nevada. The Company paid a one-time signing bonus of $5,000 upon execution of the agreement and pays a $4,000 rental fee each August. The Company will also pay an annual royalty equal to five (5) percent of the net profit from any mining production on the property.

F-14

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

4.	MINERAL PROPERTIES(continued)
	Mining claims are capitalized as tangible assets in accordance with Emerging Issues Task Force abstract 04-02. Upon completion of a bankable feasibility study, the claims will be amortized using the unit-of-production method over the life of the claim. If the Company does not continue with exploration after the completion of the feasibility study, the claims will be expensed at that time.
5.	ACCOUNTS PAYABLE - RELATED PARTY
	As of July 31, 2009 and April 30, 2009, accounts payable – related party consisted of $32,000 and $24,418, respectively, due to directors and officers of the Company for consulting fees and reimbursable expenses.
6.	NVRM PAYABLE
	As of July 31, 2009 and April 30, 2009, NVRM payable consists of $95,000 and $102,683, respectively, payable to New Verde River Mining and Robert H. Gunnison pursuant to the NVRM Agreement noted above (see Note 3). Mr. Gunnison signed an extension agreement extending the payment deadline to June 30, 2010. As a condition of the extension, the payable will bear 6% interest annually.
7.	LOANS PAYABLE
	As of July 31, 2009 and April 30, 2009, loans payable of $770,149 and $382,569, respectively, consists of borrowings, directly and indirectly, from two directors and one affiliate (5% or greater beneficial owner) of the Company. The balances bear 10% interest, are unsecured and are due on demand. As of July 31, 2009 and April 30, 2009, accrued interest – related party was $78,192 and $64,626, respectively.
8.	COMMITMENTS AND CONTINGENCIES
	Lease obligations– The Company has operating leases for its corporate office and plant facility. Future minimum lease payments under the operating leases as of July 31, 2009 are as follows:

Fiscal year ending April 30, 2010	$	66,472
Thereafter	$	11,104

	Legal proceedings– The Company is not a party to any legal proceeding and, to our knowledge, no other legal proceedings are pending, threatened or contemplated.
9.	STOCKHOLDERS’ EQUITY
	Common and Preferred Stock:
	As of July 31, 2009 and April 30, 2009, there were 75,179,852 and 72,679,852 shares of common stock outstanding and zero and zero shares of preferred stock outstanding, respectively. Outstanding shares of common stock consist of the following:
	a)	On March 16, 2006, the Company issued 1,000 shares of common stock to one individual for cash at $0.001 per share.
	b)	On November 30, 2006, the Company issued 12,500,000 shares of common stock to three individuals for cash at $0.001 per share.

F-15

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

9.	STOCKHOLDERS’ EQUITY(continued)
	c)	On December 29, 2006, the Company issued 7,800,000 shares of common stock for cash at $0.01 per share.
	d)	On January 10, 2007, the Company issued 1,050,000 shares of common stock for the purchase of 7/8ths interest in 24 minerals claims at $0.01 per share.
	e)	On February 28, 2007, the Company issued 1,250,000 shares of common stock to three individuals for cash at $0.10 per share.
	f)	On March 31, 2007, the Company issued 1,800,000 shares of common stock to four individuals for cash at $0.10 per share.
	g)	On April 2, 2007, the Company issued 2,000,000 shares of common stock to one individual, in connection with the NVRM Agreement, for the purchase of intellectual property and equipment.
	h)	On May 31, 2007, the Company closed a private placement offering for proceeds of $620,582, of which $505,114 was received and recorded as share subscriptions received as of April 30, 2007. The Company issued 2,482,326 shares of common stock, at $0.25 per share, to non-U.S. investors pursuant to Regulation S of the Securities Act of 1933.
	i)	On June 4, 2007, the Company closed a private placement offering for proceeds of $825,000 and issued 3,300,000 shares of common stock, at $0.25 per share, to accredited U.S. investors pursuant to Regulation D of the Securities Act of 1933.
	j)	On October 5, 2007, the Company issued 13,968,926 shares of common stock in the reverse acquisition of Centrus Ventures Inc.
	k)	On September 3, 2008, the Company completed a private placement of 200,000 units at a price of $0.50 per unit for total proceeds of $100,000. Each unit is comprised of one share of common stock and one-half of one share purchase warrant. Each whole share purchase warrant will entitle the holder to purchase one additional share of common stock at a price of $0.75 per share for a period ending September 2, 2010.
	l)	On November 15, 2008, under the terms of a settlement agreement, the Company issued 450,760 units at a price of $0.30 per unit, with each unit consisting of one common share and one share purchase warrant of the Company. Each warrant is exercisable to purchase an additional common share at a price of $0.50 per share for a period of two (2) years from the date of issuance. The units were issued pursuant to the provisions of Regulation S promulgated under the Securities Act of 1933.
	m)	On February 24, 2009, the Company issued 9,140,000 units for $457,000 in cash and 13,736,840 units to retire corporate indebtedness under three separate private placement offerings. Each unit was comprised of one share of the Company’s common stock and one share purchase warrant, with each warrant entitling the holder to purchase an additional share of common stock for a period of two years at an exercise price of $0.10 per share. The Company also entered into a management consulting agreement with an officer of the Company, and pursuant to the terms of the agreement issued an aggregate of 3,000,000 restricted shares of its common stock.
	n)	On July 16, 2009, the Company issued 2,500,000 units to retire corporate indebtedness under two separate private placement offerings. Each unit was comprised of one share of the Company’s common stock and one share purchase warrant, with each warrant entitling the holder to purchase an additional share of common stock for a period of two years at an exercise price of $0.10 per share.

F-16

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

10.	STOCK INCENTIVE PLANS
	2009 Stock Incentive Plan- Effective January 12, 2009, the Company’s Board of Directors adopted the 2009 Stock Incentive Plan (the “2009 Plan"). The 2009 Plan allows the Company to grant certain options to its directors, officers, employees and eligible consultants. A total of 5,000,000 shares of the Company’s common stock are available for issuance under the 2009 Plan. However, the maximum aggregate number of shares of the Company’s common stock that may be optioned and sold under the 2009 Plan will increase effective on the first day of each of the Company’s fiscal quarters by an amount equal to the lesser of: (a) 10% of the total increase in the number of shares of common stock outstanding during the previous fiscal quarter; or (b) such lesser number of shares of common stock as may be determined by the Company’s Board of Directors.
	The 2009 Plan provides for the grant of incentive stock options and non-qualified stock options. Incentive stock options granted under the Plan are those intended to qualify as "incentive stock options" as defined under Section 422 of the Internal Revenue Code. However, in order to qualify as "incentive stock options" under Section 422 of the Internal Revenue Code, the 2009 Plan must be approved by the stockholders of the Company within 12 months of its adoption. The 2009 Plan has not been approved by the Company's stockholders. Non- qualified stock options granted under the 2009 Plan are option grants that do not qualify as incentive stock options under Section 422 of the Internal Revenue Code.
	The 2009 Plan provides that the exercise price for incentive stock options be the fair market value of the stock at the date of the grant and the option price for non-qualified stock options be no less than 75% of the fair market value of the stock at the date of the grant. The maximum term of an option shall be established by the Board of Directors or, if not so established, shall be ten years from the grant date. Options granted under the 2009 Plan become exercisable and expire as determined by the Board of Directors.
	On January 16, 2009, the Company granted non-qualified stock options under the 2009 Plan for the purchase of 5,000,000 shares of common stock at $0.05 per share. The nonqualified stock options were granted to various officers, directors and consultants, are fully vested and expire January 15, 2011.
	From the date of inception through July 31, 2009, compensation expense related to the granting of stock options under the 2009 Plan was $342,550 and is included in general and administrative expense. The Company calculated the value of the options using the Black-Scholes option pricing model using the following assumptions: a risk-free rate of 1.00%, volatility of 316%, estimated life of 2 years and closing stock price of $0.07 per share on the date of grant.
	2008 Stock Incentive Plan- Effective February 1, 2008, the Company’s Board of Directors adopted the 2008 Stock Incentive Plan (the “2008 Plan"). The 2008 Plan will allow the Company to grant certain options to its directors, officers, employees and eligible consultants. A total of 4,600,000 shares of the Company’s common stock are available for issuance under the 2008 Plan. However, the maximum aggregate number of shares of the Company’s common stock that may be optioned and sold under the 2008 Plan will increase effective on the first day of each of the Company’s fiscal quarters by an amount equal to the lesser of: (a) 10% of the total increase in the number of shares of common stock outstanding during the previous fiscal quarter; or (b) such lesser number of shares of common stock as may be determined by the Company’s Board of Directors.
	The 2008 Plan provides for the grant of incentive stock options and non-qualified stock options. Incentive stock options granted under the Plan are those intended to qualify as "incentive stock options" as defined under Section 422 of the Internal Revenue Code. However, in order to qualify as "incentive stock options" under Section 422 of the Internal Revenue Code, the Plan must be approved by the stockholders of the Company within 12 months of its adoption. The Plan has not been approved by the Company's stockholders. Non-

F-17

ROYAL MINES AND MINERALS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

JULY 31, 2009

10.	STOCK INCENTIVE PLANS(continued)
	qualified stock options granted under the Plan are option grants that do not qualify as incentive stock options under Section 422 of the Internal Revenue Code.
	The 2008 Plan provides that the exercise price for incentive stock options be the fair market value of the stock at the date of the grant and the option price for non-qualified stock options be no less than 75% of the fair market value of the stock at the date of the grant. The maximum term of an option shall be established for that option by the Board of Directors or, if not so established, shall be ten years from the grant date. Options granted under the 2008 Plan become exercisable and expire as determined by the Board of Directors.
	On February 1, 2008, the Company granted non-qualified stock options under the 2008 Plan for the purchase of 4,340,000 shares of common stock at $0.74 per share. The nonqualified stock options were granted to various officers, directors and consultants, are fully vested and expire January 31, 2010.
	From the date of inception through July 31, 2009, compensation expense related to the granting of stock options under the 2008 Plan was $3,583,702 and is included in general and administrative expense. The Company calculated the value of the options using the Black-Scholes option pricing model using the following assumptions: a risk-free rate of 4.50%, volatility of 107%, estimated life of 2 years and closing stock price of $1.22 per share on the date of grant.
11.	RELATED PARTY TRANSACTIONS
	For the three months ended July 31, 2009 and 2008, the Company incurred $66,000 and $96,000, respectively, in consulting fees expense from companies with a common director or officer.
12.	SUBSEQUENT EVENTS
	On August 4, 2009, the Company issued 295,000 shares of common stock for warrants exercised at $0.10 per share in satisfaction of debt.
	On August 4, 2009, the Company issued 750,000 shares of common stock for options exercised at $0.05 per share in satisfaction of debt.
	On August 14, 2009, the Company issued 3,000,000 shares of common stock to an investor relations services firm pursuant to the terms of the consulting agreement.
	On August 18, 2009, the Company issued 3,500,000 units at a price of $0.10 per unit in satisfaction of debt, with each unit consisting of one share of common stock and one share purchase warrant, with each warrant entitling the holder to purchase one additional share of common stock at a price of $0.20 per share for a period of two years from the date of issue.

F-18

ITEM 2.            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report constitute "forward-looking statements.” These statements, identified by words such as “plan,” "anticipate," "believe," "estimate," "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Part II –Item 1A. Risk Factors" and elsewhere in this Quarterly Report. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents, particularly our Annual Reports, Quarterly Reports and Current Reports, that we file from time to time with the United States Securities and Exchange Commission (the “SEC”).

OVERVIEW

We were incorporated on December 14, 2005 under the laws of the State of Nevada.

We plan to focus our business on toll processing mined ore for third party mining companies at our processing and refining plant located in Phoenix, Arizona (the “Phoenix Facility”). During the three months ended July 31, 2009, we continued to earn revenues, although minimal, from the processing of ore at our Phoenix Facility. Our Phoenix Facility is a compact, modular, cost efficient, turn-key operation, with a capacity to process up to 10 tons per day. In processing ore at our Phoenix Facility, we utilize our environmentally friendly proprietary technology for the lixiviation of minerals using thiourea stabilization (the “Lixiviation Technology”). The use of thiourea stabilization is more environmentally friendly than cyanide or sulfuric acid, which have traditionally been used for this purpose.

We also plan to engage in the exploration and development of our Piute Valley Property located in Clark County, Nevada. Our Piute Valley Property is a potential gold project that consists of a mineral lease covering 20.61 acres of patented claims (the “Smith Lease”) and an option to acquire a 7/8^th interest in 20 unpatented claims (the “BLM Claims”) located near the Smith Lease. Each BLM Claim is comprised of 160 acres.

We are actively seeking to enter into agreements to license our Lixiviation Technology to third parties. We are also seeking to enter into joint ventures with third parties to explore and develop additional mining projects. There are no assurances that we will be able to license our Lixiviation Technology or enter into joint ventures for the exploration and development of additional mining projects.

RECENT CORPORATE DEVELOPMENTS

The following corporate developments occurred since our the filing on July 29, 2009 of our Annual Report for the fiscal year ended April 30, 2009 with the Securities and Exchange Commission:

1. We completed our pilot production test on the Smith Lease during the year ended April 30, 2009. The results from our test were very promising, although inconclusive as far as the commercial viability of the gravity concentration process. Accordingly, we had a third party concentration technology evaluate the material to see if they can get consistent, higher concentrate results. However, the third party’s results were inconclusive. We have decided to delay further testing until we obtain additional financing, of which there is no assurance.

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2.	On August 12, 2009, we entered into a license agreement with Brecheisen Company, Inc., Keith D. Brecheisen and Lorna J. Brecheisen (collectively, the “Licensors”) whereby the Licensors granted us a license to use their proprietary technology to recover metals from ore using low temperature fusion (the “License”). In consideration of the License, we granted the Licensors a gross revenue royalty of eight percent of the gross revenue earned from using the License. The term of the License is for a period of 99 years and is restricted to the geographic areas of Maricopa County, Arizona and Clark County, Nevada.
3.	On August 14, 2009, we entered into an agreement (the “Mirador Consulting Agreement”) with Mirador Consulting, Inc. (“Mirador”) whereby Mirador will assist us in our efforts to seek out equity financing and will provide us with investor relations services for a period of six months ending February 14, 2010.
	In consideration of the services to be provided by Mirador, we agreed to pay Mirador $6,700 in respect of the first month and $4,000 for each month thereafter during the term of the Mirador Consulting Agreement and to accept the subscription by Mirador to purchase 3,000,000 shares of our common stock at an aggregate purchase price of $3,000. The shares will be delivered to Mirador as follows: 1,500,000 upon signing of the Mirador Consulting Agreement and 1,500,000 on or before November 15, 2009, provided that the Mirador Consulting Agreement is not terminated before that date. In the event the Mirador Consulting Agreement is terminated prior to November 15, 2009, Mirador will surrender 1,500,000 shares for cancellation against reimbursement of the purchase price. The shares were issued to Mirador in reliance upon Rule 506 of Regulation D promulgated under the Securities Act based upon representations provided by Mirador that it is an “accredited investor” as defined in Rule 501 of Regulation D.
4.	On August 18, 2009, we issued 3,500,000 units, with each unit being comprised of one share of our common stock and one share purchase warrant. Each warrant entitles the holder to purchase an additional share of common stock for a period of two years at an exercise price of $0.20 US per share. The units were issued to settle outstanding indebtedness in the amount of $350,000 owed by us to the investor. The units were issued pursuant to Section 4(2) of the Securities Act. The investor is a limited liability company and Mr. Matheson, our Chief Executive Officer, and Mr. Mitchell, our Chief Financial Officer, are each 1/8thmanaging members of the investor.

PHOENIX FACILITY AND LIXIVIATION TECHNOLOGY

We acquired our interest in the Lixiviation Technology and our Phoenix Facility on April 2, 2007 under the terms of a Technology and Asset Purchase Agreement (the “Technology Agreement”) with New Verde River Mining Co., Inc. (“New Verde”) and Robert H. Gunnison. In consideration of the Lixiviation Technology and the Phoenix Facility, we paid and issued the following:

(a)	$300,000 to New Verde for the purchase of the equipment within the Phoenix Facility as follows:
	(i)	$175,000 upon execution of the Technology Agreement (which amount has been paid); and
	(ii)	$125,000 of which $95,000 is outstanding.
(b)	issued 2,000,000 shares to Mr. Gunnison for the Lixiviation Technology.

Concurrent with the acquisition of the Lixiviation Technology and the Phoenix Facility, we entered into an Employment Agreement dated April 2, 2007 (the “Employment Agreement”) with Robert H. Gunnison whereby Mr. Gunnison agreed to act as our Production Manager commencing on April 2, 2008. In consideration of Mr. Gunnison’s services, we pay Mr. Gunnison a salary of $120,000 per annum.

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On March 13,2009, we entered into the Payment Extension and License Agreement with New Verde and Mr. Gunnison whereby New Verde and Mr. Gunnison agreed to extend the deadline for the balance owed to New Verde to June 30, 2010. In consideration of the extension, we agreed to pay interest at 6% per annum on the balance owing to New Verde. We also agreed to grant New Verde and Mr. Gunnison a non-exclusive worldwide license on the Technology (the “License”). The License will only take effect in the event of the termination of the employment agreement between Mr. Gunnison and the Company. New Verde and Mr. Gunnison will not be permitted to assign or sub-license without our prior written approval.

Our Phoenix Facility is an industrial building of approximately 9,809 square feet located in Phoenix, Arizona. The Phoenix Facility is designed as a compact, modular, cost efficient, turn-key operation, with a capacity of processing 10 tons of ore per day. In processing ore at our Phoenix Facility, we utilize our Lixiviation Technology, being a closed loop, zero liquid discharge, leach extraction process. Below is a basic diagram on the processing of ore at our Phoenix Facility.

THE PIUTE VALLEY PROPERTY

The Piute Valley Property is a potential gold project consisting of the Smith Lease and the BLM Claims. We intend to focus our operations on the Smith Lease based on its development and status.

The Smith Lease is a leased patented mineral claim covering approximately 20.61 acres located in Clark County, Nevada. We acquired our interest in the Smith Lease upon entering into a Restatement and Amendment to Lease Agreement dated April 12, 2007 (the “Lease Agreement”) with Erline Y. Smith, Trustee, Erline Y. Smith Trust and Lawana Hooper (collectively referred to as the “Lessors”). Under the terms of the Lease Agreement, we were granted the right to explore, and if proved feasible, develop the Smith Lease. These rights were granted as a lease for a term of 20 years. As consideration for the Smith Lease, we agreed to do the following:

(a)	pay $5,000 to the Lessors upon execution of the Lease Agreement (which amount has been paid);
(b)	pay an annual rental fee of $1,000 to the Lessors per each five acre parcel of the Smith Lease (we have paid the annual rental fee through August 9, 2010); and

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(c) pay an annual royalty equal to five percent of “net smelting profit” from production. Net smelting profit is defined as the net profit derived from the sale of metals and minerals produced from the Smith Lease.

In addition to the Smith Lease, our BLM Claims consist of an option to acquire a 7/8^th undivided interest in 20 mineral claims, covering approximately 3,200 acres located in Clark County, Nevada. Readers are cautioned that eight of the BLM Claims appear to be invalid due to conflicts with patented claims or more senior claims. We are investigating this further in order to determine the exact extent of the conflict with these claims.

Under the terms of various option agreements entered into in January 2007 (the “Option Agreements”) with certain optionors (the “Optionors”), we are required to issue to the Optionors the following consideration in order to maintain and exercise our option on the BLM Claims:

(a)	1,050,000 shares of common stock on execution of the Option Agreements (which shares have been issued);
(b)	an additional 420,000 shares of common stock on the fifth anniversary of the Option Agreements; and
(c)	an additional 210,000 shares of common stock on the tenth anniversary of the Option Agreements.

PLAN OF OPERATION

Our plan of operation over the next twelve months is to focus our financial resources on the continued development of our ore processing business at our Phoenix Facility. We continue to seek out to enter into ore processing agreements with third party mining companies to process ore at our Phoenix Facility. However, there are no assurances that we will be able to enter into any ore processing agreements with third party mining companies on terms acceptable to us or at all.

We anticipate that over the next twelve months our plan of operation for our Phoenix Facility and the Piute Valley Property will consist of:

1.	Upgrading our Phoenix Facility by: (a) installing another vibratory drum mill and filter press to increase the process rate at the Phoenix Facility to 2,000 lbs per hour; and (b) adding an electrowinning circuit to allow efficient extraction of high silver content material. We anticipate that we will require $500,000 in order to implement these upgrades at our Phoenix Facility.
2.	Implementing our drilling program of prime targets on the Smith Lease. The implementation of this drilling program may require the filing of a Notice with the Federal Bureau of Land Management. We anticipate that this drilling program will cost approximately $500,000. The completion of this drilling program will depend on obtaining sufficient funds for the drilling and mineral analysis.
3.	Proceeding with the purchase of a larger concentrator to be installed on the Smith Lease, subject to raising substantial financing and having a third party concentration technology evaluate the material from our pilot product test. If we are able to raise financing and purchase a concentrator, of which there is no assurance, we plan to commence the processing of mined material on the property.
4.	Exploring strategic partnerships for the exploration of the additional Piute Valley Property.

As of July 31, 2009, we had cash in the amount of $60,072. Accordingly, we do not have sufficient resources to meet the ongoing costs of our Phoenix Facility, the anticipated costs of completing our plan of operation for our Phoenix Facility, the Smith Lease or meeting the administrative costs of operating our business for the next twelve months. In order to complete our plan of operation, we will be required to obtain substantial financing from the sale of our common stock, of which there is no assurance.

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RESULTS OF OPERATIONS

Three Months Summary

		Three Months Ended					Percentage
		July 31, 2009			July 31, 2008		Increase / (Decrease)
Revenue	$	41,811		$	-		n/a
Operating Expenses		(458,032	)		(278,607	)	64.4%
Interest Expense		(13,777	)		(13,868	)	(0.7%)
Net Loss	$	(458,032	)	$	(292,475	)	47.0%

Revenues

During the three months ended July 31, 2009, we earned revenues of $41,811. These revenues consisted of $40,561 from the processing of ore at our Phoenix Facility and $1,250 from a licensing fee. We are currently in the exploration stage of our business. We have begun to process ore at our Phoenix Facility; however, our initial income from the use of our Phoenix Facility has been minimal. We can provide no assurances that we will earn significant revenue from the processing of ore at our Phoenix Facility or that we will discover commercially exploitable levels of mineral resources on our Piute Valley Property, or if such resources are discovered, that we will be able to enter into commercial production of our Piute Valley Property.

Expenses

The major components of our operating expenses for the three months ended July 31, 2009 and 2008 are outlined in the table below:

		Three Months Ended
					Percentage
		July 31, 2009		July 31, 2008	Increase / (Decrease)
Mineral Exploration and Evaluation	$	263,484	$	136,903	92.5%
Expenses
General and Administrative		148,033		116,704	26.8%
Depreciation and Amortization		46,515		25,000	86.1%
Total Operating Expenses	$	416,221	$	278,607	49.4%

Our operating expenses for the three months ended July 31, 2009 increased as compared to the three months ended July 31, 2008. The increase in our operating expenses primarily relates to an increase in mineral exploration and evaluation expenses due to expenses incurred in connection with our exploration and development program on the Smith Lease.

Mineral exploration and evaluation expenses consisted of rent and processing extraction costs in connection with our Phoenix Facility and exploration and development expenses on the Smith Lease. In addition, we also incurred consulting fees and labor expenses on our Piute Valley Property and Phoenix Facility.

Our general and administrative expenses primarily consisted of: (i) monthly consulting fees paid to our Chief Executive Officer, Mr. Matheson, to our Chief Financial Officer, Mr. Mitchell, and to a member of our Board of Directors, Mr. Boyko; and (ii) legal and accounting fees in connection with meeting our reporting requirements under the Exchange Act.

We anticipate that our operating expenses will increase significantly as we implement our plan of operation for our Phoenix Facility and our Piute Valley Property.

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LIQUIDITY AND CAPITAL RESOURCES

Working Capital
							Percentage
		At July 31, 2009			At April 30, 2009		Increase / (Decrease)
Current Assets	$	60,072		$	1,819		3,202.5%
Current Liabilities		(1,091,588	)		(756,118	)	44.4%
Working Capital Deficit	$	(1,031,516	)	$	(754,299	)	36.8%

Cash Flows
		Three Months Ended
		July 31, 2009			July 31, 2008
Net Cash Used in Operating Activities	$	(410,593	)	$	(178,825	)
Net Cash Used In Investing Activities		(18,734	)		-
Net Cash Provided By Financing Activities		487,580			178,586
Net Increase (Decrease) in Cash During Period	$	58,253		$	(239	)

As at July 31, 2009, we had a working capital deficit of $1,031,516 as compared to a working capital deficit of $754,299 as at our year ended April 30, 2009. Our working capital deficit increased due to the lack of capital to meet our ongoing expenditures, causing an increase in our short term loans to fund our ongoing operations. During the three months ended July 31, 2009, we received short term loans totaling $487,580. These loans bear interest at a rate of 10% per annum, are unsecured and due on demand.

During the three months ended July 31, 2009, we issued an aggregate of 2,500,000 Units to settle outstanding indebtedness of $125,000. Each Unit is comprised of one share of our common stock and one share purchase warrant, with each warrant entitling the holder to purchase an additional share of common stock at an exercise price of $0.10 US per share until July 15, 2011. We issued 500,000 Units to a director in reliance of Section 4(2) of the Securities Act to settle outstanding indebtedness in the amount of $25,000 owed by us to the director. We also issued 2,000,000 Units to an existing shareholder in reliance of Regulation S of the Securities Act to settle outstanding indebtedness in the amount of $100,000 owed by us to the existing shareholder. The existing shareholder represented that he was not a "US Person" as defined under Regulation S of the Securities Act.

Subsequent to our three months ended July 31, 2009, we issued 3,500,000 units to settle outstanding indebtedness of $350,000. Each Unit is comprised of one share of our common stock and one share purchase warrant, with each warrant entitling the holder to purchase an additional share of common stock at an exercise price of $0.20 US per share until August 17, 2011. The units were issued pursuant to Section 4(2) of the Securities Act. The investor is a limited liability company and Mr. Matheson, our Chief Executive Officer, and Mr. Mitchell, our Chief Financial Officer, are each 1/8^th managing members of the investor.

FINANCING REQUIREMENTS

Currently, we do not have sufficient financial resources to complete our plan of operation for the next twelve months. As such, our ability to complete our plan of operation is dependent upon our ability to obtain additional financing in the near term.

Our Board of Directors is currently seeking to arrange financing to fund our operations. However, there is no assurance that we will be able to complete the sale of any additional securities under a private placement offering. Even if we complete the sale of all of the securities offered under a private placement offering, there is no assurance that this will satisfy all of our working capital requirements for the next twelve months or that these funds will be sufficient to complete our planned exploration and development programs.

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our

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business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned mining, development and exploration activities.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in Note 1 to our interim financial statements included in this Quarterly Report.

Mineral Property Rights – We capitalize acquisition and option costs of mineral property rights. The amount capitalized represents the fair value at the time the mineral rights were acquired. The accumulated costs of acquisition for properties that are developed to the stage of commercial production will be amortized using the unit-of-production method.

Exploration Costs – Mineral exploration costs are expensed as incurred.

ITEM 3.            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4T.          CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of July 31, 2009 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date.

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended July 31, 2009 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1.            LEGAL PROCEEDINGS.

We are not a party to any other legal proceedings and, to our knowledge, no other legal proceedings are pending, threatened or contemplated.

ITEM 1A.         RISK FACTORS.

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

If we do not obtain additional financing, we may not be able to continue our operations at our Phoenix Facility or complete our exploration and development programs on the Piute Valley Property.

As at July 31, 2009, we had cash on hand of $60,072 and accumulated net loss of $8,095,710 since inception. Our plan of operation calls for significant expenses in connection with the operation of our Phoenix Facility and the exploration and development of our Piute Valley Property. If we are unable to raise sufficient financing, there is a substantial risk that we will be unable to meet payments of principal and interest to our creditors and pay our employees. In addition, we will require substantial financing in order to implement our plan of operation over the next twelve months.

Our Board of Directors is currently seeking to arrange a private placement to fund our operations. However, there is no assurance that we will be able to complete the sale of any additional securities under a private placement offering. Even if we complete the sale of all of the securities offered under a private placement offering, there is no assurance that this will satisfy all of our working capital requirements for the next twelve months or that these funds will be sufficient to complete our planned exploration and development programs.

If we complete additional financings through the sale of shares of our common stock, our existing stockholders will experience dilution.

The most likely source of future financing presently available to us is through the issuance of our common stock. The only other anticipated alternative for the financing of further exploration would be the offering by us of an interest in our properties to be earned by another party or parties carrying out further exploration thereof, which is not presently contemplated. Issuing shares of our common stock, for financing purposes or otherwise, will dilute the interests of our existing stockholders.

In order to maintain our rights to the Piute Valley Property, we will be required to make annual filings with federal and state regulatory agencies and/or be required to complete assessment work on those properties.

In order to maintain our rights to the Piute Valley Property, we will be required to make annual filings with federal and state regulatory authorities. Currently the amount of these fees is minimal; however, these maintenance fees are subject to adjustment. In addition, we may be required by federal and/or state legislation or regulations to complete minimum annual amounts of mineral exploration work on the Piute Valley Property. A failure by us to meet the annual maintenance requirements under federal and state laws could result in the loss of our rights to the Piute Valley Property.

Because we are an exploration stage company, we face a high risk of business failure.

We have commenced earning revenues, although minimal, from the processing of ore at our Phoenix Facility. Our primary business activities have involved the acquisition of the Piute Valley Property, the exploration and development on the Piute Valley Property and the commencement of operations at our Phoenix Facility.

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Potential investors should be aware of the difficulties normally encountered by exploration stage companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.

Because we anticipate our operating expenses will increase prior to our earning significant revenues, we may never achieve profitability.

Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses prior to realizing any significant revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from the operation of our Phoenix Facility or the exploration and development of our mineral property and the production of minerals thereon, if any, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we may not be able to ever generate any operating revenues or achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

Because of the speculative nature of exploration of mining properties, there is substantial risk that no commercially exploitable minerals will be found and our business will fail.

The search for valuable minerals as a business is extremely risky. We may not find commercially exploitable reserves of precious metals on our mineral claims. Exploration for minerals is a speculative venture, necessarily involving substantial risk. The expenditures to be made by us in the upcoming exploration of the mineral claims may not result in the discovery of commercial quantities of ore. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan.

Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages if and when we conduct mineral exploration activities.

The search for valuable minerals involves numerous hazards. As a result, if and when we conduct exploration activities we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.

Even if we discover commercial reserves of precious metals on our Piute Valley Property, we may not be able to successfully obtain commercial production.

Our Piute Valley Property does not contain any known bodies of ore. If our exploration programs are successful in discovering ore of commercial tonnage and grade, we will require additional funds in order to place those mineral claims into commercial production. At this time, there is a risk that we will not be able to obtain such financing as and when needed.

Because we are an exploration stage company, our business has a high risk of failure.

We are an exploration stage company that has incurred net losses since inception, we have not attained profitable operations and we are dependent upon obtaining adequate financing to complete our exploration activities. The success of our business operations will depend upon our ability to obtain further financing to complete our planned exploration program and to attain profitable operations. If we are not able to complete a successful exploration program and attain sustainable profitable operations, then our business will fail.

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As we undertake exploration of our Piute Valley Property, we will be subject to compliance with government regulation that may increase the anticipated cost of our exploration program.

There are several government regulations that materially restrict the exploration of minerals. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws. While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program.

Certain work to be performed on our mineral projects may require us to apply for permits from federal, state or local regulatory bodies.

If our applications for permits from the relevant regulatory bodies are denied, we may not be able to proceed with our exploration and development programs as disclosed above, which could have a negative effect on our business.

If we receive positive results from our exploration program and we decide to pursue commercial production, we may be subject to an environmental review process that may delay or prohibit commercial production.

If the results of our geological exploration program indicate commercially exploitable reserves, and we decide to pursue commercial production of our mineral property, we may be subject to an environmental review process under environmental assessment legislation. Compliance with an environmental review process may be costly and may delay commercial production. Furthermore, there is the possibility that we would not be able to proceed with commercial production upon completion of the environmental review process if government authorities did not approve our mine or if the costs of compliance with government regulation adversely affected the commercial viability of the proposed mine.

If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail.

Our success will largely depend on our ability to hire highly qualified personnel with experience in geological exploration. These individuals may be in high demand and we may not be able to attract the staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Our failure to hire key personnel when needed could have a significant negative effect on our business.

Because our stock is a penny stock, stockholders will be more limited in their ability to sell their stock.

Our common stock is considered to be a “penny stock” since it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Securities Exchange Act of 1934 (the “Exchange Act”). Our common stock is a “penny stock” because it meets one or more of the following conditions (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a “recognized” national exchange; (iii) it is not quoted on the Nasdaq Stock Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than $5 million.

The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor's account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably

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determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

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

Other than as previously disclosed in our Current Reports on Form 8-K, we have not completed any unregistered sales of equity securities during the fiscal quarter ended July 31, 2009.

ITEM 3.            DEFAULTS UPON SENIOR SECURITIES.

None.

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

No matters were submitted to our security holders during our fiscal quarter ended July 31, 2009.

ITEM 5.            OTHER INFORMATION.

On August 12, 2009, we entered into a license agreement with Brecheisen Company, Inc., Keith D. Brecheisen and Lorna J. Brecheisen (collectively, the “Licensors”) whereby the Licensors granted us a license to use their proprietary technology to recover metals from ore using low temperature fusion (the “License”). In consideration of the License, we granted the Licensors a gross revenue royalty of eight percent of the gross revenue earned from using the License. The term of the License is for a period of 99 years and is restricted to the geographic areas of Maricopa County, Arizona and Clark County, Nevada.

ITEM 6.            EXHIBITS.

Exhibit
Number	Description of Exhibits
2.1	Agreement and Plan of Merger dated September 24, 2007 among the Company, Royal Mines Acquisition Corp., Royal Mines Inc. and Kevin B. Epp.(4)
2.2	Agreement and Plan of Merger dated October 6, 2007 between the Company and Royal Mines Acquisition Corp.(5)
3.1	Articles of Incorporation.(1)
3.2	Certificate of Change Pursuant to NRS 78.209 increasing the authorized capital of common stock to 300,000,000 shares, par value $0.001 per share.(2)
3.3	Bylaws.(1)
3.4	Articles of Merger between the Company and Royal Mines Acquisition Corp.(5)
4.1	Form of Share Certificate.(1)
10.1	Mineral Property Option Agreement dated January 28, 2007 between Eugene E. Phebus and Royal Mines Inc.(5)
10.2	Mineral Property Option Agreement dated January 28, 2007 between Charles G. Moore and Royal Mines Inc.(5)
10.3	Mineral Property Option Agreement dated January 10, 2007 between James E. Sharp and

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Exhibit
Number	Description of Exhibits
	Royal Mines Inc.(5)
10.4	Mineral Property Option Agreement dated January 28, 2007 between Ben Barnes and Royal Mines Inc.(5)
10.5	Mineral Property Option Agreement dated January 28, 2007 between Walter Simmons II and Royal Mines Inc.(5)
10.6	Mineral Property Option Agreement dated January 28, 2007 between Leo Corbet and Royal Mines Inc.(5)
10.7	Mineral Property Option Agreement dated January 28, 2007 between William Tao and Royal Mines Inc.(5)
10.8	Mineral Property Option Agreement dated January 28, 2007 between Dr. Wilbur J. Guay and Royal Mines Inc.(5)
10.9	Mineral Property Option Agreement dated January 28, 2007 between Olivia Tearnan and Royal Mines Inc.(5)
10.10	Mineral Property Option Agreement dated January 28, 2007 between Jim Mack and Royal Mines Inc.(5)
10.11	Mineral Property Option Agreement dated January 28, 2007 between Ron Manarey and Royal Mines Inc.(5)
10.12	Mineral Property Option Agreement dated January 28, 2007 between William Lintz and Royal Mines Inc.(5)
10.13	Technology and Asset Purchase Agreement dated April 2, 2007 among New Verde River Mining Co., Inc., Robert H. Gunnison and Royal Mines Inc.(5)
10.14	Restatement and Amendment to Lease Agreement dated April 12, 2007 among Erline Y. Smith, Trustee, Erline Y. Smith Trust, Lawana Hooper and Royal Mines Inc.(5)
10.15	AV Executive Suites Service Agreement dated September 13, 2007 between Royal Mines Inc. and Anthem Village Executive Suites, LLC.(5)
10.16	Residential Lease Agreement of La Cienega Office.(5)
10.17	Lease Agreement dated June 6, 2007 among McKendry Enterprises Inc., Profit Sharing Plan and Retirement Trust and Royal Mines Inc.(5)
10.18	2008 Stock Incentive Plan.(6)
10.19	Non-Qualified Stock Option Agreement between the Company and William C. Tao.(6)
10.20	Non-Qualified Stock Option Agreement between the Company and Jason Mitchell.(6)
10.21	Extension Agreement between the Company and Robert H. Gunnison.(7)
10.22	Settlement Agreement and Mutual Release dated effective November 15, 2008 between the Company and William C. Tao.(8)
10.23	Extension Agreement dated November 18, 2008 between the Company and Robert H. Gunnison.(9)
10.24	2009 Stock Incentive Plan.(10)
10.25	Form of Non-Qualified Stock Option Agreement for Directors and Executive Officers.(10)
10.26	Management Consulting Agreement dated February 24, 2009 between the Company and Jason S. Mitchell.(11)
10.27	Payment Extension and License Agreement dated March 13, 2009 between New Verde River Mining Co., Inc., Robert H. Gunnison and the Company.(12)
10.28	Proprietary Intellectual Property License Agreement dated March 24, 2009 between the Company and Greene Lyon Group, LLC.(13)
10.29	Consulting Agreement dated August 14, 2009 between the Company and Mirador Consulting, Inc.(14)
10.30	Brecheisen License Agreement dated August 12, 2009 between Brecheisen Company, Inc., Keith D. Brecheisen, Lorna J. Brecheisen and the Company.

14

Exhibit
Number	Description of Exhibits
14.1	Code of Ethics.(3)
31.1	Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
31.2	Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
32.1	Certification of Chief Executive Officer as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
32.2	Certification of Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

Notes:

(1)	Filed with the SEC as an exhibit to our Registration Statement on Form SB-2 originally filed on August 17, 2006, as amended.
(2)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed June 12, 2007.
(3)	Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed July 30, 2007.
(4)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on September 28, 2007
(5)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed October 12, 2007.
(6)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed February 5, 2008.
(7)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed September 15, 2008.
(8)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed November 18, 2008.
(9)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed December 15, 2008.
(10)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed January 16, 2009.
(11)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed February 26, 2009.
(12)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed March 17, 2009.
(13)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed March 26, 2009.
(14)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed August 17, 2009.

15

SIGNATURES

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

			ROYAL MINES AND MINERALS CORP.
Date:	September 14, 2009	By:	/s/ K. Ian Matheson
			K. IAN MATHESON
			Chief Executive Officer
			(Principal Executive Officer)

Date:	September 14, 2009	By:	/s/ Jason S. Mitchell
			JASON S. MITCHELL
			Chief Financial Officer
			(Principal Accounting Officer)