Infrastructure Materials 10Q 2009 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008

Commission file number 000-52641

SILVER RESERVE CORP.

(Exact name of registrant as specified in its charter)

Delaware		98-0492752
(State of incorporation)		(I.R.S. Employer Identification No.)

1226 White Oaks Blvd., Suite 10A, Oakville, Ontario L6H 2B9

(Address of principal executive offices including zip code)

(905) 845-1073

(Registrant’s telephone number including area code)

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 þ No o

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. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

(Do not check if a smaller reporting company)

Smaller reporting company þ

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

The number of shares of registrant’s common stock outstanding as of September 30, 2008 was 50,900,569.

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

INTERIM FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

CONTENTS

Interim Balance Sheets as of September 30, 2008 and June 30, 2008		3

Interim Statements of Operations for the three months ended September 30, 2008 and September 30, 2007, and for the period from inception to September 30, 2008.		4

Interim Statements of Changes in Stockholders' Equity for the three months ended September 30, 2008 and for the period from inception to September 30, 2008.		5

Interim Statements of Cash Flows for the three months ended September 30, 2008 and September 30, 2007, and for the period from inception to September 30, 2008		6

Condensed Notes to Interim Financial Statements		7 - 19

- 2 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Interim Balance Sheets as at

September 30, 2008 and June 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

	Sept 30,			June 30,
	2008			2008
	$			$
ASSETS
Current
Cash and cash equivalents		3,893,544			1,553,855
Prepaid expenses and other receivables (note 9)		202,648			155,546

Total Current Assets		4,096,192			1,709,401
Plant and Equipment, net (note 5)		1,289,689			1,340,836

Total Assets		5,385,881			3,050,237

LIABILITIES
Current
Accounts payable		258,489			157,516
Accrued liabilities		88,921			192,886

Total Liabilities		347,410			350,402

Commitments and Contingencies (note 9)

STOCKHOLDERS' EQUITY
Capital Stock (note 6)
Class ‘A’ Convertible Preferred stock, $0.0001 par value, 50,000,000 shares authorized, Nil issued and outstanding		-			-
Common stock, $0.0001 par value, 100,000,000 shares authorized, 50,900,569 issued and outstanding		5,090			4,379
Additional Paid-in Capital		14,202,714			10,738,801
Deferred Stock Compensation		(1,031,250	)		(1,312,500	)
Deficit Accumulated During the Exploration Stage		(8,138,083	)		(6,730,845	)

Total Stockholders' Equity		5,038,471			2,699,835

Total Liabilities and Stockholders' Equity		5,385,881			3,050,237

See Condensed notes to the Interim Financial Statements

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SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Interim Statements of Operations

For the three months ended Sept 30, 2008 and Sept 30, 2007 and the Period from Inception (June 3, 1999) to Sept 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

				For the			For the
				three month			three month
	Cumulative			period ended			period ended
	since			Sept 30,			Sept 30,
	inception			2008			2007

	$			$			$

Revenues		-			-			-

Operating Expenses

General and administration		3,210,355			734,360			253,541
Project expenses		4,603,923			631,672			291,951
Amortization		550,194			53,005			62,113

Total Operating Expenses		8,364,472			1,419,037			607,605

Loss from Operations		(8,364,472	)		(1,419,037	)		(607,605	)
Other income-interest		316,842			11,799			39,492

Interest Expense		(90,453	)		-			(17,649	)

Loss before Income Taxes		(8,138,083	)		(1,407,238	)		(585,762	)

Provision for income taxes		-			-			-

Net Loss		(8,138,083	)		(1,407,238	)		(585,762	)

Loss per Weighted Average Number of Shares Outstanding-Basic and Fully Diluted					(0.03	)		(0.02	)

Basic Weighted Average Number of Shares Outstanding During the Periods -Basic and Fully Diluted					48,315,297			34,302,100

See Condensed notes to the Interim Financial Statements

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SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Interim Financial Statements of Changes in Stockholders’ Equity

From Inception (June 3, 1999) to Sept 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

												Deficit
												Accumulated
	Common Stock					Additional			Deferred			during the			Total
	Number					Paid-in			Stock			Exploration			Stockholders'
	of Shares			Amount		Capital			Compensation			Stage			Equity
				$		$			$			$			$

For the period from inception (June 3, 1999) through July 1, 2004		1			-		5,895						(5,895	)		-
Net (loss)		-			-		910						(910	)		-
Balance, June 30, 2005		1			-		6,805			-			(6,805	)		-
Contribution to additional paid-in capital		-			-		3,024									3,024
Cancelled shares		(1	)		-		(1	)								(1	)
Common shares issued for nil consideration		14,360,000			1,436		(1,436	)					-			-
Common shares issued for cash		2,050,000			205		414,795						-			415,000
Subscription for stock							300,000						-			300,000
Stock issuance cost		-			-		(24,500	)					-			(24,500	)
Net loss		-			-		-						(87,574	)		(87,574	)

Balance, June 30, 2006 (audited)		16,410,000			1,641		698,687			-			(94,379	)		605,949
Common shares issued for cash		3,395,739			340		548,595						-			548,935
Common shares issued to agents in lieu of commission for placement of common shares and convertible debentures		1,064,000			106		265,894						-			266,000
Common shares issued for acquisition of interests in mineral claims		3,540,600			354		884,796						-			885,150
Common shares issued for acquisition of interests in mineral claims		1,850,000			185		462,315						-			462,500
Common shares issued for acquisition of interests in a refinery		88,500			9		22,116						-			22,125
Common shares issued for purchase of a mill with capital equipments		6,975,000			697		1,743,053						-			1,743,750
Stock issuance cost							(59,426	)								(59,426	)
Stock based compensation							30,026									30,026
Net loss for the year ended June 30, 2007					-		-						(2,845,424	)		(2,845,424	)

Balance, June 30, 2007 (audited)		33,323,839			3,332		4,596,056			-			(2,939,803	)		1,659,585
Common stock issued to consultants		3,000,000			300		2,249,700			(1,875,000	)		-			375,000
Stock based compensation					-		139,272						-			139,272
Conversion of convertible debentures with accrued interest		7,186,730			719		3,590,801			-			-			3,591,520
Common shares issued for acquisition of interests in mineral claims		175,000			18		104,982									105,000
Common stock issued to a consultant		100,000			10		57,990									58,000
Amortization of deferred stock compensation										562,500						562,500
Net loss for the year													(3,791,042	)		(3,791,042	)
Balance June 30, 2008 (audited)		43,785,569			4,379		10,738,801			(1,312,500	)		(6,730,845	)		2,699,835

Common shares issued for cash (net)		7,040,000			704		3,372,296			-			-			3,373,000
Common stock issued to a consultant		75,000			7		43,493			-			-			43,500
Stock based compensation							48,124									48,124
Amortization of deferred stock compensation										281,250						281,250
Net loss for the three month period													(1,407,238	)		(1,407,238	)
Balance September 30, 2008 (unaudited)		50,900,569			5,090		14,202,714			(1,031,250	)		(8,138,083	)		5,038,471

See Condensed notes to the Interim Financial Statements

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SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Interim Statements of Cash Flows

For the three months ended Sept 30, 2008 and Sept 30, 2007

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

	Cumulative
	Since			Sept 30,			Sept 30,
	Inception			2008			2007
Cash Flows from Operating Activities
Net loss		(8,138,083	)		(1,407,238	)		(585,762	)
Adjustment for:
Amortization		550,194			53,005			62,113
Amortization of debt issuance cost		247,490			-			41,278
Stock based compensation		217,422			48,124			34,084
Shares issued for mineral claims, as part of project expenses		1,452,650			-			-
Shares issued for consultant services expensed		1,320,250			324,750			93,750
Interest on convertible debentures		90,453			-			17,649
Changes in non-cash working capital
Prepaid expenses		(202,648	)		(47,102	)		(54,205	)
Accounts payable		258,489			100,973			(4,041	)
Accrued liabilities		89,362			(103,965	)		(20,489	)

Net cash used in operating activities		(4,114,421	)		(1,031,453	)		(415,623	)

Cash Flows from Investing Activities
Decrease in Short-term investments		-			-			1,124,059
Acquisition of plant and equipment for cash		(76,342	)		(1,858	)		(4,955	)
Proceeds from sale of plant and equipment		2,500

Net cash provided (used) in investing activities		(73,842	)		(1,858	)		1,119,104

Cash Flows from Financing Activities
Issuance of common shares for cash		4,790,740			3,520,000			-
Issuance of convertible debentures subsequently converted to cash		3,501,067			-			-
Stock and debenture placement commissions paid in cash		(210,000	)		(147,000	)		-

Net cash provided by financing activities		8,081,807			3,373,000			-

Net Change in Cash		3,893,544			2,339,689			703,481
Cash- beginning of period		-			1,553,855			2,639,256

Cash - end of period		3,893,544			3,893,544			3,342,737

Supplemental Cash Flow Information
Interest paid		-			-			-

Income taxes paid		-			-			-

See Condensed notes to the Interim Financial Statements

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SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

1.	Basis of Presentation

The accompanying unaudited financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) considered necessary for fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the year ended June 30, 2009. Interim financial statements should be read in conjunction with the company’s annual audited financial statements.

The interim financial statements include the accounts of Silver Reserve Corp. (the “Company”).

2.	Exploration Stage Activities

The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company is in the exploration stage and has not yet realized revenues from its planned operations. The Company has incurred a cumulative loss of $8,138,083 from inception to September 30, 2008. The Company has funded operations through the issuance of capital stock and convertible debentures. In May and June of 2006, the Company closed a private placement of its common stock for gross proceeds of $415,000. During the year ended June 30, 2007 the Company raised $848,935 (including $300,000 received in prior year as stock subscription) through private placement of its common stock for cash. The Company also issued Convertible Debentures in the amount of $1,020,862 during the year ended June 30, 2006 and issued Convertible Debentures in the amount of $2,480,205 during the year ended June 30, 2007. During the three-month period ended September 30, 2008 the Company completed private placements of common stock for proceeds of $3,373,000 net of cash expenses. Management's plan is to continue raising additional funds through future equity or debt financing until it achieves profitable operations from silver extraction on its properties, if feasible.

- 7 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

3.	Nature of Operations

Silver Reserve Corp. (the "Company"), was incorporated on June 3, 1999 as 54836 Corporation under the laws of the State of Delaware. On April 10, 2006, 54836 Corporation changed its name to Silver Reserve Corp. The Company operates with the intent of exploration and extraction of silver and other metals in the state of Nevada.

The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property payments are capitalized only if the Company is able to allocate any economic value beyond proven and probable reserves. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property will be capitalized. For the purpose of preparing financial information, the Company is unable to allocate any economic value beyond proven and probable reserves and hence all property payments are considered to be impaired and accordingly written off to project expense. All costs associated with a property that has the potential to add to the Company’s proven and probable reserves are expensed until a final feasibility study demonstrating the existence of proven and probable reserves is completed. No costs have been capitalized in the periods covered by these financial statements. Once capitalized, such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.

Mineral property acquisition costs will also be capitalized in accordance with the FASB Emerging Issues Task Force ("EITF") Issue 04-2 when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and that adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property payments are expensed as incurred if the criteria for capitalization is not met.

To date, mineral property exploration costs have been expensed as incurred. As of the date of these financial statements, the Company has incurred only property payments and exploration costs which have been expensed. To date the Company has not established any proven or probable reserves on its mineral properties.

- 8 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

4.	Plant and Equipment, Net

Plant and equipment are recorded at cost less accumulated depreciation. Depreciation is provided commencing in the month following acquisition using the following annual rate and method:

Computer equipment	30%	declining balance method
Office furniture and fixtures	20%	declining balance method
Leasehold improvements	3 years	straight line method
Plant and Machinery	15%	declining balance method
Tools	25%	declining balance method
Vehicles	20%	declining balance method
Consumables	50%	declining balance method
Molds	30%	declining balance method
Mobile Equipment	20%	declining balance method
Factory Buildings	5%	declining balance method

	September 30, 2008				June 30, 2008
			Accumulated				Accumulated
	Cost		Depreciation		Cost		Depreciation
	$		$		$		$

Office, furniture and fixtures		18,325		6,625		17,573		6,036
Computer equipment		6,571		2,383		6,408		2,049
Leasehold improvements		16,230		10,758		16,230		9,405
Plant and Machinery		1,514,511		430,101		1,514,511		387,851
Tools		6,724		2,410		5,781		2,186
Vehicles		63,481		15,112		63,481		12,566
Consumables		64,197		47,814		64,197		45,473
Molds		900		463		900		427
Mobile Equipment		73,927		26,803		73,927		24,323
Factory Buildings		74,849		7,557		74,849		6,705

		1,839,715		550,026		1,837,857		497,021

Net carrying amount				1,289,689				1,340,836
Amortization charges				53,005				249,842

- 9 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

5.	Convertible Debentures

During the year ended June 30, 2007 the Company issued convertible debentures for a total of $2,480,205. During the quarter ended December 31, 2007, all holders of the Company’s convertible debentures exercised their conversion rights. Under the terms of the convertible debentures, the holders converted the principal amount of their convertible debentures into “units” at $0.50 per unit, where each unit consisted of a share of the Company’s common stock (a “Share”) and a warrant to purchase a Share at a purchase price of $0.75 per Share. An aggregate of 7,002,134 Shares and an aggregate of 7,002,134 Share purchase warrants were issued upon conversion of the principal amount.

The convertible debentures had a maturity of December 31, 2007 and an interest rate of 2% per annum. Pursuant to the terms of the convertible debentures, the Company had the option of paying interest in shares or in cash. The Company elected to pay interest in shares, which were restricted upon issuance. An aggregate of 184,596 Shares were issued upon the conversion of the convertible debentures as payment of interest converted at one share for each $0.49 of interest.

The Shares issued upon conversion of the convertible debentures and the Shares underlying the warrants are subject to a lock-up agreement limiting their resale. Up to 25% of the shares may be re-sold when a Registration Statement on Form SB-2 became effective on April 24, 2007 (the “Date of Effectiveness”), 25% may be re-sold six months from the Date of Effectiveness, 25% may be re-sold twelve months from the Date of Effectiveness and 25% may be re-sold eighteen months from the date of effectiveness. With respect to Shares issued upon exercise of the warrants, pursuant to the lock-up agreement 50% of the Shares received on exercise of the warrants will be free trading with the remaining 50% to become free trading six months following the exercise of the warrants.

- 10 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

6.	Issuance of common shares and warrants

Year ended June 30, 2008

Effective as of September 1, 2007, the Company entered into an agreement with Brehnam Trading Corp. (“Brehnam”) for a term of 24 months to provide consulting services on financial matters, business growth and development, and general business matters. The Company will pay Brehnam 1,500,000 restricted Shares to be earned in equal installments of 375,000 shares on December 1, 2007, June 1, 2008, December 1, 2008 and June 1, 2009. The said 1,500,000 Shares were tendered in one certificate upon execution of the agreement and Brehnam is deemed to have possession of all of the Shares. The consultant must return any unearned Shares if the agreement is terminated early.

Effective as of September 1, 2007, the Company entered into an agreement with Costa View Inc. (“Costa”) for a term of 24 months to provide consulting services on financial public relations, business promotion, business growth and development, including mergers and acquisitions, and general business matters. The Company will pay Costa 1,500,000 restricted Shares to be earned in equal installments of 375,000 Shares on December 1, 2007, June 1, 2008, December 1, 2008 and June 1, 2009. The said 1,500,000 Shares were tendered in one certificate upon execution of the agreement and Costa is deemed to have possession of all of the Shares. The consultant must return any unearned Shares if the agreement is terminated early.

During the three month period ended December 31, 2007, all holders of the Company’s convertible debentures exercised their conversion rights. Under the terms of the convertible debentures, the holders converted the principal amount of their convertible debentures into “units” at $0.50 per unit, where each unit consisted of a Share and a warrant to purchase a Share at a purchase price of $0.75 per Share. An aggregate of 7,002,134 Shares and an aggregate of 7,002,134 share purchase warrants were issued upon conversion of the principal amount.

The convertible debentures had a maturity of December 31, 2007 and an interest rate of 2% per annum. Pursuant to the terms of the convertible debentures, the Company had the option of paying interest in Shares or in cash. The Company elected to pay interest in Shares, which were restricted upon issuance. An aggregate of 184,596 shares were issued upon the conversion of the convertible debentures as payment of interest converted at one Share for each $0.49 of interest.

The Company entered into an asset purchase agreement with Roger Hall, effective as of February 15, 2008, to acquire a 100% interest in certain mineral claims located in Nye County, Nevada that are owned by Mr. Hall. Upon closing of the Agreement, the Company issued to Mr. Hall 175,000 shares of the Company’s common stock valued at $105,000 and paid him $5,000 as consideration for the mineral claims. Mr. Hall is the Company’s Chief Operating Officer and a member of its Board of Directors. The Agreement was approved by the disinterested members of the Company’s board of directors. The Company does not consider the claims purchased to be material assets at this time and expensed this cost to project expense. The Company’s assessment may change after exploration of the claims.

- 11 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

6.	Issuance of common shares and warrants-cont’d

On March 12, 2008 the Company entered into an agreement effective as of March 3, 2008, with Endeavor Holdings, Inc. (“Endeavor”) pursuant to which Endeavor was retained to provide general marketing and business consulting services to the Company for a period of 12 months. Under the terms of the agreement, the Company is required to issue to Endeavor 25,000 shares of restricted common stock and $5,000 each month during the term of the agreement. The Company issued 100,000 restricted common shares valued at $58,000 prior to June 30, 2008.

Three month period ended September 30, 2008

On August 22, 2008, the Company completed private placements of Units at $0.50 per Unit from accredited investors for 7,040,000 Units. Each Unit consists of One Common Share and one half a common share purchase warrant. Each full warrant entitles the holder to purchase one common share at $0.75 on or before September 1, 2010. The private placement was conducted entirely outside the United States pursuant to an exemption from registration under the Securities Act of 1933, as amended, provided by Regulation S (“Regulation S”). All of the investors were non-U.S. Persons. The Company paid a commission of $147,000 and issued 294,000 broker warrants to purchase Units at $0.50 per Unit in connection with the private placement. The Units have the same terms as those sold to investors.

The Company issued 25,000 common shares to Endeavor Holdings on each of July 1, August 1 and September 1 of 2008 for a total of 75,000 common shares valued at $43,500 in accordance with the terms of the contract that became effective March 3, 2008

Warrants

During the year ended June 30, 2007, the Company issued broker warrants to purchase convertible debentures as part of the commission due the agents who placed the offering of common shares and convertible debentures. These warrants represented an amount equal to 10% of the convertible debentures placed.

The Company issued 700,214 warrants at an exercise price of $0.50. The expiry dates of the above listed broker warrants was originally June 30, 2007 and was extended to December 31, 2007 and were further extended to December 31, 2008 from December 31, 2007 by resolution of the Board of Directors on November 21, 2007. Further the Board of Directors by a resolution on June 18, 2008, extended the expiry of these warrants till December 31, 2009.

During the year ended June 30, 2008, all holders of the Company’s convertible debentures exercised their conversion rights. Under the terms of the convertible debentures, the holders converted the principal amount of their convertible debentures into “units” at $0.50 per unit, where each unit consisted of a Share and a warrant to purchase a Share at a purchase price of $0.75 per Share. An aggregate of 7,002,134 Shares and an aggregate of 7,002,134 share purchase warrants were issued upon conversion of the principal amount. The expiry dates of these warrants were extended to December 31, 2009 by a resolution of the Board of Directors on June 18, 2008.

- 12 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

6.	Issuance of common shares and warrants-cont’d

Warrants

Three month period ended September 30, 2008

On August 22, 2008, the Company completed the private placements of 7,040,000 “Units” at $0.50 per Unit with accredited investors. Each one Unit consists of one common share and one half a common share purchase warrant. Each full warrant entitles the holder to purchase one common share at $0.75 on or before September 1, 2010. The private placement was conducted entirely outside the United States pursuant to an exemption from registration under Regulation S. All of the investors were non-U.S. Persons and executed subscription agreements containing the representations and covenants required for the exemption under Regulation S. The Company paid a commission of $147,000 and issued 294,000 broker warrants to purchase Units at $0.50 per Unit in connection with the private placement. The Units have the same terms as those sold to investors.

7.	Stock Based Compensation

In April of 2006, the Board of Directors approved an employee stock option plan ("2006 Stock Option Plan"), the purpose of which is to enhance the Company's stockholder value and financial performance by attracting, retaining and motivating the Company's officers, directors, key employees, consultants and its affiliates and to encourage stock ownership by such individuals by providing them with a means to acquire a proprietary interest in the Company's success through stock ownership. Under the 2006 Stock Option Plan, officers, directors, employees and consultants who provide services to the Company may be granted options to acquire common shares of the Company at not less than 110 percent of the fair market value of the stock on the date of grant. Options will have a term of 10 years. The total number of shares reserved for issuance under the 2006 Stock Option Plan is 5,000,000.

The expected term calculation is based upon the expected term the option is to be held, which is the full term of the option. The risk-free interest rate is based upon the U.S. Treasury yield in effect at the time of grant for an instrument with a maturity that is commensurate with the expected term of the stock options. The dividend yield of zero is based on the fact that we have never paid cash dividends on our common stock and we have no present intention to pay cash dividends. The expected forfeiture rate of 0% is based on the vesting of stock options in a short period of time.

Three months ended September 30, 2008

On August 7, 2008, the Board granted stock options to Kim Fraser to purchase 50,000 common shares each at an exercise price of $0.46 per share and for a term of 5 years. These options were granted in accordance with the terms of the Company’s 2006 Stock Option Plan and shall vest at the rate of 1/12 each month until fully vested. On September 12, 2008 the Company cancelled the unvested options.

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SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

7.	Stock Based Compensation-Cont’d

On April 2, 2008 the Board had granted options to two newly appointed officers to purchase 200,000 common shares each at an exercise price of $0.35 per share. These options were granted in accordance with the terms of the Company’s 2006 Stock Option Plan and vest at the rate of 1/12 each month until fully vested. Due to the resignation of one officer on July 31, 2008, the unvested options were forfeited.

For the three month period ended September 30, 2008, the Company recognized in the financial statements, stock-based compensation costs as per the following details. The fair value of each option used for the purpose of estimating the stock compensation is based on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:

	24-Jan			2-Apr			23-Jun			7-Aug
	2008			2008			2008			2008			Total

Risk free rate		5.0	%		5.0	%		5.0	%		5.0	%
Volatility factor		50	%		90.86	%		111.64	%		112.99	%
Expected dividends		0	%		0	%		0	%		0	%		-
Forfeiture rate		0	%		0	%		0	%		0	%		-
Expected life		5 years			5 years			5 years			5 years			-
Exercise price	$	0.60		$	0.35		$	0.52		$	0.46			-
Total number of options granted		50,000			400,000			250,000			50,000			750,000
Grant date fair value	$	0.29			0.25			0.42			0.38			-
Total number of options forfeited					(150,000	)					(45,833	)		(195,833	)
Stock-based compensation cost expensed during the three month period ended Sept 30, 2008	$	3,668		$	16,892		$	26,000		$	1,564		$	48,124
Unexpended Stock -based compensation cost deferred over the vesting period	$	4,586		$	25,337		$	77,131					$	107,054

As of September 30, 2008, there was $107,054 of unrecognized expenses related to non-vested stock-based compensation arrangements granted. The stock-based compensation expense for the three-month period ended September 30, 2008 was $48,124.

8.	Deferred Stock Compensation

The Company issued 1,500,000 restricted common shares each to two consultants, for a total of 3,000,000 common shares valued at $2,250,000. The Company expensed proportionate consulting expenses of $937,500 during the year ended June 30, 2008 and $281,250 during the three month period ended September 30, 2008 and the balance of $1,031,250 is reflected as a deferred stock compensation expense under shareholders’ equity in the balance sheet.

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SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

9.	Commitments and Contingencies

On August 20, 2008 the Company terminated the Option Agreement on the Como Claim Group entered into on August 21, 2006 and entered into a new agreement with the Optionee covering 87 mineral claims included in the original option. In the new agreement, the Company paid for the annual sustaining fees on 12 claims optioned in the original August 21, 2006 agreement and granted the Optionee a 1% NSR royalty on the 87 claims covered by the new agreement.

Effective as of September 1, 2007, the Company entered into an agreement with Brehnam Trading Corp. (“Brehnam”) for a term of 24 months to provide consulting services on financial matters, business growth and development, and general business matters. The Company will pay Brehnam 1,500,000 restricted Shares to be earned in equal installments of 375,000 shares on December 1, 2007, June 1, 2008, December 1, 2008 and June 1, 2009. The said 1,500,000 Shares were tendered in one certificate upon execution of the agreement and are deemed to be in Brenham’s possession. The consultant must return any unearned Shares if the agreement is terminated early.

Effective as of September 1, 2007, the Company entered into an agreement with Costa View Inc. (“Costa”) for a term of 24 months to provide consulting services on financial public relations, business promotion, business growth and development, including mergers and acquisitions, and general business matters. The Company will pay Costa 1,500,000 restricted Shares to be earned in equal installments of 375,000 shares on December 1, 2007, June 1, 2008, December 1, 2008 and June 1, 2009. The said 1,500,000 Shares were tendered in one certificate upon execution of the agreement and are deemed to be in Costa View’s possession. The consultant must return any unearned Shares if the agreement is terminated early.

On September 14, 2007 the Company accepted a proposal from Lumos & Associates to complete the regulatory permitting process for the Company’s Mill in Mina, Nevada. The total consideration to be paid under the contract is approximately $350,000. The permitting process will be carried out in twelve stages over the next three years. The Company is required to authorize in writing each stage of the work before the work proceeds.

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SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

9.	Commitments and Contingencies-Cont’d

On January 14, 2008, the Company entered into a Letter Agreement with Frank and Kelly Jo Eagan (the “Eagans”) of Goldfield, Nevada, to purchase two (2) unpatented mining claims in the Red Mountain Mining District, situated in Esmeralda County, Nevada for a purchase price of $23,000. The Eagans retained access to the property for two years, to enable them to remove any personal property. These two claims are known as “Tattoo Me” and “Tattoo U” and are located inside the boundary of the Silver Queen claim group. These claims include the former producing Mohawk Mine. As of the date of this Report, the Company does not consider these claims material.

On February 21, 2008, the Company entered into a Drilling Agreement with Hansen Drilling, Inc. to perform drilling on the Pansy Lee Claims site at agreed rates for work to be performed.

On April 4, 2008, the Company entered into a Consultant Agreement with Lumos and Associates, to facilitate completing an exploration drilling “Notice of Intent” and plan of operation in compliance with the requirements of the United States Bureau of Land Management. The Company estimates the costs of each Notice of Intent plan to range from $3,000 to $4,000.

On April 8, 2008, the Company entered into a Drilling Agreement with W. R. Hansen, Contractor, to perform drilling on various locations in Nevada at a rate of $300 per hour for work to be performed beginning in May of 2008.

Effective April 30, 2008, the Consulting Agreement between the Company and Medallion Capital Corp., was terminated.

The Company entered into a one year renewable contract with Lance Capital Ltd. for consulting and corporate administrative services commencing as of May 1, 2008, at a rate of $12,500 per month.

- 16 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

On May 20, 2008, the Company entered into an option agreement (the “Option Agreement”) with Nevada Eagle Resources, LLC and Steve Sutherland (together, the “Optionees”) effective as of May 1, 2008 (the “Date of Closing”), to acquire 25 mineral claims located in Elko County, Nevada and known as the “Medicine Claims.” During the term of the Option Agreement, the Company has the exclusive right to explore and develop, if warranted, the Medicine Claims. The Company paid $10,000 to the Optionees upon execution of the Option Agreement. The Option Agreement requires the Company to make additional payments as follows: $15,000 on the first anniversary of the Date of Closing, $30,000 on the second anniversary of the Date of Closing, $60,000 on the third anniversary of the Date of Closing and $80,000 on each anniversary of the Date of Closing thereafter until the tenth anniversary of the Date of Closing. The Optionees may elect to receive payment in cash or in shares of the Company’s common stock. Upon making the final payment on the tenth anniversary of the Date of Closing, the Company will have earned a 100% undivided interest in the Medicine Claims. Pursuant to the Option Agreement, the Medicine Claims are subject to a 3% net smelter return (“NSR”) royalty payable to the Optionees. The payments made during the term of the Option Agreement are to be applied as advance NSR royalty payments. Beginning on the eleventh anniversary of the Date of Closing, the Company is required to make annual advance royalty payments of $80,000. At such time as the Medicine Claims are in production, if ever, the Company shall make annual royalty payments equal to the greater of the actual 3% NSR or $80,000. The Company may terminate the Option Agreement at any time before the option is fully exercised upon 60 days notice to the Optionees. The Company does not consider the Medicine Claims to be material assets at this time; however this assessment may change upon further exploration.

Effective June 1, 2008, the Company entered into a consulting contract with a geologist expiring December 31, 2008. The contract will be automatically renewed after December 31, 2008, subject to any mutually agreed changes in the hourly fees for services, unless terminated by either party. The Company will compensate at the rate of $200 per day for the first 30 days, $225 per day during days 30 to 90 days and $275 per day during days 90 to December 31, 2008.

Effective as of June 23, 2008, the Company appointed Mason Douglas as the President of the Company. Mr. Douglas is also a director of the Company. In connection with the appointment, the Company entered into a consulting services agreement with a corporation that is controlled by Mr. Douglas. The Consulting Agreement has a term of one year and is then automatically renewable. Either party may terminate the Consulting Agreement upon 90 days notice to the other party. During the term of the Consulting Agreement the Company will pay the corporation a fee of $8,500 per month. The Company’s board of directors will review the performance of Mr. Douglas at six-month intervals and may adjust compensation based upon said reviews.

- 17 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

9. Commitments and Contingencies-Cont’d

The Company executed a contract (the “Drilling Contract”) with Christiansen Drilling, Inc. (“Christiansen”) a Nevada corporation, on June 27, 2008 (effective as of June 24, 2008), pursuant to which Christiansen was retained by the Company to conduct drilling projects on the Company’s mineral claims. The services Christiansen will provide under the Drilling Contract include: reverse circulation drilling with a three man crew at a rate of $500.00 per hour, equipment mobilization and demobilization at a rate of $150 per hour, grading and site preparation at a rate of $150 per hour, the procurement of drilling materials at cost plus 10%, and hole plugging(s), if needed, at a rate of $350 per hour plus material cost. Upon execution of the Drilling Contract the Company advanced $50,000 to be credited against future invoices submitted for various drill programs.

Effective August 11, 2008, the Company entered into a Letter of Intent to acquire all of the capital stock of Infrastructure Materials Corp US (“Infrastructure US”), a Nevada corporation. Infrastructure US holds all the capital stock of Infrastructure Materials Corp. Canada, an Alberta corporation. The purchase price for all of the capital stock of Infrastructure US would be the issuance at closing of 1,500,000 common shares of Silver Reserve. Infrastructure US, together with its Canadian subsidiary, holds limestone mineral properties in the United States and Canada. The Company, after conducting its due diligence, rejected acquiring the Canadian subsidiary of Infrastructure US and completed the purchase of Infrastructure US only, as described in Subsequent Events. See Footnote 11 - Subsequent Events.

10. Related Party Transactions

Three months ended September 30, 2008

Roger Hall, a Director of the Company, received $56,316 in connection with services he performed for the Company as a senior geologist.

Janet Shuttleworth, Treasurer and Corporate Secretary, was paid $14,585.

Joanne Hughes, Corporate Secretary, received $4,110 from July 1, 2008 to July 30, 2008 (date of resignation).

Mason Douglas, President, was paid $25,500.

On April 2, 2008 the Board granted had granted options to two newly appointed officers to purchase 200,000 common shares each at an exercise price of $0.35 per share. These options were granted in accordance with the terms of the Company’s 2006 Stock Option Plan and vest at the rate of 1/12 each month until fully vested. The options granted are for a term of 5 years. Due to the resignation of one officer, the unvested options were forfeited.

The Company expensed stock based compensation cost for $16,892 during the three month period ended September 30, 2008.

On June 23, 2008 the Board granted options to the newly appointed President to purchase 250,000 common shares at an exercise price of $0.52 per share. These options were granted in accordance with the terms of the Company’s 2006 Stock Option Plan and vest at the rate of 1/12 each month until fully vested.

- 18 -

SILVER RESERVE CORP.

(AN EXPLORATION STAGE MINING COMPANY)

Condensed Notes to Interim Financial Statements

September 30, 2008

(Amounts expressed in US Dollars)

(Unaudited-Prepared by Management)

The options granted are for a term of 5 years. The Company expensed stock based compensation cost for $26,000 during the three month period ended September 30, 2008.

11. Subsequent Events

Effective as of October 1, 2008 the Company terminated its contract with Endeavor Holdings, Inc. (“Endeavor”). The Company had an agreement with Endeavor that was effective as of March 3, 2008, pursuant to which Endeavor was retained to provide general marketing and business consulting services to the Company for a period of 12 months. Under the terms of the agreement, the Company was required to issue to Endeavor 25,000 shares of restricted common stock and $5,000 each month during the term of the agreement.

On November 7, 2008, the Company closed a Share Exchange Agreement to acquire all of the shares of Infrastructure Materials Corp. US (Infrastructure) from Todd Montgomery, a director and the CEO of the Company. As a result, Infrastructure became a wholly owned subsidiary of the Company. Under the terms of the Share Exchange Agreement, Mr. Montgomery received 397,024 common shares of the Company valued at $0.50 per share in exchange for all of the outstanding shares of Infrastructure. The shares issued by the Company represent a dollar value of $198,512. That amount was equal to Mr. Montgomery’s actual out-of-pocket expenditures for the incorporation of the Infrastructure and the cost of assembling the limestone properties owned by Infrastructure. The Agreement was preceded by a Letter of Intent entered into on August 11, 2008.

- 19 -

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATION

FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2008

PLAN OF OPERATIONS

We will require additional capital to implement development of our claim groups and to bring the mill and refinery to operation. We expect to raise this capital through a public offering, private placements of our securities or through loans or some combination of the foregoing.

Discussion of Operations & Financial Condition

Three Month Period ended September 30, 2008

Silver Reserve Corporation has no source of revenue and we continue to operate at a loss. We expect our operating losses to continue for so long as we remain in an exploration stage and perhaps thereafter. As at September 30, 2008, we had accumulated losses of $8,138,083. Our ability to emerge from the exploration stage and conduct mining operations is dependent, in large part, upon our raising additional equity financing.

As described in greater detail below, the Company’s major endeavor over the three months ended September 30, 2008 has been its effort to pursue exploration activities on its key Projects.

We have continued to raise capital and are moving forward with development of the Company. We have completed the evaluation of all 15 of our Projects and determined that the Pansy Lee, Medicine and Silver Queen Projects provide the best opportunity for development of resources that could go to production. Work is proceeding on these three Projects. We are progressing towards permitting of the Red Rock mill site at Mina, Nevada.

The Company continues to look for opportunities to develop other mineral deposits of commodities in high demand or anticipated high demand. We believe that the state and federal governments in the United States will embark on major infrastructure expenditures in the next 10 years creating a demand for cement that exceeds the current sources of supply. Cement is made from limestone and we believe acquisitions in this area have significant potential.

On August 12, 2008, Silver Reserve announced that it entered into a non-binding letter of intent (the “LOI”) dated as of August 12, 2008 to acquire, as a wholly-owned subsidiary, Infrastructure Materials Corp. US (“Infrastructure US”), a Nevada corporation, that held all of the outstanding capital stock of Infrastructure Materials Corp. Canada, an Alberta (Canada) corporation (“Infrastructure Canada”). Infrastructure US holds limestone mineral properties in the United States, and is actively engaged in acquiring additional limestone mineral properties. Todd Montgomery, the Company’s Chief Executive Officer, is the sole shareholder of Infrastructure US and a member of its board of directors. The transaction contemplated in the LOI was contingent upon Silver Reserve’s due diligence review and the negotiation and execution of a definitive stock exchange agreement. Subsequent to the period covered by this report, the Company acquired Infrastructure US as of November 7, 2007. Just prior to such acquisition and as a condition of closing Infrastructure US divested its interest in Infrastructure Canada. See “Subsequent Events” below for more information.

- 20 -

Readers in the United States are cautioned that with respect to the following disclosure related to mineral properties, the term, “resource” is not a term that is recognized by SEC guidelines for disclosure of mineral properties. Generally, “resource” estimates of mineralized material do not rise to the level of certainty required by SEC guidelines. The Company has no “reserves” as that term is used in the mining industry.

Key Property Location and Description

Pansy Lee Claim Group

The Pansy Lee Claim Group consists of 30 mineral claims located in Humboldt County, Nevada, approximately eight miles northwest of Winnemucca, Nevada.

The Pansy Lee claims are accessible by road from Winnemucca, Nevada. A graded dirt road runs northwesterly for a distance of 12 miles to the property which lies at elevations ranging from 4600 feet to 5200 feet.

A substantial amount of underground work has been done on the Pansy Lee Claims, as much as 910 feet below surface with over 6000 feet of horizontal tunneling on several levels. A mine was operated at the Pansy Lee claim site from 1937 to 1942. Further production occurred in 1964 and 1974. Work was undertaken again in 1981 and 1982. Much of our information about the Pansy Lee Claim Group was obtained from publicly available reports and articles concerning prior exploration of the site by other parties. A report by Hendrickson and Cazat, prepared in 1982, reported 151,300 tons of proven and possible ore with an average grade of 17.46 oz per ton silver and .218 oz per ton gold. This information is publicly available and may not be reliable. Hendrickson updated the report in 1986, increasing the estimated minable mineral material to 73,800 tons with average grades of 0.218 ounces gold per ton and 17.48 ounces silver per ton for recoverable ounces of 14,480 gold and 1,159,700 silver. The Company has not confirmed the results contained in these reports.

The Company plans to carry out research and work to obtain its own data. Three core holes were drilled and completed to depths of 800 feet on angle below the existing workings. It appears the ‘Swede’ vein was encountered in all three holes. The core has been logged and cutting is complete on Hole #1 and select portions of Hole #2 and #3 will be cut and sent for assay.

Silver Queen Claim Group

The Silver Queen Claim Group consists of 147 mineral claims located in Esmeralda County, Nevada, approximately nine miles west of Silver Peak, Nevada on Highway 47.

The Silver Queen claims are accessible from the town of Silver Peak, Nevada. The claims lie at elevations ranging from 7,800 feet to 9,012 feet and are located in the Red Mountain District. The Silver Queen Claim Group covers a northerly-trending group of silver deposits that include the Silver Queen and Mohawk mines. The deposits located in the Red Mountain district were first discovered in 1907. In 1920 a producing mine was constructed and production continued through the late 1950’s. Based upon publicly available records, the ore produced from this mine averaged 20-25 ounces of silver per ton. The Company has not confirmed the results contained in these reports.

- 21 -

A limited drill program was completed on a new surface anomalies noted during grid sampling. Four reverse circulation holes were drilled to depth of 400 to 500 feet vertically. Further surface sampling indicates that the anomaly is much larger than initially indicated and further drilling to the west is warranted. Three reverse circulation drill holes were completed on the Mohawk vein target with 2 holes, MRO1 and 3, intercepting the vein itself, MRO2 was lost in a 40 foot void which was not on the underground workings maps we have in hand. Two core holes we drilled with MOC 1 encountering and going through the vein system. MOC2 was lost in broken material about 175 above the vein intercept. All the reverse circulation drill holes are in the assay lab and the one core hole vein intercept is also in the assay lab.

Silver Reserve has obtained from public records, a 1982 report on the Mohawk Mine located within the Company’s Silver Queen Project that was prepared for a prior owner of the property. Silver Reserve has not confirmed any of the findings in the report and cannot comment of the qualifications of its authors. The report states that 52,167 tons of probably and possible mineralized material grading an average of 13.4 ounces per ton of silver (699,000 ounces silver) remains unmined in the mine workings. The report estimates extraction, after mining losses, totaling 40,071 tons of probably and possible mineralized material grading 13.3 ounces per ton silver (532,900 ounces silver). In the opinion of the authors of the report, there is great potential for finding additional tons of mineralized material. Four major exploration targets with good potential within the claim group and separate from the Mohawk vein occurrence are documented in the report. These targets, combined, have over 4,000 feet of vein strike length open to exploration and could contain several major ore bodies, according to the report.

Medicine Claim Group

The Medicine Claim Group consists of 25 unpatented claims and the company has staked an additional 124 contiguous claims located in Elko County, Nevada, covering the extension of the mineralized zone not covered by previous operation.

The mineralized zone appears to continue to the north and south as well as to depth offering potential for substantial expansion of the drill indicated mineralization. As mineralization comes to the surface, there is potential for open pit mining. We are currently carrying out a drilling program, to determine the extent of the mineralization zone.

A technical report prepared by Edward P. Jucevic PE for a prior operator of the Medicine Claim Group and dated March 9, 2001, stated the following. The Company has not confirmed these statements.

"The Medicine property contains a drill-indicated resource defined by approximately 70 drill holes. The resource estimate was calculated by previous workers at US Mineral Exploration and includes 350,000 tons grading 2.3 ounces per ton silver. The resource covers an area roughly 200 feet wide and 600 feet long. Average depth of drilling has only followed the zone down to ± 100 feet. Wide spaced drilling outside of the area of the resource has encountered significant values of lead, zinc and silver metals.

- 22 -

Mineralization consists of barite-silver-lead-zinc along high angle structures and within bleached and sanded limestone. Although lead and zinc values were only assayed for part of the holes, barite, lead and silver appear to correlate well. Zinc values are often associated with the other metals, but are also zones stratagraphically beneath the silver-lead zone. The zinc zone can be as thick as 50 feet and average +5%. Zinc values to 11.5% have been obtained from ten-foot intervals in drilling. Lead values average 3% over 10 to 40 foot thick zones. Lead values to 8% have been obtained from 10 foot intervals in drilling. Barite averages 12% throughout the mineralized zones but can attain 35% in individual intervals. Silver averages 2.3 ounces per ton with individual five foot assays carrying up to 26 ounces per ton."

As of the date of this report a Phase One drill program of 15 holes has been completed, testing the extension of the expansion of the drill indicated resource. Results will be announced as available.

SELECTED INFORMATION

	Three months ended			Three months ended
	September 30, 2008			September, 30, 2007

Revenues	$	Nil		$	Nil
Net Loss	$	1,407,238		$	585,762
Loss per share-basic and diluted	$	(0.03	)	$	(0.02	)

	As at		As at
	September 30, 2008		June 30, 2008

Total Assets	$	5,385,881	$	3,050,237
Total Liabilities	$	347,410	$	350,402
Cash dividends declared per share		Nil		Nil

The total assets as of September 30, 2008 include cash and cash equivalents for $3,893,544, prepaid expenses for $202,648 and capital assets for $1,289,689. As of June 30, 2008 total assets include cash and cash equivalents for $1,553,855, prepaid expenses and other receivables for $155,546 and capital assets for $1,340,836.

Revenues

No revenue was generated by the Company’s operations during the three-month periods ended September 30, 2008 and September 30, 2007.

- 23 -

Net Loss

The Company’s expenses are reflected in the Statements of Operation under the category of Operating Expenses.

The significant components of expense that have contributed to the total operating expense are discussed as follows:

(a) General and Administrative Expense

Included in operating expenses for the three-month period ended September 30, 2008 is general and administrative expense of $734,360, as compared with $253,541 for the three-month period ended September 30, 2007. General and administrative expense represents approximately 52% of the total operating expense for the three-month period ended September 30, 2008 and approximately 42 % of the total operating expense for the three-month period ended September 30,, 2007. General and administrative expense represents professional, consulting, office and general and other miscellaneous costs incurred during the three month periods ended September 30, 2008 and September 30, 2007. General and administrative expense increased by $480,819 in the current three month period, as compared to the similar three month period for the prior year. The increase in this expense is mainly due to non-cash expense relating to issue of stock to consultants for $324,750 (prior period $93,750), non-cash expense relating to stock based compensation for $48,124 (prior period $34,084) and due diligence costs of $107,144 (prior period $nil) relating to the proposed acquisition of Infrastructure Materials Corp. US (“Infrastructure US”), a Nevada corporation

(b) Project Expense

Included in operating expenses for the three-month period ended September 30, 2008 is project expense of $631,672 as compared with $291,951 for the three-month period ended September 30, 2007. Project expense is a significant expense and it represents approximately 44% of the total operating expense for the three-month period ended September 30, 2008 and approximately 48% of the total operating expense for the three-month period ended September 30, 2007. The increase in expense is due to the Company incurring additional costs on exploration of its properties.

- 24 -

Liquidity and Capital Resources

The following table summarizes the Company’s cash flow and cash in hand for the three-month period:

	September 30, 2008			September 30, 2007

Cash and cash equivalent	$	3,893,544		$	3,342,737
Working capital	$	3,748,782		$	1,819,564
Cash used in operating activities	$	(1,031,453	)	$	(415,623	)
Cash provided (used) in investing activities	$	(1,858	)	$	1,119,104
Cash provided by financing activities	$	3,373,000		$	Nil

As at September 30, 2008 the Company had working capital of $3,748,782 as compared to $1,819,564 as of September 30, 2007. The reason for increase in working capital is the raising of cash for $3,373,000 (net) through the issue of common shares during the three month period ended September 30, 2008.

Subsequent Events

On November 7, 2008, the Company closed a “Share Exchange Agreement” pursuant to which it acquired all of the issued and outstanding shares of Infrastructure Materials Corp. US (“Infrastructure US"), a Nevada corporation owning limestone mineral properties in the U.S.. Todd Montgomery, a director and CEO of the Company, is Infrastructure’s sole shareholder and member of its board of directors.. As a result, Infrastructure became a wholly owned subsidiary of the Company. Under the terms of the Share Exchange Agreement, Mr. Montgomery received 397,024 common shares of the Company valued at $0.50 per share in exchange for all of the outstanding shares of Infrastructure. The shares issued by the Company represent a dollar value of $198,512. That amount was equal to Mr. Montgomery’s actual out-of-pocket expenditures for the incorporation of the Infrastructure and the cost of assembling the limestone properties owned by Infrastructure. The Agreement was preceded by a Letter of Intent entered into on August 11, 2008, which included a Canadian subsidiary of Infrastructure. The Company, after conducting a due diligence review, rejected acquiring the Canadian subsidiary of Infrastructure. Infrastructure subsequently divested its interest in the Canadian subsidiary prior to the consummation of the Share Exchange Agreement. As of the date of this report, the Company does not consider the mineral claims acquired pursuant to the Share Exchange Agreement material. Our assessment may change after exploration of the claims.

- 25 -

Off-Balance Sheet Arrangement

The Company had no off- balance sheet arrangement as of September 30, 2008 and September 30, 2007.

Contractual Obligations and Commercial Commitments

Effective as of September 1, 2007, the Company entered into an agreement with Brehnam Trading Corp. (“Brehnam”) for a term of 24 months to provide consulting services on financial matters, business growth and development, and general business matters. The Company will pay Brehnam 1,500,000 restricted Shares to be earned in equal installments of 375,000 shares on December 1, 2007, June 1, 2008, December 1, 2008 and June 1, 2009. The said 1,500,000 Shares were tendered in one certificate upon execution of the agreement and are deemed to be in Brenham’s possession. The consultant must return any unearned Shares if the agreement is terminated early.

Effective as of September 1, 2007, the Company entered into an agreement with Costa View Inc. (“Costa”) for a term of 24 months to provide consulting services on financial public relations, business promotion, business growth and development, including mergers and acquisitions, and general business matters. The Company will pay Costa 1,500,000 restricted Shares to be earned in equal installments of 375,000 shares on December 1, 2007, June 1, 2008, December 1, 2008 and June 1, 2009. The said 1,500,000 Shares were tendered in one certificate upon execution of the agreement and are deemed to be in Costa View’s possession. The consultant must return any unearned Shares if the agreement is terminated early.

On February 21, 2008, the Company entered into a Drilling Agreement with Hansen Drilling, Inc. to perform drilling on the Pansy Lee Claims site at agreed rates for work to be performed.

- 26 -

Effective April 30, 2008, the Consulting Agreement between the Company and Medallion Capital Corp., was terminated.

The Company entered into a one year renewable contract with Lance Capital Ltd. for consulting and corporate administrative services commencing as of May 1, 2008, at a rate of $12,500 per month.

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Effective August 11, 2008, the Company entered into a Letter of Intent to acquire all of the capital stock of Infrastructure Materials Corp. US (“Infrastructure US”), a Nevada corporation. Infrastructure US holds all the capital stock of Infrastructure Materials Corp. Canada, an Alberta corporation. The purchase price for all of the capital stock of Infrastructure US would be the issuance at closing of 1,500,000 common shares of Silver Reserve. Infrastructure US, together with its Canadian subsidiary, holds limestone mineral properties in the United States and Canada. The Company, after conducting it due diligence, rejected acquiring the Canadian subsidiary of Infrastructure US and completed the purchase of Infrastructure US only. Subsequent to the period covered by this report this transaction was consummated pursuant to a Share Exchange Agreement on November 7, 2008. See “Subsequent Events” above.

Acquisition, Exploration and Evaluation Expenditures

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CONTROLS AND PROCEDURES

Based on an evaluation our Chief Executive Officer and Chief Financial Officer conducted, of the effectiveness of the design and operation of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15(e) they concluded that our disclosure controls and procedures were effective as of September 30, 2008, to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are:

recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, and

accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management of Silver Reserve is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that:

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

* Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

* Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce this risk.

In making this assessment, management, used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.

Inherent in small business is the pervasive problem of segregation of duties. Given that the Company has a small accounting department, segregation of duties cannot be completely accomplished at this stage in the corporate lifecycle. Management has added many compensating controls to effectively reduce and minimize the risk of a material misstatement in the Company’s financial statements.

Based on its assessment, management has concluded that the Company's disclosure controls and procedures and internal control over financial reporting is effective based on those criteria.

During the quarter ended September 30, 2008, there have been no changes to the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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RISK FACTORS

1.	THE COMPANY HAS NO SOURCE OF OPERATING REVENUE AND EXPECTS TO INCUR SIGNIFICANT EXPENSES BEFORE ESTABLISHING AN OPERATING COMPANY, IF IT IS ABLE TO ESTABLISH AN OPERATING COMPANY AT ALL.

Currently, the Company has no source of revenue, limited working capital and no commitments to obtain additional financing. The Company will require additional working capital to carry out its exploration programs. The Company has no operating history upon which an evaluation of its future success or failure can be made. The ability to achieve and maintain profitability and positive cash flow is dependent upon:

further exploration of our properties and the results of that exploration.

raising the capital necessary to conduct this exploration and preserve the Company’s Properties.

raising capital to develop our properties, establish a mining operation, and operate this mine in a profitable manner if any of these activities are warranted by the results of our exploration programs and a feasibility study.

Because the Company has no operating revenue, it expects to incur operating losses in future periods as it continues to spend funds to explore its properties. Failure to raise the necessary capital to continue exploration could cause the Company to go out of business.

2.	THE COMPANY COULD ENCOUNTER REGULATORY AND PERMITTING DELAYS.

The Company could face delays in obtaining permits to operate on the property covered by the claims. Such delays could jeopardize financing, if any is available, which could result in having to delay or abandon work on some or all of the properties.

3.	THERE ARE PENNY STOCK SECURITIES LAW CONSIDERATIONS THAT COULD LIMIT YOUR ABILITY TO SELL YOUR SHARES.

Our common stock is considered a "penny stock" and the sale of our stock by you will be subject to the "penny stock rules" of the Securities and Exchange Commission. The penny stock rules require broker-dealers to take steps before making any penny stock trades in customer accounts. As a result, the market for our shares could be illiquid and there could be delays in the trading of our stock which would negatively affect your ability to sell your shares and could negatively affect the trading price of your shares.

CURRENT LEVELS OF MARKET VOLATILITY COULD HAVE ADVERSE IMPACTS

The capital and credit markets have been experiencing volatility and disruption. If the current levels of market disruption and volatility continue or worsen, there can be no assurance that the Company will not experience adverse effects, which may be material. These effects may include, but are not limited to, difficulties in raising additional capital or debt and a smaller pool of investors and funding sources. There is thus no assurance the Company will have access to the equity capital markets to obtain financing when necessary or desirable.

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A GENERAL DETERIORATION IN ECONOMIC CONDITIONS MAY HAVE ADVERSE IMPACTS

The current economic environment is challenging and uncertain. The consequences of a prolonged recession may include a lower level of economic activity and uncertain regarding commodity markets. Further, the risks associated with industries in which the Company operates become more acute in periods of a slowing economy or slow growth.

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PART II: OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS:

The Company is not a party to any pending legal proceeding or litigation and none of the Company’s property is the subject of a pending legal proceeding.

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

On August 22, 2008, the Company completed private placements of 7,040,000 “Units” at $0.50 per Unit from accredited investors. Each one Unit consists of one common share and one half-common share purchase warrant. Each full warrant entitles the holder to purchase one common share at $0.75 on or before September 1, 2010. The private placement was conducted entirely outside the United States pursuant to an exemption from registration under the Securities Act of 1933, as amended, provided by Regulation S promulgated thereunder. All of the investors were non-U.S. Persons and executed subscription agreements containing the representations and covenants required for the exemption under Regulation S. The Company paid a commission of $147,000 and issued 294,000 broker warrants to purchase Units at $0.50 per Unit in connection with the private placement. These Units have the same terms as those sold to investors.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES:

None.

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

None.

ITEM 5: OTHER INFORMATION:

ITEM 6: EXHIBITS

Exhibits

(a)	31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

	31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

	32.1	Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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(b)	In addition, the following reports are incorporated by reference:

Current Report on Form 8-K, “Item 3.02 – Unregistered sale of Equity Securities,” dated August 1, 2008.

Current Report on Form 8-K, “Item 5.02 – Departure of Directors or Certain Officers; Appointment of Certain Officers” dated August 13, 2008.

Current Report on Form 8-K, “Item 3.02 – Unregistered sale of Equity Securities,” dated August 18, 2008.

Current Report on Form 8-K, “Item 1.01-Entry into a Material Definitive Agreement,” dated November 7, 2008.

SIGNATURE

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

Dated: November 12, 2008	/s/ Janet Shuttleworth
	Janet Shuttleworth, Secretary

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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

Infrastructure Materials (IFAM) Inactive 10-Q2009 Q1 Quarterly report

Content analysis