Mexus Gold US - FORM 10-Q - August 20, 2010

Attached files

file	filename
EX-32.1 - EX 32.1 - Mexus Gold US	ex321.htm
EX-31.1 - EX 31.1 - Mexus Gold US	ex311.htm

U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

		For the quarterly period ended June 30, 2010

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

For the transition period from ___________ to _____________

MEXUS GOLD US

Nevada	000-52413	20-4092640
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification Number)
	1805 N. Carson Street, #150
	Carson City, NV 89701
	(Address of principal executive offices)

	(916) 776 2166
	(Issuer’s Telephone Number)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange Act.

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if 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]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court.

Yes	[ ]
No	[ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of June 30, 2010, there were 149,504,416 shares of our common stock were issued and outstanding.

PART I

ITEM 1.FINANCIAL STATEMENTS

MEXUS GOLD US

	Page

Balance Sheets for June 30, 2010 and March 31, 2010	F-2

Statements of Operations for the three months ended June 30, 2010 and 2009	F-3

Statement of Changes in Shareholders' Deficit for the three months ended June 30, 2010	F-4

Statement of Cash Flows for the three months ended June 30, 2010 and June 30, 2009	F-5

Notes to Financial Statements:	F-6

F-1

MEXUS GOLD US
Condensed Balance Sheets

				June 30, 2010		March 31, 2010
				(unaudited)		(Derived from
						Audited
						Statements)

ASSETS

Current assets:
	Cash		$	5,768	$	1,022
	Due from related party (Note 6)			0		0
	Inventory			0		0
		Total current assets		5,768		1,022

Fixed assets:
	Property and equipment, net of depreciation			67,453		88,168
		Total fixed assets		67,453		88,168

Other assets:
	Idle Equipment			77,614		66,537
	Deferred Costs			249,002		164,180
				326,615		230,717

TOTAL ASSETS			$	399,836	$	319,907

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
	Accounts payable		$	748	$	4,248
	Accounts payable to related party (Note 3)			24,200		21,600
	Sales tax payable			318		318
	Accrued interest			2,272		639
	Share subscription payable			95,000		20,000
	Capital lease-current			24,225		24,225
	Loans payable to related party (Note 3)			46,734		34,434
	Notes payable			71,530		36,000
	Deferred gain equipment sale			33,449		39,075
		Total current liabilities		298,476		180,539

Longterm liabilities:
	Capital lease-longterm			25,775		25,775
		Total longterm liabilities		25,775		25,775

STOCKHOLDERS' DEFICIT (Note 4)
	Preferred stock, 10,000,000 shares authorized, no par value,
		-0- shares issued and outstanding		—		—
	Common stock, 500,000,000 shares authorized, no par value,
		144,667,679 shares issued and outstanding as at March 31, 2010
		149,504,416 shares issued and outstanding as at June 30, 2010
	Additonal Paid In Capital			731,007		609,953
	Retained deficit			(804,927)		(641,028)

TOTAL STOCKHOLDERS' DEFICIT				75,584		113,593

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT			$	399,836	$	319,907

See notes to the accompanying financial statements
F-2

MEXUS GOLD US
STATEMENTS OF OPERATIONS

			For the		For the
			Three Months Ended		Three Months Ended
			June 30, 2010		June 30, 2009

Revenues:
	Sales	$	0	$	5,261
Total revenues			0		5,261

Expenses:
	Cost of Goods Sold		0		6,033
	General and administrative		64,231		895
	Compensation expense (Notes 3 and 4)		98,560		6
Total operating expenses			162,791		6,934

Loss from operations			(162,791)		(1,673)

Gain (loss) on Sale of Equipment			(5,000)		0
			(5,000)		0
Other Income and Expense
	Interest expense		(3,892)		0
	Federal income tax expense		0		0
			(3,892)		0

Provision for Income Taxes (Note 5)			-		-

NET LOSS		$	(163,899)	$	(1,673)

Basic loss per common share		$	(0.00)	$	(0.00)
Diluted loss per common share		$	(0.00)	$	(0.00)

Weighted average common shares outstanding - Basic			146,279,925		136,506,000
Weighted average common shares outstanding - Diluted			146,279,925		136,506,000

See notes to the accompanying financial statements

F-3

MEXUS GOLD US
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
(Unaudited)

									Total
	Common Stock				Additonal		Retained		Stockholders'
	Shares		Amount		Paid In Capital		Deficit		Deficit

Balance at March 31, 2010	144,667,679	$	144,668	$	609,953	$	(641,028)	$	113,593


Shares issued for equipment purchase	1,486,737		1,486		28,248				29,734

Shares issued for S-8 consulting	3,150,000		3,150		83,006				86,156

Shares issued for cash	200,000		200		9,800				10,000

Net loss for the three months ended June 30, 2010							(163,899)		(163,899)

Balance at June 30, 2010	149,504,416	$	149,504	$	731,007	$	(804,927)	$	75,584

See notes to the accompanying financial statements
F-4

MEXUS GOLD US
STATEMENTS OF CASH FLOWS

			For the		For the
			Three Months Ended		Three Months Ended
			June 30, 2010		June 30, 2009

CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss	$	(163,899)	$	(1,673)
	Adjustments to reconcile net income to net cash
	provided by (used in) operating activities:
	Depreciation and amortization		2,704		0
	Stock based compensation		86,156		6
	Payments through the issuance of company stock:
	Equipment		0		0
	Option to aquire Mexus Gold Ming S.A. de C.V.
	and mining leasehold properties		0		0
	Gain on sale of equipment		0		0
	Changes in operating assets and liabilities:
	Equipment		18,011		0
	Accounts Receivable		0		0
	Receivable from GK Gym		0		(916)
	Prepaid Expenses		0		0
	Inventory		0		1,719
	Accounts payable and accrued expenses		75,733		661

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES			18,705		(203)

CASH FLOWS FROM INVESTING ACTIVITIES
	Equipment Purchases		29,735		0
	Equipment Fabrication		(11,076)		0
	Increase in deferred costs		(84,822)		0
NET CASH USED IN INVESTING ACTIVITIES			(66,163)		0


CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from loan payable to officer		12,300		295
	Proceeds from loan payable		35,530		0
	Proceeds from issuance of common shares for cash		10,000		0
	Proceeds from sales and leaseback equipment		(5,626)		0
	Proceeds received from notes payable		0		0
	Due from GK Gym		0		0


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			52,204		295

NET CHANGE IN CASH			4,746		92

CASH BALANCES
	Beginning of year		1,022		3,478
	End of year	$	5,768	$	3,570

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR:
	Interest	$	1,735	$	0
	Income taxes	$	0	$	0

See notes to the accompanying financial statements
F-5

MEXUS GOLD US

Notes to Financial Statements

NOTE 1. BASIS OF PRESENTATION

The accompanying interim financial statements of Mexus Gold US (the “Company”) have been prepared pursuant to the rules of the Securities and Exchange Commission (the "SEC") for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These financial statements and notes herein are unaudited, but in the opinion of management, include all the adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. These financial statements should be read in conjunction with the Company's audited financial statements and notes thereto included in the Company’s Form 10-K for the period ended June 30, 2010 as filed with the SEC. Interim operating results are not necessarily indicative of operating results for any future interim period or for the full year.

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has a limited operating history and limited funds. These factors, among others, may indicate that the Company will be unable to continue as a going concern.

The Company is dependent upon outside financing to continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management’s plans to raise necessary funds via a private placement of its common stock to satisfy the capital requirements of the Company’s business plan. There is no assurance that the Company will be able to raise necessary funds, or that if it is successful in raising the necessary funds, that the Company will successfully operate its business plan.

The financial statements do not include any adjustments relating to the recoverability and classification of assets and/or liabilities that might be necessary should the Company be unable to continue as a going concern. Our continuation as a going concern is dependent upon our ability to meet our obligations on a timely basis, and, ultimately to attain profitability.

NOTE 3.

RELATED PARTY TRANSACTIONS

On September 4, 2009, the Company entered into a six month Rental Agreement with Mexus Gold International, Inc., a Nevada corporation, to lease a Komatsu P38D Dozer and a PC440 core drill at a rate of $3,850 per month, payable in advance by the 5th day of each month. Payment can be made in cash or in restricted shares of common stock of the Company valued at $.08 per share. Mr. Paul D. Thompson, our sole officer and director, owns a majority interest in Mexus Gold International, Inc.

On December 21, 2009, the Company issued 40 million restricted shares of its common stock to Mexus Gold International, Inc. as payment for the following pieces of mining equipment:

Equipment	Serial Number	# Shares

Komatsu Dozer Drill	2NKCLL9X7FM327785	4,000,000
Cone	CONEP282S11709	22,000,000
Jaw Crusher	JAW P12X361209	8,000,000
Serge Tank	PSTF96144	3,000,000
Hydraulic Drum	HYDS12YD	3,000,000

The equipment was valued at $40,000.00, or par value of $0.001 per share.

Loans Payable to Related Party

On March 31, 2008, the Company made a two year zero interest promissory note payable to Phillip E. Koehnke, APC, our majority shareholder, in the amount of $17,687.70.

On September 2, 2009, Phillip E. Koehnke agreed to forgive all but $17,685.70 of notes due to him and cancel 129,025,000 shares of common stock held by him in exchange for a payment of $85,000. The forgiveness of the debt resulted in a $411,102 gain, which has been recorded as additional paid-in capital because the transaction occurred with a related party.

Effective September 30, 2009, the Company entered into an asset purchase agreement with Phillip E. Koehnke, whereby the Company sold its retail sports apparel sales assets, as presented on its balance sheet for the period ended September 30, 2009, in exchange for cancelation of the $17,687.70 two year promissory note held by Mr. Koehnke.

On August 21, 2009, the Company made a one year zero interest convertible promissory note payable to Taurus Gold, Inc. in the amount of $85,000. The note was convertible into restricted shares of the Company’s common stock at any time up to the maturity date at a conversion rate of $.002 (see Note 4).

On September 30, 2009, the Company made a two year zero interest promissory note payable to Phillip E. Koehnke, APC, our former majority shareholder in the amount $6,038. This is the only remaining note balance to this related party since the Asset Purchase Agreement was executed.

On October 15, 2009 the Company made a Demand Note Agreement with Paul Thompson Sr. in the amount of $10,000.00 at zero interest.

On February 5, 2010 the Company made a Note Payable with Paul Thompson Sr. in the amount of $3500.00 at zero interest related to the acquisition of the Acker drill.

On February 10, 2010 the Company made a Demand Note Agreement with Paul Thompson Sr. in the amount of $6,300.00 at zero interest.

On March 2, 2010 the Company made a Demand Note Agreement with Paul Thompson Sr. in the amount of $5,400.00 at zero interest.

On May 1, 2010 the Company made a Demand Note Agreement with Paul Thompson Sr. in the amount of $12,300.00 at zero interest.

Issuances of Securities

On or about September 30, 2009 the Company issued 109,000 restricted shares of its common stock to Susie Johnson, the Company’s President, as payment for services.

Accounts Payable

The Company had a payable balance due to G.K.’s Gym, Inc., a related party owned by the parents of Phillip E. Koehnke, as of December 31, 2009. At December 31, 2009, the Company owed $9,600 to G.K.’s Gym, Inc. for rent.

The Company has a payable balance due for rent to Paul Thompson Sr. in the amount of $12,000.00 as of March 31, 2010.

Equipment Lease

On December 9, 2009 the Company entered into a 24 month lease agreement with Francis and Alice Stadelman, Trustees of the Stadelman Revocable Living Trust, for equipment. The equipment is one Komatsu Dozer Driller with serial number 2NKCLL9X7FM327785.

Future minimum lease payments required under the arrangement are as follows:

		Amount

For the year ended March 31, 2010, minimum lease payments:	$	0

For the year ended March 31, 2011, minimum lease payments:	$	37,500

For the year ended March 31, 2012 minimum lease payments:		12,500

Total future minimum lease payments:	$	50,000

Legal Services

Legal counsel to the Company is a firm controlled by our former majority shareholder.

NOTE 4.

STOCKHOLDERS’ DEFICIT

The stockholders’ equity section of the Company contains the following classes of capital stock as of March 31, 2010:

Preferred stock, no par value; 10,000,000 shares authorized, zero (0) shares issued and outstanding.

Common stock, no par value; 500,000,000 shares authorized: 144,667,669 shares issued and outstanding.

Common Stock Transactions

On or about September 30, 2009 the Company issued 109,000 restricted shares of its common stock to Susie Johnson, the Company’s President, as payment for services rendered during the three months ended September 30, 2009. The transaction was recorded at par value, or $109.

On October 16, 2009, the Company acquired an eight (8) month option, with a six (6) month extension, to purchase certain patented and unpatented mining claims situated in Esmeralda County, Nevada, United States. The option price was 250,000 restricted shares of the Company’s common stock. The exercise price of the option is five million dollars ($5,000,000) payable in installments of both cash and restricted shares of the Company’s common stock

On October 20, 2009, the Company entered into a 180 day option agreement with Mexus Gold Mining, S.A. de C.V. pursuant to which the Company acquired the right to acquire 99% of the capital stock of Mexus Gold Mining, S.A. The option price was 20 million restricted shares of the Company’s common stock and the exercise price is 20 million restricted shares of the Company’s common stock. The agreement is conditioned upon Mexus Gold Mining, S.A. de C.V. obtaining an audit of its financial records by public accountants acceptable to the standards required for financial reporting purposes in the United States of America. On February 11, 2010, the Company issued 20 million restricted shares of the Company’s common stock as the exercise price of the option.

On November 11, 2009, the Company issued 416,667 restricted shares of common stock to an accredited investor for $25,000.00, or $ 0.06 per share.

On December 9, 2009 the company issued shares in exchange for cash in the amount of 833,333 shares for $50,000.00, or $0.06 per share.

On December 14, 2009 the company issued 11,000,000 shares of S8 stock for consulting with a value of $.001 per share.

On December 21, 2009, the Company issued 375,000 restricted shares of common stock to an accredited investor for $30,000.00, or $0.08 per share.

On January 11, 2010 the Company issued 1,000,000 shares of S8 stock for consulting with a value of $.001 per share.

On January 21, 2010 the Company issued 125,000 shares of S8 stock for consulting with a value of $.001 per share.

On January 25, 2010 the Company issued 375,000 restricted shares of common stock to an accredited investor for $30,000.00, or $.001 per share.

On February 5, 2010 the Company issued 153,846 restricted shares of common stock for the purchase of equipment valued at $20,000.00, or $.13 per share.

On February 5, 2010 the Company issued 60,000 restricted shares of common stock for the purchase of equipment valued at $12,500.00, or $.001 per share plus a payable of $9000.00.

On February 5, 2010 the Company issued 100,000 shares of S8 stock for consulting with a value of $.001 per share.

On April 14, 2010 the Company issued 200,000 shares of common stock to an accredited investor for $10,000.00, or $0.05 per share.

On April 15, 2010 the Company issued 850,000 shares of S8 stock for consulting with a value of $0.02 per share.

On April 15, 2010 the Company issued 68,750 shares of common stock for the purchase of equipment valued at $1,375.00 or $0.02 per share.

On April 15, 2010 the Company issued 1,088,612 shares of common stock for the purchase of equipment valued at $21,772.24 or $0.02 per share.

On April 15, 2010 the Company issued 600,000 shares of S8 stock for consulting with a value of $0.02 per share.

On April 15, 2010 the Company issued 156,250 shares of S8 stock for consulting with a value of $0.02 per share.

On April 15, 2010 the Company issued 43,750 shares of S8 stock for consulting with a value of $0.035 per share.

On April 15, 2010 the Company issued 329,375 shares of S8 stock for the purchase of equipment valued at $6,587.50 or $0.02 per share.

On May 13, 2010 the Company issued 400,000 shares of S8 stock for consulting with a value of $0.035 per share.

On May 13, 2010 the Company issued 100,000 shares of S8 stock for consulting with a value of $0.035 per share.

On May 13, 2010 the Company issued 250,000 shares of S8 stock for consulting with a value of $0.035 per share.

On May 13, 2010 the Company issued 500,000 shares of S8 stock for consulting with a value of $0.035 per share.

On May 13, 2010 the Company issued 250,000 shares of S8 stock for consulting with a value of $0.035 per share.

The issuance of securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act of 1933 and Regulation D as transactions by an issuer not involving any public offering. The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the share certificates and other instruments issued in such transactions. The sales of these securities were made without general solicitation or advertising.

The Company intends to use the proceeds from sale of the securities for the purchase of equipment for mining operations, mining machinery, supplies and payroll for operations, professional fees, and working capital.

There were no underwritten offerings employed in connection with any of the transactions set forth above.

Preferred Stock Transactions

None

NOTE 5.

INCOME TAXES

The Company records its income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes”. The Company incurred net operating losses during all periods presented through June 30, 2010 resulting in a deferred tax asset, which was fully allowed for; therefore, the net benefit and expense resulted in $-0- income taxes.

NOTE 6.

IDLE EQUIPMENT

The following mining equipment is currently being fabricated and modified by the Company and is not presently in use.

	Cone 1709
	Crusher
		C Labor
		C Parts/Matls
		C Shop/Sup
	Total Crusher
	Hopper
	Hydraulic Drum 12YD
	Jaw Crusher 1209
	Serge Tank 6144
	Automated Cable Puller

NOTE 7. OTHER EVENTS

On October 1, 2009, the Company changed its name to Mexus Gold US, re-domiciled to the State of Nevada and changed the par value of its common stock to $0.001.

Effective September 30, 2009, the Company discontinued its retail sports apparel sales business and began its mining operations as follows:

On October 20, 2009, the Company entered into a 180 day option agreement with Mexus Gold Mining, S.A. de C.V. pursuant to which the Company acquired the right to acquire 99% of the capital stock of Mexus Gold Mining, S.A. The option price is 20 million restricted shares of the Company’s common stock and the exercise price is 20 million restricted shares of the Company’s common stock. The agreement is conditioned upon Mexus Gold Mining, S.A. de C.V. obtaining an audit of its financial records by public accountants acceptable to the standards required for financial reporting purposes in the United States of America. The term of the option may be extended by the Company for such reasonable time as is required by Mexus Gold Mining, S.A. de C.V. to complete its audit.

Mexus Gold Mining, S.A. de C.V. represents that it owns or has claim to certain lands which are either patented land ownership or concession agreements in the State of Sonora, Mexico. In addition, Mexus Gold Mining, S.A. de C.V. owns equipment suitable for exploring for precious mineral deposits or extracting and processing mineral ores for the purpose of sale of such refined product, and has agreed to maintain the equipment in good working order and free of any lien, assessment or claim of indebtedness of any kind or nature.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ORPLAN OF OPERATIONS

Cautionary Statement Concerning Forward-Looking Statements

The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and related notes included in this report. This report contains “forward-looking statements.” The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements based on current expectations and assumptions.

Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from expectations include, but are not limited to, those set forth under the section “Risk Factors” set forth in this report.

The forward-looking events discussed in this report, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. For these statements, we claim the protection of the “bespeaks caution” doctrine. All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

The Company

Mexus Gold US is a development stage mining company engaged in the evaluation, acquisition, exploration and advancement of gold, silver and copper projects in the State of Sonora, Mexico and the Western United States. Mexus Gold US is dedicated to protect the environment, provide employment and education opportunities for the communities that it operates in.

Our President and CEO, Paul Thompson, brings over 40 years experience in mining and mining development to Mexus Gold US. Mr. Thompson is currently recruiting additional management personnel for its Mexico, Nevada, and submarine Cable Recovery operations to assist in growing the company.

Our executive offices are located at, 1805 N. Carson Street, #150, Carson City, Nevada 89701. Our telephone number is (916) 776 2166.

We were originally incorporated under the laws of the State of Colorado on June 22, 1990, as U.S.A. Connection, Inc. On October 28, 2005, we changed our name to Action Fashions, Ltd. On October 28, 2009, we changed our domicile to Nevada and changed our name to Mexus Gold US to better reflect our new business operations. Our fiscal year end is March 31st.

Description of the Business of Mexus Gold US

Mexus Gold US is engaged in the evaluation, acquisition, exploration and advancement of gold exploration and development projects in the state of Nevada and Mexico, as well as, the salvage of precious metals from identifiable sources. Our main activities in the near future will be comprised of our mining opportunity, completion of the acquisition of Mexus Gold S.A. de C.V. and the cable salvage opportunity.

Our mining opportunity located in the state of Nevada and the completion of the acquisition and merger of Mexus Gold S.A. de C.V. which holds properties in the state of Sonora, Mexico will provide us with projects to recover gold, silver, cooper and other precious metals. The cable salvage opportunity involves principally the recovery of copper and lead from abandoned cable previously utilized for communications purposes. Each of these opportunities are discussed further herein.

In addition, our management will look for opportunities to improve the value of the gold projects that we own or may acquire knowledge of or may acquire control through exploration drilling, introduction of technological innovations or acquisition with the goal of developing those properties into operating mines. We expect that emphasis on gold project acquisition and development will continue in the future.

Business Strategy

Our business plan was developed with the overriding goal of maximizing shareholder value through the exploration and development of our mineral properties, utilizing the extensive mining-related background and capabilities of our management and employees, and also through strategic partnerships. To achieve this goal, our business plan focuses on five strategic areas:

Lida Mining District, Nevada

We believe the Nevada properties represent the potential to provide the company with a viable project with the addition of additional geologic evaluation and the drilling of prospective areas. Our strategy for this project is to utilize geological data acquired through prior studies, confirm prior drilling results, expand the delineation of the possible ore body and identify reserves through our own geological evaluations.

Mexus Gold S.A. de C.V.

Our main objective is to complete the acquisition and merger of Mexus Gold S.A. de C.V. We expect that we will have to provide funding to the operation in Mexico in order to finalize the transaction. Once the transaction is completed, we expect to begin shipping raw materials from the mining areas for bulk processing and further analysis. We also expect to initialize an exploration drilling program to further identify the extent of the possible reserves now identified.

Cable Salvage Operation

We have determined that instituting a salvage operation offshore Alaska initially for the smaller diameter cable will provide us with the knowledge and experience to proceed forward with this project.

Other Exploration Properties

Our Other Exploration Properties comprise earlier-stage exploration properties. We are currently conducting a number of activities in connection with our earlier-stage exploration properties. During 2009, additional unpatented mining claims were staked in Esmeralda County, Nevada. The evaluation includes compilation of all geologic data and land information for the properties in a geological information system data base. We also staked additional claims in the State of Sonora, Mexico in areas of interest to the company.

Mergers and Acquisitions

We will routinely review merger and acquisition opportunities. An appropriate merger and acquisition opportunity must be accretive to the overall value of Mexus Gold US. Our primary focus will be on those opportunities involving precious metal production or near-term production with a secondary focus on other resource-based opportunities. Potential acquisition targets would include private and public companies or individual properties. Although our preference would be for candidates located in the United States and Mexico. Mexus Gold US will consider opportunities located in other countries where the geopolitical risk is acceptable.

Mining Operations

We classify our mineral properties into three categories: “Development Properties”, “Advanced Exploration Properties”, and “Other Exploration Properties”. Development Properties are properties where a decision to develop the property into a producing mine has been made. Advanced Exploration Properties are those properties where we retain a significant ownership interest or joint venture and where there has been sufficient drilling and analysis to identify and report proven and probable reserves or other mineralized material. We currently do not have a Development Property or Advanced Exploration Property. Other Exploration Properties are those that do not fall into the other categories. Please see below for information about our Other Exploration Properties.

Other Exploration Properties

Our Other Exploration Properties consist of the following:

Mining Properties located in the state of Nevada

Lida Mining District

We have entered into agreements on lands located in Esmeralda County, Nevada. We hold an option on 150 acres of patented lands, 14 mining claims and two mill sites with water rights. We have also staked additional claims as a result of our initial geological evaluations.

The lands are situated in an area of previous exploration and evaluation for precious metals. Past mine engineering reports have established indicated reserves through drilling and show both underground and open pit mining potential. Our plans are to conduct a drilling program to confirm the data presented in prior geological reports. Based on the results of our geological evaluation we will determine our future course of exploration and evaluation.

There have been several geological reports over the years regarding the properties. The following reports are under evaluation:

1. A 1977 report by Andrew J. Zinkle, Mining Engineer, the property was given 52,946 tons proven, 99,500 tons probable and 278,000 tons possible mineral bearing ore with grades estimated at 20 ounces per ton silver and .05 ounces per ton gold.

2. A report dated 1981 by E.R. Kruchowski, Mine Engineer gives the property 136,089 proven tons ore and 272,178 probable tons ore at average grades of 7.63 ounces silver per ton and .05 ounces gold per ton.

The previous Engineering reports mentioned are reported to us as covering only one third of the patented property. Additional patented claims have been included in the option agreement representing approximately 100 acres. The additional lands have no current geological evaluation ,however, there are historical reports prior to 1939.

Mining Properties Located in Mexico

The following properties are located in Mexico and owned by Mexus Gold S.A. de C.V.:

Ocho Hermanos

The main feature is a sulfide zone composed primarily of galena with some pyrite and arsenopyrite. Above this zone there is an oxide zone composed of iron and lead oxides. Recent grab samples taken indicate that values over 5,000 grams per ton of silver were encountered. These samples may not reflect the average grade. However, grab sample results indicate silver values over 3,000 grams per ton appear to be not unusual. Gold in the samples ranged from 1 gram per ton to over 5 grams per ton.

370 Area

This zone is composed of a sedimentary sequence (limestone, quartzite, shale) intruded by dacite and diorite as well as rhyolite. The docite exhibits argillic alterations as well as silicification (quartz veins). The entire area is well oxidized on the surface. This is an area of classic disseminated low grade gold and silver mineralization. Surface grab sample assays show 0.14 grams per ton to as high as 29.490 grams per ton gold. This area is an important area for potentially defining an open pit heap leach project.

El Scorpion Project Area

This area has several shear zones and veins which show copper and gold mineralization’s. Recent assays of a 84’ drill hole shows 2,887 grams per ton to 1,139 grams per ton of copper and 3.971 grams per ton to 0.072 grams per ton of gold. Another assay of rock sample from the area shows greater than 10,000 grams per ton copper. This land form distribution appears to be snonymous to the ideal porphyry deposit at Baja La Alumbrera, Argentina.

Los Laureles

Los Laureles is a vein type deposit mainly gold with some silver and copper. Recent assays from grab samples show gold values of 67.730 grams per ton gold, 38.4 grams per ton silver, 2,800 grams per ton copper.

Cable Salvage Operation

Our examination of the information provided to us and our accumulation of data has identified the most prospective area to begin our salvage operations is the near coast areas of Alaska. The initial recovery operations will be comprised of acquiring two and one-half inch diameter cable with a weight of eight and one-half pounds. We are satisfied that we will be able to comply with all permits and notifications to the appropriate governmental authorities regarding the salvage operations.

Employees

Mexus Gold US has no employees at this time. Consultants with specific skills are utilized to assist with various aspects of the requirements of activities such as project evaluation, property management, due diligence, acquisition initiatives, corporate governance and property management. If we complete our planned activation of the Nichols Property Exploration and Drilling Program, Cable Salvage Operations and completion of the Acquisition of Mexus Gold S.A. de C.V. Program, our total workforce will be approximately 30 persons. Mr. Paul D. Thompson is our sole officer and director.

Competition

Mexus Gold US competes with other mining companies in connection with the acquisition of gold properties. There is competition for the limited number of gold acquisition opportunities, some of which is with companies having substantially greater financial resources than Mexus Gold US. As a result, Mexus Gold US may have difficulty acquiring attractive gold projects at reasonable prices.

Management of Mexus Gold US believes that no single company has sufficient market power to affect the price or supply of gold in the world market.

Legal Proceedings

There are no legal proceedings to which Mexus Gold US or Mexus Gold S.A. de C.V. are a party or of which any of our properties are the subject thereof.

Property Interests, Mining Claims and Risk

Property Interests and Mining Claims

Our exploration activities are conducted in the state of Nevada. Mineral interests may be owned in this state by (a) the United States, (b) the state itself, or (c) private parties. Where prospective mineral properties are owned by private parties, or by the state, some type of property acquisition agreement is necessary in order for us to explore or develop such property. Generally, these agreements take the form of long term mineral leases under which we acquire the right to explore and develop the property in exchange for periodic cash payments during the exploration and development phase and a royalty, usually expressed as a percentage of gross production or net profits derived from the leased properties if and when mines on the properties are brought into production. Other forms of acquisition agreements are exploration agreements coupled with options to purchase and joint venture agreements. Where prospective mineral properties are held by the United States, mineral rights may be acquired through the location of unpatented mineral claims upon unappropriated federal land. If the statutory requirements for the location of a mining claim are met, the locator obtains a valid possessory right to develop and produce minerals from the claim. The right can be freely transferred and, provided that the locator is able to prove the discovery of locatable minerals on the claims, is protected against appropriation by the government without just compensation. The claim locator also acquires the right to obtain a patent or fee title to his claim from the federal government upon compliance with certain additional procedures.

Mining claims are subject to the same risk of defective title that is common to all real property interests. Additionally, mining claims are self-initiated and self-maintained and therefore, possess some unique vulnerabilities

not associated with other types of property interests. It is impossible to ascertain the validity of unpatented mining claims solely from an examination of the public real estate records and, therefore, it can be difficult or impossible to confirm that all of the requisite steps have been followed for location and maintenance of a claim. If the validity of a patented mining claim is challenged by the BLM or the U.S. Forest Service on the grounds that mineralization has not been demonstrated, the claimant has the burden of proving the present economic feasibility of mining minerals located thereon. Such a challenge might be raised when a patent application is submitted or when the government seeks to include the land in an area to be dedicated to another use.

Reclamation

We may be required to mitigate long-term environmental impacts by stabilizing, contouring, resloping and revegetating various portions of a site after mining and mineral processing operations are completed. These reclamation efforts will be conducted in accordance with detailed plans, which must be reviewed and approved by the appropriate regulatory agencies.

Risk

Our success depends on our ability to recover precious metals, process them, and successfully sell them for more than the cost of production. The success of this process depends on the market prices of metals in relation to our costs of production. We may not always be able to generate a profit on the sale of gold or other minerals because we can only maintain a level of control over our costs and have no ability to control the market prices. The total cash costs of production at any location are frequently subject to great variation from year to year as a result of a number of factors, such as the changing composition of ore grade or mineralized material production, and metallurgy and exploration activities in response to the physical shape and location of the ore body or deposit. In addition costs are affected by the price of commodities, such as fuel and electricity. Such commodities are at times subject to volatile price movements, including increases that could make production at certain operations less profitable. A material increase in production costs or a decrease in the price of gold or other minerals could adversely affect our ability to earn a profit on the sale of gold or other minerals. Our success depends on our ability to produce sufficient quantities of precious metals to recover our investment and operating costs.

Distribution Methods of the Products

The end product of our operations will usually be doré bars. Doré is an alloy consisting of gold, silver and other precious metals. Doré is sent to refiners to produce bullion that meets the required market standard of 99.95% pure gold. Under the terms of refining agreements we expect to execute, the doré bars are refined for a fee and our share of the refined gold, silver and other metals are credited to our account or delivered to our buyers who will then use the refined metals for fabrication or held for investment purposes.

General Market

The general market for gold has two principal categories, being fabrication and investment. Fabricated gold has a variety of end uses, including jewelry, electronics, dentistry, industrial and decorative uses, medals, medallions and official coins. Gold investors buy gold bullion, official coins and jewelry. The supply of gold consists of a combination of current production from mining and the draw-down of existing stocks of gold held by governments, financial institutions, industrial organizations and private individuals.

Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts, including duration;

We do not have any designs or equipment which are copyrighted, trademarked or patented.

Effect of existing or probable governmental regulations on the business

Government Regulation

Mining operations and exploration activities are subject to various national, state, provincial and local laws and regulations in the United States, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We have obtained or have pending applications for those licenses, permits or other authorizations currently required to conduct our exploration and other programs. We believe that Mexus Gold US is in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder in the Nevada and United States and in any other jurisdiction in which we will operate. We are not aware of any current orders or directions relating to Mexus Gold US with respect to the foregoing laws and regulations.

Environmental Regulation

Our gold projects are subject to various federal and state laws and regulations governing protection of the environment. These laws are continually changing and, in general, are becoming more restrictive. It is our policy to conduct business in a way that safeguards public health and the environment. We believe that the actions and operations of Mexus Gold US will be conducted in material compliance with applicable laws and regulations. Changes to current state or federal laws and regulations in Nevada, where we operate currently, or in jurisdictions where we may operate in the future, could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of our projects.

Research and Development

We do not foresee any immediate future research and development costs.

Costs and effects of compliance with environmental laws

Changes to current state or federal laws and regulations in Nevada, where we operate currently, or in jurisdictions where we may operate in the future, could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of our projects.

Critical Accounting Policies

Our policy is to use the accrual method of accounting to prepare and present financial statements, which conform to generally accepted accounting principles. The company has elected a March 31, year-end.

We consider all highly liquid investments with maturities of three months or less when purchased, to be cash equivalents.

Inventories are valued at the lower of average cost (which approximates computation on a first-in, first-out basis) or market (net realizable value or replacement cost).

Revenue is recognized at the time of sale.

We account for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes”. SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Results of Operations

The following management’s discussion and analysis of the operating results and financial condition of Mexus Gold US for the three month period ended June 30, 2010 has been prepared based on information available to us as June 30, 2010. This discussion should be read in conjunction with the audited Financial Statements of the Company for the year ended March 31, 2010 and the related notes thereto filed with the Company’s annual report on Form 10-K, which have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States. All amounts herein are in U.S. dollars.

Three Months Ended June 30, 2010 Compared with Three Months Ended June 30, 2009.

Mexus Gold US had a net loss during the three months ended June 30, 2010 of $163,899 compared to a net loss of $1,673 during the same period in 2009. The increase in the net loss is attributable to the change of business direction on September 30, 2009 to pursue opportunities in the mining industry.

Revenue

For the three months ended June 30, 2010, we had revenues no ($-0-) revenues compared to $5,261 for the three months ended June 30, 2009. This change is due to the change in our business operations. We do not expect to have any revenues until we begin mining operations which we anticipate will begin within the next nine months. We believe that we have sufficient available cash and available loans from our sole officer and director and other individual sources to satisfy our working capital and capital expenditure requirements during the next 12 months. There can be no assurance, however, that cash and cash from loans will be sufficient to satisfy our working capital and capital requirements for the next 12 months or beyond.

Operating Expenses

Operating expenses increased to $162,791 during the three months ended June 30, 2010 compared to $1,673 for the same period in 2009. The increase was due to the Company’s expansion into the mining industry through the development process of its properties and equipment. In addition, the Company has had expenses relating to its submarine cable salvage operations.

Interest Expense

Mexus Gold US incurred $3,892 of interest expense during the three months ended June 30, 2010 compared to ($-0-) during the same period in 2009. The increase was attributable to the Company’s requirement for cash to further its operations to establish its operations.

Provision for Income Taxes

For the three months ended June 30, 2010, no income tax benefit recognized.

Liquidity and Capital Resources

At June 30, 2010, we had cash of $5,768 compared to $1,022 at March 31, 2010. We consider this difference in cash on hand as insignificate.

Our fixed assets decreased from $66,537 at March 31, 2010, to $67,453 at June 30, 2010, due the Company’s decision to sell a portion of it existing equipment to acquire additional equipment considered necessary for the fabrication process of another equipment application.

The increase in Deferred Costs at March 31, 2010, of $88,822 is principally mining equipment which is in the process of being transferred to Mexus Gold D.A. de C.V. pending governmental permitting by authorities in Mexico.

We have idle equipment of $77,614 at March 31, 2010, as compared to $66,537 at March 31, 2010, Our idle equipment represents our process of fabricating and modifying equipment relating to mining and salvage operations. Our idle equipment may be used to perform bulk sampling projects on our exploration properties or will have the capacity of being placed into a production process pending a determination by management as to the most beneficial application of the equipment.

Our liabilities increased from $180,529 as of March 31, 2010, to $298,476 at March 31, 2010. This increase is due additional loans received for working capital in the amount $110,530.

Future Goals

The Company is currently in the process of obtaining governmental approval of its acquisition of Mexus Gold S.A. de C.V. in Mexico. We have also begun the process of obtaining the necessary permits to begin our cable salvage operations. We have obtained a barge and are currently in the process of fabricating the cable pulling equipment. We have also acquired a search vessel which will search and identify the submarine cable locations.

In the next 12 months, our goal is to begin mining operations in Mexico and to begin cable salvage operations in Alaska.

Off-balance Sheet Arrangements

We maintain no significant off-balance sheet arrangements

Foreign Currency Transactions

None.

Off-balance Sheet Arrangements

We maintain no significant off-balance sheet arrangements

Foreign Currency Transactions

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We currently do not utilize sensitive instruments subject market risk in our operations.

ITEM 4. CONTROLS AND PROCEDURES

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934, as of the end of the period covered by this Report on Form 10-Q, our management evaluated, with the participation of our principal executive and financial officer, the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act). Disclosure controls and procedures are defined as those controls and other procedures of an issuer that are designed to ensure that the information required to be disclosed by the issuer in the reports it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on their evaluation of these disclosure controls and procedures, our chairman of the board and chief executive and financial officer has concluded that our disclosure controls and procedures are effective.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles generally accepted in the United States of America. The Company's internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of 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 of America, and that receipts and expenditures are being made only in accordance with authorization 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 Company's financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company's internal control over financial reporting at June 30, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control--Integrated Framework. Based on that assessment under those criteria, management has determined that, at June 30, 2010, the Company's internal control over financial reporting was effective.

This Quarterly Report on Form 10-Q does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.

Inherent Limitations of Internal Controls

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting 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 our assets;
●		provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
●		provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Our management does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has not identified any change in our internal control over financial reporting in connection with the its evaluation of our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

We are not subject to any legal proceedings responsive to this Item Number.

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

We have sold the following unregistered securities to accredited investors for the quarter ended June 30, 2010.

On April 14, 2010 the Company issued 200,000 shares of common stock for $10,000.00, or $0.05 per share.

On April 15, 2010 the Company issued 68,750 shares of common stock for the purchase of equipment valued at $1,375.00 or $0.02 per share.

On April 15, 2010 the Company issued 1,088,612 shares of common stock for the purchase of equipment valued at $21,772.24 or $0.02 per share.

There were no underwritten offerings employed in connection with any of the transactions set forth above.

ITEM 3.DEFAULT UPON SENIOR SECURITIES

None.

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

None.

ITEM 5.OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Statements

Balance Sheets at June 30, 2010 and March 31, 2009

Statements of Operations for the three months ended June 30, 2010 and 2009

Statement of Changes in Shareholders' Deficit

Statements of Cash Flows for the three months ended June 30, 2010 and 2009

Notes to Financial Statements

Schedules

All schedules are omitted because they are not applicable or the required information is shown in the Financial Statements or notes thereto.

	Exhibit	Form	Filing	Filed with
Exhibits	#	Type	Date	This Report

Articles of Incorporation filed with the Secretary of State of Colorado on June 22, 1990	3.1	10-SB	1/24/2007

Articles of Amendment to the Articles of Incorporation filed with the Secretary of State of Colorado on October 17, 2006	3.2	10-SB	1/24/2007

Articles of Amendment to Articles of Incorporation filed with the Secretary of State of the State of Colorado on January 25, 2007	3.3	10KSB	6/29/2007

Amended and Restated Bylaws dated December 30, 2005	3.3	10-SB	1/24/2007

Code of Ethics	14.1	10-KSB	6/29/2007

Certification of Paul D. Thompson, pursuant to Rule 13a-14(a)	31.1			X

Certification of Paul D. Thompson pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	32.1			X

Signatures

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

August 19, 2010

/s/ Paul D. Thompson

Paul D. Thompson

Chief Executive Officer

Chief Financial Officer

Principal Accounting Officer

Director

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