SILICA RESOURCES CORP - FORM 10-Q

Attached files

file	filename
EX-31.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES EXCHANGE ACT OF 1934 RULE 13A-14(A) OR 15D-14(A). - SILICA RESOURCES CORP	exhibit_31-1.htm
EX-31.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECURITIES EXCHANGE ACT OF 1934 RULE 13A-14(A) OR 15D-14(A). - SILICA RESOURCES CORP	exhibit_31-2.htm
EX-32.1 - CERTIFICATIONS PURSUANT TO SECURITIES EXCHANGE ACT OF 1934 RULE 13A-14(B) OR 15D-14(B) AND 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES- OXLEY ACT OF 2002. - SILICA RESOURCES CORP	exhibit_32-1.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Mark One

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended December 31, 2010

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______

Commission File No. 000-52169

Silica Resources Corporation
(Name of small business issuer in its charter)

Nevada	71-0090401
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

789 West Pender Street, Suite 1010 Vancouver, British Columbia, Canada V6C 1H2
(Address of principal executive offices)

(604) 630-2940
(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:	Name of each exchange on which registered:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001
(Title of Class)

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	x

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years.

N/A

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

Yes o No o

Applicable Only to Corporate Registrants

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

Class		Outstanding as of February 2, 2011
Common Stock, $0.001		72,755,800

SILICA RESOURCES CORPORATION

Form 10-Q

Part I	FINANCIAL INFORMATION	F-1

Item 1	Financial Statements	F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9

Item 4.	Controls and Procedures	10

Part II.	OTHER INFORMATION	10

Item 1	Legal Proceedings	10

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10

Item 3	Defaults Upon Senior Securities	11

Item 4	Removed and Reserved	11

Item 5	Other Information	11

Item 6	Exhibits	11

PART I

ITEM 1. FINANCIAL STATEMENTS

SILICA RESOURCES CORPORATION

(An Exploration Stage Company)

FINANCIAL STATEMENTS

DECEMBER 31, 2010

(unaudited)

Index

Balance Sheets	F–2

Statements of Operations	F–3

Statements of Cash Flows	F–4

Statements of Stockholders Deficit	F–5

Notes to Financial Statements	F–6

F-1

SILICA RESOURCES CORPORATION
(An Exploration Stage Company)

BALANCE SHEETS


	December 31, 2010 $ (Unaudited)			March 31, 2010 $ (Audited)

ASSETS

Current Assets

Cash		379			2,057
Receivables		3,557			1,713
		3,936			3,770

Mineral properties (Note 2)		5,217			5,217

Total Assets		9,153			8,987


LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

Accounts payable and accrued liabilities		295,341			217,873
Promissory notes (Note 5)		280,891			232,810
Due to related parties (Note 4)		143,017			98,017

Total Liabilities		719,249			548,700

Contingencies (Note 5)

Stockholders’ Deficit

Capital stock (Note 3)		72,756			72,756
Authorized: 2,000,000,000 common shares, $0.001 par value
Issued and outstanding: 72,755,800 shares
(March 31, 2010 – 72,755,800 shares)

Warrants (Note 3)		-			12,703

Additional paid in capital		495,162			482,459

Deficit accumulated during the exploration stage		(1,278,014	)		(1,107,631	)

Total Stockholders’ Deficit		(710,096	)		(539,713	)

Total Liabilities and Stockholders’ Deficit		9,153			8,987

F-2

SILICA RESOURCES CORPORATION
(An Exploration Stage Company)

STATEMENTS OF OPERATIONS
(Unaudited)


													CUMULATIVE
													FROM
													INCEPTION
													OCTOBER 7,
	THREE MONTHS ENDED						NINE MONTHS ENDED						2005 TO
	DECEMBER 31,						DECEMBER 31,						DECEMBER
	2010			2009			2010			2009			31, 2010
	$			$			$			$			$

Expenses

Consulting		28,757			25,168			80,328			66,741			437,679
Depreciation		-			35			-			110			1,228
Interest		5,160			4,056			14,394			9,922			35,702
Legal		6,322			3,622			14,978			12,970			174,876
Management fees		-			-			-			-			15,000
Mineral property exploration		-						7,000			7,025			314,095
Office and administration		13,697			9,700			34,885			36,297			178,974
Professional services		2,600			1,100			18,798			26,356			110,126

Loss from operations		(56,536	)		(43,681	)		(170,383	)		(159,421	)		(1,267,680	)

Other items:
Impairment of mineral properties		-			-			-			(3,580	)		(18,927	)
Settlement of debt		-			-			-			-			8,593


Net loss		(56,536	)		(43,681	)		(170,383	)		(163,001	)		(1,278,014	)


Basic and diluted loss per share		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Weighted average number of shares outstanding – basic and diluted		72,755,800			72,755,800			72,755,800			72,755,800

F-3

SILICA RESOURCES CORPORATION
(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS
(Unaudited)


													CUMULATIVE
													FROM
													INCEPTION
	THREE MONTHS ENDED						NINE MONTHS ENDED						OCTOBER 7 2005
	DECEMBER 31,			DECEMBER 31,			DECEMBER 31,			DECEMBER 31,			TO DECEMBER
	2010			2009			2010			2009			31, 2010
	$			$			$			$			$

Operating Activities

Net loss		(56,536	)		(41,125	)		(170,383	)		(163,001	)		(1,278,014	)

Items not requiring the use of cash
Depreciation		-			-			-			110			1,228
Interest accrued		5,236			3,580			14,470			9,717			35,437
Mineral property costs		-			-			-			-			300
Consulting fees accrued		15,000			-			45,000			-			105,000
Impairment of mineral properties		-			-			-			3,580			18,927
Settlement of debt		-			-			-			-			(8,593	)
Changes in operating assets and liabilities
Receivables		(1,002	)		(1,162	)		(1,845	)		1,274			(3,558	)
Accounts payable and accrued liabilities		15,493			22,934			77,468			57,568			303,934

Net Cash Used in Operating Activities		(21,809	)		(15,773	)		(35,290	)		(90,752	)		(825,339	)

Investing Activities
Acquisition of mineral properties		-			-			-			-			(24,144	)
Acquisition of office equipment		-			-			-			-			(1,228	)
Net Cash Used in Investing Activities		-			-			-			-			(25,372	)

Financing Activities
Proceeds from sale of common stock		-			-			-			-			567,618
Due to related party					15,000			-			43,444			38,017
Promissory notes		21,414			650			33,612			45,750			245,455

Net Cash Provided by Financing Activities		21,414			15,650			33,612			89,194			851,090

Increase (Decrease) in Cash		(395	)		(123	)		(1,678	)		(1,558	)		379

Cash – Beginning		774			724			2,057			2,159			-

Cash – Ending		379			601			379			601			379

Supplemental Disclosures:

Interest paid		-			-			-			-
Income taxes paid		-			-			-			-

F-4

SILICA RESOURCES CORPORATION (An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS’ DEFICIT - OCTOBER 7, 2005 (DATE OF INCEPTION) TO DECEMBER 31, 2010 (Unaudited)

	COMMON STOCK						Additional Paid-in Capital			Common Share Subscription			Warrants			Deficit Accumulated during the Exploration Stage			Total
	Number			Par Value


				$			$			$			$			$			$
Capital Stock issued for Cash:
- February 2006 at $0.00005 per share		60,000,000			60,000			(57,000	)		-			-			-			3,000
- February 2006 at $0.0025 per share		24,000,000			24,000			36,000			-			-			-			60,000
- March 2006 at $0.0025 per share		6,400,000			6,400			9,600			-			-			-			16,000
Capital Stock issued for Mineral Property:
- march 2006 at $0.0025 per share (Note 4)		120,000			120			180			-			-			-			300

Capital Subscription		-			-			-			(2,000	)		-			-			(2,000	)

Net loss for the year		-			-			-			-			-			(12,280	)		(12,280	)

Balance, March 31, 2006		90,520,000			90,520			(11,220	)		(2,000	)		-			(12,280	)		65,020

Capital Stock issued for Cash:
- June 2006 at $0.0025 per share		8,000,000			8,000			12,000			-			-			-			20,000
- September 2006 at $0.0025 per share		800,000			800			1,200			-			-			-			2,000

Capital Subscription		-			-			-			2,000			-			-			2,000

Net loss for the year		-			-			-			-			-			(127,317	)		(127,317	)

Balance, March 31, 2007		99,320,000			99,320			1,980			-			-			(139,597	)		(38,297	)

Capital Stock issued for Cash:
- November 2007 to January 2008 at $0.25 per share		1,480,000			1,480			319,988			-			48,532			-			370,000

Issue Cost - legal		-			-			(3,382	)		-			-			-			(3,382	)

Net loss for the year		-			-			-			-			-			(212,504	)		(212,504	)

Balance, March 31, 2008		100,800,000			100,800			318,586			-			48,532			(352,101	)		115,817

Capital Stock issued for Cash:
- June 3, 2008 at $0.25 per share		400,000			400			86,897			-			12,703			-			100,000

Shares Cancelled		(28,444,200	)		(28,444	)		28,444			-			-			-			-

Net loss for the year		-			-			-			-			-			(531,394	)		(531,394	)

Balance, March 31, 2009		72,755,800			72,756			433,927			-			61,235			(883,495	)		(315,577	)

1,480,000 warrants expired		-			-			48,532			-			(48,532	)		-			-

Net loss for the year		-			-			-			-			-			(224,136	)		(224,136	)

Balance, March 31, 2010		72,755,800			72,756			482,459			-			12,703			(1,107,631	)		(539,713	)

400,000 warrants expired		-			-			12,703			-			(12,703	)		-			-

Net loss for the period		-			-			-			-			-			(170,383	)		(170,383	)

Balance, December 31, 2010		72,755,800			72,756			495,162			-			-			(1,278,014	)		(710,096	)

F-5

SILICA RESOURCES CORPORATION

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010

(Unaudited)

1.	BASIS OF PRESENTATION AND NATURE OF OPERATIONS

The unaudited financial information furnished herein reflects all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented. These interim financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding fiscal year, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s financial statements for the fiscal year ended March 31, 2010, has been omitted. The results of operations for the nine month period ended December 31, 2010 are not necessarily indicative of results for the entire year ending March 31, 2011.

Management has evaluated events occurring between the end of the fiscal quarter December 31, 2010 to the date of filing.

Recent accounting pronouncements with future effective dates are not expected to have an impact on the Company’s financial statements.

2.	MINERAL CLAIM INTEREST

Elkhorn property

The Company owns a 100% interest in the Elkhorn property located in Beaverhead County, Montana with a carrying value of $5,217.

3.	CAPITAL STOCK

At December 31, 2010, there were no outstanding stock options.

Stock Purchase Warrants

At December 31, 2010, there were no outstanding share purchase warrants. Warrant transactions and the number of warrants outstanding at December 31, 2010 are summarized as follows:

	Year ended March 31, 2010							Nine months ended December 31, 2010
	Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Life in Years		Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Life in Years
Balance, Beginning		1,880,000		$	0.35		0.79		400,000		$	0.35		0.18
Expired		(1,480,000	)		0.35		-		(400,000	)	$	0.35		-
Balance, End		400,000		$	0.35		0.18		-			-		-

F-6

SILICA RESOURCES CORPORATION

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010

(Unaudited)

4.	RELATED PARTY TRANSACTIONS

As at December 31, 2010, the Company owed $12,017 (March 31, 2010 - $12,017) for expense reimbursements to a company with a director in common.

During the period ended December 31, 2010, the Company incurred $45,000 (December 31, 2009 - $30,000) as consulting fees for mineral property exploration services rendered to a director and officer of the Company. As at December 31, 2010, the Company owed $131,000 (March 31, 2010 - $86,000) to this officer.

The above transactions have been recorded at exchange amount which is the amount of consideration established and agreed to by the related parties. See Note 5.

5.	PROMISSORY NOTES

On May 27, 2008, the Company signed a promissory note, with a company that is a significant shareholder, due on August 26, 2008 in the amount of $50,000, unsecured with annual interest of 7%. Interest of $2,637 was accrued during the nine months ended December 31, 2010. The note was not repaid on its due date. The note is due on demand and continues to accrue interest at its originally stated terms.

On September 12, 2008, the Company issued a promissory note in the amount of $20,000, unsecured, due and payable with accumulated interest within 190 days and bears interest of 8% per annum. Interest of $1,205 was accrued during the nine months ended December 31, 2010. The note was not repaid on its due date. The note is due on demand and continues to accrue interest at its originally stated terms.

On November 20, 2008, the Company issued a promissory note, with a company that is a significant shareholder, in the amount of $4,000, unsecured, due and payable with accumulated interest within 6 months and bears interest of 10% per annum. The note was not repaid on its due date. Interest of $356 was accrued during the nine months ended December 31, 2010. The note is due on demand and continues to accrue interest at its originally stated terms. Two further unsecured notes with annual interest at 10% were issued by the Company to this shareholder on September 18, 2009 and November 13, 2009 in the amounts of $650 and $4,100 respectively, each for a one year term from the date of issue; the Company accrued an aggregate of $398 in interest on these notes during the nine months ended December 31, 2010. In addition, two further unsecured notes denominated in Canadian dollars with annual interest at 10% were issued by the Company to this shareholder on September 3, 2009 and February 3, 2010 in the amounts of CDN$1,000 and CDN$10,000 respectively, each for a one year term from the date of issue; the Company accrued an aggregate of $826 in interest on these notes during the nine months ended December 31, 2010. A further unsecured note with annual interest at 10% was issued by the Company to this shareholder on January 18, 2010 in the amount of $7,300, for a one year term from the date of issue; the Company accrued an aggregate of $552 in interest on this note during the nine months ended December 31, 2010. On July 6, 2010, the Company issued a promissory note in the amount of $7,000 ($2,000 received on May 19, 2010 and $5,000 on July 6, 2010) to a company that is a significant shareholder. The note is due on demand and accrues interest at 10% per annum. Interest of $372 was accrued during the nine months ended December 31, 2010. A further three unsecured notes with annual interest at 10% was issued by the Company to this shareholder on September 13, 2010, November 19, 2010, and December 20, 2010 in the amounts of $5,300, CDN$10,200, and CDN$10,950 for a one year term from the date of issue; the Company accrued an aggregate of $328 in interest on these notes during the nine months ended December 31, 2010.

On December 3, 2008, the Company issued a promissory note to a company that is a significant shareholder, due June 4, 2009 in the amount of $75,000, unsecured with annual interest of 8% compounding monthly. The note was not repaid on its due date. On June 16, 2009, the Company issued a second promissory note to this shareholder in the amount of $40,000. The note was due on December 16, 2009, is unsecured, and bears interest at 8% per annum compounded monthly. The note was not repaid on its due date. The Company accrued an aggregate of $7,796 in interest on these notes during the nine months ended December 31, 2010. The notes are due on demand and continue to accrue interest at their originally stated terms.

F-7

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

GENERAL

Silica Resources Corporation was incorporated under the laws of the State of Nevada in October 7, 2005. We are engaged in the business of acquisition, exploration and development of mineral properties in the United States and Canada. We also plan to locate and acquire other precious or industrial mineral properties. As of the date of this Quarterly Report, our main focus is the identification, acquisition, exploration and development of mineral properties, which has resulted in the acquisition of our interest in the properties discussed below.

Our shares of common stock are quoted on Pink OTC Markets under the symbol “SRCN”.

Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we", "our", "us”, "the Company", “the Corporation”, “Silica”, or "Silica Resources Corporation" refers to Silica Resources Corporation.

BUSINESS OPERATIONS

We are a resource exploration company currently engaged in the exploration and development of properties that we believe may contain valuable minerals for the purpose of discovering commercially viable mineral deposits. Our foundational group of assets consists of the properties located in Montana as more fully described below. We entered into an agreement with Major Ventures LLC, Elk Creek Corporation and Balbach Colorado Inc. (collectively, the "Vendors") to earn a 100% interest in the properties. Since we are an exploration stage company, there is no assurance that a commercially viable mineral deposit exists on the property covered by the prospect lease, and a great deal of further exploration will be required before a final evaluation as to the economic and legal feasibility for our future exploration is determined. We have no known reserves of any type of mineral. To date, we have not discovered an economically viable mineral deposit on the property, and there is no assurance that we will discover one.

MINERAL PROPERTIES

The location of our mineral properties is summarized as follows:

Location	Approximate Acreage
Elkhorn Property, Beaverhead County, Montana	920 acres

Mineral Property Acquisition Agreement/Elkhorn Property

On January 31, 2008, we entered into a mineral property acquisition agreement (the "Agreement"), with Major Ventures LLC, Elk Creek Corporation and Balbach Colorado Inc. (collectively, the "Vendors"). Effective March 27, 2008, we completed the terms and conditions of the Agreement. In accordance with the terms and conditions of the Agreement, the Vendors granted to us the sole and exclusive option (the "Option") to acquire a 100% undivided legal, beneficial and registerable interest in and to the following unencumbered mineral property interests (collectively, the "Property"): (i) the Elkhorn property located in Beaverhead County, Montana, and comprising approximately 1,777 acres; (ii) the Ramey Creek property located in Custer County, Idaho, and comprising approximately 393 acres; and (iii) the Roaring River property located in Elmore County, Idaho, and comprising approximately 2,707 acres.

In order to exercise the Option, we were obligated to provide the following consideration to the Vendors in the following manner: (i) we caused one of our certain existing founding shareholders to sell an aggregate of 2,000,000 of our post-forward stock split restricted and controlled and issued and outstanding common shares from the holdings of such shareholder (each an "Affiliate Share") to the order and direction of the Vendors at a purchase price of U.S. $0.0001 per Affiliate Share, as follows: (a) 1,000,000 Affiliates Shares to Balbach Colorado Inc, (b) 600,000 Affiliate Shares to Elk Creek Corporation, and (c) 400,000 Affiliate Shares to Major Ventures LLC; and (ii) we have paid to or on the Vendors’ behalf, all underlying option, regulatory and governmental payments and assessment work required to keep the mineral property interests comprising the Property and any underlying option agreements respecting any of the mineral property interests comprising the Property in good standing.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

MINERAL PROPERTIES - continued

On March 27, 2008, we completed the acquisition requirements under the Agreement and exercised the Option and thereby acquired an undivided 100% legal, beneficial and registerable interest in and to the mineral property interests comprising the Property. During fiscal year ended March 31, 2008, we paid an aggregate of $85,000 to the Vendors, of which $4,900 for geologists’ fees spent were recorded as acquisition of mineral property, and the remaining was administration expenditures which were expenses as exploration and development in mineral property costs.

As of August 31, 2008, we have decided to allow the leases on the Roaring River and Ramey Creek properties to lapse without renewal due to difficulties with environmental policies that were not conducive to long term exploration initiatives. We have thus impaired lapsed mineral properties by $15,347 during fiscal year ended March 31, 2009.

Effective on June 30, 2009, we decided to renew fifty (50) of the eighty-six (86) total claims based on identification of exploratory and geological work indicating core claims and to allow the remaining thirty-six (36) claims comprising the property to lapse without renewal. Management has analyzed the market conditions and rising price for molybdenum and believes that such factors increase the potential value of these claims as an exploration target. We have thus impaired lapsed mineral properties by $3,580 during fiscal year ended March 31, 2010 on the basis of net acres abandoned. The current renewed lease on the Elkhorn property remains in good standing and is paid through August 2011. As of the date of this Quarterly Report, the Elkhorn Property is comprised of 50 staked MO Lode mining claims on approximately 920 acres within the Elkhorn Mining District in Beaverhead County, Montana.

PROPOSED FUTURE BUSINESS OPERATIONS

Our current strategy is to complete further acquisition of additional mineral opportunities which fall within the criteria of providing a geological basis for development of mining initiatives that can provide revenue potential and production cash flows and create expanding reserves. Our emphasis during the past fiscal year was on exploration objectives targeting molybdenum. We are also considering further options for acquisitions and development mandates that may or may not be molybdenum related. We anticipate that our ongoing efforts, subject to adequate funding being available, will continue to be focused on successfully concluding negotiations for additional interests in mineral properties. We plan to build a strategic base of exploration properties with mineral production capability. Our ability to continue to complete planned exploration activities and expand acquisitions and explore mining opportunities is dependent on adequate capital resources being available and further sources of debt and equity being obtained. See “Plan of Operation”.

RESULTS OF OPERATIONS

We are an exploration stage company and have not generated any revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

The summarized financial data set forth in the table below is derived from and should be read in conjunction with our unaudited financial statements for the nine month period ended December 31, 2010 and December 31, 2009, including the notes to those financial statements which are included in this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

The following table sets forth selected financial information for the periods indicated.

	Three Month Period Ended December 31,						Nine Month Period Ended December 31,						For the Period from October 7, 2005 (inception) to December 31,
	2010			2009			2010			2009			2010
Expenses
Depreciation	$	-0-		$	35		$	-0-		$	110		$	1,228
Interest		5,160			4,056			14,394			9,922			35,702
Consulting		28,757			25,168			80,328			66,741			437,679
Legal		6,322			4,056			14,978			12,970			174,876
Management fees		-0-			-0-			-0-			-0-			15,000
Mineral property exploration		-0-			-0-			7,000			7,025			314,095
Office and administration		13,697			9,700			34,885			36,297			178,974
Professional services		2,600			1,100			18,798			26,356			110,126
Loss from operation	$	(56,536	)	$	(43,681	)	$	(170,383	)	$	(159,421	)	$	(1,267,680	)
Settlement of debt		-0-			-0-			-0-			-0-			8,593
Impairment of mineral properties		-0-			-0-			-0-			(3,580	)		(18,927	)
Net Loss	$	(56,536	)	$	(43,681	)	$	(170,383	)	$	(163,001	)	$	(1,278,014	)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

RESULTS OF OPERATIONS - continued

We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Nine Month Period Ended December 31, 2010 Compared to Nine Month Period Ended December 31, 2009.

Our net loss for the nine month period ended December 31, 2010 was ($170,383) compared to a net loss of ($163,001) during the nine month period ended December 31, 2009 (an increase of $7,382). During the nine month periods ended December 31, 2010 and December 31, 2009, we did not generate any revenue.

During the nine month period ended December 31, 2010, we incurred expenses of $170,383 compared to $159,421 incurred during the nine month period ended December 31, 2009 (an increase of $10,962). This resulted in a loss from operations during the nine month period ended December 31, 2010 of ($170,383) as compared with the loss from operations during the nine month period ended December 31, 2009 of ($159,421) that excluded impairment of mineral properties in the amount of ($3,580). The expenses incurred during the nine month period ended December 31, 2010 consisted of: (i) consulting of $80,328 (2009: $66,741); (ii) depreciation of $-0- (2009: $110); (iii) interest of $14,394 (2009: $9,922); (iv) legal of $14,978 (2009: $12,970); (v) mineral property exploration of $7,000 (2009: $7,025); (vii) office and administration of $34,885 (2009: $36,297); and (viii) professional services of $18,798 (2009: $26,356).

Expenses incurred during the nine month period ended December 31, 2010 compared to the nine month period ended December 31, 2009 increased nominally due to the increase in consulting charges, interest expense, and legal costs that were greater in aggregate than decreases in professional services and office and administration. General and administrative expenses include corporate overhead, financial and administrative contracted services, marketing, and certain consulting costs.

Loss from operations of ($170,383) during the nine month period ended December 31, 2010 was adjusted by $-0- in impairment of mineral properties as compared to ($3,580) during the nine month period ended December 31, 2009 in impairment of mineral properties. This resulted in a net loss for the nine month period ended December 31, 2010 of ($170,383) compared to a net loss for the nine month period ended December 31, 2009 of ($163,001).

The weighted average number of shares outstanding was 72,755,800 for both the nine month periods ended December 31, 2010 and December 31, 2009.

Three Month Period Ended December 31, 2010 Compared to Three Month Period Ended December 31, 2009.

Our net loss for the three month period ended December 31, 2010 was ($56,536) compared to a net loss of ($43,681) during the three month period ended December 31, 2009 (an increase of $12,855). During the three month periods ended December 31, 2010 and December 31, 2009, we did not generate any revenue.

During the three month period ended December 31, 2010, we incurred expenses of $56,536 compared to $43,681 incurred during the three month period ended December 31, 2009 (an increase of $12,855). This resulted in a loss from operations during the three month period ended December 31, 2010 of ($56,536) as compared with the loss from operations during the three month period ended December 31, 2009 of ($43,681). These expenses incurred during the three month period ended December 31, 2010 consisted of: (i) consulting of $28,757 (2009: $25,168); (ii) depreciation of $-0- (2009: $35); (iii) interest of $5,160 (2009: $4,056); (iv) legal of $6,321 (2009: $3,622); (v) office and administration of $13,697 (2009: $9,700); and (vii) professional services of $2,600 (2009:$1,100).

Expenses incurred during the three month period ended December 31, 2010 compared to the three month period ended December 31, 2009 increased nominally due to the increases in all categories of expenses. This resulted in a net loss for the three month period ended December 31, 2010 of ($56,536) compared to a net loss for the three month period ended December 31, 2009 of ($43,681).

The weighted average number of shares outstanding was 72,755,800 for both the three month periods ended December 31, 2010 and December 31, 2009.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

LIQUIDITY AND CAPITAL RESOURCES

Nine Month Period Ended December 31, 2010

As at the nine month period ended December 31, 2010, our current assets were $3,937 and our current liabilities were $719,249, which resulted in a working capital deficit of $715,312. As at the nine month period ended December 31, 2010, current assets were comprised of $379 in cash and $3,558 in receivables. As at the nine month period ended December 31, 2010, current liabilities were comprised of: (i) $295,341 in accounts payable and accrued liabilities; (ii) $280,891 in promissory notes; and (iii) $143,017 due to related parties.

As at the nine month period ended December 31, 2010, our total assets were $9,154 comprised of: (i) current assets of $3,937; and (ii) valuation of mining properties of $5,217. The slight increase in total assets during the nine month period ended December 31, 2010 from fiscal year ended March 31, 2010 was primarily due to the increase in receivables.

As at the nine month period ended December 31, 2010, our total liabilities were $719,249 comprised entirely of current liabilities. The increase in liabilities during the nine month period ended December 31, 2010 from fiscal year ended March 31, 2010 was primarily due to the increase in accounts payable, amounts due to related parties, and promissory notes utilized to fund operations. See “Material Commitments.”

Stockholders’ deficit increased from ($539,713) for fiscal year ended March 31, 2010 to ($710,096) for the nine month period ended December 31, 2010.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the nine month period ended December 31, 2010, net cash flows used in operating activities was ($35,290) consisting primarily of a net loss of ($170,383). For the nine month period ended December 31, 2009, net cash flows used in operating activities was ($90,752) consisting primarily of a net loss of ($163,001). During the nine month period ended December 31, 2010, net cash flows used in operating activities was adjusted by items not requiring the use of cash for interest accrued in the amount of $14,470 (2009: $9,717), depreciation of $-0- (2009: $110), and impairment of mineral properties of $-0- (2009: $3,580). Net cash flows used in operating activities was further changed by ($1,845) (2009: $1,274) by receivables, and $77,468 (2009: $57,568) by accounts payable and accrued liabilities.

Cash Flows from Investing Activities

For the nine month periods ended December 31, 2010 and June 30, 2009, net cash flows used in investing activities was $-0-.

Cash Flows from Financing Activities

We have financed our operations primarily from either debt related advances or the issuance of equity and other debt instruments. For the nine month period ended December 31, 2010, net cash flows provided from financing activities was $33,612 compared to $89,194 for the nine month period ended December 31, 2009. Cash flows from financing activities for the nine month period ended December 31, 2010 consisted of $33,612 in promissory notes compared to cash flows from financing activities for the nine month period ended December 31, 2009 comprised of $45,750 in promissory notes in $43,444 in advances from related parties.

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities and debt instruments. Our working capital requirements are expected to increase in line with the growth of our business.

PLAN OF OPERATION AND FUNDING

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next nine months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) mineral property exploration; (ii) possible exploratory drilling initiatives on current and future properties; (iii) future property acquisitions; and, (iv) new business acquisitions under consideration and negotiation. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict or negate our business operations.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

PLAN OF OPERATION AND FUNDING - continued

Our plan of operations for the next twelve months is to complete the following objectives within the time periods specified, subject to our obtaining the funding necessary. We anticipate expenditures as follows during the next phase of exploration and development of our Elkhorn property subject to the availability of adequate funding yet to be obtained.

Elkhorn Property	Budgeted Expense
Land acquisition and maintenance		30,000
Personnel and travel		50,000
Consultants		30,000
Drilling 5,000 feet at 60 foot (4 DDH)		300,000
Road and drillsite preparations		20,000
Engineering, surveying		15,000
Assaying (500 samples at 50 foot intervals)		25,000
Contingency and unallocated		80,000
Elkhorn Property Total:		550,000

We will have to raise additional funding in order to conduct any such work programs outlined above and budgeted expenditures relating to the Elkhorn Property as well as ongoing general and administrative expenses and those required costs related to the Property relating to the Agreement. We will also have to settle existing payables and extinguish existing debts.

We estimate that our total expenditures over the next twelve months could be approximately $750,000 to $900,000. Possible future acquisition targets remain unbudgeted in the estimate of expenditures.

Advances and further private placements are expected to be adequate to fund our operations over the next nine months. However, we will require financing to enable us to complete our exploration programs, and to pay for our general and administrative expenses for the next 12 months.

During the twelve month period following the date of this Quarterly Report, we anticipate that we will not generate any revenue. Accordingly, we anticipate that we will be required to obtain financing in order to complete our plan of operations during the next twelve months. We believe that debt financing will not be an alternative for us as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or contemplated debt securities to fund our plan of operations. In the absence of such financing, we will not be able to continue exploration of our prospects and our business plan will fail. Even if we are successful in obtaining equity financing to fund our exploration programs, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our prospects. If we do not continue to obtain financing, we will be forced to abandon our exploration prospects and our plan of operations will fail.

We may consider entering into a joint venture arrangement to provide the required funding to develop our current or future properties under consideration by management. We have undertaken preliminary efforts to locate a joint venture participant for our Elkhorn property. Even if we determined to pursue a joint venture participant, there is no assurance that any third party would enter into a joint venture agreement with us in order to fund exploration of our prospect claims. If we entered into a joint venture arrangement, we would likely have to assign a percentage of our interest in our prospect lease to the joint venture participant.

MATERIAL COMMITMENTS

As of the date of this Quarterly Report, and other than our continuing obligations under the Agreement, we do not have any material commitments other than as described below.

Promissory Notes

On September 12, 2008, the Company issued a promissory note in the amount of $20,000, unsecured, due and payable with accumulated interest within 190 days and bears interest of 8% per annum. Interest of $1,205 was accrued during the period ended December 31, 2010. The note was not repaid on its due date. The note is due on demand and continues to accrue interest at its originally stated terms.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

MATERIAL COMMITMENTS - continued

On November 20, 2008, the Company issued a promissory note, with a company that is a significant shareholder, in the amount of $4,000, unsecured, due and payable with accumulated interest within 6 months and bears interest of 10% per annum. The note was not repaid on its due date. Interest of $356 was accrued during the nine months ended December 31, 2010. The note is due on demand and continues to accrue interest at its originally stated terms. Two further unsecured notes with annual interest at 10% were issued by the Company to this shareholder on September 18, 2009 and November 13, 2009 in the amounts of $650 and $4,100 respectively, each for a one year term from the date of issue; the Company accrued an aggregate of $398 in interest on these notes during the nine months ended December 31, 2010. In addition, two further unsecured notes denominated in Canadian dollars with annual interest at 10% were issued by the Company to this shareholder on September 3, 2009 and February 3, 2010 in the amounts of CDN$1,000 and CDN$10,000 respectively, each for a one year term from the date of issue; the Company accrued an aggregate of $826 in interest on these notes during the nine months ended December 31, 2010. A further unsecured note with annual interest at 10% was issued by the Company to this shareholder on January 18, 2010 in the amount of $7,300, for a one year term from the date of issue; the Company accrued an aggregate of $552 in interest on this note during the nine months ended December 31, 2010. On July 6, 2010, the Company issued a promissory note in the amount of $7,000 ($2,000 received on May 19, 2010 and $5,000 on July 6, 2010) to a company that is a significant shareholder. The note is due on demand and accrues interest at 10% per annum. Interest of $372 was accrued during the period ended December 31, 2010. A further three unsecured notes with annual interest at 10% was issued by the Company to this shareholder on September 13, 2010, November 19, 2010, and December 20, 2010 in the amounts of $5,300, CDN$10,200, and CDN$10,950 for a one year term from the date of issue; the Company accrued an aggregate of $328 in interest on these notes during the nine months ended December 31, 2010.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next twelve months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

GOING CONCERN

The independent auditors' report accompanying our March 31, 2010 and March 31, 2009 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse change in foreign currency and interest rates.

Exchange Rate

Our reporting currency is United States Dollars (“USD”). In the event we acquire any properties outside of the United States, the fluctuation of exchange rates may have positive or negative impacts on our results of operations. However, since all of our properties are currently located within the United States, any potential revenue and expenses will be denominated in U.S. Dollar, and the net income effect of appreciation and devaluation of the currency against the US Dollar would be limited to our costs of acquisition of property.

Interest Rate

Interest rates in the United States are generally controlled. Any potential future loans will relate mainly to acquisition of properties and will be mainly short-term. However our debt may be likely to rise in connection with expansion and if interest rates were to rise at the same time, this could have a significant impact on our operating and financing activities. We have not entered into derivative contracts to hedge existing risks for speculative purposes.

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.

As of December 31, 2010, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer and our principal financial and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (also our principal executive officer and chief financial officer also our principal financial and accounting officer) concluded that our disclosure controls and procedures were effective in providing reasonable assurance in the reliability of our financial reports as of the end of the period covered by this quarterly report. Effectiveness of disclosure controls was primarily a function of our current scale and scope of operations which are relatively non-complex with a limited volume of transactions and capital resources.

Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal controls over financial reporting that occurred during the three month period ended December 31, 2010 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

Inherent limitations on effectiveness of controls

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. 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.

AUDIT COMMITTEE

Our Board of Directors has not established an audit committee. The respective role of an audit committee has been conducted by our Board of Directors. When established, the audit committee's primary function will be to provide advice with respect our financial matters and to assist our Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

No report required.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

No report required.

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

Removed and Reserved.

ITEM 5. OTHER INFORMATION

No report required.

ITEM 6. EXHIBITS

Exhibits:

31.1

Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

31.2

Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

32.1

Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

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.

	SILICA RESOURCES CORPORATION

Dated: February 2, 2011	By:	/s/ Paul Brock
		Paul Brock, President and
		Chief Executive Officer

Dated: February 2, 2011	By:	/s/ Paul Brock
		Paul Brock, Chief Financial Officer

SILICA RESOURCES CORP - FORM 10-Q - February 14, 2011

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SILICA RESOURCES CORP Reports