EARTH DRAGON RESOURCES INC. - FORM 10-Q

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EX-31.1 - EARTH DRAGON RESOURCES INC.	exhibit311.htm
EX-31.2 - EARTH DRAGON RESOURCES INC.	exhibit312.htm

UNITED STATES

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 February 28, 2011

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

For the transition period from __________________ to ______________________

Commission file number

000-53774

EARTH DRAGON RESOURCES INC.
(Exact name of small business issuer as specified in its charter)
Nevada					N/A
(State or other jurisdiction of incorporation or organization)					(IRS Employer Identification No.)
Azaban Green Terrace St. 3-20-1 Minami Azabu Minato-ku Tokyo, 106-0047 Japan
(Address of principal executive offices)
81-(0)3-6859-8532
(Issuer’s telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[ X]	YES	[ ]	NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act
Large accelerated filer			[ ]			Accelerated filer				[ ]
Non-accelerated filer			[ ]	(Do not check if a smaller reporting company)		Smaller reporting company				[ X ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act
						[ ]	YES	[ x ]	NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
						[ ]	YES	[ ]	NO
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
						[ ]	YES	[ ]	NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

254,480,000 common shares issued and outstanding as of April 11, 2011.

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

Earth Dragon Resources Inc.

(An Exploration Stage Company)

Finacial Statements

Table of Content

Balance Sheets	............................................................................................................................................................................................... F-2

Statements of Operations	............................................................................................................................................................................................... F-3

Statements of Stockholders' Equity Deficiency	...............................................................................................................................................................................................F-4

Statements of Cash Flows	............................................................................................................................................................................................... F-5

F-1

Earth Dragon Resources Inc.
(An Exploration Stage Company)
Balance Sheets
(Expressed in US Dollars)


					February 28,		May 31,
					2011		2010
			ASSETS		(Unaudited)
Current Assets
	Cash			$	40,914	$	18,700
	Prepaid Expenses				15,700		-
Total Current Assets					56,614		18,700
Mining property acquisition costs, less reserve for
	impairment of $6,500				-		-
Total Assets				$	56,614	$	18,700




LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities
	Account payable and accrued liabilities			$	2,264	$	13,833
	Due to related parties				8,839		9,395
	Notes payable				341,980		-
Total current liabilities					353,083		23,228
Stockholders' Equity (Deficiency)
	Common stock, $0.0001 par value;
		authorized 2,850,000,000 shares, issued and outstanding
		254,480,000 and 454,480,000 shares, respectively			25,448		45,448
	Additional paid-in capital				102,327		72,552
	Deficit accumulated during
		the exploration stage			(424,244)		(122,528)
Total stockholders' equity (deficiency)					(296,469)		(4,528)
Total Liabilities and Stockholders' Equity (Deficiency)				$	56,614	$	18,700

See notes to financial statements.

F-2

Earth Dragon Resources Inc.
(An Exploration Stage Company)
Statements of Operations
(Expressed in US Dollars)
(Unaudited)

			Three months Ended February 28, 2011		Three months Ended February 28, 2010		Nine months Ended February 28, 2011		Nine months Ended February 28, 2010		Period October 23, 2007 (Inception) to February 28, 2011

Revenue		$	-	$	-	$	-	$	-	$	-

Cost and expenses
	Impairment of mining property acquisition costs		-		-		-		-		6,500
	Impairment of investment in Tanzania Joint Venture		125,000		-		125,000		-		125,000
	Exploration costs		-		-		400		-		31,662
	Compensation to related parties		50,000		-		84,839		-		84,839
	Other general and administrative expenses		82,008		3,933		91,477		9,140		176,243
Total Costs and Expenses			257,008		3,933		301,716		9,140		424,244


Net Loss		$	(257,008)	$	(3,933)	$	(301,716)	$	(9,140)	$	(424,244)

Net Loss per share
	Basic and diluted	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)


Number of common shares used to compute loss per share
	Basic and Diluted		367,813,334		454,480,000		425,591,112		454,480,000		388,657,551


See notes to financial statements.

F-3

Earth Dragon Resources Inc.
(An Exploration Stage Company)
Statements of Stockholders' Equity (Deficiency)
For the period October 23, 2007 (Inception) to February 28, 2011
(Expressed in US Dollars)


		Common Stock, $0.0001 Par Value				Additional Paid-in Capital		Deficit Accumulated During the Exploration Stage		Total Stockholders' Equity (Deficiency)
		Shares		Amount
Common stock issued for cash
	on January 31, 2008 at $0.0000526 per share	380,000,000	$	38,000	$	(18,000)	$	-	$	20,000
Net loss for the period October 23,
	2007 (inception) to May 31, 2008	-		-		-		(14,392)		(14,392)
Balance, May 31, 2008		380,000,000		38,000		(18,000)		(14,392)		5,608
Common stock sold on
	January 31, 2009 at $0.0013158 per share	74,480,000		7,448		90,552		-		98,000
Net loss		-		-		-		(84,167)		(84,167)
Balance, May 31, 2009		454,480,000		45,448		72,552		(98,559)		19,441
Net loss								(23,969)		(23,969)
Balance, May 31, 2010		454,480,000		45,448		72,552		(122,528)		(4,528)

Unaudited:
Forgiveness of due to related party by
	Yuan Kun Deng, Chief Executive Officer
	of the Company from October 23, 2007
	(inception) to September 21, 2010	-		-		9,775		-		9,775
Cancellation on January 21, 2011 of
	common stock issued on January 31, 2008
	to Yuan Kun Deng, Chief Executive
	Officer of the Company from October 23,
	2007 (inception) to September 21, 2010	(200,000,000)		(20,000)		20,000		-		-
Net loss for the nine months
ended February 28, 2011		-		-		-		(301,716)		(301,716)
Balance, February 28, 2011		254,480,000	$	25,448	$	102,327	$	(424,244)	$	(296,469)


See notes to financial statements.

F-4

Earth Dragon Resources Inc.
(An Exploration Stage Company)
Statements of Cash Flows
(Expressed in US Dollars)
(Unaudited)


				Nine months Ended February 28, 2011		Nine months Ended February 28, 2010		Period October 23, 2007 (Inception) to February 28, 2011

Cash Flows from Operating Activities
	Net loss		$	(301,716)	$	(9,140)	$	(424,244)
	Adjustments to reconcile net loss to net cash
		used for operating activities:
		Impairment of mining property acquisition costs		-		-		6,500
		Impairment of investment in Tanzania Joint Venture		125,000		-		125,000
	Changes in operating assets and liabilities:
		Prepaid expenses		(15,700)		-		(15,700)
		Accounts payable and accrued liabilities		(7,023)		(6,221)		4,244
		Due to related party		33,839		-		33,839
Net cash provided by (used for) operating activities				(165,600)		(15,361)		(270,361)

Cash Flows from Investing Activities
	Mineral property acquisition			-		-		(6,500)
	Investment in Tanzania Joint Venture			(125,000)		-		(125,000)
Net cash provided by (used for) investing activities				(125,000)		-		(131,500)

Cash Flows from Financing Activities
	Proceeds from sale of common stock			-		-		118,000
	Due to related party			(2,186)		3,899		9,775
	Notes Payable			315,000		-		315,000
Net cash provided by (used for) financing activities				312,814		3,899		442,775

Increase (decrease) in cash				22,214		(11,462)		40,914
Cash, beginning of period				18,700		30,398		-

Cash, end of period			$	40,914	$	18,936	$	40,914


Supplemental Disclosures of Cash Flow Information:
	Interest paid		$	-	$	-	$	-
	Income taxes paid		$	-	$	-	$	-

Schedule of non-cash financing activities:
	Issuance of Promissory Note to Irish Son Limited
		("ISL") in exchange for ISL's payment of
		company liabilities (Accounts payable and
		accrued liabilities- $1,980, Due to related party-
		$25,000)	$	26,980	$	-	$	26,980
	Increase in due to related party (Yuan Kun Deng,
		Chief Executive Officer of the Company from
		October 23, 2007 (inception) to September 21, 2010)
		as a result of Mr. Deng's payment of Company liabilities	$	2,566	$	-	$	2,566
	Forgiveness of due to related party by Yuan Kun Deng,
		Chief Executive Officer of the Company from
		October 23, 2007 (inception) to September 21, 2010	$	9,775	$	-	$	9,775

See notes to financial statements.

F-5

EARTH DRAGON RESOURCES INC.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

February 28, 2011

(Expressed in US Dollars)

(Unaudited)

1. Nature of Operations

Earth Dragon Resources, Inc. (the “Company”) was incorporated in the State of Nevada on October 23, 2007. The Company is an Exploration Stage Company as defined by Accounting Standards Codification (“ASC”) Topic 915, “Development Stage Entities”. As discussed in Note 3, the Company has acquired a mineral property located in the State of Nevada, U.S.A, and has not yet determined whether this property contains reserves that are economically recoverable. As discussed in Note 4, the Company entered into two joint venture agreements to finance mining activities in Africa.

Effective December 14, 2010, the Company effected a 38 for 1 forward stock split, increasing the issued and outstanding shares of common stock from 11,960,000 shares to 454,480,000 shares. All shares and per share amounts have been adjusted to retroactively reflect this stock split.

2. Interim Financial Information

The unaudited financial statements as of February 28, 2011 and for the three and nine months ended February 28, 2011 and 2010 and for the period October 23, 2007 (inception) to February 28, 2011 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of February 28, 2011 and the results of operations and cash flows for the periods ended February 28, 2011 and 2010. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the nine months ended February 28, 2011 are not necessarily indicative of the results to be expected for any subsequent quarter of the entire year ending May 31, 2011. The balance sheet at May 31, 2010 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the period October 23, 2007 (inception) to May 31, 2010 as included in our Form 10-K filed with the Securities and Exchange Commission on September 14, 2010.

3. Mineral Property

In December 2007, we acquired the right to conduct exploration activities on the Mountain Queen Lode Mining Claim, located in Clark County, Nevada, U.S.A., at a cost of $6,500. The Claim Number is NMC#1010396, which expires September 1, 2011.

In March 2008, the Company received an evaluation report from a third party consulting firm recommending an exploration program with a total estimated cost of $88,000. Due to lack of working capital, the Company has not completed this program.

On May 31, 2008, the Company recorded a $6,500 provision for impairment of mining property acquisition costs.

4. Joint Venture Agreements

Ghana

On January 12, 2011, the Company entered into a Joint Venture Agreement with Gravhaven Limited whereby the parties are to work together to develop the Nkwanta and the Asuogya mining concessions located in Ghana that are owned by Netas Mining Company (“Netas”). Gravhaven Limited has the right to acquire a 65% ownership interest in Netas pursuant to the terms of a Joint Venture Agreement dated April 5, 2010 it entered into with Netas and Emmanuel Adolf Tagoe, a shareholder of Netas. Under the terms of its joint venture agreement with Gravhaven, the Company is to contribute $2,000,000 towards the development of Netas’ concessions in exchange for a 20% ownership in Netas.

On March 8, 2011, we paid $35,000 to Hansen Drilling Ltd. as our first cash contribution to this joint venture.

Tanzania

On January 21, 2011, the Company entered into a Joint Venture Agreement with Gregory Investments Corp. (“Gregory”) whereby the parties were to work together to develop certain mining concessions located in Tanzania that are owned by Chisu Gold Mines Limited (“Chisu”), which is owned 60% by Gregory. The Joint Venture Agreement provided that the Company was to pay Gregory an initial amount of $100,000 and was to conduct due diligence within 90 days. Also, the Company was to contribute an additional $400,000 within 90 days, an additional $2,000,000 over 2 years (in exchange for a 20% ownership interest in Chisu), and an additional $3,000,000 within 3 years of the date of completion of the feasibility study (in exchange for an additional 30% ownership interest in Chisu). On March 30, 2011, the Company decided not to proceed with this joint venture.

On January 24, 2011 and February 23, 2011, we made payments to Ivana Obrenic of $25,000 and $100,000, respectively, pursuant to this joint venture. Effective February 28, 2011, we recorded a $125,000 provision for impairment of investment in Tanzania joint venture.

5. Due to Related Parties

Due to related parties consists of :

	February 28, 2011		May 31, 2010
Compensation and expenses due Thomas Herdman
(“ Herdman”), chief executive officer of the
Company since September 21, 2010	$	6,339	$	-

Compensation due Date Jiriicho (“ Jiriicho”),
director of the Company since
February 1, 2011		2,500		-
Amount due Yuan Kun Deng (“Deng”),
chief executive officer of the Company from
October 23, 2007 (inception) to September 21, 2010,
non-interest bearing, due on demand		-		9,395
Totals	$	8,839	$	9,395

Under a Consultant Agreement dated September 23, 2010 with Herdman, chief executive officer of the Company since September 21, 2010, the Company agreed to pay Herdman compensation of $15,000 per month for management services, or $79,839 for the period September 21,2010 to February 28, 2011. On October 13, 2010 and November 18, 2010, Irish Son Limited (“ISL”) paid $10,000 and $15,000, respectively, to Herdman or his designee on behalf of the Company (see Note 6). The term of the Consultant Agreement is one year; either party may terminate the agreement by giving the other party 30 days written notice.

Under a Consultant Agreement dated February 1, 2011 with James Park Mining Geologist, Director of the Company since February 1, 2011, the Company agreed to pay James Park compensation of $2,500 per month for director fees and service relating to Company joint ventures.

Under a Consultant Agreement dated February 1, 2011 with Date Jiriicho, Director of the Company since February 1, 2011, the Company agreed to pay Date Jiriicho compensation of $2,500 per month for director fees.

Under a Release signed by Deng, chief executive officer of the Company from October 23, 2007 (inception) to September 21, 2010, Deng agreed to waive the $9,775 remaining balance due him. The Company reported this forgiveness as a $9,775 addition to additional paid-in capital.

6. Notes Payable

Notes payable consist of :

	February 28, 2011		May 31, 2010
Promissory note dated February 28, 2011 issued to
MED Venture Ltd. for cash advances on January
24, 2011 and February 22, 2011, interest at 12%,
due February 27, 2012, unsecured	$	315,000	$	-
Promissory note dated November 30, 2010 issued to
Irish Son Limited (“ISL”) in exchange for ISL’s

payments of certain Company liabilities (see
Note 5), interest at 6%, due on demand, unsecured		26,980		-
Totals	$	341,980	$	-

7. Common Stock

On January 31, 2008, the Company issued 380,000,000 shares of common stock to its former chief executive officer for total cash proceeds of $20,000.

On January 31, 2009, the Company closed on the sale of a total of 74,480,000 shares of common stock in its public offering at a price of $0.0013158 per share for total cash proceeds of $98,000.

On January 21, 2011, the Company cancelled 200,000,000 shares of common stock which had been issued on January 31, 2008 to Yuan Kun Deng, the chief executive officer of the Company from October 23, 2007 (inception) to September 21, 2010, pursuant to the request of Mr. Deng.

At February 28, 2011, there are no outstanding stock options or warrants.

8. Income Taxes

The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate of 35% to income (loss) before income taxes. The sources of the difference follow:

					Period from
	For the nine months ended				October 23, 2007
	February 28,				(Date of Inception) to
		2011		2010	February 28, 2011
Expected tax at 35%	$	(105,601)	$	(3,199)	$	(148,485)
Increase in valuation allowance		105,601		3,199		148,485
Income tax provision	$	-	$	-	$	-

Significant components of the Company’s deferred income tax assets are as follows:

	February 28, 2011			May 31, 2010
Net operating loss carryforward	$	148,485	$	42,885
Valuation allowances		(148,485)		(42,885)
Net deferred income tax assets	$	-	$	-

Based on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset of $148,485 at February 28, 2011 attributable to the future utilization of the net operating loss carryforward of $424,244 will be realized. Accordingly, the Company has maintained a 100% allowance against the deferred tax asset in the financial statements. The Company will continue to review this valuation allowance and make adjustments as appropriate. The $424,244 net operating loss carryforward expires $14,392 in year 2028, $84,167 in year 2029, $23,969 in year 2030 and $301,716 in year 2031.

Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

9. COMMITMENTS AND CONTINGENCIES

Going Concern Uncertainty

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and is unlikely to generate earnings in the immediate or foreseeable future. As of February 28, 2011, the Company has negative working capital of $296,469 and has accumulated losses of $424,244 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company plans to raise additional funds through private placements of debt and /or equity and to acquire interests in mining properties to ultimately achieve profitability. However, there is no assurance that the Company will attain these objectives. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Joint Venture Agreement

As discussed in Note 4, under the Ghana joint venture agreement, the Company has committed to provide financing of $2,000,000 to the joint venture. Presently, the Company does not have sufficient funds and /or available financing to meet this commitment.

Rental Agreement

On January 10, 2011 the company entered into an Online Virtual Office Agreement with Regus for office space located in Japan. The term of the agreement is from January 11, 2011 to January 31, 2012. The monthly rent is 23,900 Japanese yen (or $292 translated at the February 28, 2011 exchange rate)

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

Forward-Looking Statements

This section of this quarterly report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

As used in this quarterly report, the terms "we", "us", "our", "our company" mean Earth Dragon Resources Inc., unless otherwise indicated. We have no subsidiaries.

General Overview

We were incorporated in the State of Nevada on October 23, 2007.

Plan of Operation

We are a start-up, exploration stage corporation and have not yet generated or realized any revenues from our business operations.

Our auditor has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. There is no assurance we will ever reach this point. Accordingly, we must raise cash from sources other than the sale of minerals found on the claim. That cash must be raised from other sources. Our only other source for cash at this time is investments by others. We must raise cash to implement our project and stay in business.

Nevada Claim

Our exploration target is to find an ore body containing zinc. Our success depends upon finding mineralized material. This includes a determination by our consultant if the claim contains reserves. Mineralized material is a mineralized body, which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal. If we don’t find mineralized material or we cannot remove mineralized material, either because we do not have the money to do it or because it is not economically feasible to do it, we will cease operations.

In addition, we may not have enough money to complete our exploration of the claim. If it turns out that we have not raised enough money to complete our exploration program, we will try to raise additional funds from a second public offering, a private placement or loans. At the present time, we have not made any plans to raise additional money and there is no assurance that we would be able to raise additional money in the future. If we need additional money and can’t raise it, we will have to suspend or cease operations.

We must conduct exploration to determine what amount of minerals, if any, exist on our properties and if any minerals which are found can be economically extracted and profitably processed.

The claim is undeveloped raw land. To our knowledge, the claim has never been mined. The only event that has occurred is the recording of the claim by Larry Sostad in the name of Multi Metal Mining Corp., a physical examination of the claim by Yuan Kun Deng, our former officer and director, and retaining our consultant to manage the exploration of the claim. The registration of the claim was included in the $6,500 paid to Mr. Sostad. No additional payments were made or are due to Mr. Sostad or Multi Metal Mining Corp. for their services. The claims were recorded in Multi Metal Mining Corp. in order to simplify possible reconveyances of the claims to the former record owners and to the Bureau of Land Management should mineralized material not be discovered on the claim. Since Mr. Deng is a resident of the People’s Republic of China, the ability to obtain an acknowledged reconveyances (notarized) in compliance with U.S. law is very limited. To eliminate the problems related with the foregoing, we elected to have the claims recorded in Multi Metal Mining Corp.’s name. Multi Metal Mining Corp. is owned by Mr. Sostad.

On October 17, 2008, Multi Metal Mining Corp. executed a trust agreement acknowledging that it holds the claim in trust for us. In the event that Multi Metal Mining Corp. transfers title to a third party, the trust agreement will be used as evidence that they breached the terms thereof as well as breaching its fiduciary duty to us. Under the terms of the trust agreement, we have the responsibility to keep the claims in good standing in terms of filing and work and all other requirements. Originally, the trust agreement was executed by Mr. Sostad, individually, however, we discovered the claim was registered in the name of Multi Metal Mining Corp. a corporation owned by Mr. Sostad. We determined that the trust agreement would have to be executed by the record owner of the claim, Multi Metal Mining Corp.

On October 17, 2008, a new the trust agreement was executed by us and Multi Metal Mining Corp. to specifically state that Multi Metal Mining Corp. was the record holder of the claim; that it held the claim in trust for us; that the law of the situs of the claim, the law of Nevada, would govern the terms of the trust agreement; that the parties to the trust agreement consented to personal jurisdiction in the state of Nevada; that Multi Metal Mining Corp. will not transfer its interest to anyone other than us; that Multi Metal Mining Corp. will only transfer title to the claim to us; that Multi Metal Mining Corp. will not demand payment for the claim when it transfers the same to us; that Multi Metal Mining Corp. does not have the right to sell or transfer the interest in and to the claim to anyone but us; that Multi Metal Mining Corp. does not have the right to profit from the transfer of the claim if mineralized material is found on the claim; and, that Multi Metal Mining Corp. must transfer title to the claim to us without payment of any kind, upon our demand, whether mineralized material is found on the claim or not. The trust agreement, under Nevada law, will have the effects described above with respect to the obligations and duties of Multi Metal Mining Corp.

We do not know if we will find mineralized material. We believe that activities occurring on adjoining properties are not material to our activities. The reason is that whatever is located under adjoining claim may or may not be located on our claim.

We do not claim to have any minerals or reserves whatsoever at this time on the claim.

We intend to implement an exploration program which consists of trenching. Trenching is the process of removing samples from the surface and immediately below the surface to the ground. The samples will be tested to determine if mineralized material is located on the claim. Based upon the tests of samples, we will determine if we will terminate operations; proceed with additional exploration of the claim; or develop the claim. We intend to take our core samples to analytical chemists, geochemists and registered assayers located in Reno, Nevada. We have not selected any of the foregoing as of the date of this report.

We do not intend to interest other companies in the claim if we find mineralized materials. We intend to try to develop the reserves ourselves through the use of consultant. We have no plans to interest other

companies in the claim if we do not find mineralized material. To pay the consultant and develop the reserves, we will have to raise additional funds through a second public offering, a private placement or through loans. As of the date of this report, we have no plans to raise additional funds. Further, there is no assurance we will be able to raise any additional funds even if we discover mineralized material and a have a defined ore body.

If we are unable to complete any phase of exploration because we don’t have enough money, we will cease operations until we raise more money. If we can’t or don’t raise more money, we will cease operations. If we cease operations, we don’t know what we will do and we don’t have any plans to do anything.

All of the work on the claim will be conducted by unaffiliated independent contractors that we will hire. The independent contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material.

Ghana Property

On January 12, 2011, we entered into a Joint Venture Agreement with Gravhaven Limited whereby the parties agreed to work together to develop the Nkwanta and the Asuogya mining concessions located in Ghana that are owned by Netas Mining Company (“Netas”). Gravhaven Limited has the right to acquire a 65% ownership interest in Netas pursuant to the terms of a Joint Venture Agreement dated April 5, 2010, it entered into with Netas and Emmanuel and Adolf Tagoe, a shareholder of Netas.

Under the terms of its joint venture agreement with Gravhaven, we will contribute $2,000,000 towards the development of Netas’ concessions in exchange for a 20% ownership in Netas Mining Company.

We are putting together exploration and drilling programs for the year 2011. The nature of exploration work program that will follow allows for five to ten years for the project. Since some gold was recovered during early prospecting work, it is assumed that full production will be attained in the shortest period possible.

The work program is part of our overall strategy that involves surface sampling of the veins, trenching and excavating the gold bearing horizons, and prospecting and mapping the concession while initially focusing on the "Golden Arrow Vein," (quartz vein) that is 2 meters in width currently being excavated by local African miners. Visible gold has been noted in the vein and we have implemented underground blasting to acquire fresh rock samples for gold assays.

The vein extends for a minimum of 275 meters across a well-defined linear ridge hosted by altered volcanics that contain fine disseminated arsenopyrite, a mineral common to gold deposits. Assays sampled as high as 6.70 ounces per ton (207.83 g/t). The bluish grey quartz vein was sampled over a 1 meter chip sample in the "Golden Arrow" adit, approximately 20 meters vertically below the over burden and surface laterite1 material.

The Nkwanta Concession lies within the Ashanti Gold Belt. The Ashanti Belt has the longest history of gold mining and is consequently the most understood of Ghana's gold belts. The area was the focus for gold exploitation in pre-colonial times when small scale artisanal mining extracted gold for traditional authorities whose culture attached great significance and value to the metal.

A total of 309 grab and channel samples and 290 auger samples mostly from within or near to the underground workings at the Golden Arrow, Chief, D10, Little D10, Scorpion and Ankobra quartz veins

were collected during 2010. Initial results from the Golden Arrow Vein produced gold values from both the grab and channel samples (a total of 59 samples) offered results as high as 1,579 ppm (1,579 g/t) and with numerous samples ranging from 25 - 200 ppm (25 - 200 g/t).

The Golden Arrow vein was sampled from historic workings at depths of approximately 200 feet with visible gold often seen in the smoky quartz veins which strike about 63° and dip steeply (generally 76°) to the southeast and average about 1.69 meters in width. All samples were sent for analysis by fire assay at Intertek Laboratory (formerly Transworld laboratory) in Tarkwa Ghana.

Results of Operations

Overview

Three Months Ended February 28, 2011 and 2010

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended February 28, 2011 which are included herein.

Our operating results for the three (3) months ended February 28, 2011 and for the three (3) months ended February 28, 2010 for the respective items are summarized as follows:

	Three months Ended February 28 2011 ($)		Three months Ended February 28 2010 ($)
Revenue		-		-
Operating Expenses		257,008		3,933
Net Income (Loss)		(257,008)		(3,933)

Operating Expenses

Our operating expenses for the three (3) months ended February 28, 2011 and February 28, 2010 are outlined in the table below:

		Three Months Ended
		February 28
		2011		2010

Impairment of mining property acquisition costs	$	-	$	-
Impairment of investment in Tanzania Joint Venture	$	125,000	$	-
Exploration costs	$	-	$	-
Compensation to related party	$	50,000	$	-
Other general and administrative expenses	$	82,008	$	3,933

The increase in operating expenses for the three (3) months ended February 28, 2011, compared to the same period in fiscal 2010, was due to impairment of investment in the Tanzania Joint Venture in the

amount of $125,000, an increase in other general and administrative expenses to $82,008 from $3,933, and compensation to related parties in the amount of $50,000.

Revenues

We have earned $0 revenues from selling precious metals since our inception.

Nine Months Ended February 28, 2011 and 2010

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended February 28, 2011 which are included herein.

Our operating results for the nine months ended February 28, 2011, for the nine months ended February 28, 2010 and the changes between those periods for the respective items are summarized as follows:

	Nine months Ended February 28 2011 ($)		Nine months Ended February 28 2010 ($)
Revenue		-		-
Operating Expenses		301,716		9,140
Net Income (Loss)		(301,716)		(9,140)

Operating Expenses

Our operating expenses for the nine months ended February 28, 2011 and February 28, 2010 are outlined in the table below:

		Nine Months Ended
		February 28
		2011		2010

Impairment of mining property acquisition costs	$	-	$	-
Impairment of investment in Tanzania Joint Venture	$	125,000	$	-
Exploration costs	$	400	$	-
Compensation to related party	$	84,839	$	-
Other general and administrative expenses	$	91,477	$	9,140

The increase in operating expenses for the nine months ended February 28, 2011, compared to the same period in fiscal 2010, was due to impairment of investment in the Tanzania Joint Venture in the amount of $125,000, an increase in other general and administrative expenses to $91,477 from $9,140, compensation to related parties in the amount of $84,839, and exploration costs of $400.

Revenues

We have earned $0 revenues from selling precious metals since our inception.

Liquidity and Financial Condition

As of February 28, 2011, our total assets were $40,914 in cash and $15,700 in prepaid expenses and our total current liabilities were $341,980. As of February 28, 2011, we had a working capital deficit of $285,366. Our financial statements report a net loss of $301,716 for the nine months ended February 28, 2011.

We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed.

Cash Flows
		Nine Months Ended		Nine Months Ended
		February 28, 2011		February 28, 2010

Net Cash provided by (Used in) Operating Activities	$	(165,600)	$	(15,361)
Net Cash Provided by (Used In) Investing Activities	$	125,000	$	-
Net Cash Provided by Financing Activities	$	312,814	$	3,899
Cash increase (decrease) during the period	$	22,214	$	(11,462)

We had $40,914 in cash as of February 28, 2011 as compared to $18,700 as of May 31, 2010. We had a working capital deficit of $296,469 as of February 28, 2011 compared to working capital deficit of $4,528 as of May 31, 2010.

We have the right to explore one claim containing one twenty acre claim. We will begin our exploration provided that sufficient working capital is obtained.

Since inception, we have issued 254,480,000 shares of our common stock and received $118,000. This number of shares issued reflects a 38:1 forward split that we conducted on December 14, 2010. On March 15, 2011, our Board of Directors approved a further 3:1 forward split. We are working with FINRA so that this change will be effected in the market in the near term.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Milestones

Providing that sufficient working capital is obtained, the following are our milestones for the Nevada claim:

1.	90-180 days - Surveying, Trenching and Sampling. We will survey the claim. Surveying will cost up to $5,000. Trenching and sampling will cost up to $7,500. Trenching will used to accumulate samples from the surface and just below the surface. Our activities will be subcontracted to non-affiliated third parties. Time to conduct trenching and sampling - 90 days.
2.	180-210 days- Have an independent third party analyze the samples from the trenching to determine if mineralized material is below the ground. If mineralized material is found, we will attempt to define the ore body. We estimate that it will cost $3,000 to analyze the samples and will take 30 days. Delivery of the samples to the independent third party is necessary to carry out this milestone.

210-370 days – If mineralized material is found, specific drilling targets will be established. We estimate this would cost $1,200. Subsequently, a process of permitting, contracting and hosting a drilling rig on site (including posting reclamation bond and all necessary government permits) which we estimate will cost $35,000 for mobilization/demobilization and $12,500 – 25,000 per drill hold, depending upon terrain and depth.

The following are our milestones for the Ghana claim:

1. 30 days – We will conduct an offering of securities to raise $250,000 in working capital.

2. 60 days - We will drill targets for a summer drill program.

Limited Operating History; Need for Additional Capital

There is limited historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

To become profitable and competitive, we conduct into the research and exploration of the claim before we start production of any minerals we may find. We believe that we have the funds that will allow us to operate for one year.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter ended November 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1A.

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. [REMOVED AND RESERVED]

ITEM 5.

OTHER INFORMATION

ITEM 6.

EXHIBITS.

The following documents are included herein:

Exhibit No.	Document Description
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 14th day of April, 2011.

	EARTH DRAGON RESOURCES INC.

Date: April 14, 2011	/s/ Thomas William Herdman
	Thomas William Herdman
	President, Secretary, Treasurer and Director (Principal Executive Officer, Principal Financial and
	Principal Accounting Officer)

EARTH DRAGON RESOURCES INC. - FORM 10-Q - April 14, 2011

Attached files

EARTH DRAGON RESOURCES INC. Reports