INTERNATIONAL SILVER INC - FORM 10-Q/A

Attached files

file	filename
EX-32.1 - CERTIFICATION - INTERNATIONAL SILVER INC	islv_ex321.htm
EX-31.2 - CERTIFICATION - INTERNATIONAL SILVER INC	islv_ex312.htm
EX-32.2 - CERTIFICATION - INTERNATIONAL SILVER INC	islv_ex322.htm
EX-31.1 - CERTIFICATION - INTERNATIONAL SILVER INC	islv_ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 – Q /A

(Amendment No. 1)

(MARK ONE)

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

for the quarterly period ended March 31, 2011

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

FOR THE TRANSITION PERIOD FROM _______ TO _______.

INTERNATIONAL SILVER, INC.

(Exact name of registrant as specified in its charter)

Arizona

(State or other jurisdiction of incorporation or organization)

333-147712		86-0715596
(Commission File Number)		(IRS Employer Identification Number)

5210 E. Williams Circle, Suite 700

Tucson, Arizona 85711

(Address of principal executive offices including zip code)

(520) 889-2040

(Registrant's telephone number, including area code)

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

Yes x No o

Indicate by check mark whether the registrant has submitted electronically or posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Paragraph 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 o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of " large accelerated filer", "accelerated filer" and "small reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non–Accelerated filer ¨ Smaller reporting company x

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

Yes o No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS.

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

Yes o No o

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.

Class		Shares Outstanding at May 12, 2011
Common Stock, $0.0001 Par Value		29,080,830

Exhibit Index located at page 34

		Page
	PART 1 - FINANCIAL INFORMATION

Item 1	FINANCIAL STATEMENTS	3

	Consolidated Financial Statements:		5
	Balance Sheets		5
	Statement of Operations		6
	Statement of Cash Flows		7
	Supplemental Disclosures of Non-cash Financing Activities:		8

	Notes To The Financial Statements		11

Item 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS		22

Item 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		29

Item 4T	CONTROLS AND PROCEDURES		29

	PART II – OTHER INFORMATION

Item 1	LEGAL PROCEEDINGS		30

Item 1A	RISK FACTORS		30

Item 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		32

Item 3	DEFAULTS UPON SENIOR SECURITIES		32

Item 4	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		32

Item 5	OTHER INFORMATION		32

Item 6	EXHIBITS		34

PART 1 – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

SEALE AND BEERS, CPAs

PCAOB & CPAB REGISTERED AUDITORS

www.sealebeers.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

International Silver, Inc.

(An Exploration Stage Company)

We have reviewed the accompanying condensed consolidated balance sheet of International Silver, Inc. as of March 31, 2011, and the related condensed consolidated statements of operations for the three-month periods ended March 31, 2011 and March 31, 2010, and for the period from inception on June 16, 2006 through March 31, 2011, and condensed consolidated statements of cash flows for the three-month periods then ended and for the period from inception on June 16, 2006 through March 31, 2011. These interim financial statements are the responsibility of the Corporation’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for the financials and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been reviewed assuming that the Company will continue as a going concern. As discussed in Note A to the financial statements, the Company has not yet established an ongoing source of revenues sufficient to cover its operating costs, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note A. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have previously audited, in accordance with auditing standards of the Public Company Accounting Oversight Board (United States), the balance sheet of International Silver, Inc. as of December 31, 2010, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the year then ended (not presented herein); and in our report dated April 22, 2011, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed balance sheet as of December 31, 2010, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

/s/ Seale and Beers, CPAs

Seale and Beers, CPAs

Las Vegas, Nevada

May 11, 2011

50 S. Jones Blvd Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351

International Silver, Inc.

(An Exploration Stage Company)

Condensed Consolidated Financial Statements

For The Three Months Ended March 31, 2011

(Unaudited)

and

For the Year Ended December 31,2010

(Audited)

International Silver, Inc.

(An Exploration Stage Enterprise)

Unaudited Interim Condensed Consolidated Balance Sheets

	As At
	March 31,			December 31,
	2011			2010
ASSETS

CURRENT ASSETS
Cash	$	2,097		$	35,983
Due from related parties - Note H		778			15,919
Prepaid expenses - Note C		38,449			80,530
Total Current Assets	$	41,324		$	132,432

TOTAL ASSETS	$	41,324		$	132,432

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	9,832		$	2,467
Payroll taxes payable		402			274
Accrued expenses		11,992			8,464
Due to related parties - Note H		36,589			48,089
Note payable - Note D		75,000			75,000
Discount on Notes payable		-			(66,667	)
Total Current Liabilities	$	133,815		$	67,627

Total Liabilities	$	133,815		$	67,627

SHAREHOLDERS' EQUITY
Common stock - Note F
authorized shares - 500,000,000
par value $0.0001 per share
issued & o/s - 12/31/10 28,581,753
issued & o/s - 03/31/11 28,581,753	$	2,858		$	2,858
Shares Issuable		16,250			-
Additional paid-in capital		1,389,121			1,389,121
Accumulated deficit prior to exploration stage		(176,034	)		( 176,034	)
Accumulated deficit during exploration stage		(1,324,685	)		(1,151,140	)
Total Shareholders' Equity	$	(92,491	)	$	64,805

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	41,324		$	132,432

See accompanying notes to the condensed consolidated financial statements

International Silver, Inc.

(An Exploration Stage Enterprise)

Unaudited Interim Condensed Consolidated Statement of Income

	Three Months Ended						Inception (June 16, 2006) of Exploration Stage through (March 31, 2011)
	March			March
	2011			2010
				(Restated)			(Restated)

REVENUES
Consulting-third parties	$	-		$	-		$	44,199
Consulting-related parties		-			29,280			389,190
Total Revenues	$	-		$	29,280		$	433,389

Operating Expenses
Exploration costs	$	12,923		$	-		$	296,845
General and administration
Bad debt expense		-			-			41,860
All other general & administrative		67,706			20,589			847,648
Depreciation and depletion		-			-			755
Total operating expenses	$	80,629		$	20,589		$	1,187,108

Operating Income/Loss	$	(80,629	)	$	8,691		$	(753,719	)

Other Income (Expenses)
Impairment loss	$	-		$	(15,000	)	$	(40,000	)
Stock compensation expense								(396,000	)
Interest expense		(92,917	)		-			(134,967	)
Total other income/(expense)	$	(92,917	)	$	(15,000	)	$	(570,967	)

Net Income/(Loss)	$	(173,546	)	$	(6,309	)	$	(1,324,686	)


Basic and Diluted
Income/(Loss) per Share	$	(0.01	)	$	(0.00	)

Weighted Average Shares
Outstanding		28,581,753			18,538,420

See accompanying notes to the condensed consolidated financial statements

International Silver, Inc.

(An Exploration Stage Enterprise)

Unaudited Interim Condensed Consolidated Statement of Cash Flows

							Inception (June 16,
	Three Months Ended						2006) of Exploration
	March 31,			March 31,			Stage through
	2011			2010			(March 31, 2011)
				(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income/(Loss)	$	(173,546	)	$	(6,309	)	$	(1,324,686	)
Adjustments used to reconcile net (loss)
to net cash (used) by operating activities:
Non-controlling interest in subsidiary		-			-			(3,530	)
Dissolution of subsidiary		-			-			3,530
Depreciation and depletion		-			-			755
Impairment loss		-			15,000			40,000
Financing Cost		82,917			-			91,250
Issuance of common stock
In exchange for land		-			-			30,000
In exchange for services		-			-			157,000
In exchange for exploration costs		-			-			55,385
In exchange for debt		-			-			50,000
Issuance of Incentive Stock Option Grants		-			-			396,000
Changes in operating assets and liabilities
Decrease/(Increase) in receivables		15,141			(3,558	)		248,883
Decrease/(Increase) in employee receivable		-			-			2,317
Decrease/(Increase) in prepaid expenses		42,081			248			(41,923	)
(Decrease)/Increase in payables		(4,008	)		(433	)		33,345
(Decrease)/Increase in accrued expenses		3,528			463			35,613
Net Cash Flows (used by) Operating Activities	$	(33,886	)	$	5,411		$	(226,060	)

CASH FLOW FROM INVESTMENT ACTIVITIES
Lease/purchase option on land	$	-		$	-		$	(90,000	)
Purchase of land		-			-			(90,000	)
Purchase of equipment		-			-			(6,668	)
Net Cash Flows from Investment Activities	$	-		$	-		$	(186,668	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock:
Cancellation of debt	$	-		$	-		$	-
Net proceeds from stock issuance		-			-			120,000
Sale of mining property
For treasury stock		-			-			(30,000	)
Exchange for securities		-			-			(25,000	)
Return of deed of trust - mining property		-			-			90,000
Disposal of vehicle		-			-			215
Third-party loan		-			-			75,000
Borrowings from related parties		-			-			152,980
Net Cash Flows from Financing Activities	$	-		$	-		$	383,195

Net Increase/(Decrease) in Cash	$	(33,886	)	$	5,411		$	(29,533	)

Beginning Cash Balance	$	35,983		$	35,747		$	31,630

Ending Cash Balance	$	2,097		$	41,158		$	2,097

See accompanying notes to the condensed consolidated financial statements

International Silver, Inc.

(An Exploration Stage Enterprise)

Supplemental Disclosures of Non-Cash Financing Activities

	Three Months Ended				Exploration Stage
	March 31,		March 31,		(June 16, 2006
	2011		2010		through
	Unaudited		Unaudited		March 31, 2011)


The Company issued shares of its common stock in exchange for the following:

For services rendered:
Director services	$	-	$	-	$	21,000
Legal and professional services		-		-		116,350
Stock transfer agent services		-		-		5,500
Accounting services		-		-		6,150
Geology and engineering		-		-		8,000
Sub-total	$	-	$	-	$	157,000
For land/mining property		-		-		42,000
For equipment		-		-		3,000
For exploration costs		-		-		55,385
For contributed capital		-		-		315,072
Total non-cash issuances of stock	$	-	$	-	$	572,457

Shares of common stock issuable
For debt interest	$	16,250			$	16,250
	$	16,250	$	-	$	16,250

Shares of common stock cancelled
Repurchase of its common stock	$	-	$	30,000	$	30,000

Issuance of incentive stock option grants
Grants issued	$	-	$	-	$	396,000



The Company relinquished its mining property in exchange for the following:

For repurchase of its common stock	$	-	$	-	$	(30,000	)
For marketable securities in another company	$	-	$	-	$	(25,000	)
For deed of trust in the mining property	$	-	$	-	$	90,000

See accompanying notes to the condensed consolidated financial statements

International Silver, Inc.

(An Exploration Stage Enterprise)

Unaudited Interim Condensed Consolidated Statement of Shareholders' Equity]

																		Accumulated Deficit
			Common Stock				Additional											Prior			During
	Share		No. of		$	0.0001	Paid-In			Shares Issuable				Treasury Stock				Exploration			Exploration
	Price		Shares		Par Value		Capital			Shares		Amount		Shares		Amount		Stage			Stage			Total
Shares issued:
Prior to June 16, 2006				1,000			$	258,522										$	(176,034	)	$	0		$	82,488
At June 16, 2006				1,000			$	258,522			0	$	0		0	$	0	$	(176,034	)	$	0		$	82,488

Stock Split - 12,000:1
July 24, 2006				12,000,000	$	1,200		(1,200	)																0
Shares issued for services
September 13, 2006	$	0.0750		1,000,000		100		74,900																	75,000
October 21, 2006	$	0.0500		100,000		10		4,990																	5,000
Shares issued for property
September 19, 2006	$	1.0000		30,000		3		29,997																	30,000
Shares issued for acquisition
Metales Preciosos,
S.A. de C.V.
October 21, 2006	$	0.1846		300,000		30		55,355																	55,385
Net Income/(Loss)																						(163,224	)		(163,224	)
At December 31, 2006				13,430,000	$	1,343	$	422,564			0	$	0		0	$	0	$	(176,034	)	$	(163,224	)	$	84,649

Shares issued for cash
May 4, 2007	$	0.5000		400		0		200																	200
May 11, 2007	$	0.5000		2,000		0		1,000																	1,000
May 14, 2007	$	0.5000		4,000		0		2,000																	2,000
May 16, 2007	$	0.5000		600		0		300																	300
June 4, 2007	$	0.5000		3,000		0		1,500																	1,500
October 29, 2007	$	0.5000		4,000		0		2,000																	2,000
November 6, 2007	$	0.5000		28,000		3		13,997																	14,000
November 8, 2007	$	0.5000		18,000		2		8,998																	9,000
November 13, 2007	$	0.2500		200,000		20		49,980																	50,000
Shares issued for services
May 22, 2007	$	0.0550		100,000		10		5,490																	5,500
September 13, 2007	$	0.0400		250,000		25		9,975																	10,000
September 21, 2007	$	0.0400		150,000		15		5,985																	6,000
Shares exchanged for debt
June 30, 2007	$	0.5000		336,186		33		168,060																	168,093
Net Income/(Loss)																						(128,147	)		(128,147	)
At December 31, 2007				14,526,186	$	1,452	$	692,048			0	$	0		0	$	0	$	(176,034	)	$	(291,371	)	$	226,095

Shares issued for services
June 12, 2008	$	0.1333	150,000			15			19,985																			20,000
Shares exchanged for debt
September 8, 2008	$	0.2890	335,567			35			96,945																			96,980
Shares repurchased
November 10, 2008																(30,000	)		(30,000	)								(30,000	)
Net Income/(Loss)																									(298,788	)		(298,788	)
At December 31, 2008			15,011,753		$	1,501		$	808,978		0		$	0		(30,000	)	$	(30,000	)	$	(176,034	)	$	(590,159	)	$	14,286

Shares issued for services
October 6, 2009	$	0.0100	3,550,000			355			35,145																			35,500
Net Income/(Loss)																									(82,160	)		(82,160	)
At December 31, 2009			18,561,753		$	1,856		$	844,123		0		$	0		(30,000	)	$	(30,000	)	$	(176,034	)	$	(672,319	)	$	(32,374	)

Shares cancelled
January 10, 2010	$	1.0000	(30,000	)		(3	)		(29,997	)						30,000		$	30,000									0
Shares issuable
March 3, 2010	$	0.0025	0								6,000,000			15,000														15,000
Shares issued for land
April 26, 2010	$	0.0025	6,000,000			600			14,400		(6,000,000	)		(15,000	)													0
Shares exchanged for debt
August 18, 2010	$	0.0250	2,000,000			200			49,800																			50,000
Shares issued for cash
August 24, 2010	$	0.0200	2,000,000			200			39,800																			40,000
Stock option - grants issued
November 1, 2010	$	0.1200							396,000																			396,000
Shares exchanged for
convertible note
December 31, 2010	$	0.6000	50,000			5			74,995																			75,000
Net Income/(Loss)																									(478,821	)		(478,821	)

At December 31, 2010			28,581,753		$	2,858		$	1,389,121		0		$	0		0		$	0		$	(176,034	)	$	(1,151,140	)	$	64,805

Shares issuable
March 31, 2011	$	0.6500	0								25,000			16,250														16,250
Net Income/(Loss)																									(173,546	)		(173,546	)

At March 31, 2011			28,581,753		$	2,858		$	1,389,121		25,000		$	16,250		0		$	0		$	(176,034	)	$	(1,324,686	)	$	(92,491	)

See accompanying notes to the condensed consolidated financial statements

International Silver, Inc.

(An Exploration Stage Company)

Notes to Unaudited Interim Condensed Consolidated Financial Statements

Note A - Organization and Business

General

International Silver, Inc. is an exploration stage company, as set forth in FASB ASC 915 – Development Stage Entities and “Industry Guide 7” of the Securities and Exchange Commission’s Guides for the Preparation of Registration Statements and with the Society for Mining, Metallurgy and Exploration’s “Guide for Reporting Exploration Information, Mineral Resources, and Mineral Reserves” dated March 1, 1999. The Company’s strategy consists of acquiring and exploring high-grade silver properties throughout North and South America.

The Company was incorporated in the State of Arizona, as ARX Engineering, Inc., on September 4, 1992 and then subsequently changed their corporate company name to Western States Engineering, Inc. On June 20, 2006, the Company changed its name to International Silver, Inc. in connection with its new business plan of acquisition of exploration properties, along with providing engineering services.

The business strategy consists of acquiring and exploring high-grade silver properties throughout North and South America. The Company will initiate an intensive reconnaissance and exploration program around the Prince Mine and Pan American properties located in Nevada, to identify potentially high-grade silver targets and to evaluate other properties in each of the districts for possible acquisition. The Company will continue to seek and evaluate new opportunities for exploration and/or development properties.

Condensed Financial Statements

The accompanying interim consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position for the periods ended March 31, 2011 and December 31, 2010 and results of operations and cash flows for the comparative periods at March 31, 2011 and March 31, 2010 and for the comparative periods March 31, 2011 and March 31, 2010 have been made.

Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed interim financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2010 audited financial statements. The results of operations for the period ended March 31, 2011 are not necessarily indicative of the operating results for the full year.

Going Concern

The Company’s condensed financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) a private placement and (2) initiating a public offering.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other resources of financing and attain profitable operations. The accompanying condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note B - Summary of Significant Accounting Policies

Principles of Consolidation

The financial statements include the accounts of International Silver, Inc. and its subsidiary Western States Engineering, Inc. for the three months ended March 31, 2011 and March 31, 2010. The Company’s financial condition and results of operations are based on its consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (GAAP).

Recent Accounting Pronouncements

Management has evaluated the recent accounting pronouncements issued since the audited financial statements and in managements’ opinion, the relevant pronouncements reviewed have no material effect on the Company’s financial statements. At March 31, 2011 there were no recent accounting standards that apply to the Company activities.

Use of Estimates

Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant areas requiring the use of management estimates include the determination of mineral ore quantities; the depletion expense calculation, if applicable; useful lives of property and equipment for depreciation; impairment valuations and calculation of any deferred taxes. Actual results may differ from those estimates, and such differences may be material to the condensed financial statements.

Concentration of Credit Risk

Our cash equivalents and prepaid expenses (and trade receivables when recorded) are exposed to concentrations of credit risk. We manage and control risk by maintaining cash with major financial institutions. Management believes that the financial institutions are financially sound and the risk of loss is low.

Concentrations and Economic Vulnerability

Concentrations and economic vulnerability include reliance on related parties. During the year 2010, 100% of the revenue was realized from a related party.

Fair Value of Financial Instruments

Due to their short-term nature, the carrying value of our current financial assets and liabilities approximates their fair values. The fair value of our borrowings, if recalculated based on current interest rates, would not significantly differ from the recorded amounts.

Cash and Cash Equivalents

For the statement of cash flows, any liquid investments with a maturity of three months or less at the time of acquisition are considered to be cash equivalents.

Accounts Receivable

Accounts receivable are stated, net of an allowance for uncollectible accounts. At March 31, 2011 and at December 31, 2010, there were no trade receivables, only related party receivables of $778 and $15,919, respectively. No allowance for uncollectible accounts was established, as management deem the accounts as fully-collectible.

Investments

Investments in marketable securities are classified under one of three methods:

1)	available for sale

2)	held to maturity

3)	trading securities

The accounting treatment accorded any investment will depend on whether the presence of ‘significant influence” over an investee exists. If the investor owns at least 20% of its common stock, then significant influence is assumed. If there is less than 20% ownership or if there is no significant influence over an investee, the investment is valued at

the Fair Value Method, otherwise the Equity Method is utilized. At March 31, 2011 and December 31, 2010, the Company held securities “available for sale” that were reported under the Fair Value method. At March 31, 2011 and December 31, 2010, the Company held 25,000 shares of Atlas Precious Metals Inc. common stock, whose value was considered impaired.

Mineral Development

Costs associated with the acquisition of mineral interests, in the exploration stage, are “expensed”. Mineral exploration costs are also “expensed” as incurred. Mine infrastructure development costs incurred prior to establishing proven and probable reserves are expensed. When it otherwise becomes probable that infrastructure costs will not be recoverable, they are impaired. When it has been determined that a mineral property can be economically developed, the costs incurred to develop such property, including costs to further delineate the ore body and remove overburden to initially expose the ore body, are capitalized as incurred. These costs will then be amortized using the units-of-production method over the estimated life of the ore body based on estimated recoverable ounces of proven and probable reserves.

To the extent that any development costs benefit an entire mineralized property, they are amortized over the estimated life of the property. The specific capitalized cost bases subject to depletion are calculated on a formula based on the number of tons of ore that are expected to be mined divided by the total tons in proven and probable reserves in the property. To date, no development has occurred, nor has depletion has been taken, since production has not commenced.

Mineral Interests and Property

Mineral interests include the costs of acquired mineral rights and royalty interests in production, development and exploration stage properties.

Production stage mineral interests represent interests in operating properties that contain proven and probable reserves. Development stage mineral interests represent interests in properties under development that contain proven and probable reserves. Exploration stage mineral interests represent interests in properties that are believed to potentially contain mineralized material.

Mineral interests related to mining properties in the production stage are amortized over the life of the related property using the Units of Production method in order to match the amortization with the expected underlying future cash flows. Development stage mineral interests are not amortized until such time as the underlying property is converted to the production stage. At March 31, 2011 and December 31, 2010, all mineral interests were in the exploration stage.

Impairment of Long-Lived Assets

The company adheres to ASC 360-10-20, "Accounting for the Impairment and Disposal of Long-Lived Assets," which requires that long-lived assets to be held and used be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows are less than the carrying amount of the asset and would be calculated based on discounted cash flows. At March 31, 2010, the Company incurred an impairment loss on mining property.

Revenue Recognition and Production Costs

Revenue is totally from engineering consulting services. At March 31, 2011, there had been no production from any of the Company's properties.

Reclamation and Remediation Costs (Asset Retirement Obligations)

The Company has adopted ASC 410-20 - Asset Retirement Obligation which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. Since the Company’s activities are in the exploration and feasibility stage, there is no legal or contractual obligation for reclamation or remediation of our mines or mining interests.

Earnings (Loss) Per Share

Basic income (loss) per share is computed by dividing income (loss) attributable to the common shareholders by the weighted-average number of common shares outstanding for the reporting period. Diluted net income per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect is to reduce a loss or increase earnings per share. On November 1, 2010, the Company adopted and granted stock options to its directors, employees and key consultants. At March 31, 2011 and December 31, 2010 no options had been exercised.

Income Taxes

The Company accounts for income taxes under ASC 740-10-30 - Accounting for Income Taxes. ASC 740-10-30 is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, ASC 740-10-35 generally considers all expected future events other than enactments of changes in the tax law or rates. Income tax information is disclosed in Note E – Income Taxes of the condensed consolidated financial statements.

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax assets are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Statement of Cash Flows Information and Supplemental Non-Cash Financing Activities

Non-cash financing costs for the three months ended March 31, 2011 were $ 16,250 and nil for the three months ended March 31, 2010. “Non-cash" investing and financing transactions for the three months ended March 31, 2011 resulted from financing costs on short-term debt as discussed in Note D – Note Payable.

Comprehensive Income

ASC 220-10-55-2 - Comprehensive Income, requires companies to classify items of other comprehensive income by their nature in a financial statement and display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of a statement of financial position. On March 31, 2011 and March 31, 2010, the Company did not have any material items of comprehensive income.

Derivative Instruments

The Company revalues derivative liabilities as of each balance sheet date, and otherwise complies with the provisions of ASC 815-10.

Stock-Based Compensation

In December 2004, the Financial Accounting Standards Board, issued ASC 718 - Share-Based Payment, requires “public” companies to recognize the cost of employee services received in exchange for equity instruments, based on the grant-date fair value of those instruments, with limited exceptions. ASC 718 also affects the pattern in which compensation cost is recognized, the accounting for employee share purchase plans, and the accounting for income tax effects of share-based payment transactions. The Company adopted a stock option plan on November 1, 2010, which is accounted for pursuant to ASC 718.

Note C – Prepaid Expense

Prepaid expenses encompass, two mineral property leases, which are treated as operating lease, pursuant to FASB ASC 840-20. Disclosure of lease terms is explained in Note D – Mining Properties of the audited financial statements for the year ended December 31, 2010. At March 31, 2011 and December 31, 2010, prepaid expenses were comprised of the following:

	March 31, 2011		December 31, 2010

Prepaid lease - Prince Mine	$	30,137	$	42,467

Prepaid lease - Pan American Mine		7,123		36,712

Prepaid – Other		1,188		1,351

Total Prepaid Expense	$	38,449	$	80,530

Note D – Note Payable

On December 21, 2010, the Company obtained a convertible note in the amount of $75,000 from Tintic Standard Gold Mines, Inc. This bridge loan was made in contemplation of the Company obtaining $2,000,000 in equity financing from other independent third-parties.

Stated interest for the ninety-day period is $10,000 and as additional consideration, the holder was granted fifty thousand shares of our common stock on December 31, 2010. These shares shall be “restricted” shares and bear “piggyback and demand registration” rights.

At March 31, 2011, an extension pursuant to the terms of the note was made. At March 31, 2011, interest in the amount of $10,000 was accrued and an additional 25,000 shares of common stock was issuable to Tintic Standard Gold Mines, Inc.

	At March 31, 2011		At December 31, 2010

Short-term convertible note	$	75,000	$	75,000
Less: Discount on Note		0		66,667
Short-Term Debt, net of discount	$	75,000	$	8,333

On April 21, 2010, the note was converted to 499,077 shares of common stock.

Note E - Income Taxes

The Company has reported (for income tax purposes) net operating losses for 2011, 2010 and prior years as follows:

Net Operating Loss carry-forward to Year 2006	$	106,508
Net Operating Income - Year 2006 (Applied)		(4,693	)
Net Operating Loss carry-forward to Year 2007	$	101,815
Net Operating Loss - Year 2007		111,921
Net Operating Loss carry-forward to Year 2008	$	213,736
Net Operating Loss - Year 2008		237,958
Net Operating Loss carry-forward to Year 2009	$	451,694
Net Operating Loss - Year 2009		62,811
Net Operating Loss carry-forward to Year 2010	$	514,505
Net Operating Loss - Year 2010		47,369
Net Operating Loss carry-forward to Year 2011	$	561,874

Pursuant to the provisions of the Internal Revenue Code, the Company has elected to forego the carry-back provisions, allowable under the IRS regulations, for the stated accounting periods.

At March 31, 2011 the Company recorded a deferred tax benefit of $263,202, but due to a going-concern issue, Management made an allowance for a provision of an equal amount, should the Company not be able to avail itself of that tax benefit. Deferred tax asset is based on prevailing IRS graduated tax tables which average 32% at March 31, 2011 and December 31, 2010.

Net deferred tax assets consists of the following components:

	March 31,			December 31,
	2011			2010

Deferred Tax Asset	$	263,202		$	203,503
Valuation Account		(263,202	)		(203,503	)
Net Deferred Tax Asset	$	0		$	0

At December 31, 2010, The Company had a net operating loss carry-forward of $561,874 for federal income tax purposes that may be offset against future taxable income from years 2010 through 2028. Our deferred tax benefit is adjusted for interim results, but we simultaneously adjust the allowance for a net zero effect.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.

Note F – Shareholders’ Equity

The Company was incorporated on September 4, 1992 with the initial issuance of 1,000 shares of common stock at a par value of $1.00 per share. On June, 2006 the Board of Directors adopted a new business strategy to change its emphasis from providing engineering services to conducting mine exploration and development. As a result, the Board of Directors amended its Articles of Incorporation to authorize 500,000,000 shares of common stock, at a par value of $0.0001 to allow for equity financing. Additionally, the Board of Directors passed a resolution, dated June 16, 2006, to effectuate a stock split of 12,000 to 1, for all represented shares. On July 24, 2006, the three shareholders of record were given their new share distribution of 4,000,000 shares each.

On September 13, 2006, the Company issued 1,000,000 shares of common stock at $0.075 per share in exchange for legal services.

On September 19, 2006, the Company issued 30,000 shares of common stock at $1.00 per share for land.

On October 21, 2006, the Company issued 300,000 shares of common stock at $.185 per share in exchange for a 98% interest in the holdings of Metales Preciosos Atlas, S.A. de C.V., a Mexican subsidiary.

On October 21, 2006, the Company issued 100,000 shares of common stock at $.050 per share in exchange for Directors fees.

During 2007, the Company conducted a private placement and issued an additional 260,000 shares of common stock for cash as follows:

On May, 2007, the Company issued 7,000 shares of common stock at $0.500 per share for $3,500.

On June, 2007, the Company issued 3,000 shares of common stock at $0.500 per share for $1,500.

On October, 2007, the Company issued 4,000 shares of common stock at $0.500 per share for $2,000.

On November, 2007, the Company issued 246,000 shares of common stock at $0.297 per share for $73,000.

On May 22, 2007, the Company issued 100,000 shares of common stock at $0.055 per share in exchange for transfer agent fees.

On June 30, 2007, the Company issued 336,186 shares of common stock at $0.500 per share in exchange for an outstanding debt owed a shareholder/officer, as explained in Note H.

On September 13, 2007, the Company issued 100,000 shares of common stock at $0.040 per share in exchange for Director fees.

On September 13, 2007, the Company issued 150,000 shares of common stock at $0.040 per share in exchange for engineering consulting services.

On September 21, 2007, the Company issued 150,000 shares of common stock at $0.040 per share in exchange for consulting services.

On June 12, 2008, the Company issued 150,000 shares of common stock at $0.133 per share in exchange for legal services.

On September 8, 2008, the Company issued 335,567 shares of common stock at $0.289 per share in exchange for an outstanding debt owed to a shareholder/officer.

On November 10, 2008, the Company repurchased 30,000 of its own shares in common stock upon relinquishing its holdings in the Tecoma Mining District. These shares are being held in Treasury as of December 31, 2009, valued at $1.00 per share, their original issue price.

On September 23, 2009, the Board of Directors passed a resolution for the issuance of 3,550,000 shares of common stock at $0.010 to its directors, officers and certain consultants for services rendered. The share certificates were effective October 6, 2009, but are “restricted” pursuant to Rule 144 of the Securities Act of 1934.

On March 1, 2010, the Company purchased its 70% interest in the Estrades Mine in exchange for 6,000,000 shares of its common stock, at a share price of $0.0025 per share.

On August 18, 2010, the Company issued 2,000,000 shares of common stock at $0.025 per share in exchange for an outstanding debt of $50,000 owed to a shareholder/officer.

On August 24, 2010, the Company conducted a private placement and issued an additional 2,000,000 shares of common stock at $0.02 per share for $40,000.

On December 31, 2010, the Company issued 50,000 shares of common stock in exchange for a convertible note to Tintic Standard Gold, Inc. for $75,000.

At December 31, 2010, the Company had authorized 500,000,000 shares of common stock, 28,581,753 shares had been issued and are outstanding.

On March 31, 2011, 25,000 shares remain issuable in exchange for financing costs on a short-term note.

Note G – Stock Option Plan

At November 1, 2010, the Board of Directors (“Board”) of the Company authorized the approval of a stock option plan (the “Plan”). The plan allows the Board of Directors, or a committee thereof at the Board’s discretion, to grant stock options to officers, directors, key employees and consultants of the company and its affiliates. The Board authorized the Corporation to issue up to 20% of the total number of outstanding shares of the Company’s common stock as Stock Options. No vesting will be required.

Options outstanding as of March 31, 2011 are as follows:

	No. of shares		Weighted – Average Exercise Price		Contractual Life
Outstanding – Beginning of Quarter		3,300,000	$	0.20		5.0 years
Granted		0		-
Exercised		0		-
Forfeited		0		-
Outstanding – End of Quarter		3,300,000	$	0.20		5.0 years

Note H - Related Party Transactions

Amounts due from and to related parties, are receivable from or payable to entities controlled by the shareholders, officers, or directors of the Company (“Related Entities”). The underlying transactions are with these related parties. These amounts are unsecured and not subject to specific terms of repayment.

	March 31,		December 31,
	2011		2010
Receivable from Related Entities
Atlas Precious Metals, Inc.	$	620	$	15,860
Arimetco		158		59
Total	$	778	$	15,919

Atlas Precious Metals Inc. contracts engineering services from International Silver, Inc. related to feasibility studies and other general engineering services at their smelter located in Potosi, Bolivia. The balance due from Atlas Precious Metals Inc. at March 31, 2011 was nil and at December 31, 2010 was $15,860 related to these engineering services rendered. Other amounts due from various related parties pertain to courier services paid by International Silver, Inc. and reimbursed by these related companies:

	March 31,		December 31,
Payable to Related Entities	2011		2010
Shareholder/Officer - H.R. Shipes	$	36,589	$	36,589
Atlas Precious Metals, Inc.		0		11,500
Total	$	36,589	$	48,089

On July 12, 2010, the Company reduced its debt by $50,000 with its principal shareholder, H.R. Shipes by issuing two million shares of common stock.

The Company also subleases office space from Atlas Precious Metals Inc., a related company, at a rate of $500 per month.

Note I- Office Leases

The Company rents (subleases) its administrative offices from an affiliate in Tucson, Arizona and is billed an allocated portion ($500 per month), commencing October 1, 2008 based on percentage of floor space occupied. During 2008 and through mid-year 2009, the foreign exploration office for Metales Preciosos Atlas , S.A. de C.V. , located in Hermosillo, Sonora, Mexico rented on a month-to-month basis at $500 per month. Rental expense for all administrative offices for the three months ended March 31, 2011 was $1,500 and the twelve months ended December 31, 2010 was $6,900.

Note J – Exploration Costs

Acquired mineral interests are presented as “exploration costs” as required by “Industry Guide 7” of the Securities and Exchange Commission’s Guides for the Preparation of Registration Statements and with the Society for Mining, Metallurgy and Exploration’s “Guide for Reporting Exploration Information, Mineral Resources, and Mineral Reserves”. Exploration costs incurred since inception through March 31, 2011 are $296,845. Exploration costs incurred for the three months ended March 31, 2011 were $12,923 and for the twelve months ended December 31, 2010 were $16,923.

Note K – Subsequent Events

Management has reviewed all subsequent events through the issuance date of the condensed financial statements and has disclosed all material events that have transpired subsequent to March 31, 2011 up through the issuance date, including the following:

On April 25, 2011, the Company issued 499,077 shares of its common stock upon the conversion of the Tintic Standard Gold Mines, Inc. bridge loan convertible note in full satisfaction of the principal and interest up to the conversion date. This included the additional 25,000 shares for the note extension made on March 21, 2011.

Note L – Restatement of Previously Issued Financial Statements

The Company’s previously issued financials statements for the period ended March 31, 2010 have been restated due to a correction of error, made during the fourth quarter in 2009, relating to the duplication of reimburseable costs to a related party causing an overstatement of liabilities and understatement of retained earnings/(deficit) as of March 31, 2010 in the amount of $7,143. In addition, Other Revenues were reclassified in the amount of $378 for the three months ended March 31, 2010 and $17,919 for Inception to-Date, March 31, 2010. The reclassifications related to the three months ended March 31, 2010 represent courier service reimbursements from related entities for $378. From the inception of the exploration stage period starting June, 2006 to March 31, 2010, reimburseable costs had been carried as Other Revenue and have now been reclassified to offset the appropriate expenditure accounts, i.e. insurance rebate for $4,178, various courier service and office reimbursements from related entities The effect of these corrections are noted below:

	Three Months Ended March 31, 2010
	Original		Change			Restated
STATEMENT OF OPERATIONS
Revenue
Other	$	29,658	$	( 378	)	$	29,280
Operating Expenses
Allother general & administrative	$	20,967	$	( 378	)	$	20,589

Earnings per share	$	.00	$	.00		$	.00

	Inception of Exploration Stage (June 16, 2006 Through March 31, 2010)
STATEMENT OF OPERATIONS
Revenue
Other	$	17,919		$	( 17,919	)	$	0
Total Revenue	$	416,928		$	( 17,919	)	$	399,009
Consulting	$	120,960		$	( 3,618	)	$	117,342
Rent	$	76,636		$	( 1,500	)	$	75,136
Operating Expenses
All other general & administrative	$	401,438		$	( 19,944	)	$	381,494
Operating Income/(Loss)	$	(626,889	)	$	7,143		$	(619,746	)
Net Income/(Loss)	$	(685,771	)	$	7,143		$	(678,628	)
Accumulated Deficit–End of period	$	(861,805	)	$	7,143		$	(854,662	)

ITEM 2 – MANAGEMENT DISCUSSION’S AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Management Discussion and Analysis Section

Forward-Looking Statements

This Management’s Discussion and Analysis should be read in conjunction with our financial statements and its related notes. The terms “we,” “our” or “us” refer to International Silver, Inc. This discussion contains forward-looking statements based on our current expectations, assumptions, and estimates. The words or phrases “believe,” “expect,” “may,” “anticipates,” or similar expressions are intended to identify “forward-looking statements.” The

results shown herein are not necessarily indicative of the results to be expected in any future periods. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties pertaining to our business, included the risk factors contained herein.

We are an exploration stage company that engages in minerals exploration activities in the United States and Mexico involving silver, gold, zinc, copper and other minerals. To-date, we have not generated any revenues from any of these activities since approximately June, 2006, when we switched our emphasis in our business plan and commenced our mineral exploration business. To date, our exploration activities have been limited to the exploration and purchasing of mineral interests in the United States and Mexico.

Results of Operations, Liquidity and Cash Flows

For the three months ended March 31,, 2011 (the “March 2011 Quarter”) as compared to the three months ended March 31, 2010 (the “March 2010 Quarter”)

Operating Performance

For the March 2011 Quarter, we recorded a net loss of $173,546, as compared to a net loss of $6,309 for March 2010 Quarter or an increase in net loss of $167,237. The decrease in net loss is due to reduced revenues and increased expenditures in the areas of exploration and general and administrative expenses, as follows:

During the March 2011 Quarter we had no revenues, whereas during the March 2010 Quarter, we had revenues of $29,280 from engineering services provided to a related party.

Operating losses reflected during the March 2011 Quarter were $(80,629) an increase of $89,320 as compared to a an operating income of $8,691 for the March 2010 Quarter. This increase is due no realized revenues and increased operating expenditures of $60,040. Most of the increase resulted from the expired portion of mining leases ($41,918) during the March 2011 Quarter, nonexistent during the March 2010 Quarter. Other areas where increased expenditures occurred were in exploration costs ($12,922), legal ($2,500) and stock transfer fees ($1,480).

A net increase in Other Expenses of $77,917 from the March 2010 Quarter was due to interest expense of $92,917 incurred during the March 2011 Quarter resulting from a bridge loan obtained in December of 2010. There was no interest expense incurred during the March 2010 Quarter. An impairment loss of $15,000 was incurred during the March 2010 Quarter.

Liquidity and Capital Resources

Our financial statements as presented in Item 1 of this report have been prepared in conformity with US GAAP, which contemplate our continuation as a going concern. However, the report of our independent registered public accounting firm on our financial statements, for the three months ended March 31, 2011, contains an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern. The “going concern” qualification results from, among other things, our development-stage status, no revenue recognized since inception, other than for engineering services, and our net losses from inception as a development stage company, which total approximately $1,324,686, the outstanding arrangements with related parties and uncertainty in raising additional capital. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary if we were unable to continue as a going concern.

Currently, we have funded our operations through a private placement, short-term notes payable, and some on-going engineering consulting services. The capital required to execute our total business vision and objectives is significant. During 2011, we continue to be engaged in efforts to raise capital to fund the working capital requirements and exploration and development activities necessary to meet our business objectives.

We will have to supplement our currently available funds to satisfy our cash requirements for the immediate months by attempting to collect upon existing receivables and raising funds through an equity funding. We anticipate total spending requirements of approximately $4.5 million pending adequate financing over the next twelve months, in the following areas:

Our global capital budget for the completion of acquisitions, exploration and development programs in the Pioche District are as follows:

Activity	Cost - U.S.$
1. Mine Salaries and Benefits, one year	$	950,000
2. Geological Evaluation and Drilling Contracts	$	600,000
3. Mine Re-habilitation, mobilization	$	250,000
4. Miscellaneous Equipment	$	200,000
5. Working Capital	$	150,000
6. Corporate Overhead, One Year	$	800,000
7. Legal	$	50,000
8. Property Payments and Acquisitions	$	1,200,000
9. Offering Commissions	$	300,000
TOTAL	$	4,500,000

We cannot meet these requirements from our operations. We intend to seek to finance these activities through the sale of our equity securities. We cannot assure you that we will be able to raise sufficient funds, if any, through the sale of our equity securities, and our inability to raise these funds will impair our ability to develop our business. Further, any sale of equity securities is likely to result in significant dilution to our shareholders

Cash and Cash Flows

Cash on hand at March 31, 2011 was $2,097 as compared to $41,158 at March 31, 2010. The decrease in cash of $39,061 at the end of the three months ended March 31, 2011 as compared to the three months ended March 31, 2010 was primarily due to a reduction in revenues of $29,280 and increased cash expenditures for exploration costs, legal expense and stock transfer fees of approximately $17,900.

There was no cash impact from either investing or financing activities during the two comparative quarters.

Our business plan does not reflect, nor do we anticipate, any revenues during our exploration phase, aside from ongoing engineering services rendered to an affiliate and others. We do not anticipate any other type of revenue until we confirm previously demonstrated mineralization, obtain operating permits, and construct mining and processing facilities.

Exploration Costs – Inception to Date

On June 16, 2006, our Board of Directors passed a resolution to change the nature of its operations from an engineering services company to an exploration company. Since converting our business plan to conducting exploration activities, we have engaged in the following exploration activities and incurred the following costs:

Capitalized Acquisitions

a) Purchased the Tecoma Mine (fee simple) – Year 2007	$	90,000

b) Sale of Tecoma Mine – Year 2008		(90,000	)

Exploration Costs:
a) Acquired a 98% interest in Metales Preciosos, S.A. de C.V., a Mexican company, whose mineralized interests are as indicated in 1)–4):
1) El Cumbro property		14,260

2) El Cusito property		15,000

3) Canada de Oro property		15,000

4) La Moneda property		10,000

b) Langtry property (options expired – exploration abandoned)
1) Option payment		10,000

2) Option payment		90,000

3) Exploration		21,075

c) Acquisition of BLM mineral claims - Calico District
1) Silverado mining claims		4,250

2) Leviathon mining claims		46,729

d) Other exploration sites (evaluation)
1) Anaconda		7,500

2) Oro Blanco		8,840

3) Pioche		32,940

e) General Administrative Costs		21,251

Total acquisitions and exploration costs	$	296,845

These direct exploration costs account for approximately 25% of the total operating expenditures of $1,187,108, since our exploration activities commenced on June 16, 2006. General and administrative expenses, which include salaries, consulting, rent, and travel, comprise the majority of the remaining of the operating expenditures for this time period.

Uncertainties and Trends

Our operations, potential funding, and potential revenues are dependent now, and in the future, upon the following factors:

Price volatility in worldwide commodity prices, including silver, gold, and other minerals, which is affected by: (a) sale or purchase of silver by central banks and financial institutions; (b) interest rates; (c) currency exchange rates; (d) inflation or deflation; (e) speculation; and (f) fluctuating prices in worldwide and local commodities for petroleum-related products, chemicals, and solvents,

Global and regional supply and demand of silver, gold, and other minerals, including investment, industrial and jewelry demand;

Political and economic conditions of major silver, gold or other mineral-producing countries;

Threatened changes to the U.S. Mining Law that may cause increasing federal land royalties, or other unanticipated consequences and related increased costs of conduct in mining operations in the United States; and

Global economic conditions may affect pricing and availability of materials and supplies.

Off-Balance Sheet Arrangements

We have not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated with us under whom we have:

an obligation under a guarantee contract,

a retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets,

any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, or

any obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by us and material to us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with us.

We do not have any off-balance sheet arrangements or commitments that 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.

Changes in Accounting Policies

The significant accounting policies outlined within our Condensed Consolidated Financial Statements for the quarter ended March 31, 2011 have been applied consistently with the year ended December 31, 2010.

Recently Enacted Accounting Standards

Management has evaluated the recent accounting pronouncements issued since the audited financial statements and in managements’s opinion, the relevant pronouncements reviewed have no material effect on the Company’s

financial statements.

PLAN OF OPERATIONS

Our Plan of Operations has been organized for each of our properties and claims to account for the similarities and differences in the location, geology, the prospective metals that may be hosted by each property or claim, and the current stage of exploration of each property and claim; accordingly, we have several Plans of Operations to account for those similarities and differences among our various properties and claims. Our Plans of Operations represent our Phase I exploration activities and are for a period of twelve months, at an approximate cost of $2.9 million. We will begin with evaluation of existing mine plans and reserves of both the Prince and Pan American Mines, and mechanical and electrical evaluation of the Caselton Concentrator. Clean up and repair of underground workings to provide safe access will be followed by geologic sampling. and mapping of known structures and existing workings with a view to commencement of operations since both were operating mines. Based upon our analysis of the test results and studies, we will determine whether to proceed with Phase II exploration and development, which will be focused on developing a near surface reserve on the Prince property and re-start evaluation of the Pan American Mine to feed the Castleton Concentrator. We cannot determine, predict, or assure whether we will be able to proceed with Phase II exploration and development activities regarding any of our properties or claims. Our exploration activities will be conducted under the overall direction of our Consulting Geologist, but each Plan of Operations described below will be directly managed and supervised by a Project Manager that we hire.

Properties - The Leviathon property in San Bernardino County, California and the Pioche mining district properties in Lincoln County, Nevada.

We will continue to hold the Leviathon property and will focus our exploration efforts on the Pioche Mining District at a total cost of $3,000,000. We will use thirteen employees and infrastructure for the Prince Mine, Pan American Mine and Caselton Concentrator. Our exploration program is shown below:

Exploration Phase I:

Evaluation of existing mine plans and reserves calculations:

BothPrince and Pan American were operating mines when shut down and have operations plans and reserves calculations. These will be organized and evaluated and prepared for required supplemental work and digitizing to determine the accuracy and reliability of existing data. Initial attention will focus on the development of an open pit resource at the Prince Mine and plan the drilling program to develop that resource. Simultaneously, a second crew will evaluate the Pan American Mine for re- start. The initial programs will require approximately three months and will proceed simultaneously with the physical rehabilitation of underground workings of both mines.

Repair of existing underground workings to allow safe access.

This will entail three months of work by three laborers and one supervisor. The main Prince shaft will be re-conditioned and put into working order to identify the scope of underground work required to access existing workings in a safe and secure manner.

Clean up of surface dumps, ore piles, facilities, etc.

This will entail surveying and mapping of the property with reference points for each surface dump. Dumps will be measured and tonnage calculations produced. A general clean-up campaign of the surface will be conducted. This will require two laborers under the supervision of the Mine Manager. Surveying and mapping will be contracted to local surveyors. It will require less than one month and will be conducted simultaneously with items 1) and 2).

Mapping and sampling of underground workings.

Mapping will be conducted with contract surveyors under the supervision our geologist with a view to verifying existing mine plans, ore locations and status of workings. It will require one month. It will commence following month three when the workings have been secured and made safe. Sampling of underground structures will be conducted by our geologist with three helpers. It will commence in month four and will require one to two months. Assaying will be done either in Ely, Nevada, or Salt Lake using a recognized assay lab under contract.

5)	Geophysical studies. This phase will begin immediately and require two months. An Induced Polarization Study will immediately be contracted to further define the zone identified for open pit mining and will require approximately two months to complete. It will be coordinated by our Geologist.

Mechanical and electrical inspection of the Caselton Concentrator.

During the first months of operation, the Caselton Concentrator will be inspected both mechanically and electrically to quantify its condition and determine the extent of repairs and the time and cost that will be required to initiate operations. It is anticipated that this work will require approximately 30 days to complete.

Exploration Phase II:

Surface and underground drilling of identified mineralization and extensions thereof.

No later than month six, all accumulated data from underground and surface sampling, geo-chemical and geo-physical studies will be evaluated to confirm the highest priority targets for open mining on the Prince Mine. A drilling contractor will be hired to conduct the drilling program to define tonnages and grades of reserves. The contractor will be managed by the Mine Manager with sampling under the supervision of our Geologist. Two helpers will be required. It is estimated that this program will require up to four months

Mine planning based on identified reserves.

As assays come back from drilling programs, the Mine Manager will enter them into a mine planning software to produce a scoping study. Assuming the reserves developed are adequate, an independent engineering firm will be hired to produce an independent ore reserve estimate, compliant with Canadian Instrument 43-101. This phase will require approximately three months and will most probably commence at approximately month nine.

Feasibility Studies.

This phase of the Operations Plan will commence following development of reserve estimates, probably at approximately 8 months following commencement of work and will be done in 'house' and under contract with an independent engineering firm. It will include metallurgical testing of core samples to determine the appropriate flow sheet for processing the ore. This phase will require approximately six months to completion.

Environmental Permitting

This phase of the Operations Plan will be on-going with the Feasibility Study and will require a minimum of six months, depending on the size of the reserve defined by the various testing programs, mine planning and the feasibility report. It will commence as soon as possible and will be managed by the Mine Manager, our Geologist and Environmental Engineer.

5)	Mine development This phase of the Operating Plan will commence upon granting the required environmental permits and operating licenses. Mine development will be under the Mine Manager and will be done by outside contractors.

Pan American re-start budget

During the first three months of Phase II, a re-start plan and budget based on Pan American ore to the Caselton Concentrator will be developed. The concentrator will require new environmental permits and will be a part of the Item 4) work. A new tailings dam will be designed and permitted as soon as practical.

Our ability to complete any of the activities described under “Plan of Operations” require significant funding. We do not presently have any commitment for portion of the funding, and we cannot assure you that we will be able to obtain any funding or that the terms on which funding may be available will be acceptable. To the extent that we are able to raise funding for a portion of our needs, we will have to allocate such funding among the projects, and we may not be able to complete any of these projects. If we are able to raise limited funding, it may result in significant dilution to our shareholders. Further, our use of proceeds may be determined by the investors based on their priorities, which may be different from our priorities.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None

ITEM 4T. - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures as defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934, as amended ("Exchange Act") that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In accordance with Exchange Act Rule 13a-15(b), our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter covered by this Quarterly Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, as of the end of the third quarter ending March 31, 2011, to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

Changes in internal controls

Our management, with the participation our Chief Executive Officer and Chief Financial Officer, performed an evaluation as to whether any change in our internal controls over financial reporting occurred during the financial quarter ending March 31, 2011. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in our internal controls over financial reporting during the financial quarter ending March 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None

ITEM 1A - RISK FACTORS

Risk Factors

Item 1A. Risk Factors.

In addition to the information contained in this report, you should carefully consider the risk factors disclosed in our Form 10-K, which could materially affect our business, financial condition or future results. Except as described elsewhere in this report, there have been no material changes from the risk factors previously disclosed in our Form 10-K.

Risks Related to our Business Activities.

Our financial condition raises substantial doubt about our ability to continue as a going concern.

As of March 31, 2011, we have an accumulated deficit of $1,500,719. We are an exploration stage enterprise and have generated nominal revenue during our exploration stage. Our auditor has issued a going concern opinion that there is substantial doubt whether we can continue as an ongoing business. If we fail to obtain approximately $4.5 million of financing, we will be unable to pursue our business plan and operations will have to be curtailed or terminated, in which case you will lose part or all of your investment in our common stock. Further, if we raise funds through the sale of our equity securities, our shareholders will suffer significant dilution.

Because we lack an operating history and have had virtually no operations, our internal controls and reporting systems may have material weaknesses which may result in material risks of which we are unaware remaining unreported or undisclosed.

Our operating history since the inception of our new business plan in 2006 has consisted of preliminary exploration activities and non-income-producing activities. In addition, our management has not devoted its full time to our business and operations. Accordingly, our internal institutional structures are weak, and we have limited internal controls and reporting systems. This means we may be unable to detect and report material risks and weaknesses in or to our business and operations. If a material adverse contingency that had remained undetected and undisclosed due to the weaknesses described above occurred, this lack of disclosure would limit your ability to plan for such an event and could have a material adverse effect on our business and results of operations and on your investment in us.

Because our properties or claims may never have reserves or be profitable, your investment in our common shares may be negatively impacted.

None of the properties or claims on which we have the right to explore for silver and other precious metals is known to have any confirmed commercially mineable deposits of silver or other metals that may be mined at a profit. We may be unable to develop our properties at a profit, either because:

	the deposits are not of the quality or size that would enable us to make a profit from actual mining activities; or
	because it may not be economically feasible to extract metals from the deposits.

In either case, you may lose part or all of you entire investment.

Because we are an exploration stage company, we have no mining operations, and our future operations are subject to substantial risks, we may never be successful in conducting any future mining operations .

We are not a mining company, but rather a beginning stage exploration stage. We will be unable to generate revenues or make profits, unless we actually mine deposits, if any actually exist.

We lack an operating history in our current business plan and we have losses, which make it difficult for you to evaluate whether we will be able to continue our operations or ever be profitable.

In June 2006, we began our current business plan of conducting exploration for silver and other minerals — our short operating history has consisted of preliminary exploration activities and non-income-producing activities. Accordingly, we have no adequate operating history for you to evaluate our future success or failure.

Our management has conflicts of interest that may favor the interests of our management, but to the detriment of our minority shareholders’ interests.

Our officers and directors also serve as officers and/or directors of other mining exploration companies and are related by family relations to one another. As a result, their personal interests and those of the companies that they are affiliated with may come into conflict with our interests and those of our minority stockholders. We as well as the other companies that our officers and directors are affiliated with may present our officers and directors with business opportunities that are simultaneously desired. Additionally, we may compete with these other companies for investment capital, technical resources, key personnel and other things. You should carefully consider these potential conflicts of interest before deciding whether to invest in our shares of our common stock. We have not yet adopted a policy for resolving such conflicts of interests. Because the interests of our officers and the companies that they are affiliated with may disfavor our own interests and those of our minority stockholders, you should carefully consider these conflicts of interest before purchasing shares of our common stock.

The services of our President and Chief Executive Officer, Executive Vice President/Chief Financial Officer, Consulting Geologist, and our Vice President of Administration and Logistics, are essential to the success of our business; the loss of any of these personnel will adversely affect our business.

Our business depends upon the continued involvement of our officers, directors, and consulting geologist, each of whom have mining experience from 9 to 35 years. The loss, individually or cumulatively, of these personnel would adversely affect our business, prospects, and our ability to successfully conduct our exploration activities. Before you decide whether to invest in our common stock, you should carefully consider that the loss of their expertise, may negatively impact your investment in our common stock.

We may be denied the government licenses and permits or otherwise fail to comply with federal and state requirements for our exploration activities.

Our future exploration activities will require licenses, permits, or compliance with other state and federal requirements regarding prospecting, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Delays or failures to acquire required licenses or permits or successfully comply with the pertinent federal and state regulations will negatively impact our operations.

We do not carry any property or casualty insurance and do not intend to carry such insurance in the near future which may expose us to liabilities that will negatively affect our financial condition.

The search for valuable minerals exposes us to numerous hazards. As a result, we may become subject to liability for such hazards, including environmental pollution, cave-ins, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods and earthquakes or other hazards that we cannot insure against or which we may elect not to insure. At the present time we have no coverage to insure against these hazards, should we incur liabilities involving these hazards that may have a material adverse effect on our financial condition.

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

None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 - REMOVED AND RESERVED

None

ITEM 5 - OTHER INFORMATION

None

SIGNATURES

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

	INTERNATIONAL SILVER, INC.

Dated: May 12, 2010	By:	/s/Harold R Shipes
		Harold R. Shipes,
		Chief Executive Officer/Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated.

Signature	Title	Date

/s/ Harold R. Shipes	Chairman of the Board/Director	May 12, 2010
Harold R. Shipes	Chief Executive Officer
	(Principal Executive Officer)

/s/John A. McKinney	Chief Financial Officer	May 12, 2010
John A. McKinney	Executive Vice President
	(Principal Financial Officer)

Exhibit 31.1

Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002

Exhibit 31.2

Certification by the Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002

Exhibit 32.1

Certification by the Principal Executive Officer pursuant to Section 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

Exhibit 32.2

Certification by the Principal Financial Officer pursuant to Section 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

Attached files

INTERNATIONAL SILVER INC Reports

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