BASIS OF PRESENTATION AND NATURE OF OPERATIONS

BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Continued)

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.

As shown in the accompanying financial statements, the Company has incurred a net loss of $1,134,538 for the period from April 28, 2006 (inception) to May 31, 2011, and has no revenues. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its natural resource properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement.

The financial statements have, in management’s opinion, been properly prepared within the framework of the significant accounting policies summarized below:

Organization and Start-up Costs

Costs of start up activities, including organizational and incorporation costs, are expensed as incurred.

Exploration Stage Enterprise

The Company’s financial statements are prepared using the accrual method of accounting. Until such properties are acquired and developed, the Company will continue to prepare its financial statements and related disclosures in accordance with entities in the exploration stage.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Mineral Property Interests

The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Exploration costs are expensed as incurred regardless of the stage of development or existence of reserves. Costs of acquisition are capitalized subject to impairment testing when facts and circumstances indicate impairment may exist. Proceeds received from the sale of any interest in a property will first be credited against the carrying value of the property, with any excess included in operations for the period.

The Company regularly performs evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of its investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable.

Management periodically reviews the carrying value of its investments in mineral leases and claims with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a producing mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that the Company will continue exploration on such project. The Company does not set a pre-determined holding period for properties with unproven deposits, however, properties which have not demonstrated suitable metal concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if future exploration is warranted, whether there has been any impairment in value and that their carrying values are appropriate.

If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or determination of value. The amounts recorded as mineral leases and claims represent costs to date and do not necessarily reflect present or future values.

The Company’s exploration activities are subject to various laws and regulations governing the protection of the environment. These laws are continually changing, generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Mineral Property Interests (Continued)

The accumulated costs of properties that are developed on the stage of commercial production will be amortized to operations through unit-of-production depletion.

Cash

Cash consists primarily of cash on deposit.

Investments

Investments in securities of publicly traded companies are measured at fair value. Resulting gains or losses are recognized in the statement of operations.

Investments in securities of private companies that do not have a quoted market price on a recognized securities exchange are recorded at cost. Investments are written-down when, in the opinion of management, there has been an impairment in their value which is other than temporary and such impairment is recorded in the statement of operations.

Computer Equipment

Computer equipment is recorded at cost and will be depreciated over an estimated useful life of three years on a straight-line basis.

Financial Instruments

The Company’s financial instruments include cash, accounts payable and accrued liabilities, amounts due to related parties, amount due to shareholder, promissory notes payable, promissory notes payable to related parties, loan payable and convertible notes. All such instruments are carried at cost, which, due to the short maturity of these financial instruments, approximate fair value at May 31, 2011.

Foreign Currency Translation

The Company’s functional currency is the US dollar. Transactions in a foreign currency are translated into U.S. dollars as follows:

i)

revenue and expense items are translated at the average rate in effect during the applicable accounting period.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates

The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Actual results may differ from the estimates.

Basic and Diluted Loss Per Share

Basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

The following outstanding share purchase warrants were excluded from the diluted EPS computation as their effect would have been anti-dilutive:

Income Taxes

The Company uses an asset and liability approach for financial accounting and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

Impairment of Long-Lived Assets

The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. In such cases, the amount of the impairment is determined based on the relative fair values of the impaired assets. The Company tests the recoverability of the assets whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Asset Retirement Obligations

An asset retirement obligation (“ARO”) is a legal obligation associated with the retirement of a tangible long-lived asset and is recognized as a liability in the period which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset.

The cost of the tangible asset, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the asset. The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. The fair value of the ARO is measured using expected future cash flows, discounted at the Company’s credit-adjusted risk-free interest rate. To date, no significant asset retirement obligation exists due to the early stage of exploration. Accordingly, no liability has been recorded.

Share-based Compensation

The Company accounts for stock-based compensation under the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, Stock Compensation, which requires the recognition of the fair value of stock-based compensation. Under the fair value recognition provisions for ASC 718, stock-based compensation cost is estimated at the grant date based on the fair value of the awards expected to vest and recognized as expense ratably over the requisite service period of the award. The Company has used the Black-Scholes valuation model to estimate fair value of its stock-based awards which requires various judgmental assumptions including estimating stock price volatility and expected life. The Company’s computation of expected volatility is based on a combination of historical and market- based volatility. In addition, the Company considers many factors when estimating expected life, including types of awards and historical experience. If any of the assumptions used in the Black-Scholes valuation model change significantly, stock- based compensation expense may differ materially in the future from that recorded in the current period.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718 and the conclusions reached by ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505-50.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Environmental Protection and Reclamation Costs

The operations of the Company have been, and may in the future be affected from time to time in varying degrees by changes in environmental regulations, including those for future removal and site restorations costs. Both the likelihood of new regulations and their overall effect upon the Company may vary from region to region and are not predictable.

Environmental expenditures that relate to ongoing environmental and reclamation programs are charged to the statements of operations as incurred or capitalized and amortized depending upon their future economic benefits. The Company does not currently anticipate any material capital expenditures for environmental control facilities because its property holding is at an early stage of exploration.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market.

The Company uses a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Observable inputs such as quoted prices in active markets;

Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments (Continued)

The following table presents information about the Company’s financial instruments that have been measured at fair value as of May 31, 2011, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair values:

Recent Accounting Pronouncements

In May 2011, the FASB issued new authoritative guidance to provide a consistent definition of fair value and ensure that fair value measurements and disclosure requirements are similar between GAAP and International Financial Reporting Standards. This guidance changes certain fair value measurement principles and enhances the disclosure requirements for fair value measurements. This guidance is effective for interim and annual periods beginning after December 15, 2011 and is applied prospectively. The Company does not expect that the adoption of this guidance will have a material impact on its financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements (Continued)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

q)

LONG-TERM INVESTMENT

In the year ended November 30, 2009, the Company received 250,000 common shares in Solfotara Mining Corp. (“Solfotara”), a private Canadian company as consideration for transferring its interest in an option agreement to Solfotara. The total value attributed to the common stock received from Solfotara was $10,367.

Solfotara undertook a corporate reorganization, whereby it spun out a certain project to Copper Development Corporation (“CDC”) in consideration for publicly traded shares in CDC.

These marketable securities were distributed to Solfotara’s shareholders on March 24, 2011. Accordingly, the Company received 209,000 shares in CDC, having a fair value of $115,909. This receipt was recognized as dividend income in the statement of operations.

On April 21, 2011, the Company settled $110,770 of debt by transferring its ownership in the 209,000 CDC shares which had a value of $120,279. The settlement of debt was allocated as follows:

MINERAL PROPERTY ACQUISITION COSTS

Clisbako Claims

On December 16, 2008, the Company entered into a purchase agreement to acquire an undivided 100% interest in a group of ten mineral claims (collectively known as the “Clisbako” claims) located in the Cariboo Mining Division of British Columbia, Canada. Consideration for the claims was 6,000,000 shares (issued – see Note 10(a)) of the Company’s common stock with a value of $300,000 and the issuance to the vendor of a promissory note in the amount of CDN$70,000 (US$56,600) payable June 30, 2009. On July 23, 2009, the Company reached an agreement with the vendor to extend the deadline of the CDN$70,000 mineral property payment (“Property Payment”) to December 31, 2009. In consideration of the extension of the deadline, the Company issued 60,000 common shares to the vendor with a fair value of $36,000.

On January 21, 2010, the Company reached an agreement with the vendor to further extend the due date of the Property Payment to February 15, 2010. In consideration of the further extension of the deadline, the Company issued 10,000 shares of its common stock to the vendor with a value of $4,200.

On March 15, 2010, the Company entered into a third extension agreement dated for reference February 15, 2010, with the vendor to extend the Property Payment from February 15, 2010 to June 30, 2010. In consideration of the extension, the Company issued to the vendor 20,000 common shares with a value of $2,200.

MINERAL PROPERTY ACQUISITION COSTS (Continued)

Clisbako Claims (Continued)

Paying an aggregate of $150,000 to CMI. as follows:

(a)

$50,000 on execution of the agreement (CDN$50,000 or US$48,650 has been paid);

(b)

a further $50,000 on or before February 28, 2011 (paid CDN$40,000 or US$40,604); and

(c)

a further $50,000 on or before April 30, 2011. (By agreement dated April 30, 2011 with Manado Gold Corp., the Company has agreed to waive payment, in exchange to terminate an assigned option with respect to the Manado property. See Note 4 (c)).

Issuing an aggregate of 600,000 Shares to CMI as follows:

Incurring Exploration Expenditures of CDN$650,000 on the Clisbako Property as follows:

CDN$100,000 on or before September 15, 2011;

a further CDN$300,000 on or before September 15, 2012; and

a further CDN$250,000 on or before September 15, 2013.

MINERAL PROPERTY ACQUISITION COSTS (Continued)

Eureka Claims

On May 29, 2009, the Company entered into an assignment agreement to acquire an undivided 100% interest in a series of mineral claims referred to as the CPG Project, Fish Claims and The Golden Snow Property (collectively known as the “Eureka” claims) situated in the Eureka County, Esmeralda County and Mineral County, Nevada. Consideration for the claims was as follows:

150,000 common shares (issued) with a value of $37,500;

$10,000 advance royalty payment due on or before August 28, 2009 (paid);

$15,000 advance royalty payment due on or before August 28, 2010 (paid);

$20,000 advance royalty payment due on or before August 28, 2011;

$25,000 advance royalty payment due on or before August 28, 2012;

$30,000 advance royalty payment due on or before August 28, 2013, with an additional $30,000 due each year thereafter for a period of ten years, with an option to renew for an additional ten years.

The Company entered into three property agreements dated as of April 26, 2011 covering the Golden Snow Property, the CPG Project and the Fish Claims to replace the single agreement covering these mineral properties.

CPG Project

The Company entered into an agreement dated as of March 31, 2011 with Claremont Nevada Mines LLC (“Claremont”) to earn a 100% undivided interest (the “CPG Option”) in the CPG Project by:

(a)

i)         $4,100 on or before August 28, 2011;

ii)         $5,100 on or before August 28, 2012; and

iii)        $6,200 on or before August 28, 2013.

MINERAL PROPERTY ACQUISITION COSTS (Continued)

Eureka Claims (Continued)

CPG Project (Continued

paying to Claremont, during the term of the option, $1,000 in connection with the delivery by the Company to Claremont of:

a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

a final feasibility study in respect of the property that is approved by the Company’s management.

to 1% by paying $1,000,000 to the royalty holder; or

to 2% by paying $500,000 to the royalty holder.

paying to Claremont advance royalty payments as follows:

$5,400 on or before August 28, 2011;

$6,800 on or before August 28, 2012; and

$8,100 on or before August 28, 2013.

MINERAL PROPERTY ACQUISITION COSTS (Continued)

Eureka Claims (Continued)

Fish Claims (Continued)

paying to Claremont, during the term of the option, $1,000 in connection with the delivery by the Company to Claremont of:

a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

a final feasibility study in respect of the property that is approved by the Company’s management.

to 1% by paying $1,000,000 to the royalty holder; or

to 2% by paying $500,000 to the royalty holder.

paying to the Golden Snow Optionors advance royalty payments as follows:

$10,600 on or before August 28, 2011;

$13,200 on or before August 28, 2012; and

$15,900 on or before August 28, 2013.

MINERAL PROPERTY ACQUISITION COSTS (Continued)

Eureka Claims (Continued)

Golden Snow Property (Continued)

paying to the Golden Snow Optionors, during the term of the option, $1,000 in connection with the delivery by the Company to the Golden Snow Optionors of:

a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

a final feasibility study in respect of the property that is approved by the Optionee’s management.

to 1% by paying $1,000,000 to the royalty holder; or

to 2% by paying $500,000 to the royalty holder.

The first 25% interest in the Underlying Agreement upon Terrace:

paying the Company $25,000 by way of a non-interest bearing Promissory Note due 45 days from the date of the Earn-In Agreement, subsequent to period-end the Promissory Note was extended to September 27, 2011. In consideration of this extension, the Note will bear interest of 10% per annum calculated from April 26, 2011;

MINERAL PROPERTY ACQUISITION COSTS (Continued)

Eureka Claims (Continued)

Agreement with Terrace Ventures Inc. (Golden Snow Property) (Continued)

The first 25% interest in the Underlying Agreement upon Terrace: (Continued)

completing exploration expenditures on the Property totalling $250,000 by July 31, 2012.

An additional 25% interest in the Underlying Agreement upon Terrace:

paying the Company $50,000 on or before May 31, 2013;

completing exploration expenditures on the Property totalling $500,000 by July 31, 2013.

An additional 25% interest in the Underlying Agreement upon Terrace:

paying the Company $100,000 on or before May 31, 2014;

completing exploration expenditures on the Property totalling $1,000,000 by July 31, 2014.

Terrace is also obligated to pay all advance royalties, county and BLM claim fees and Nevada state taxes during the currency of the Earn-In Agreement.

Manada Gold Claims

On January 19, 2010 the Company entered into an option agreement to acquire interests in four mineral claims (collectively known as the “Manado Gold claims”) in the Lobongan District of Northern Sulawesi, Indonesia. The Company paid $35,000 for this option agreement and then entered into an acquisition agreement to purchase an 85% in the Manado gold claims over a three year period. Terms of the acquisition agreement were for the Company to earn an initial 10% interest to pay a cash payment of $90,000 (paid $15,050), issue 150,000 shares of the Company’s stock (not issued) and complete an exploration program of at least $250,000 (not completed); to earn a further 15% pay a cash payment of $100,000, issue 300,000 shares of the Company’s stock, and complete an additional $500,000 exploration program; to earn a further 26% interest pay $200,000, issue 500,000 shares of the Company’s stock and incur a further $1,000,000 in exploration expenditures; the final 34% interest upon completion of a scoping study on the claims.

MINERAL PROPERTY ACQUISITION COSTS (Continued)

Manada Gold Claims (Continued)

In August 2010, the Company entered into an agreement with Manado Gold Corp. (“Manado Gold”) to earn a 75% interest in the Company’s 85% interest. Manado Gold agreed to reimburse the Company $80,000 (received $68,427), carry out the exploration expenditures required under the original acquisition agreement and to issue the Company 950,000 shares of its capital stock to the Company.

On April 30, 2011, the optionors of the mineral property agreed to have the Company terminate its agreement with Manado Gold, in return the Company agreed to waive the payment of $50,000 in respect of the Clisbako property due April 30, 2011 (note 4 (a)) from Manado Gold.

As at May 31, 2011, the Company has abandoned its pursuit of an interest in the acquisition agreement.

June Claims

On February 5, 2010, the Company entered into an option agreement to acquire an undivided 100% interest in a series of mineral claims (collectively known as the “June claims”) situated in the Alberni Mining Division of British Columbia, Canada. Consideration for the claims is as follows:

Payment of $3,000 due on February 5, 2010 (paid);

Payment of $10,000 due on or before May 6, 2010;

Payment of $10,000 and the issuance of 100,000 shares of the Company’s common stock due on or before February 5, 2011;

Payment of $10,000 and the issuance of 100,000 shares of the Company’s common stock due on or before February 5, 2012;

Payment of $10,000 and the issuance of 100,000 shares of the Company’s common stock due on or before February 5, 2013.

During the year ended November 30, 2010, the Company abandoned and wrote off all costs incurred with respect to the June property.

MINERAL PROPERTY AND ACQUISITION COSTS (Continued)

Elko Claims

On April 13, 2011, the Company acquired a 30-day exclusive right to negotiate with Development Resources LLC, a Delaware limited liability company, for the acquisition of 54 mineral claims located in Elko County, Nevada. The Company paid $10,000 to Development Resources LLC to acquire the exclusive right. This right expired unexercised on May 20, 2011.

PROMISSORY NOTES PAYABLE

On January 11, 2010, the Company entered into a promissory note agreement whereby it borrowed $75,000 from an arm’s length party. The note bears interest at 10% per annum, is unsecured and repayable on demand. As at May 31, 2011, a total of $10,109 (November 30, 2010 - $6,637) has been accrued as interest on this note.

On April 21, 2011, the Company settled $24,459 of the promissory note by way of exchange of marketable securities for debt. See Note 3.

Pursuant to a purchase agreement to acquire the Clisbako claims outlined in Note 4(a), the Company issued a promissory note in the amount of CDN$70,000 (translated to US$65,913 as at November 30, 2009) payable June 30, 2009. The promissory note is unsecured and free of interest. During the year ended November 30, 2009, the Company reached an agreement with the vendor to extend the deadline of the promissory note to December 31, 2009.

During the year ended November 30, 2010, the Company obtained various extensions from the vendor to postpone the Property Payment. The Company repaid CDN$55,000 on the promissory note. During the six month period ended May 31, 2011, the Company repaid the remaining balance of CDN$15,000 of the promissory note.

During the six month period ended May 31, 2011, the Company entered into additional promissory note agreements, whereby it borrowed an additional $85,500 from arms’ length parties. These notes bear interest at 10% per annum, are unsecured and are repayable on demand. As at May 31, 2011, total interest of $1,062 has been accrued on these outstanding notes.

PROMISSORY NOTES PAYABLE TO RELATED PARTIES

On December 19, 2007, the Company entered into a promissory note agreement whereby it borrowed $20,000. The note is unsecured, repayable on demand and bears interest at 10% per annum, payable annually. As at May 31, 2011, a total of $6,834 (November 30, 2010 - $5,901) has been accrued as interest payable on the loan. During the year ended November 30, 2008, the owner of the company holding the promissory note became an officer and director of the Company.

On April 21, 2011, the Company settled $5,883 of the promissory note by way of marketable securities for debt exchange. See Note 3.

On April 13, 2011, the Company entered into a promissory note agreement, whereby it borrowed $12,000 from a related party. This note bears interest of 10% per annum, is unsecured and is repayable on demand. As at May 31, 2011, total interest of $158 has been accrued on this note.

LOAN PAYABLE

On October 1, 2008, the Company received a loan from an arm’s length party of $10,000. The loan is unsecured, repayable on demand and bears interest at 10% per annum, payable annually. During the year ended November 30, 2009, the Company paid back $4,610 of this balance. As at May 31, 2011, a total of $1,876 (November 30, 2010 - $1,625) has been accrued as interest payable on the loan.

On April 21, 2011, the Company settled $1,590 of the loan by way of exchange of marketable securities for debt. See Note 3.

CONVERTIBLE NOTES

On April 30, 2009, the Company issued 55, $2,500 Convertible Notes (the “notes”) in the aggregate amount of $137,500 due and payable on or before October 31, 2010, with interest charged at the rate of 10% per annum payable annually. Attached to the Notes were 550,000 share purchase warrants (10,000 attached to each of the 55 notes). Each warrant entitles the holder to purchase three shares of the Company’s common stock for a period expiring one year from the date of issuance of the notes at an exercise price of $0.25 ($0.083 per share). At the election of the holder, the notes and interest accrued thereon are convertible into such number of shares of the Company’s common stock as shall be equal to the principal amount of the convertible note to be converted divided by $0.05. Conversion of the notes does not affect the warrants.

CONVERTIBLE NOTES (Continued)

During the year ended November 30, 2008, the Company had received $67,500 towards the convertible notes offering. During the year end November 30, 2009, the Company received the remaining $70,000 towards this offering.

The Company has allocated the proceeds received between the notes and the detachable warrants on a relative fair value basis. The fair value of the warrants was estimated using the Black-Scholes option pricing model at the date of issue with the following weighted average assumptions: expected dividend yield of 0%; average risk free interest rate of 0.63%; expected volatility of 229% and a term of 1.0 year. The fair value of the notes was estimated by multiplying the number of shares that would result from an immediate exercise of the conversion option, by the market price on the date of issue. The relative fair values of the notes and the warrants determine the debt discount attributable to the warrants. The result was $47,479 of the proceeds being allocated to the warrants and $90,021 being allocated to the notes. The resulting discount on the notes is amortized over the term of the notes to maturity such that, in the absence of any conversions, the carrying value of the notes at maturity would be equal to the face amount of $137,500. In the event of a conversion of any, or all, of the face amount of the notes, the proportionate amount of the unamortized discount as of the date of conversion is immediately charged to operations.

In accordance with the provisions of ASC 470 – 20, the Company determined the intrinsic value of the beneficial conversion feature on the notes by comparing the market price of the Company’s common stock at issuance of the notes to the effective conversion price of the notes, as determined by dividing the proceeds allocated to the notes by the number of shares that would result from an immediate exercise of the conversion option. The initial beneficial conversion feature was determined to be $734,250; however, in accordance with the provisions of ASC 470 – 20, it is limited to the proceeds allocated to the notes, being $90,021. This beneficial conversion feature was recorded as an immediate charge to additional paid-in capital and a further discount on the convertible note carrying value. This further discount is to be amortized over the term of the notes to maturity. In the event of a conversion of any, or all, of the face amount of the notes, the proportionate amount of the unamortized beneficial conversion feature as of the date of conversion is immediately charged to operations.

During the year ended November 30, 2010, the Company recorded as finance charges, $28,964 of amortization (May 31, 2010 - $15,783) of the discount resulting from the allocation of proceeds to the warrants and a further $54,917 (May 31, 2010 - $29,925) of the intrinsic value of the beneficial conversion feature, leaving total unamortized amounts of $Nil (May 31, 2010 - $38,173). The accrued interest of $24,122 remains unpaid as of May 31, 2011 and November 30, 2010, and is included in accounts payable and accrued liabilities.

8.

CONVERTIBLE NOTES (Continued)

During the year ended November 30, 2010, the entire principal of $137,500 was converted into 2,750,000 shares of the Company’s common stock.

9.

UNIT SUBSCRIPTIONS RECEIVED

During the year ended November 30, 2010, the Company received $14,965 in subscription funds in connection with a private placement mentioned above. Due to the provision in the subscription agreements that the subscription funds will constitute non-interest bearing demand loans to the Company in the event the subscriptions are not accepted by the Company, the Company classified the unit subscriptions received in advance as current liabilities.

10.

CAPITAL STOCK

Common Stock

On June 19, 2006, the Company issued 27,000,000 common shares to the Company’s founder (9,000,000 pre-stock split shares at a price of $0.001 for gross proceeds of $9,000).

During the year ended November 30, 2006, pursuant to a private placement, the Company issued 17,997,144 common shares (5,999,048 pre-stock split shares at a price of $0.02 for gross proceeds of $119,981).

During the year ended November 30, 2008, the Company received $80,000 from completing a private placement of 3,000,000 units (1,000,000 pre-stock split units at a price of $0.08 per unit). Each unit was comprised of one share of the Company’s common stock and one share purchase warrant. Each warrant entitles the subscriber to purchase one share of the Company’s common stock for a period expiring two years from the date of issue at an exercise price of $0.033 per share.

During the year ended November 30, 2009, the Company completed the following stock transactions:

issued 6,000,000 common shares pursuant to a mineral property purchase agreement (see Note 4). The Company recorded these shares at a price of $0.05 per share for a total value of $300,000;

CAPITAL STOCK (Continued)

Common Stock (Continued)

issued 150,000 common shares pursuant to a mineral property assignment agreement (see Note 4). The Company recorded these shares at a price of $0.25 per share for a total value of $37,500; and

issued 60,000 common shares pursuant to an extension to a mineral property purchase agreement (see Note 4). The Company recorded these shares at a price of $0.60 per share for a total value of $36,000.

During the year ended November 30, 2010, the Company completed the following stock transactions:

issued 600,000 units for total proceeds of $60,000 in relation to a private placement. Each unit consists of one common share and one share purchase warrant, each whole warrant entitling the holder thereof to purchase an additional common share at a price of $0.15 for a period of two years.

issued 150,000 common shares from exercise of warrants;

issued 2,750,000 common shares with a value of $137,500 pursuant to the conversion of convertible notes (see Note 8);

issued 30,000 common shares with a value of $6,400 pursuant to an extension to a mineral property purchase agreement (see Note 4);

The Company approved a private offering of up to 3,000,000 units (the “Units”) at a price of $0.05 per unit for gross proceeds of up to $150,000. The Company received in advance 527,200 units for proceeds of $26,360 which were issued during the period ended May 31, 2011. Each unit consists of one common share and one share purchase warrant, each whole warrant entitling the holder thereof to purchase an additional common share at a price of $0.10 for a period of two years.

Share Purchase Warrants

As at May 31, 2011 share purchase warrants were outstanding for the purchase of common shares as follows:

CAPITAL STOCK (Continued)

Share Purchase Warrants (Continued)

A summary of changes in share purchase warrants for the periods ended November 30, 2010 and May 31, 2011 is presented below:

CAPITAL STOCK (Continued)

Stock Options

On March 1, 2011, the Company adopted its 2011 Stock Incentive Plan (the “2011 Plan”). The 2011 Plan provides for the issuance of incentive and non-qualified shares of the Company's stock to officers, directors, employees, and non-employees. A total of 5,500,000 shares of the Company’s common stock are available for issuance under the Plan. The exercise price must not be less than: (i) 80% of market price of the Company's common stock in respect of non-qualified stock options; and (ii) market price of the Company's common stock in respect of incentive stock options. The options can be granted for a maximum term of 10 years and vest as determined by the Board of Directors.

RELATED PARTY TRANSACTIONS

As of May 31, 2011, the Company is indebted to the following additional related parties otherwise not disclosed in previous notes:

Included in due to related parties is a loan payable to a member of the board of directors of MAC of $497 (November 30, 2010 - $Nil);

Included in due to related parties is a loan payable to a company owned by a member of the board of directors of MAC of $1,013 (November 30, 2010 - $Nil).

The amounts due to the related parties are unsecured, non-interest bearing with no fixed terms of repayment.

During the six months ended May 31, 2011, the Company paid or accrued $18,000 (2010 - $18,000) for management fees to the board of directors of MAC.

On April 21, 2011, outstanding management fees aggregating $14,390 were settled by the Company by the transferring of marketable securities to related parties. See Note 3.

These transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties.

COMMITMENTS AND CONTRACTUAL OBLIGATIONS

The Company has no significant commitments or contractual obligations with any parties respecting executive compensation, consulting arrangements or other matters. Rental of premises and investor relations services are provided on a month-to-month basis.

SEGMENT INFORMATION

The Company has one reportable operating segment, being the acquisition and exploration of mineral properties. Details of identifiable assets by geographic segments are as follows:

SUBSEQUENT EVENTS

Subsequent to May 31, 2011, the Company entered into two promissory note agreements whereby it borrowed $28,346 from an arm’s length party. Each note bears interest at 10% per annum, is unsecured and is repayable on demand.

Effective April 21, 2011, Bryan Wilson resigned as a member of our Board of Directors. To fill the vacancy created by his resignation, we appointed Howard Metzler as a member of our Board of Directors. There were no disagreements between with Mr. Wilson regarding any matter relating to the Company’s operations, policies or practices.

On April 26, 2011, we entered into three property agreements dated as of March 31, 2011 covering our Golden Snow, CPG and Fish Properties located in Nevada. The three properties were previously held under a single agreement. The three new agreements are on substantially the same terms, but allow us to acquire each property independently and permit us to enter into agreements for joint venture financing of exploration programs on a property-by-property basis. See “CPG Project”, “Fish Claims” and “Golden Snow Property” below.

We entered into an agreement with Terrace Ventures Inc. dated April 26, 2011 (the "Earn-In Agreement"). Under the terms of the Earn-In Agreement, Terrace will earn up to a 75% interest in the Company’s agreement with the Golden Snow Optionors (the “Underlying Agreement”) by paying to the Company up to $175,000 and expending up to $1,750,000 to do exploration work on the Golden Snow Property. See “Agreement with Terrace Ventures Inc.” below.

On May 12, 2011, we entered into an amendment to the letter agreement dated April 13, 2011 with Development Resources LLC granting us the exclusive right to negotiate the acquisition of 54 mineral claims located in the Long Canyon area of Elko County, Nevada. Under the terms of the amendment agreement, Development Resources LLC, the owner of the mineral claims, agreed to extend the exclusivity period for an additional 7 days to permit negotiations to be completed. We were unable to reach an agreement with Development Resources LLC by the end of the exclusivity period.

We settled approximately $110,000 of outstanding indebtedness of the Company and our wholly-owned subsidiary, Magellan Acquisition Corp. ("Magellan"), by transferring our 209,000 shares of Copper Development Corp. held by Magellan to certain creditors of the Company and Magellan, including $7,923.50 of indebtedness to Richard W. Donaldson, our President, $5,883.00 of indebtedness to Kahala Financial Corp. a company controlled by Mr. Donaldson, $6,174.50 of indebtedness to Don Archibald, a director of Magellan and $291.50 of indebtedness to David K. Ryan, a director of Magellan. For the purposes of the settlement, the shares of Copper Development Corp. were valued based on their trading price on the London AIM Market of approximately $0.55 per share.

paying to the CPG Optionor advance royalty payments as follows:

$4,100 on or before August 28, 2011;

$5,100 on or before August 28, 2012; and

$6,200 on or before August 28, 2013.

paying to the CPG Optionor, during the term of the option, $1,000 in connection with the delivery by the Company to the CPG Optionor of:

a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

a final feasibility study in respect of the property that is approved by the Company’s management.

to 1% by paying $1,000,000 to the royalty holder; or

to 2% by paying $500,000 to the royalty holder.

paying to the Fish Optionor advance royalty payments as follows:

$5,400 on or before August 28, 2011;

$6,800 on or before August 28, 2012; and

$8,100 on or before August 28, 2013.

paying to the Fish Optionor, during the term of the option, $1,000 in connection with the delivery by the Company to the Fish Optionor of:

a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

a final feasibility study in respect of the property that is approved by the Company’s management.

to 1% by paying $1,000,000 to the royalty holder; or

to 2% by paying $500,000 to the royalty holder.

paying to the Golden Snow Optionors advance royalty payments as follows:

$10,600 on or before August 28, 2011;

$13,200 on or before August 28, 2012; and

$15,900 on or before August 28, 2013.

paying to the Golden Snow Optionors, during the term of the option, $1,000 in connection with the delivery by the Company to the Golden Snow Optionors of:

a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

a final feasibility study in respect of the property that is approved by the Company’s management.

to 1% by paying $1,000,000 to the royalty holder; or

to 2% by paying $500,000 to the royalty holder.

The first 25% interest in the Underlying Agreement upon Terrace:

paying the Company $25,000 by way of a promissory note, bearing interest at a rate of 10% per annum, due on September 27, 2011;

completing exploration expenditures on the Property totalling $250,000 by July 31, 2012.

An additional 25% interest in the Underlying Agreement upon Terrace:

paying the Company $50,000 on or before May 31, 2013;

completing exploration expenditures on the Property totalling $500,000 by July 31, 2013:

An additional 25% interest in the Underlying Agreement upon Terrace:

paying the Company $100,000 on or before May 31, 2014;

completing exploration expenditures on the Property totalling $1,000,000 by July 31, 2014.