Mexus Gold US - FORM 10-Q - February 13, 2012

Attached files

file	filename
EX-31.1 - EX 31.1 - Mexus Gold US	ex31.htm
EX-32.1 - EX 32.1 - Mexus Gold US	ex32.htm

U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

		For the quarterly period ended December 31, 2011

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

For the transition period from ___________ to _____________

MEXUS GOLD US

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

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

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

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

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if smaller reporting company)		Smaller reporting company [X]

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

Yes	[ ]
No	[X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

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

Yes	[ ]
No	[ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of February 2, 2012, 168,693,953 shares of our common stock were issued and outstanding.

PART I

ITEM 1.FINANCIAL STATEMENTS

MEXUS GOLD US

(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011

(Unaudited)

MEXUS GOLD US
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
	December 31, 2011			March 31, 2011
ASSETS	(Unaudited)			(Audited)
CURRENT ASSETS
Cash	$	1,386		$	109,142
Prepaid and other assets		5,255			5,984
TOTAL CURRENT ASSETS		6,641			115,126

FIXED ASSETS
Equipment, net of accumulated depreciation		1,433,199			913,048
TOTAL FIXED ASSETS		1,433,199			913,048

OTHER ASSETS
Equipment under construction		122,813			416,415
Mineral properties		663,684			451,569
TOTAL OTHER ASSETS		786,497			867,984

TOTAL ASSETS	$	2,226,337		$	1,896,158

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	106,219		$	53,805
Accounts payable – related party		40,275			86,675
Advance from Powercom Services Inc.		800,000			800,000
Notes payable		239,850			347,000
Notes payable - related party		116,461			71,893
Loan payable		1,247			1,139
TOTAL CURRENT LIABILITIES		1,304,052			1,360,512

LONG TERM LIABILITIES
Notes payable, net of current portion		69,000			156,000
Loan payable, net of current portion		37,193			38,142
TOTAL LONG TERM LIABILITIES		106,193			194,142
TOTAL LIABILITIES		1,410,245			1,554,654

STOCKHOLDERS’ EQUITY
Capital stock
Authorized
9,000,000 shares of preferred stock, $0.001 par value per share, nil issued and outstanding
1,000,000 shares per Series A Convertible Preferred Stock, $0.001 par value per share
500,000,000 shares of common stock, $0.001 par value per share
Issued and outstanding
375, 000 shares of Series A Convertible Preferred Stock ( 0 – March 31, 2011)		375			-
167,860,620 shares of common stock (161,117,595 - March 31, 2011)		167,863			161,118
Additional paid in capital		4,647,211			3,464,937
Common stock payable		270,041			155,245
Accumulated deficit		(648,441	)		(648,441	)
Accumulated deficit during the exploration stage		(3,620,957	)		(2,791,355	)
TOTAL STOCKHOLDERS’ EQUITY		816,092			341,504
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,226,337		$	1,896,158

The accompanying notes are an integral part of these consolidated financial statements.

MEXUS GOLD US
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three months ended December 31, 2011			Three months ended December 31, 2010			Nine months ended December 31, 2011			Nine months ended December 31, 2010			Cumulative results from September 18, 2009 to December 31, 2011
REVENUES

Revenues	$	19,728		$	-		$	178,819		$	20,000		$	199,819
Total revenues		19,728			-			178,819			20,000			199,819

EXPENSES
General and administrative		97,410			368,286			391,935			694,906			1,555,848
Exploration costs		160,644			62,341			479,798			112,304			747,452
Stock-based compensation		63,200			114,138			94,673			264,138			1,453,836
Total expenses		321,254			544,765			966,406			1,071,348			3,757,136

Loss from operations		(301,526	)		(544,765	)		(787,587	)		(1,051,348	)		(3,557,317	)

OTHER INCOME (EXPENSE)
Interest expense		(7,066	)		(6,845	)		(40,724	)		(20,558	)		(70,745	)
Gain (loss) on sale of equipment		(1,291	)		6,472			(1,291	)		6,380			7,104
Total other income (expense)		(8,357	)		(373	)		(42,015	)		(14,178	)		(63,640	)

NET LOSS	$	(309,883	)	$	(545,138	)	$	(829,602	)	$	(1,065,526	)	$	(3,620,957	)

BASIC LOSS PER COMMON SHARE
BASIC LOSS PER COMMON SHARE	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING- BASIC

		166,954,995			152,872,343			164,056,274			150,404,096

The accompanying notes are an integral part of these consolidated financial statements.

MEXUS GOLD US
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine months ended December 31, 2011			Nine months ended December 31, 2010			Cumulative from September 18, 2009 to December 31, 2011

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(829,602	)	$	(1,065,526	)	$	(3,620,957	)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization		146,615			37,772			244,848
(Gain) loss on sale of equipment		1,291			(43,984	)		(7,105	)
Gain on settlement of account payable		11,000			-			11,000
Stock-based compensation		94,673			281,136			1,453,856
Stock issued for interest		18,520			-			21,520
Changes in operating assets and liabilities:
(Increase) decrease in prepaid and other assets		729			(18,250	)		(5,255	)
Increase in accounts payable and accrued liabilities, including related parties		24,446			37,116			146,992
NET CASH USED IN OPERATING ACTIVITIES		(532,328	)		(771,736	)		(1,755,101	)

CASH FLOWS FROM INVESTING ACTIVITIES
Equipment		(117,346	)		(627,716	)		(789,743	)
Equipment under construction		(135,223	)		(23,049	)		(418,828	)
Mineral properties		(62,115	)		(68,152	)		(232,934	)
Sale of equipment		-			-			50,000
NET CASH USED IN INVESTING ACTIVITIES		(314,684	)		(718,917	)		(1,391,505	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of notes payable		150,000			486,000			649,500
Repayment of notes payable		(104,922	)		-			(104,922	)
Notes payable from related party		59,650			48,551			121,736
Repayment of notes payable from related party		(12,882	)		-			(12,882	)
Advance from Powercom Services Inc.		-			800,000			800,000
Proceeds from issuance of common stock		403,000			130,000			1,314,700
Share subscriptions payable		244,410			67,000			375,155
NET CASH PROVIDED BY FINANCING ACTIVITIES		739,256			1,531,551			3,143,287

INCREASE (DECREASE) IN CASH		(107,756	)		40,898			(3,319	)

CASH, BEGINNING OF PERIOD		109,142			1,022			4,705

CASH, END OF PERIOD	$	1,386		$	41,920		$	1,386

Interest paid	$	7,902		$	20,558		$	34,922
Income tax paid	$	-		$	-		$	-

Supplemental disclosure of non-cash investing and financing activities:
Shares for equipment and mineral property	$	271,886		$	323,632		$	1,030,934
Shares issued to pay capital lease liability	$	-		$	-		$	50.000
Shares issued and shares payable for loans	$	230,500		$	-		$	230,500
Shares issued for advances related party	$	2,200		$	-		$	2,200
Shares issued for accounts payable, including related party	$	39,000		$	-		$	39,000
Deferred gain on equipment	$	-		$	-		$	46,000
Stock payable for equipment purchase	$	-		$	-		$	31,500
Loan for equipment	$	-		$	-		$	43,046
The accompanying notes are an integral part of these consolidated financial statements.

MEXUS GOLD US

(AN EXPLORATION STAGE COMPANY)

Notes to Consolidated Financial Statements

December 31, 2011

(Unaudited)

1.	ORGANIZATION AND BUSINESS OF COMPANY

Mexus Gold US (the “Company”) was originally incorporated under the laws of the State of Colorado on June 22, 1990, as U.S.A. Connection, Inc. On October 28, 2005, the Company changed its’ name to Action Fashions, Ltd. On September 18, 2009, the Company changed its’ domicile to Nevada and changed its’ name to Mexus Gold US to better reflect the Company’s new planned principle business operations. The Company has a fiscal year end of March 31.

The Company re-entered the exploration stage as of September 18, 2009, as defined by the Financial Accounting Standard Board (FASB) in FASB ASC 915-10, “Development Stage Entities”. The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced. All losses accumulated since re-entry into the exploration stage has been considered part of the Company’s exploration stage activities.

The Company is a mining company engaged in the evaluation, acquisition, exploration and advancement of gold, silver and copper projects in the State of Sonora, Mexico and the Western United States, as well as, the salvage of precious metals from identifiable sources.

2.	BASIS OF PREPARATION

Pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q, the consolidated financial statements, footnote disclosures and other information normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The consolidated financial statements contained in this report are unaudited but, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the consolidated financial statements. All significant inter-company accounts and transactions have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet at March 31, 2011 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management reviews these estimates and assumptions on an ongoing basis using currently available information. Actual results could differ from those estimates.

Cash and cash equivalents

The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

Per Share Data

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share". Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Fair value of financial instruments

The Company's financial instruments consist of cash, accounts payable, accrued liabilities, advances, notes payable, and a loan payable. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505. The Company implemented this standard during the six months ended December 31, 2010.

3.	GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company has a limited operating history and limited funds and has an accumulated deficit of $648,441 and an accumulated deficit since entry into the exploration stage of $3,620,957 at December 31, 2011. These factors, among others, may indicate that the Company will be unable to continue as a going concern.

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

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

4.	RECENT ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY

There have been no recent accounting pronouncements or changes in accounting pronouncements that impacted the third quarter of fiscal 2012, or which are expected to impact future periods that were not already adopted and disclosed in prior periods.

5.	ACCOUNTS PAYABLE – RELATED PARTIES

During the nine months ended December 31, 2011 and 2010, the Company incurred rent expense payable to Paul D. Thompson, the sole director and officer of the Company, of $34,200 and $59,400, respectively. At December 31, 2011 and March 31, 2011, $0 and $46,400 for this obligation is outstanding, respectively.

At December 31, 2011 and March 31, 2011, the Company has an outstanding payable balance for rent due to G.K.’s Gym, Inc. of $9,600, which is owned by the parents of Philip E. Koehnke, the former majority shareholder of the Company.

At December 31, 2011 and March 31, 2011, the Company has an outstanding obligation of $24,637, due to Philip E. Koehnke APC, the former majority shareholder of the Company, for legal fees.

At December 31, 2011 and March 31, 2011, the Company has an outstanding obligation of $6,038, due to Philip E. Koehnke, the former majority shareholder of the Company, related to an asset purchase agreement.

6.	NOTES PAYABLE – RELATED PARTY

These notes are unsecured, non-interest bearing and due on demand. These notes were accumulated through a series of cash advances to the Company and are due to Paul D. Thompson, the sole director and officer of the Company. As of December 31, 2011 and March 31, 2011, Notes payable – related party totalled $116,461 and $71,893, respectively.

7.	NOTES PAYABLE

On December 1, 2011, the Company made an unsecured Promissory Note Agreement with Francis Stadelman in the amount of $20,000 at eight percent interest with two payments of $10,300 due no later than December 10, 2011 and January 1, 2012. As of December 31, 2011, the Company has made both scheduled payments.

On December 19, 2011, the Company made an unsecured Promissory Note Agreement with Francis Stadelman in the amount of $30,000 at eight percent interest with a payment of $10,500 due no later than January 1, 2012 and two remaining payments of $11,000 due no later than February 1, 2012 and March 1, 2012.

Defaulted Senior Notes

On February 16, 2010, the Company made an unsecured Promissory Note Agreement with William McCreary in the amount of $2,500 at eight percent interest and due on demand or no later than September 1, 2010. The Company has not made the scheduled payments and is in default on this note as of December 31, 2011. The default rate on the note is eight percent.

8.	STOCKHOLDERS’ EQUITY (DEFICIT)

The stockholders’ equity of the Company comprises the following classes of capital stock as of December 31, 2011 and March 31, 2011:

Preferred Stock, $.001 par value per share; 9,000,000 shares authorized, 0 shares issued and outstanding at December 31, 2011 and March 31, 2011, respectively.

Series A Convertible Preferred Stock (‘Series A Preferred Stock”), $.001 par value share; 1,000,000 shares authorized: 375,000 and 0 shares issued and outstanding at December 31, 2011 and March 31, 2011, respectively.

On August 22, 2011, the Board of Directors designated 1,000,000 shares of its Preferred Stock, $0.001 par value as Series A Preferred Stock. Holders of Series A Preferred Stock may convert one share of Series A Preferred Stock into one share of Common Stock. Holders of Series A Preferred Stock have the number of votes determined by multiplying (a) the number of Series A Preferred Stock held by such holder, (b) the number of issued and outstanding Series A Preferred Stock and Common Stock on a fully diluted basis, and (c) 0.000006.

Common Stock, par value of $0.001 per share; 500,000,000 shares authorized: 167,860,620 and 161,117,595 shares issued and outstanding at December 31, 2011 and March 31, 2011, respectively. Holders of Common Stock have one vote per share of Common Stock held.

On October 17, 2011, the Company issued 100,000 shares of common stock to satisfy obligations under share subscription agreements for mineral property valued at $20,000 included in share subscription payable.

On October 31, 2011, the Company issued 2,044,480 shares of common stock to satisfy obligations under share subscription agreements for cash, equipment and services valued at $233,500 included in share subscription payable.

On November 7, 2011, the Company issued 300,000 shares of common stock to satisfy obligations under share subscription agreements for mineral property valued at $60,000 included in share subscription payable.

On December 20, 2011, the Company issued 107,142 shares of common stock to satisfy obligations under share subscription agreements for equipment valued at $7,500 included in share subscription payable

Common Stock Payable

On October 5, 2011, the Company issued 78,572 shares of common stock payable to pay accounts payable valued at $11,000 ($0.14 per share). On October 31, 2011, the Company issued shares in satisfaction of the payable.

On October 17, 2011, the Company received $60,000 in cash in exchange for a common stock payable of 600,000 shares of common stock ($0.10 per share).

On October 20, 2011, the Company received $50,000 in cash in exchange for a common stock payable of 500,000 shares of common stock ($0.10 per share). On October 31, 2011, the Company issued shares in satisfaction of the payable.

On October 21, 2011, the Company issued 68,182 shares of common stock payable to pay loan payable valued at $7,500 ($0.11 per share). On October 31, 2011, the Company issued shares in satisfaction of the payable.

On November 16, 2011, the Company received $40,000 in cash in exchange for a common stock payable of 400,000 shares of common stock ($0.10 per share).

On November 29, 2011, the Company issued 107,172 shares of common stock payable for equipment valued at $7,500 ($0.07 per share). On December 20, 2011 the Company issued shares in satisfaction of the payable.

On December 8, 2011, the Company received $100,000 in cash in exchange for a common stock payable of 1,538,461 shares of common stock ($0.065 per share).

On December 16, 2011, the Company issued 77,000 shares of common stock payable for equipment valued at $5,236 ($0.068 per share).

9.	SUBSEQUENT EVENTS

On January 5, 2012, the Company received $15,000 in cash in exchange for a common stock payable of 250,000 shares of common stock ($0.06 per share).

On January 17, 2012, the Company received $35,000 in cash in exchange for a common stock payable of 583,333 shares of common stock ($0.06 per share).

On December 19th, 2011, the Company made an unsecured Promissory Note Agreement with Francis Stadelman in the amount of $30,000 at eight percent interest with three payments due in January, February, and March 2012. The Company has not made the scheduled payments and is in default on this note as of February 1, 2012. The default rate on the note is eight percent.

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

Cautionary Statement Concerning Forward-Looking Statements

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

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

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

The Company

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

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

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

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

Description of the Business of Mexus Gold US

Mexus Gold US is engaged in the evaluation, acquisition, exploration, and advancement of gold exploration and development projects in the state of Nevada and Mexico, as well as, the salvage of precious metals from identifiable sources. Our main activities in the near future will be comprised of our mining operations in Nevada and Mexico and our cable salvage operations in Alaska and along the west coast of the United States.

Our mining opportunities located in the state of Nevada and the state of Sonora, Mexico will provide us with projects to recover gold, silver, copper, and other precious metals. The cable salvage opportunity involves principally the recovery of copper and lead from abandoned cable previously utilized for communications purposes. Each of these opportunities is discussed further herein.

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

Business Strategy

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

Lida Mining District, Nevada

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

Mexus Gold S.A. de C.V.

Effective March 31, 2011, we have acquired Mexus Gold S.A. de C.V. We begun funding the operations in Mexico and have begun shipping equipment to the mining sites. In addition, we have begun shipping raw materials from the mining areas for bulk processing and further analysis. We have also initiated an exploration drilling program to further identify the extent of the possible reserves now identified.

Cable Salvage Operation

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

Other Exploration Properties

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

Mergers and Acquisitions

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

Mining Operations

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

Other Exploration Properties

Our Other Exploration Properties consist of the following:

Mining Properties located in the state of Nevada

Lida Mining District

We have entered into agreements on lands located in Esmeralda County, Nevada. We hold an option on 150 acres of patented lands, 14 mining claims, and two mill sites with water rights. We have also staked additional claims as a result of our initial geological evaluations. On July 9, 2011, we entered into an Agreement to extend the option period until July 7, 2012.

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

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

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

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

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

Mining Properties Located in Mexico

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

Caborca Project

On January 5, 2011, Mexus Gold Mining S.A. de C.V. entered into a Purchase Agreement to purchase the Caborca Project. The Caborca Project consists of 7,400 acres (3,000 hectares) about 50 kilometers northwest of the City of Caborca, Sonora State, Mexico. The Caborca Project lies on claims filed by the owners of the Santa Elena Ranch, which controls the surface rights over the project claims. The claims lie near 112o 25' W, 31o 7.5" N. These claims were visited near the end of January, 2011. On or about July 11, 2011, we acquired five additional claims surrounding the Caborca Project consisting of approximately 1,000 additional acres.

We have been unable to locate geologic maps of the area from the Government Geological Survey. However, pursuant to our investigation of the project, the claims were found to be underlain by an igneous complex. The rocks observed included many types of granitic rocks, exhibiting porphyrytic textures, gneissic and equigrannular textures. Quartz was variable. At times quartz "eyes" were observed, that is porphyrytic quartz which many workers consider to be indicative of a porphyry environment. In other localities, no quartz was evident. When no quartz was present, the rock was equigrannular. Quartz veining was evident throughout the claim group. A mine was developed along a major quartz vein, called the Julio 2 Mine with the vein being called the Julio Vein.

There are multiple exploration targets on the Caborca Project. The two most important are the quartz stockwork zone and the Julio vein system. The first target will be the quartz stockwork zone. At least four drill holes are expected to be drilled in this zone to test the mineral potential of this area. Additional holes will be completed to test the Julio vein system.

Ocho Hermanos

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

As of the date of this report, we have obtained all necessary permits to begin operations and as of December 31, 2011, we have completed the bypass water channel around the 8 brothers mine. All necessary milling equipment for the 8 brothers mine is now complete and ready to be shipped to Mexico to begin operations.

370 Area

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

El Scorpion Project Area

This area has several shear zones and veins which show copper and gold mineralization’s. Recent assays of an 84’ drill hole shows 1.750% per ton to .750% per ton of copper and 3.971 grams per ton to 0.072 grams per ton of gold. Another assay of rock sample from the area shows greater than 4.690% per ton copper. This land form distribution appears to be synonymous to the ideal porphyry deposit at Baja La Alumbrera, Argentina.

Los Laureles

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

As of the date of this Report, we have opened up old workings at the Los Laureles claim and have discovered a gold carrying vein running north and south into the mountain to the south.

Cable Salvage Operation

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

On July 8, 2010, the Company entered into a Project Management Agreement with Powercom Services, Inc., a Georgia corporation, to provide the necessary capital so Mexus can proceed with the first phase of our Cable Recovery in Alaskan waters.

Mexus President/CEO Paul Thompson along with Ken Setter, the person in charge of the Alaska submarine cable project for Mexus, returned from a two week trip in August 2011 to Alaska to verify the cable locations in Alaska waters culminating in the execution of the contract which will fund Mexus through its first barge load sale of cable.

Mr. Ken Setter directed Mr. Thompson to several sites along the Pacific Coast of Alaska where we were able to identify the submarine cable. We were able to retrieve several sections for sampling purposes, and to test the Company’s new innovative way of retrieving cable from the bottom of the ocean. We believe the new cable pulling equipment will have the capability of pulling up to 10 miles per day or 475,200 pounds of cable per day.

The cable is composed of copper, lead, and steel all salvageable for scrap sales or processing for end user. Mexus is now ready to start equipping its 260’ barge located in Seattle, Washington with pulling equipment for the trip to Alaska where it will be able to start pulling cable at a point identified & marked by Messrs. Setters and Thompson on their recent trip.

On October 29, 2010, our tugboat, the "Caleb", and our 230 foot barge arrived in Ketchikan, Alaska. The boats are equipped with automated cable pulling equipment and underwater electrical equipment, magtonetor, underwater cable identifier, remote cameras and a high definition scanning sensor, and a cable left buoy marking system. As of the date of this report, we have begun cable pulling operations, weather permitting.

In addition, we have now located additional submarine cable in Washington State waters with our special survey equipment and we are awaiting cooperation from Washington State to pull the cable.

Employees

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

Competition

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

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

Legal Proceedings

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

Property Interests, Mining Claims, and Risk

Property Interests and Mining Claims

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

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

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

Reclamation

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

Risk

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

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

Distribution Methods of the Products

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

General Market

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

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

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

Effect of existing or probable governmental regulations on the business

Government Regulation

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

Environmental Regulation

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

Research and Development

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

Costs and effects of compliance with environmental laws

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

Results of Operations

The following management’s discussion and analysis of operating results and financial condition of Mexus Gold US is for the three and nine month periods ended December 31, 2011 and 2010 and for the period from September 18, 2009 (exploration stage entry) through December 31, 2011. All amounts herein are in U.S. dollars.

Three Months Ended December 31, 2011 compared with the Three Months Ended December 31, 2010 and September 18, 2009 (Exploration Stage Entry) through December 31, 2011

We had a net loss during the three months ended December 31, 2011 of $309,883 compared to a net loss of $545,138 during the same period in 2010. We had a cumulative net loss of $3,620,957 for the period from September 18, 2009 (Exploration Stage Entry) through December 31, 2011. This increase in net loss is attributable to an increase in exploration costs.

Revenue

For the three months ended December 31, 2011, we had revenues of $19,728 compared to $0 for the three months ended December 31, 2010. We recorded revenues of $199,819 for the cumulative period from September 18, 2009 (Exploration Stage Entry) through December 31, 2011. During the three months ended December 31, we earned $18,751 from gold sales and $977 from cable and scrap metal sales. The cumulative period from September 18, 2009 (Exploration Stage Entry) through December 31, 2011 includes $150,000 of revenue from an option agreement.

Operating Expenses

Total operating expenses decreased to $321,254 during the three months ended December 31, 2011, compared to $544,765 for the three months ended December 31, 2010. Total operating expenses for the period from September 18, 2009 (exploration stage entry) through December 31, 2011 were $3,757,136. The decrease in operating expenses was due to a decrease in general and administrative expenses and stock-based compensation.

Other Income (Expense)

We incurred $7,066 of interest expense during the three months ended December 31, 2011 compared to $6,845 during the same period in 2010 and $70,745 for September 18, 2009 (Exploration Stage Entry) to December 31, 2011. The increase is attributable to an increase in our borrowings during the three months ended December 31, 2011 to further and establish our operations.

Nine months Ended December 31, 2011 compared with the Nine months Ended December 31, 2010

We had a net loss during the nine months ended December 31, 2011 of $829,602 compared to a net loss of $1,065,526 during the same period in 2010. This increase in exploration costs was offset by decreases in general and administrative expense and stock-based compensation.

Revenue

For the nine months ended December 31, 2011, we had revenues of $178,819 compared to $20,000 for the nine months ended December 31, 2010. During the nine months ended December 31, 2011 we earned $18,751 from gold sales, $5,000 from commission, $150,000 from an option agreement and $5,068 from cable and scrap metal sales.

Operating Expenses

Total operating expenses decreased to $966,406 during the nine months ended December 31, 2011, compared to $1,071,348 for the nine months ended December 31, 2010. Although we had an increase in exploration expenses due to increased exploration activity on our mineral properties in Mexico and due to our cable salvage operations, our operating expenses was offset by decreases in general and administrative expenses and stock-based compensation.

Other Income (Expense)

We incurred $40,724 of interest expense during the nine months ended December 31, 2011 compared to $20,558 during the same period in 2010. The increase is attributable to an increase in our borrowings during the nine months ended December 31, 2011 to further and establish our operations.

Liquidity and Capital Resources

At December 31, 2011, we had cash of $1,386 compared to $109,142 at March 31, 2011. This decrease in cash is primarily due to cash used in operations and the purchase of equipment and mineral properties.

Our equipment increased to $1,433,199 at December 31, 2011, compared to $913,048 at March 31, 2011. The increase in equipment during the nine months ended December 31, 2011 is due to the purchase of vehicles and heavy equipment for exploration activities and equipment under construction being put into service.

Equipment under construction decreased to $122,813 at December 31, 2011, compared to $416,415 at March 31, 2011. The decrease is due to the construction of equipment being put in service for exploration activities in Mexico. Our equipment under construction represents our process of fabricating and modifying equipment relating to mining and salvage operations. We anticipate equipment under construction will be used to perform bulk sampling projects on our exploration properties or will have the capacity of being placed into a production process pending a determination by management as to the most beneficial application of the equipment.

Our mineral properties increased to $663,684 at December 31, 2011, compared to $451,569 at March 31, 2011.

Total assets increased to $2,226,337 at December 31, 2011, compared to $1,896,158 at March 31, 2011. The majority of the increase in assets related to the purchase of equipment and mineral properties during the nine months ended December 31, 2011.

Our total liabilities decreased to $1,410,245 at December 31, 2011, compared to $1,554,654 as of March 31, 2011. This total includes current liabilities of $1,304,052 and long-term liabilities of $106,193 as of December 31, 2011. At March 31, 2011, current liabilities totaled $1,360,512 and long-term liabilities totaled $194,142.

In addition to anticipated revenues from operations, we believe that we have sufficient available cash and available loans from our sole officer and director and other individual sources to satisfy our working capital and capital expenditure requirements during the next 12 months. There can be no assurance, however, that cash and cash from loans will be sufficient to satisfy our working capital and capital requirements for the next 12 months or beyond.

Future goals

Now that we have obtained the necessary permits to begin mining operations in Mexico, our goal is to put the Ocho Hermanos into production as of September, 2011. Our bypass is complete and we have the necessary equipment to start mining operations. First, we will remove the over burden and prepare the pit for excavation. We estimate that it will take 30 to 45 days to remove the overburden down to the ore deposit. Our milling equipment is complete and is awaiting importing into Mexico. Mexus expects by the time the overburden is removed, that the equipment will be in place to start processing the ore.

We have also begun our cable salvage operation in Alaska and the state of Washington and plan on continuing salvage operations in mid summer weather permitting. We also intend to acquire a large vessel to begin cable salvage operations in open waters.

In the next 12 months, our goal is to begin mining operations in Mexico and to continue our cable salvage operations in Alaska and along the west coast of the United States.

Foreign Currency Transactions

The majority of our operations are located in United States and most of our transactions are in the local currency. We plan to continue exploration activities in Mexico and therefore we will be exposed to exchange rate fluctuations. We do not trade in hedging instruments and a significant change in the foreign exchange rate between the United States Dollar and Mexican Peso could have a material adverse effect on our business, financial condition and results of operations.

Off-balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

ITEM 4(T). CONTROLS AND PROCEDURES

We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report.

Based on this evaluation, our chief executive officer and chief financial officer concluded that as of the evaluation date our disclosure controls and procedures were not effective. Our procedures were designed to ensure that the information relating to our company required to be disclosed in our SEC reports is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure. Management is currently evaluating the current disclosure controls and procedures in place to see where improvements can be made.

ITEM 5. OTHER INFORMATION

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the framework in “Internal Control Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon this evaluation, management has concluded that our internal control over financial reporting was not effective as of December 31, 2011, to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Steps that the Company believes it must undertake is to retain a consulting firm to, among other things, design and implement adequate systems of accounting and financial statement disclosure controls during the current fiscal year to comply with the requirements of the SEC. We believe that the ultimate success of our plan to improve our disclosure controls and procedures will require a combination of additional financial resources, outside consulting services, legal advice, additional personnel, further reallocation of responsibility among various persons, and substantial additional training of those of our officers, personnel and others, including certain of our directors such as our committee chairs, who are charged with implementing and/or carrying out our plan.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as required in Rule 13a-15(b). We are conducting an evaluation to design and implement adequate systems of accounting and financial statement disclosure controls. We expect to complete this review during 2011 to comply with the requirement of the SEC. We believe that the ultimate success of our plan to improve our internal control over financial reporting will require a combination of additional financial resources, outside consulting services, legal advice, additional personnel, further reallocation of responsibility among various persons, and substantial additional training of those of our officers, personnel and others, including certain of our directors such as our Chairman of the Board and Chief Financial Officer, who are charged with implementing and/or carrying out our plan. It should also be noted that the design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting, or any system we design or implement in the future, will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control

There have not been any changes in our internal control over financial reporting during the three month period ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

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

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

On October 31, 2011, the Company issued 2,044,480 shares of common stock to satisfy obligations under share subscription agreements for cash, equipment, and services valued at $233,500 included in share subscription payable.

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

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

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

ITEM 3.DEFAULT UPON SENIOR SECURITIES

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

None.

ITEM 5.OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Statements

Consolidated Balance Sheets at December 31, 2011 and March 31, 2011

Consolidated Statements of Operations for the three and nine months ended December 31, 2011 and 2010 and the period from September 18, 2009 (Exploration Stage Entry) through December 31, 2011

Consolidated Statements of Cash Flows for the nine months ended December 31, 2011 and 2010 and the period from September 18, 2009 (Exploration Stage Entry) through December 31, 2011

Notes to Consolidated Financial Statements

Schedules

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

	Exhibit	Form	Filing	Filed with
Exhibits	#	Type	Date	This Report

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

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

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

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

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

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

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

Signatures

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

February 14, 2012

/s/ Paul D. Thompson

Paul D. Thompson

Chief Executive Officer

Chief Financial Officer

Principal Accounting Officer

Director

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