Edgar Filing: SILVERSTAR MINING CORP.

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

Forward-Looking Statements

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our consolidated financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors".

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report and unless otherwise indicated, the terms "we", "us", "our", “Company”, and “Silverstar” mean Silverstar Mining Corp., a Nevada corporation, unless otherwise indicated and the term “Silverdale” means Silverdale Mining Corp., our wholly owned subsidiary.

Corporate History

We were incorporated under the laws of the State of Nevada on December 5, 2003 under the name “Computer Maid, Inc.”. On February 13, 2006, we changed our name from “Computer Maid, Inc.” to “Rose Explorations Inc.”.

In February 2006, we acquired the Rose Prospect Lode Mining Claim in Clark County Nevada and in June 2006, we staked the Rose Prospect II Lode Mining Claim adjacent to the west of the Rose Lode Claim to cover other indicated mineralized zones observed in that area. From February 2006, we have been a development stage company engaged in the exploration of mineral properties.

Effective March 4, 2008, we completed a merger with our subsidiary, Silverstar Mining Corp., a Nevada corporation. As a result, we have changed our name from “Rose Explorations Inc.” to “Silverstar Mining Corp.” We changed the name of our company to better reflect the direction and business of our company.

In addition, effective March 4, 2008 we effected a three (3) for one (1) forward stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital increased from 75,000,000 shares of common stock with a par value of $0.001 to 225,000,000 shares of common stock with a par value of $0.001.

On March 31, 2008, we entered into a joint venture agreement with New Jersey Mining Co. to acquire a 50% interest in the Silver Strand silver mine located in the Coeur d’Alene Mining District.

Under the terms of the joint venture agreement, we have agreed to share equally in the production and further development and exploration of the property.

On June 13, 2008, we entered into a share exchange agreement with Silverdale Mining Corp., a Nevada corporation, and the shareholders of Silverdale Mining Corp. The closing of the transactions contemplated in the share exchange agreement and the acquisition of all of the issued and outstanding common stock in the capital of Silverdale Mining Corp. occurred on July 24, 2008. In accordance with the closing of the share exchange agreement, we issued 4,334,000 shares of our common stock to the former shareholders of Silverdale Mining Corp. in exchange for the acquisition, by our company, of all of the 4,334,000 issued and outstanding shares of Silverdale Mining Corp.

On September 2, 2008, we entered into a letter of intent with Gold Canyon Partners, LLP pursuant to which we have agreed to purchase a 100% interest in a mining property commonly known as the Cobalt Canyon Gold Project, in the Chief District, located in Lincoln County, Nevada. The acquisition contemplated by the letter of intent is subject to the fulfillment of certain conditions precedent, due diligence and the negotiation of a definitive agreement. The Company does not have any short term prospects for raising the funds needed to complete these projects and has written off its deferred mineral property costs related to these projects.

Due to the implementation of British Columbia Instrument 51-509 on September 30, 2008 by the British Columbia Securities Commission, we have been deemed to be a British Columbia based reporting issuer. As such, we are required to file certain information and documents at www.sedar.com.

On October 10, 2009, we closed a private placement consisting of 950,000 shares of our common stock at a price of $0.25 per share for aggregate gross proceeds of $237,500. We issued 570,000 shares to 6 non-US persons pursuant to an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933, as amended. We issued 380,000 shares to 3 US persons pursuant to the exemption from registration provided for under Rule 506 of Regulation D, promulgated under the United States Securities Act of 1933, as amended.

On January 15, 2009, we closed a private placement consisting of 484,837 shares of our common stock at a price of $0.45 per share for aggregate gross proceeds of $218,176.65. We issued 454,837 shares to 10 non-US persons pursuant to an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933, as amended. We issued 30,000 shares to 1 US persons pursuant to the exemption from registration provided for under Rule 506 of Regulation D, promulgated under the United States Securities Act of 1933, as amended.

On March 25, 2009, we entered into a share cancellation/return to treasury agreement with each of Dennis O’Brien, Matt Williams, Howard Lahti and David Rice wherein each have agreed to the cancellation and return to treasury of all but 25,000 shares of common stock of our company held by each.

Also on March 25, 2009, we entered into a share cancellation/return to treasury agreement with Grant Brackebusch, wherein Grant Brackebusch has agreed to the cancellation and return to treasury of all of the shares of common stock of our company held by Grant Brackebusch.

Furthermore, on March 25, 2009, Dennis O’Brien, Matt Williams, Howard Lahti and David Rice resigned as directors of our company.

On March 31, 2009, we entered into a share cancellation/return to treasury agreement with David Bond wherein David Bond agreed to the cancellation and return to treasury of all but 50,000 shares of common stock of our company held by David Bond.

Also on March 31, 2009, we entered into a share cancellation/return to treasury agreement with John Jardine wherein John Jardine agreed to the cancellation and return to treasury of all but 100,000 shares of common stock of our company held by John Jardine.

In addition, on March 31, 2009, David Bond resigned as a director and chairman of the board of our company, John Jardine resigned as chief financial officer, secretary and treasurer of our company and Lawrence Siccia was elected a director of our company.

Effective June 2, 2009, we entered into a share cancellation/return to treasury agreement with Jim MacKenzie wherein he has agreed to the cancellation and return to treasury of 850,000 shares of our common stock. Subsequent to the stock cancellation, Mr. MacKenzie will hold 150,000 shares of our common stock.

On June 2, 2009, Jim MacKenzie resigned as our president, chief executive officer and director. As a result of Jim MacKenzie’s resignation, Lawrence Siccia was appointed as our president and chief executive officer.

On June 2, 2009, Mr. Greg Cowan, a former president, chief executive officer, secretary, treasurer and director of our company, transferred 5,000,000 restricted shares of our common stock to Mr. Lawrence Siccia, our current president, chief executive officer and director. Mr. Siccia purchased the shares from personal funds in the amount of $500.

Plan of Operation

We are an exploration stage mining company engaged in the exploration of minerals on properties located in Idaho and Nevada.

Our current focus is to raise funds to conduct exploration activities on our Rose Lode Claim.

Rose Prospect Lode Mining Claim

The Rose Lode Claim is located in the Goodsprings (Yellow Pine) Mining District situated within the southwestern comer of the State of Nevada, U.S.A. The Rose Lode Claim covers some former exploratory workings on a mineral showing.

The Yellow Pine Mining District is located in the area of the Spring Mountains of southern Nevada. Although less famous than many of the other mining districts of the Great Basin it nevertheless ranks second only to Tonopah in total Nevada lead and zinc production. During World War I this district was one of the most productive in the West, but by the end of World War II only a few mines remained in operation. The region is known for its historic production of lead, zinc, silver and gold.

The Rose Lode Claim is underlain by the Mississippian Monte Cristo Limestone Formation with the mineralization possibly comprised of copper minerals hosted by a breccia zone which may be up to 200 feet wide within the Anchor Limestone Member.

Mineral Property Option Agreement between our Company and Chuck Stein on the Pinehurst Properties

On September 14, 2007, our wholly owned subsidiary, Silverdale Mining Corp. entered into a mineral property option agreement with Chuck Stein to acquire an undivided 100% right, tile and interest in eight unpatented mining claims described as the “Corby”, “Cory FR”, “Walker”, “Linda”, “Eddie”, “Smokey”, “Dorian” and “Valerine” claims which are located near Pinehurst, Shoshone County, Idaho.

In order to exercise this option we have agreed, over a period of four years, to make a total cash payment of $1,000,000, issue a total of 1,000,000 restricted shares of our common stock and conduct exploration expenditures of $1,000,000 on the claims.

To date, we have paid $50,000 but have not completed all the commitments per the agreement. However, we have not received notification from Chuck Stein of default and continue to explore opportunities to proceed with this project.

Mineral Property Joint Venture Agreement between our Company and New Jersey Mining Company

On March 1, 2008, we entered into a mineral property option agreement with New Jersey Mining Company ("NJMC") to purchase a 50% Joint Venture Interest in mining operations on certain mining property commonly known as the Silver Strand mine, located in Kootenai County, Idaho.

In order to exercise this Joint Venture Agreement we have agreed to pay NJMC $500,000 and agreed to reimburse NJMC $60,000 being 50% of the current reclamation bond held by the U.S. Forest Service. We have also agreed to issue 50,000 shares of our common stock to NJMC. The NJMC will be the operator of the mine and will also mill the ore at its mineral processing plant in Kellogg, Idaho and market saleable products on behalf of the Joint Venture. Operating costs and revenues will be shared by the Joint Venture partners on an equal (50:50) basis with no add-ons for corporate general and administrative costs. To date, we have paid $270,000.

Cobalt Canyon Gold Project

On September 8, 2008, we entered into a letter of intent with Gold Canyon Properties, LLP to examine and possibly acquire 100% of the Cobalt Canyon Gold Project located in Lincoln County, Nevada. The Cobalt Canyon properties are located in the Chief Mining District of southeastern Nevada. The project includes numerous small underground mines within the Chief District situated just north of Caliente, Nevada. The project includes 22 unpatented federal lode claims (approx. 363 acres) and an option to acquire 59 acres in three patented mining claims. Our company and Gold Canyon Properties, LLP are determining the terms related to this letter of intent. To date we have paid $17,458..

The Company was unable to conclude an agreement with Gold Canyon Capital Partners and has written off its deferred mineral property costs related to the project.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the twelve month period ending December 31, 2010.

Off-Balance Sheet Arrangements

As of December 31, 2009, our company had no off-balance sheet arrangements, including any outstanding derivative financial statements, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. Our company does not engage in trading activities involving non-exchange traded contracts.

Employees

We do not expect any significant changes in the number of employees during the next twelve month period. We presently conduct our business through agreements with consultants and arms-length third parties.

Results of Operations for the Three Months Ended December 31, 2009 as compared to the Three Months Ended December 31, 2008

The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the three month periods ended December 31, 2009 and 2008.

We have not generated any revenue since inception and are dependent upon obtaining financing to pursue our business activities. For these reasons, our auditors believe that there is substantial doubt that we will be able to continue as a going concern.

Our operating results for the three month periods ended December 31, 2009 and 2008 and the changes between those periods for the respective items are summarized as follows:

		Three Month Period Ended December 31, 2009		Three Month Period Ended December 31, 2008		Change Between Three Month Periods Ended December 31, 2009 and December 31, 2008
Revenue	$	Nil	$	Nil	$	Nil
Bank charges and interest	$	1,703	$	379	$	1,324
Consulting	$	Nil	$	53,500	$	(53,500)
Exploration and development	$	Nil	$	2,459	$	(2,459)
Filing fees	$	678	$	2,559	$	(1,881)
Investor relations	$	Nil	$	28,100	$	(28,100)
Legal and accounting	$	5,746	$	20,385	$	(14,639)
Management fees	$	4,500	$	Nil	$	4,500
Rent	$	1,500	$	43	$	1,457
Transfer agent	$	825	$	2,400	$	(1,575)
Travel and entertainment (recovery)	$	(326)	$	1,408	$	(1,734)
Write-down of mineral property acquisition costs	$	Nil	$	4,142	$	(4,142)
Net loss	$	(14,626)	$	(115,375)	$	100,749
Basic and diluted loss per share	$	(0.0003)	$	(0.0025)	$	(0.0024)

Liquidity and Financial Condition

Working Capital

	Three Month Period Ended December 31, 2009 ($)	Year Ended September 30, 2009 ($)	Change between December 31, 2009 and September 30, 2009 ($)
Current Assets	9,288	1,013	8,275
Current Liabilities	57,518	40,617	16,901
Working Capital/(Deficit)	(48,230)	(39,604)	(8,626)

Cash Flows

			Change
			between
			Three Month
			Periods Ended
	Three Month	Three Month	December 31, 2009
	Period Ended	Period Ended	and December 31,
	December 31, 2009	December 31, 2008	2008
	($)	($)	($)
Cash Flows used in Operating Activities	(21,725)	(100,982)	79,257
Cash Flows provided by/(used in) Investing Activities	Nil	Nil	Nil
Cash Flows provided by Financing Activities	30,000	33,500	(3,500)
Increase (decrease) in Cash and Cash Equivalents During Period	8,275	(67,482)	(75,757)

As of December 31, 2009, our total assets were $9,288 and our total liabilities were $57,518. Our financial statements report a net loss of $14,626 for the three months ended December 31, 2009 as compared to a net loss of $115,375 for the three months ended December 31, 2008. We have had a net loss of $1,394,251 for the period from December 5, 2003 (inception) to December 31, 2009.

Going Concern

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on the annual consolidated financial statements for the year ended September 30, 2009, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern.

We anticipate that additional funding will be required in the form of debt or equity capital financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through debt to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.

Application of Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our consolidated financial statements.

We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Significant accounting policies used in the preparation of our consolidated financial statements are set forth in Note 2 to our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4T. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

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

As of December 31, 2009, the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president and chief executive officer (our principal executive officer and our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief executive officer (our principal executive officer and our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended December 31, 2009 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

Much of the information included in this quarterly report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections and estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward looking statements”.

Our securities are highly speculative and involve a high degree of risk, including among other items the risk factors described in our annual report on Form 10-K for the fiscal year ended September 30, 2009, filed on January 4, 2010. You should carefully consider those risk factors and other information in our annual report on Form 10-K and this quarterly report before deciding to invest in our securities. We are unaware of any material changes in or additional risk factors since the filing of our annual report.

Other Risks

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Securities Holders

None.

Item 5. Other Information

Effective June 2, 2009, Jim MacKenzie resigned as our president, chief executive officer and director. As a result of Mr. MacKenzie’s resignation, Mr. Lawrence Siccia was appointed as our president and chief executive officer.

On June 2, 2009, Mr. Greg Cowan, a former president, chief executive officer, secretary, treasurer and director of our Company, transferred 5,000,000 restricted shares of our common stock to Mr. Lawrence Siccia, our current president, chief executive officer and director. Mr. Siccia purchased the shares from personal funds in the amount of $500. Mr. Siccia now owns 11.5% of the issued and outstanding shares of our company.

Item 6. Exhibits

Exhibit Number	Description

(3)	Articles of Incorporation and Bylaws

3.1	Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2 filed on January 30, 2007).

3.2	By-laws (incorporated by reference from our Registration Statement on Form SB-2 filed on January 30, 2007).

3.3	Articles of Merger filed with the Secretary of State of Nevada on February 20, 2008 and which is effective March 4, 2008 (incorporated by reference from our Current Report on Form 8-K filed on March 5, 2008).

3.4	Certificate of Change filed with the Secretary of State of Nevada on February 20, 2008 and which is effective March 4, 2008 (incorporated by reference from our Current Report on Form 8-K filed on March 5, 2008).

(10)	Material Contracts

10.1	Purchase Agreement Rose Prospect Lode Claim (incorporated by reference from our Registration Statement on Form SB-2 filed on January 30, 2007).

10.2	Share Exchange Agreement dated June 13, 2008, among our company, Silverdale Mining Corp. and the selling the shareholders of Silverdale Mining Corp. as set out in the share exchange agreement (incorporated by reference from our Current Report on Form 8-K filed on June 16, 2008).

10.3	Mineral Property Option Agreement dated September 14, 2007 between Silverdale Mining Corp. and Chuck Stein (incorporated by reference from our Current Report on Form 8-K filed on July 28, 2008).

10.4	Joint Venture Agreement dated March 31, 2008 between our company and New Jersey Mining Company (incorporated by reference from our Current Report on Form 8-K filed on July 28, 2008).

10.5	Consulting Agreement dated April 1, 2008 between our company and Mr. James MacKenzie (incorporated by reference from our Quarterly Report on Form 10-QSB filed on August 14, 2008).

10.6	Share Cancellation/Return to Treasury Agreement with Donald James MacKenzie (incorporated by reference from our Current Report on Form 8-K filed on October 17, 2008).

10.7	Share Cancellation/Return to Treasury Agreement with Greg Cowan (incorporated by reference from our Current Report on Form 8-K filed on October 17, 2008).

(14)	Code of Ethics

14.1	Code of Ethics and Business Conduct (incorporated by reference from our Annual Report on Form 10-KSB filed on December 29, 2008).

(21)	Subsidiaries of the Registrant

21.1	Silverdale Mining Corp.

(31) *	Section 302 Certifications

(32) *	Section 906 Certification

*filed herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SILVERSTAR MINING CORP.
	(Registrant)


Dated: February 15, 2010
	Lawrence Siccia
	President, Chief Executive Officer and Director
	(Principal Executive Officer, Principal Financial
	Officer and Principal Accounting Officer)

Nevada	98-04256287
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

164-997 Hornby Street, Vancouver, BC, Canada V6Z 1V3	V6Z 1V3
(Address of principal executive offices)	(Zip Code)

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

	As at 31 December 2009	As at 30 September 2009 (audited)
	$	$
Assets

Current
Cash and cash equivalents	9,288	1,013

	9,288	1,013

Liabilities

Current
Accounts payable and accrued liabilities (Note 6)	10,179	16,501
Convertible debentures (Note 7)	15,994	15,616
Demand loan (Note 8)	30,345	-
Due to related parties (Note 9)	1,000	8,500

	57,518	40,617
Stockholders’ deficiency
Capital stock (Note 10)
Authorized
225,000,000 of common shares, par value $0.001
Issued and outstanding
31 December 2009 – 42,168,837 common shares, par value $0.001
30 September 2009 – 42,168,837 common shares, par value $0.001	42,169	42,169
Additional paid-in capital	1,303,852	1,297,852
Deficit, accumulated during the development stage	(1,394,251)	(1,379,625)

	(48,230)	(39,604)

	9,288	1,013

	For the period from the date of inception on 5 December 2003 to 31 December 2009	For the three month period ended 31 December 2009	For the three month period ended 31 December 2008
	$	$	$

Expenses
Bank charges and interest (Notes 7, 8 and 13)	19,381	1,703	379
Consulting	138,467	-	53,500
Exploration and development (Note 5)	13,028	-	2,459
Filing fees	15,890	678	2,559
Investor relations	84,992	-	28,100
Legal and accounting (Notes 9 and 10)	160,251	5,746	20,385
Licences and permits	3,415	-	-
Management fees (Notes 10 and 13)	71,500	4,500	-
Rent (Notes 10 and 13)	28,200	1,500	43
Transfer agent fees	17,647	825	2,400
Travel, entertainment and office (recovery)	23,184	(326)	1,408
Write-down of mineral property acquisition costs (Note 5)	811,696	-	4,142
Write-down of website development costs (Note 4)	6,600	-	-

Net loss for the period	(1,394,251)	(14,626)	(115,375)

Basic and diluted loss per common share		(0.0003)	(0.0025)

Weighted average number of common shares used in per share calculations		42,168,837	44,791,609

	For the period from the date of inception on 5 December 2003 to 31 December 2009	For the three month period ended 31 December 2009	For the three month period ended 31 December 2008
	$	$	$

Cash flows used in operating activities
Net loss for the period	(1,394,251)	(14,626)	(115,375)
Adjustments to reconcile loss to net cash used by operating activities
Accrued interest (Notes 7 and 8)	16,339	723	-
Contributions to capital by related parties (Notes 10 and 13)	131,500	6,000	-
Write-down of mineral property acquisition costs (Note 5)	811,696	-	-
Write-down of website development costs (Note 4)	6,600	-	-
Changes in operating assets and liabilities
Increase (decrease) in accounts payable and accrued liabilities	10,179	(6,322)	-
Increase (decrease) in due to related parties	1,000	(7,500)	14,393

	(416,937)	(21,725)	(100,982)
Cash flows used in investing activities
Acquisition of Silverdale, net of cash received (Note 3)	(140,221)	-	-
Mineral property acquisition costs (Note 5)	(21,375)	-	-
Website development costs (Note 4)	(6,600)	-	-

	(168,196)	-	-
Cash flows from financing activities
Convertible debenture	15,000	-	-
Demand loan	30,000	30,000	-
Share subscriptions received in advance	-	-	(204,000)
Share issue costs	(1,255)	-	-
Common shares issued for cash (Note 11)	550,677	-	237,500
Common shares redeemed (Note 11)	(1)	-	-

	594,421	30,000	33,500

Increase (decrease) in cash and cash equivalents	9,288	8,275	(67,482)

Cash and cash equivalents, beginning of period	-	1,013	89,819

Cash and cash equivalents, end of period	9,288	9,288	22,337

	Number of shares issued	Capital stock		Share subscription received in advance / Additional paid in capital		Deficit, accumulated during the development stage		Stockholders’ equity (deficiency)
			$		$		$		$

Balance at 5 December 2003 (inception)	-		-		-		-		-
Common share issued for cash ($0.33 per share) (Note 11)	3		-		1		-		1
Net loss for the period	-		-		-		(450)		(450)

Balance at 30 September 2004	3		-		1		(450)		(449)
Net loss for the year	-		-		-		(300)		(300)

Balance at 30 September 2005	3		-		1		(750)		(749)
Common shares issued for cash ($0.0003 per share) (Note 11)	30,000,000		30,000		(20,000)		-		10,000
Common shares redeemed – cash ($0.33 per share) (Note 11)	(3)		-		(1)		-		(1)
Contributions to capital by related parties – expenses (Notes 10 and 13)	-		-		24,000		-		24,000
Net loss for the year	-		-		-		(40,190)		(40,190)

Balance at 30 September 2006	30,000,000		30,000		4,000		(40,940)		(6,940)
Contributions to capital by related parties – expenses (Notes 10 and 13)	-		-		24,000		-		24,000
Common shares issued for cash ($0.0033 per share) (Note 11)	25,500,000		25,500		59,500		-		85,000
Net loss for the year	-		-		-		(64,567)		(64,567)

Balance at 30 September 2007	55,500,000		55,500		87,500		(105,507)		37,493
Contributions to capital by related parties – expenses (Notes 10 and 13)	-		-		12,000		-		12,000
Share subscriptions received in advance (Note 11)	-		-		422,176		-		422,176
Share issue costs	-		-		(1,255)		-		(1,255)
Common shares issued for business acquisition ($0.15 per share) (Notes 3, 11 and 13)	4,334,000		4,334		645,766		-		650,100
Common shares returned to treasury and cancelled (Notes 11 and 13)	(15,000,000)		(15,000)		15,000		-		-
Net loss for the year	-		-		-		(263,596)		(263,596)

Balance at 30 September 2008	44,834,000		44,834		1,181,187		(369,103)		856,918

$

Cash and cash equivalents	1,539
Mineral property interests	790,321

Total assets acquired	791,860

Purchase price	791,860

		Accumulated amortization / Impairment		Net Book Value
	Cost	Accumulated amortization / Impairment		31 December 2009	30 September 2009 (audited)
	$		$	$	$

Website and development costs	6,600		(6,600)	-	-

		Payments $		Shares		Exploration expenditures $
Upon execution of agreement	(paid)		50,000		100,000		100,000
On or before 14 September 2009			100,000		150,000		200,000
On or before 14 September 2010			350,000		250,000		300,000
On or before 14 September 2011			500,000		500,000		400,000

Total			1,000,000		1,000,000		1,000,000

	Balance at 31 December 2009	Balance at 30 September 2009 (audited)
	$	$

Three convertible debentures issued to three unrelated parties bearing interest at a rate of 10% per annum on any unpaid principle balances, unsecured, and having no fixed terms of repayment. The holders of the convertible debentures have the right to convert any portion of the unpaid principle and/or accrued interest into restricted common shares of the Company at any time within thirty-six months from the issue date on the basis of $0.0025 per common share for each dollar of principle and/or interest due and payable. The Company may repay principal amounts due at any time without premium or penalty. During the three month period ended 31 December 2009, the Company accrued interest expense of $378 (31 December 2008 – $Nil) (Note 13). The balance as at 31 December 2009 consists of principal of $15,000 (30 September 2009 – $15,000) and accrued interest of $994 (30 September 2009 – $616), respectively.	15,994	15,616

	Balance at 31 December 2009	Balance at 30 September 2009 (audited)
	$	$

A demand loan issued to a unrelated party bearing interest at a rate of 10% per annum on any unpaid principle and interest balances, secured by the general credit of the Company, and having no fixed terms of repayment. The Company may repay principal amounts due at any time without premium or penalty. During the three month period ended 31 December 2009, the Company accrued interest expense of $345 (31 December 2008 – $Nil) (Note 13). The balance as at 31 December 2009 consists of principal $30,000 (30 September 2009 – $Nil) and accrued interest of $345 (30 September 2009 – $Nil), respectively.	30,345	-

	For the three month period ended 31 December 2009	For the three month period ended 31 December 2008
	$	$

Deferred tax asset attributable to:
Current operations	4,973	39,228
Contributions to capital by related parties	2,040	-
Less: Change in valuation allowance	(2,933)	(39,228)

Net refundable amount	-	-

	As at 31 December 2009	As at 30 September 2009 (audited)
	$	$

Income tax operating loss carryforward	1,394,251	1,379,625

Statutory federal income tax rate	34%	34%
Contributed rent and services	-22.48%	-22.57%
Effective income tax rate	0%	0%

Deferred tax assets	160,626	157,693
Less: Valuation allowance	(160,626)	(157,693)

Net deferred tax asset	-	-