T
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QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Washington
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001-01428
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68-0612191
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1611
N. Molter Road, Ste. 201
Liberty
Lake, Washington
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99019
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(Address
of principal executive offices)
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(Zip
Code)
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Large
accelerated filer £
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Accelerated
filer £
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Non-accelerated
filer £(Do not
check if a smaller reporting company)
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Smaller
reporting Company S
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HuntMountain
Resources Ltd. and Subsidiaries
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(An
Exploration Stage Enterprise)
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Consolidated
Balance Sheets
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March 31,
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December 31,
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|||||||
2008
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2007
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|||||||
(unaudited)
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||||||||
Assets
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||||||||
CURRENT
ASSETS:
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||||||||
Cash
and cash equivalents:
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||||||||
Cash
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$ | 336,191 | $ | 273,020 | ||||
Short
term cash investments - domestic
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12,897 | 12,909 | ||||||
Short-term
cash investments - Argentina
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252,402 | 367,375 | ||||||
Total
cash and cash equivalents
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601,491 | 653,304 | ||||||
Employee
receivable
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2,407 | 2,115 | ||||||
Accounts
receivable
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1,181 | 40,622 | ||||||
Prepaid
expenses
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67,197 | 72,612 | ||||||
Accrued
interest receivable
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3,955 | 1,969 | ||||||
Total
current assets
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676,232 | 770,621 | ||||||
EQUIPMENT:
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||||||||
Office
equipment and vehicle
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27,547 | 11,216 | ||||||
Less
accumulated depreciation
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9,328 | 7,014 | ||||||
18,220 | 4,203 | |||||||
OTHER
ASSETS:
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||||||||
Receivable
- V.A. tax, Argentina
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375,221 | 190,719 | ||||||
Land
- La Josefina Estancia
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710,000 | 710,000 | ||||||
Performance
bond
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189,834 | 214,762 | ||||||
Property
deposits
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271,500 | 136,500 | ||||||
Investments
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7,331 | 7,331 | ||||||
Property
purchase option
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70,000 | 70,000 | ||||||
1,623,885 | 1,329,312 | |||||||
Total
assets
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$ | 2,318,337 | $ | 2,104,136 | ||||
Liabilities
and Stockholders’ Equity
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||||||||
CURRENT
LIABILITIES:
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||||||||
Trade
accounts payable
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$ | 330,886 | $ | 380,118 | ||||
Accrued
wages and related taxes
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132,612 | 120,202 | ||||||
Short
term note payable
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5,247,000 | 3,747,000 | ||||||
Debt
discount:
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(2,751,062 | ) | (2,664,606 | ) | ||||
Net
short term note payable
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2,495,938 | 1,082,394 | ||||||
Accrued
interest on note payable
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293,253 | 165,149 | ||||||
Total
current liabilities
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3,252,689 | 1,747,864 | ||||||
STOCKHOLDERS’
EQUITY:
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||||||||
Preferred
stock –
10,000,000 shares, $0.001 par value, authorized;-0- shares issued and
outstanding
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- | - | ||||||
Common
stock – 300,000,000 shares, $0.001 par value, authorized; 33,428,285 and
32,266,285 shares issued and outstanding, respectively
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33,428 | 32,491 | ||||||
Additional
paid-in capital
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18,193,493 | 12,081,316 | ||||||
Retained
earnings - prior to development stage
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90,527 | 90,527 | ||||||
Deficit
accumulated during the development stage
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(19,166,381 | ) | (11,794,981 | ) | ||||
Accumulated
other comprehensive income (loss)
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(85,419 | ) | (53,081 | ) | ||||
Total
stockholders’ equity
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(934,352 | ) | 356,272 | |||||
Total
liabilities and stockholders’ equity
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$ | 2,318,337 | $ | 2,104,136 | ||||
Signed
on behalf of the Board of Directors:
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The
accompanying notes are an integral part of these consolidated financial
statements.
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HuntMountain
Resources Ltd. and Subsidiaries
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(An
Exploration Stage Enterprise)
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Consolidated
Statements of Income
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Three
months ended March 31,
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From
Inception of Development Stage July 1, 2005
through
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|||||||||||
2008
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2007
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March 31,
2008
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||||||||||
(unaudited)
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(unaudited)
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(unaudited)
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||||||||||
INCOME:
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||||||||||||
Dividend
and interest income
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$ | 2,035 | $ | 265 | $ | 74,317 | ||||||
EXPENSES:
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||||||||||||
Professional
fees
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165,224 | 36,446 | 852,034 | |||||||||
Marketing
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6,499 | 9,300 | 183,210 | |||||||||
Exploration
expenses
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828,413 | 399,013 | 2,944,815 | |||||||||
Travel
expenses
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63,849 | 17,617 | 341,625 | |||||||||
Administrative
and office expenses
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52,891 | 17,643 | 413,137 | |||||||||
Payroll
expenses
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190,150 | 124,763 | 1,107,165 | |||||||||
Stock
compensation expense
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52,500 | - | 251,100 | |||||||||
Comon
stock and options issued for services
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- | 9,000 | 353,250 | |||||||||
Interest
expense and bank charges
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141,238 | 14,140 | 334,156 | |||||||||
Financing
charge
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4,229,946 | 39,176 | 9,485,595 | |||||||||
Amortization
of debt discount
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1,641,212 | 259,670 | 2,968,828 | |||||||||
Depreciation
expense
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2,314 | 935 | 9,327 | |||||||||
7,374,236 | 927,703 | 19,244,242 | ||||||||||
LOSS
BEFORE OTHER INCOME
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(7,372,200 | ) | (927,438 | ) | (19,169,924 | ) | ||||||
OTHER
INCOME:
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||||||||||||
Income
from partnership interest
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800 | - | 3,543 | |||||||||
LOSS
BEFORE INCOME TAXES:
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(7,371,400 | ) | (927,438 | ) | (19,166,381 | ) | ||||||
Income
taxes:
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- | - | - | |||||||||
NET
LOSS
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$ | (7,371,400 | ) | $ | (927,438 | ) | $ | (19,166,381 | ) | |||
BASIC
AND DILUTED LOSS PER SHARE, based on weighted-average shares
outstanding
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33,358,219 | 32,266,285 | ||||||||||
WEIGHTED-AVERAGE
COMMON SHARES OUTSTANDING, BASIC AND DILUTED
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$ | (0.22 | ) | $ | (0.03 | ) |
The
accompanying notes are an integral part of these consolidated financial
statements.
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HuntMountain
Resources Ltd. and Subsidiaries
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(An
Exploration Stage Enterprise)
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Consolidated
Statements of Cash Flows
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Three
months ended March
31,
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From
Inception of Development Stage July 1, 2005
through
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|||||||||||
2008
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2007
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March 31,
2008
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||||||||||
(unaudited)
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(unaudited)
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(unaudited)
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||||||||||
Increase
(Decrease) in Cash and Cash Equivalents
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||||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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||||||||||||
Net
loss
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$ | (7,371,400 | ) | $ | (927,438 | ) | $ | (19,166,381 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities
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||||||||||||
Depreciation
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2,314 | 935 | 9,327 | |||||||||
Stock
option compensation expense
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52,500 | - | 251,100 | |||||||||
Common
stock and options issued for services
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- | 9,000 | 353,250 | |||||||||
Financing
charge
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4,229,946 | 39,176 | 9,485,595 | |||||||||
Amortization
of debt discount
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1,641,212 | 259,670 | 2,968,828 | |||||||||
Gain
on sale of precious metal investments
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- | - | (15,194 | ) | ||||||||
Increase
in long term receivable - V.A. tax
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(184,502 | ) | - | (375,221 | ) | |||||||
Increase
in employee receivable
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(293 | ) | - | (2,407 | ) | |||||||
Increase
in accounts receivable
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39,441 | - | (1,181 | ) | ||||||||
(Increase)
decrease in prepaid expenses
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5,415 | 4,595 | (67,197 | ) | ||||||||
Increase
in accounts payable
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(49,232 | ) | - | 286,761 | ||||||||
Increase
in accrued liabilities
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12,410 | 13,340 | 163,737 | |||||||||
Net
cash used in operating activities
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(1,622,190 | ) | (600,722 | ) | (6,108,984 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
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||||||||||||
Land
purchases
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- | - | (710,000 | ) | ||||||||
Accrued
interest income
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(1,986 | ) | - | (3,955 | ) | |||||||
Purchase
of performance bond
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- | (251,613 | ) | (247,486 | ) | |||||||
Property
deposits
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(135,000 | ) | - | (271,500 | ) | |||||||
Property
purchase option
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- | - | (70,000 | ) | ||||||||
Sale
of precious metal investments
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- | - | 28,913 | |||||||||
Acquisition
of equipment
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(16,331 | ) | - | (27,547 | ) | |||||||
Net
cash used in investing activities
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(153,317 | ) | (251,613 | ) | (1,301,575 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
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||||||||||||
Proceeds
from convertible note financing
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1,500,000 | 807,000 | 5,247,000 | |||||||||
Increase
in debt discount
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(86,456 | ) | - | (2,751,062 | ) | |||||||
Increase
in accrued interest payable
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128,104 | - | 293,253 | |||||||||
Proceeds
from sales of common stock
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189,456 | - | 4,136,932 | |||||||||
Net
cash from financing activities
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1,731,104 | 807,000 | 6,926,123 | |||||||||
Effect
of currency translation on cash
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(7,410 | ) | - | (21,994 | ) | |||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
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(51,813 | ) | (45,335 | ) | (506,430 | ) | ||||||
CASH
AND CASH EQUIVALENTS, BEGINNING OF YEAR/PERIOD
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653,304 | 297,191 | 1,107,921 | |||||||||
CASH
AND CASH EQUIVALENTS, END OF YEAR/PERIOD
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$ | 601,491 | $ | 251,856 | $ | 601,491 | ||||||
Supplemental
Disclosures of Cash Flow Information:
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||||||||||||
Income
taxes, paid net of refunds:
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- | - | - | |||||||||
Interest
paid:
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- | - | - |
The
accompanying notes are an integral part of these consolidated financial
statements.
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Total
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Level
I
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Level
II
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Level
III
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|||||||||||||
Assets:
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||||||||||||||||
Performance
bond
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$ | 189,834 | $ | 189,834 | $ | 0 | $ | 0 | ||||||||
Total:
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$ | 189,834 | $ | 189,834 | $ | 0 | $ | 0 |
Three
month periods ended
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||||||
March 31, 2008
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March 31, 2007
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|||||
Weighted
average risk free rate:
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2.09%
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4.92%
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||||
Weighted
average volatility:
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82.8%
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75%
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||||
Expected
dividend yield:
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0%
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0%
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||||
Weighted
average life (years):
|
5.0
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2.0
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Number
of
Options
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Weighted
Average Exercise
Price
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Weighted
Average
Remaining
Contractual
Life
(Years)
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Number
of
Exercisable
Options
at
March
31, 2008
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|||||||||||||
90,000 | $ | 0.20 | 3.89 | 90,000 | ||||||||||||
700,000 | $ | 0.25 | 3.31 | 650,000 | ||||||||||||
100,000 | $ | 0.30 | 3.59 | 100,000 | ||||||||||||
10,000 | $ | 0.34 | 2.33 | 10,000 | ||||||||||||
10,000 | $ | 0.37 | 2.01 | 10,000 | ||||||||||||
320,000 | $ | 0.38 | 4.74 | 160,000 | ||||||||||||
150,000 | $ | 0.40 | 4.75 | 100,000 | ||||||||||||
650,000 | $ | 0.45 | 4.28 | 600,000 | ||||||||||||
5,000 | $ | 0.55 | 3.25 | 5,000 | ||||||||||||
55,000 | $ | 0.60 | 4.74 | 55,000 | ||||||||||||
200,000 | $ | 0.63 | 3.89 | 175,000 | ||||||||||||
TOTALS
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2,290,000 | $ | 0.378 | 3.99 | 1,955,000 |
Year of the Agreement
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Payment to FK Minera S.A.
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Exploration Expenditure
Requirement
|
Ownership
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|||||||||
First
year
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$ | 50,000 | $ | 250,000 | 0 | % | ||||||
Second
year
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50,000 | 250,000 | 0 | % | ||||||||
Third
year
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75,000 | 0 | 51 | % | ||||||||
Fourth
year
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75,000 | 0 | 60 | % | ||||||||
Fifth
year
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75,000 | 0 | 100 | % |
As
Originally Reported
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As
Restated
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Impact
of the error Increase (Decrease)
|
||||||||||
Income
Statement for the three month period ended March 31,
2007
|
||||||||||||
Financing
Charge
|
$ | - | $ | 39,176 | $ | 39,176 | ||||||
Amortization
of debt discount
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- | 259,670 | 259,670 | |||||||||
Net
loss
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(628,592 | ) | (927,438 | ) | (298,846 | ) | ||||||
Basic
and fully diluted loss per share
|
$ | (0.02 | ) | $ | (0.03 | ) | $ | (0.01 | ) | |||
Balance
Sheet at March 31, 2007
|
||||||||||||
Short-term
Note Payable - Related Party, net of debt discount
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$ | 807,000 | $ | 253,107 | $ | (553,893 | ) | |||||
Total
current liabilities
|
881,372 | 327,479 | (553,893 | ) | ||||||||
Additional
paid-in capital
|
2,433,570 | 3,286,308 | 852,738 | |||||||||
Deficit
Accumulated During the Development Stage
|
(2,830,126 | ) | (3,128,972 | ) | (298,846 | ) | ||||||
Total
Stockholders’ Equity (Deficit)
|
(279,535 | ) | 274,358 | 553,893 |
ITEM
1.
|
LEGAL
PROCEEDINGS
|
ITEM
1A.
|
RISK
FACTORS
|
ITEM
2
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UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
ITEM
4.
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SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
ITEM
5.
|
OTHER
INFORMATION
|
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31.1--
|
Certification
required by Rule 13a-14(a) or Rule 15d-14(a). Tim
Hunt
|
|
31.2--
|
Certification
required by Rule 13a-14(a) or Rule 15d-14(a). Bryn
Harman
|
|
32.1--
|
Certification
required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, Tim
Hunt
|
|
32.2--
|
Certification
required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, Bryn
Harman
|
/s/
Tim Hunt
|
||||
BY:
|
DATE: December
10, 2008
|
|||
TIM
HUNT, CHAIRMAN, PRESIDENT & CHIEF EXECUTIVE OFFICER
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/s/
Bryn Harman
|
||||
BY:
|
DATE:
December 10, 2008
|
|||
BRYN
HARMAN, CHIEF FINANCIAL OFFICER
|