**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-QSB**

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

For the quarterly period ended  **July 31, 2007**

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

For the transition period from _________ to ________

Commission File No.  **000-30230**
| **GENERAL METALS CORPORATION** |  
(Exact name of small business issuer as specified in its charter)

 
**Delaware**

**65-0488983**

 
(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 
 
 

 
**1 E. Liberty St., Suite 6000, Reno, NV 89501**

 
(Address of principal executive offices)

**(775) 686-6078**

 
(Issuer's telephone number, including area code)

 
 
N/A

 
 
(Former Name, Former Address if Changed Since last Report)

 
Check whether the issuer (1) filed all reports to be filed by Section 13 or 15(d) of the Exchange Act 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  o  

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 after distribution of securities under a plan confirmed by a court.  Yes  o     No  o.

**[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 September 4, 2007, there were 85,458,289 shares of common stock, par value $0.001, outstanding.

Transitional Small Business Disclosure Format (Check One):  Yes  o  

No  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 ] 

 

 

- 2 -

 

 

**PART I  -  FINANCIAL INFORMATION**

**Item  1.**

**Financial Statements.**

 

It is the opinion of management that the interim financial statements for the quarter ended July 31, 2007 include all adjustments necessary in order to ensure that the interim financial statements are not misleading.

 

**General Metals Corporation -- Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Unaudited Consolidated Balance Sheets**

 

 

 

- 4 -

 

 

**General Metals Corporation -- Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Unaudited Consolidated Statements of Operations**

 

 

 

 

- 5 -

 

 

**General Metals Corporation -- Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Statement of Stockholders' Equity**

**from inception July 17, 1998 to July 31, 2007**

 

 

 

 

- 6 -

 

 

**General Metals Corporation -- Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Statement of Stockholders' Equity (Cont’d)**

**from inception July 17, 1998 to July 31, 2007**

 

 

 

 

 

 

 

- 7 -

 

 

**General Metals Corporation -- Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Statement of Stockholders' Equity (Cont’d)**

**from inception July 17, 1998 to July 31, 2007**

 

 

 

 

- 8 -

 

 

**General Metals Corporation -- Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Statement of Stockholders' Equity (Cont’d)**

**from inception July 17, 1998 to July 31, 2007**

 

 

 

 

 

- 9 -

 

 

**General Metals Corporation -- Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Unaudited Consolidated Statements of Cash Flows**

 

 

 

 

- 10 -

 

 

**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Notes to Audited Consolidated Financial Statements**

(July 31, 2007 and April 30, 2007)

 

**NOTE 1.  ORGANIZATION AND DESCRIPTION OF BUSINESS**

**Nature of Business**

General Metals Corporation (the Company) was organized in the State of New Jersey on March 4, 1994 and reincorporated in the State of Delaware on September 13, 1995 as Interactive Multimedia Network, Inc.  On March 29, 2005 the Company changed its name to RECOV Energy Corp. and then on January 12, 2006 changed its name to General Metals Corporation.  The Company was unsuccessful in its business plan of developing and marketing consumer products and therefore actively pursued a merger or acquisition candidate.

On January 20, 2006 the Company entered into an agreement, effective March 15, 2006, to acquire all of the issued and outstanding shares and convertible securities of General Gold Corporation (General Gold), an Exploration Stage Company (See “Note 3 Acquisition of General Gold” for details).  This transaction resulted in a change of control and is accounted for as a reverse acquisition with General Metals Corporation as the surviving legal entity and General Gold the historical accounting company.  The Company will operate General Gold as a wholly owned subsidiary.

Through the acquisition of General Gold the Company is now an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No.7 “*Accounting and Reporting by Development Stage Enterprises*”.  General Gold entered into the mining exploration business by executing an agreement dated November 14, 2004, to acquire substantially all of the assets related to the Independence mining claims in Lander County, Nevada (See “Note 9 Mineral Properties” for details). The Company’s principal business is the acquisition and exploration of mineral properties. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.

**Basis of Presentation**

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles.  The Company operates on an April 30 fiscal year end.  

For accounting purposes, the acquisition of General Gold has been treated as a reverse acquisition.  Accordingly, the consolidated financial statements, statements of operations, statement of stockholders’ deficit and statements of cash flows reflect the results of operations and cash flows of General Gold for the period from its inception on July 17, 1998 to January 31, 2006 and consolidated with those of General Metals from acquisition on March 15, 2006 to July 31, 2007.

**NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Principles of Consolidation**

The accompanying consolidated financial statements include the accounts of General Metals Corporation and its wholly owned subsidiary, General God Corporation.  Collectively, they are referred herein as the Company.  All inter-company balances and transactions have been eliminated on consolidation.

**Use of estimates**

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.  

 

 

- 11 -

 

 

**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Notes to Audited Consolidated Financial Statements (cont’d)**

(July 31, 2007 and April 30, 2007)

 

**NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)**

**Cash and Cash Equivalents**

 

Cash and cash equivalents consist of cash and short term deposits with original maturities of three months or less when purchased.  As of January 31, 2007, cash and cash equivalents consists of cash and cash in trust.

**Property and Equipment**

 

Property and equipment consists of furniture and equipment and is recorded at cost.  Equipment acquired from the acquisition is recorded at net book value.  The furniture and equipment are being depreciated on a straight-line basis over their estimated lives of five years.

 

Following is a summary of property and equipment July 31, 2007 and April 30, 2007:

 

 

31-Jul-2007

30-Apr-2007

Furniture and Equipment

$       6,348

$        6,348

Vehicle Purchase

36,700

21,700

Less:  Accumulated Depreciation

       (3,855)

        (2,453)

Property and Equipment, Net

$     39,193

$      25,595

**Basic and Diluted Net Income (Loss) Per Share**

The Company computes net income (loss) per share in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

The numerators and denominators used in the computations of basic and diluted EPS are presented in the following table as at July 31:

 

 

2007

2006

 

Numerators for Basic and Diluted EPS

 

 

 

Net income/(loss) to common shareholders 

($705,856)

($174,384)

 

Denominators for Basic EPS

 

 

 

Weighted average of shares outstanding

84,158,029

71,037,598

 

Basic Earnings/(Loss) Per Share

($0.01)

($0.01)

 

Denominators for Diluted EPS

 

 

 

Weighted average of shares outstanding

86,304,835

71,037,598

 

Diluted Earnings/(Loss) Per Share

($0.01)

($0.01)

 

 

- 12 -

 

 

**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Notes to Audited Consolidated Financial Statements (cont’d)**

(July 31, 2007 and April 30, 2007)

 

**NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)**

**Financial Instruments**

The Company’s financial instruments consist of cash; cash in trust, accounts payable and accrued liabilities and amounts due to related parties. The Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of cash, cash in trust, accounts payable and accrued liabilities and amounts due to related parties approximates their carrying values due to the immediate or short term maturity of these financial instruments.

**Mineral Property Costs**

The Company is in the exploration stage and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property acquisition costs are capitalized.  Exploration and Development costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

**Long-Lived Assets**

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

**Income Taxes**

Under SFAS No 109 *"Accounting for Income Taxes"*the Company is required to recognize deferred tax liabilities and assets using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statements carrying values and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Future income tax -assets are recorded in the financial statements if realization is considered more likely than not.  

 

**NOTE 3.  ACQUISITION OF GENERAL GOLD**

On January 20, 2006 the Company entered into an agreement, effective March 15, 2006, to acquire all of the issued and outstanding shares and convertible securities of General Gold Corporation (General Gold), an Exploration Stage Company.  This transaction resulted in a change of control and is accounted for as a reverse acquisition with General Metals Corporation as the surviving legal entity and General Gold the historical accounting company.  The Company will operate General Gold as a wholly owned subsidiary.

At the effective date of the merger The Company had 7,669,521 shares issued and outstanding and issued 36,097,500 common shares and 3,048,750 one-year warrants to affect the merger.  Below are the balance sheets and adjustments giving affect to the acquisition on March 15, 2006:

 

 

- 13 -

 

 

**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Notes to Audited Consolidated Financial Statements (cont’d)**

(July 31, 2007 and April 30, 2007)

 

**NOTE 3.  ACQUISITION OF GENERAL GOLD (cont’d)**

 

 

 

General

 

General

 

 

 

Adjusted

 

 

Metals

 

Gold

 

 

 

Balance

 

 

March 15,

 

March 15,

 

Acquisition

 

March 15,

 

 

2006

 

2006

 

Adjustments

 

2006

**ASSETS**

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

$             8,582

 

$         39,268

 

$              -  

 

$        47,850

 

Accounts Receivable net

10,000

 

11,790

 

-  

 

21,790

 

Prepaid Expense

-  

 

12,500

 

-  

 

12,500

 

Loan to Related Party

-  

 

30,000

 

(30,000)

 

-  

 

Total Current Assets

18,582

 

93,558

 

(30,000)

 

82,140

 

 

 

 

 

 

 

 

 

Fixed Assets

 

 

 

 

 

 

 

 

Investment in Mining Property

 

 

55,000

 

 

 

55,000

 

Property, Plant and Equipment, net

3,256

 

2,808

 

 

 

6,064

 

Total Fixed Assets

3,256

 

57,808

 

-  

 

61,064

 

 

 

 

 

 

 

 

 

Total Assets

$          21,838 

 

$       151,366

 

$      (30,000)

 

$       143,204

 

 

 

 

 

 

 

 

 

**LIABILITIES AND STOCKHOLDERS' EQUITY**

Current Liabilities

 

 

 

 

 

 

 

 

Accounts Payable and Accrued Liabilities

$       226,563

 

$        20,776

 

 

 

247,339

 

Notes and Loans Payable

335,956

 

 

 

 

 

335,956

 

Tax Payables

614

 

 

 

 

 

614

 

Loan From Related Party

30,000

 

1,457

 

(30,000)

 

1,457

Total Liabilities

593,133 

 

22,233

 

(30,000)

 

585,366

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

Common Stock

7,670

 

36,097

 

 

 

43,767

 

Paid in Capital

3,427,057

 

774,967

 

(4,006,022)

 

196,002

 

Accumulated Equity/(Deficit)

(4,006,022)

 

(681,931)

 

4,006,022

 

(681,931)

 

Total Stockholders' Equity

(571,295)

 

129,133

 

-  

 

(442,162)

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

$        21,838 

 

$        151,366

 

$       (30,000)

 

$      143,204

 

 

**NOTE 4.  GOING CONCERN**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. However, at July 31, 2007 the Company has an accumulated loss of $2,047,655 during its exploration stage.  This raises substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that might result from this uncertainty.  

 

 

- 14 -

 

 

**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Notes to Audited Consolidated Financial Statements (cont’d)**

(July 31, 2007 and April 30, 2007)

**Managements Plan**

Management continues to seek funding from its shareholders and other qualified investors to pursue its exploration and development programs. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that the Company will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment. Further, the Company may continue to be unprofitable. The Company needs to raise additional funds in the immediate future in order to proceed with its exploration program. 

On August 28, 2006 the Company initially retained a specialist international equity capital firm whose primary business is arranging financings for junior and other mining companies. They have arranged over $500 million for junior mining companies over the last several years.  The agreement calls for an equity financing of shares and warrants in the amount of up to $2,000,000.  In February 2007, the balance of retainer was paid and the Company information was distributed to the specialist’s clients for review.  

During December, January and February the Company successfully completed a series of Private Placements discussed in the Stockholders Equity Note 7.

 

**NOTE 5.  GAIN ON FORGIVENESS OF DEBT AND DEBT CONVERSION**

**Forgiveness of Debt**

The Company acquired General Gold on March 15, 2006.  Prior the acquisition the Company had arranged to reduce or eliminate certain accounts payable however, the transactions were not completed until after the acquisition and prior to the April 30, 2006 report date.  Shareholder loans in the amount of $91,174 and accrued attorney fees in the amount of $110,784 were forgiven.  The Company determined that $24,606 in stale payables with no collection activity for over six years could be legally written-off.  Should any of these creditors take action to collect the company will reassume responsibility.  Following is a list of Accounts payable that have been written-off and a gain on forgiveness of debt has been recorded:

 

Accounts Payable:

 

Shareholder Loans

$   91,175

Attorney Fees – Related Party

110,784

Stale Payables

      24,606

Total Debt Forgiven

$ 226,565

**Debt Conversion**

The Company converted $370,581 shareholder loans to 20,031,405 pre-split common shares during the year ended April 30, 2006.  Agreements were reached to convert the debt in February 2005 at a rate of $0.0185 per share as disclosed in the 10KSB/A-2 for March 31, 2005 filed with the SEC on October 4. 2005.  Although the debt conversion was agreed to in February 2005 the actual transactions were not recorded until after the acquisition of General Gold and prior to the April 30, 2006 report date.

The Company converted $35,000 accrued liabilities and shareholder loans to 466,666 pre-split common shares on January 31, 2007.

The Company converted $35,000 accrued liabilities to 466,666 pre-split common shares on May 18, 2007.

 

 

- 15 -

 

 

**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Notes to Audited Consolidated Financial Statements (cont’d)**

(July 31, 2007 and April 30, 2007)

**NOTE 6.  RELATED PARTY TRANSACTIONS**

The President and CEO has provided financing to the company in the form of demand notes with no fixed or determinable repayment dates.  The amounts are recorded as current liabilities with the balance as of July 31, 2007, 2007 and April 30, 2007 of $40,184 and $63,184 respectively.

 

**NOTE 7.  STOCKHOLDERS' EQUITY**

**Preferred Stock**

The Company is authorized to issue 50,000,000 preferred shares with a par value of $0.001 per share.  As of July 31, 2007 no preferred stock is issued and outstanding

**Common Stock**

The Company is authorized to issue 200,000,000 common shares with a par value of $0.001 per share.

Because of the reverse acquisition of General Gold the Statement of Stockholders’ equity has been revised to reflect General Gold’s historical accounting General Metals is consolidated as if acquired by General Gold.

On July 19, 2007 the Company executed an 11:10 forward stock split.  This forward split has been retroactively applied to the Statement of Shareholders Equity.  The following notes have been adjusted to retroactively reflect the post-split shares issued however the price per share reported is the original price.

On March 15, 2006, the Company had 7,669,521 common shares issued and outstanding.  On that date it issued 36,097,500 common shares in a one for one share exchange with the shareholders of General Gold.  As of the close of March 15, 2006 the Company had 48,143,791 post-split common shares issued and outstanding.

Between March 15 and April 30, 2006 the Company issued an additional 22,034,546 post-split common shares to convert $370,581 of debt at the pre-split rate of $0.0185 per share.

The Company issued 550,000 post-split common shares valued at $500 as an executive hiring incentive.

The Company received and cancelled 550,000 post-split common shares valued at $500 from a prior executive.

On April 28, 2006 the Company issued 702,900 post-split common shares at the pre-split price of $0.25 per share through the exercising of warrants.

The Company received $76,000 advanced payment on a private placement.

On August 17, 2006 the Company issued 110,000 post split common shares at the pre-split price of $0.25 per share through the exercise of director’s warrants.

On October 15, 2006 the Company issued 440,000 common shares in a private placement for $50,000 at pre-split price of $0.125 per share and 158,400 common shares for services valued at $18,000 or pre-split price of $0.125 per share.

On January 31, 2007 the Company agreed to issue 385,310 post-split common shares at pre-split price of $0.075 per share and an equal number of warrants exercisable by February 20, 2008 at $0.075 per share.  Of the shares to be issued 220,460 were used to purchase a vehicle valued at $15,000 and 164,850 shares were issued for $11,216 cash.

 

 

- 16 -

 

 

**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

**Notes to Audited Consolidated Financial Statements (cont’d)**

(July 31, 2007 and April 30, 2007)

**NOTE 7.  STOCKHOLDERS' EQUITY (cont’d)**

**Common Stock (cont’d)**

On January 31, 2007 the Company agreed to issue 330,000 post-split common shares at the pre-split price of $0.075 per share for services valued at $22,500.

On January 31, 2007 the Company agreed to issue and aggregate of 4,293,396 post-split common shares at $0.075 per share in a private placement with an equal number of warrants exercisable on March 7, 2008 at $0.075 per share.  Of the aggregate shares, 513,333 post-split shares were issued to satisfy $35,000 debt and 3,770,063 post-split shares were issued for $93,250 cash $26,000 prepaid subscriptions and subscription receivable of $163,800.

On March 15, 2007, the Company issued 1,100,000 post-split common shares at the pre-split price of $0.075 per share or $75,000 along with 1,000,000 two year warrants exercisable at $0.26 per share to acquire 100% interest in Mikite Gold Resources ("Mikite"), a Ghanaian corporation with exclusive exploration rights to the 150 square kilometer Nyinahin mining concession near Bibiani, Ghana.

On March 30, 2007, the Company issued 275,000 post-split common shares at pre-split price of $0.075 per share or $18,750 along with 250,000 one year warrants exercisable at $0.075 per share as an incentive to join the company as CFO.

On April 23, 2007 the Company issued 2,332,000 post-split common shares at pre-split price of $0.125 per share for $265,000 cash and 1,060,000 twelve month warrants exercisable at $0.125.

On April 30, 2007 the Company issued 363,440 post-split common shares at pre-split price of $0.125 per share for $41,300 cash and 165,200 twelve month warrants exercisable at $0.125.

On May 18, 2007 the Company issued 513,333 post-split common shares to convert $35,000 debt.

Between May 18 and May 31, 2007 the Company issued 667,040 post-split common shares in a private placement at the pre-split price of $0.125 for a total of $75,800.

Between May 18 and May 25, 2007 the Company issued 2,343,219 post-split common shares from exercise of warrants at the pre-split price of $0.75 per share or $159,765.

Between May 18 and May 22, 2007 the Company issued 654,500 post-split common shares from exercise of warrants at the pre-split price of $0.20 per share or $119,000.

On May 22, 2007 the Company issued 44,000 post-split common shares from exercise of warrants at the pre split-price of $0.125 per share or $5,000.

On May 31, 2007 the Company issued 132,000 post-split common shares for the purchase of an asset valued at $15,000 or $0.125 per share.

On July 19, 2007 the Company recorded the issue of 177,760 post-split common shares to balance with the shares issued per the transfer agent.

On July 31, 2007 the Company issued 216,000 common shares from exercised of warrants at $0.20 per share or $43,200.

On July 31, 2007 the Company issued 52,470 common shares in a private placement for $0.125 per share or $6,559.

 

 

- 17 -

 

 

**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Notes to Audited Consolidated Financial Statements (cont’d)**

(July 31, 2007 and April 30, 2007)

 

**NOTE 7.  STOCKHOLDERS' EQUITY (cont’d)**

 

**Warrants**

 

The Company has the following warrants outstanding as of July 31, 2007 and has recorded the cost associated with the issue of the warrants using the Black-Sholes option pricing model with the following results:

 

 

 

 

 

 

 

Derivative 

Expiration

 

Exercise 

 

 

 

Value of 

Date

 

Price 

 

Shares

 

Warrants 

 

 

 

 

 

 

 

3/30/2008

 

$0.0750

 

250,000

 

$      23,355 

4/23/2008

 

$0.1250

 

1,060,000

 

60,125

4/30/2008

 

$0.1250

 

165,200

 

17,705

5/31/2008

 

$0.1250

 

218,000

 

32,028

5/31/2008

 

$0.2500

 

815,000

 

86,766

3/15/2009

 

$0.2600

 

1,000,000

 

63,282

 

 

 

 

 

 

 

Total Derivative Cost of Warrants

 

$   283,261 

 

**NOTE 8.  PROVISION FOR INCOME TAXES**

The Company provides for income taxes under Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. 

SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.  In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is $463,067, which is calculated by multiplying a 35% estimated tax rate by the items making up the deferred tax account, the NOL of $1,323,049.  The total valuation allowance is a comparable $463,067.

The provision for income taxes is comprised of the net changes in deferred taxes less the valuation account plus the current taxes payable as shown in the chart below for the year ended April 30, 2007:

 

Deferred Tax Asset

$    463,067

Less: Valuation Allowance

    (463,067)

Net Deferred Tax Asset

$             0

 

 

 

- 18 -

 

 

**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Notes to Audited Consolidated Financial Statements (cont’d)**

(July 31, 2007 and April 30, 2007)

 

**NOTE 8.  PROVISION FOR INCOME TAXES (cont’d)**

 

The federal NOL is due to expire 20 years from the date of its creation. The chart below shows the year of creation, the amount of each estimated year’s NOL and the year of expiration if not utilized. 

 

 

Year Created

Amount

Year to Expire

 

1999

$       587

2019

 

2000

2,000

2020

 

2001

14,977

2021

 

2002

16,657

2022

 

2003

21

2023

 

2004

20,886

2024

 

2005

153,123

2025

 

2006

418,616

2026

 

2007

        696,182

2027

Total NOL Carry forward

$    1,248,049

 

 

 

**NOTE 9.  MINERAL PROPERTY**

On November 14, 2004, the Company entered into a letter of intent with Independence Mines, LLC (“Independence”) and Gold Range, LLC (“Gold”) with respect to the purchase of an option that Gold held to the Independence mining claims in Lander County, Nevada and substantially all of the assets that Gold uses to conduct the business of Independence. On April 29, 2005, the Company entered into an agreement (the “Assignment Agreement”), which replaced the letter of intent whereby the Company purchased an assignment of lease to the Independence mining claims from Gold. The purchase price included $25,000 (paid) at the close of the Assignment Agreement, $25,000 (paid) when the definitive agreement was entered into between Gold and the Lessor and a final $25,000 (paid) within 30 days of the lease recordation date. On October 26, 2005, the Company issued 5,000,000 restricted shares ofcommon stock to Gold. Also, in addition to other underlying NSR requirements, the Company must pay a 1% net smelter royalty fee to Gold.  The original payment of $25,000 was expensed, however, the remaining $50,000 payment and $5,000 for 5,000,000 shares of restricted stock issued have been capitalized as mineral property acquisition costs.

 

**NOTE 10. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS**

Below is a listing of the most recent Statement of Financial Accounting Standards (SFAS) SFAS 155-157 and their effect on the Company.

**Statement No. 155 –***Accounting for Certain Hybrid Financial Instruments*****

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, which amends SFAS No. 133, Accounting for Derivatives Instruments and Hedging Activities and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities.  SFAS No. 155 amends SFAS No. 133 to narrow the scope exception for interest-only and principal-only strips on debt instruments to include only such strips representing rights to receive a specified portion of the contractual interest or principle cash flows.  SFAS No. 155 also amends SFAS No. 140 to allow qualifying special-purpose 

 

 

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**General Metals Corporation**

**Successor to General Gold Corporation**

(An Exploration Stage Company)

 

**Notes to Audited Consolidated Financial Statements (cont’d)**

(July 31, 2007 and April 30, 2007)

 

entities to hold a passive derivative financial instrument pertaining to beneficial interests that itself is a derivative instrument. 

 

**Statement No. 156 –***Accounting for Servicing of Financial Assets*

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, which provides an approach to simplify efforts to obtain hedge-like (offset) accounting.  This Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. The Statement (1) requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations; (2) requires that a separately recognized servicing asset or servicing liability be initially measured at fair value, if practicable; (3) permits an entity to choose either the amortization method or the fair value method for subsequent measurement for each class of separatelyrecognized servicing assets or servicing liabilities; (4) permits at initial adoption a one-time reclassification of available-for-sale securities to trading securities by an entity with recognized servicing rights, provided the securities reclassified offset the entity's exposure to changes in the fair value of the servicing assets or liabilities; and (5) requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the balance sheet and additional disclosures for all separately recognized servicing assets and servicing liabilities. SFAS No. 156 is effective for all separately recognized servicing assets and liabilities as of the beginning of an entity's fiscal year that begins after September 15, 2006, with earlier adoption permitted in certain circumstances. The Statement also describes the manner in which it should be initially applied. 

 

**Statement No. 157** – *Fair Value Measurements*

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, to clarify how to measure fair value and to expand disclosures about fair value measurements.  The expanded disclosures include the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value on earnings and is applicable whenever other standards require (or permit) assets and liabilities to be measured at fair value.  SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. 

The adoption of these new Statements is not expected to have a material effect on the Company’s current financial position, results or operations, or cash flows.   

 

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**Item 2.**

**Management's Discussion and Analysis or Plan of Operation.**

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The statements contained in this section include projections of future results and "forward-looking statements" as that term is defined in the Exchange Act. All statements that are included in this report, other than statements of historical fact, are forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the expectations are disclosed in this report, including, without limitation, general business conditions.

OVERVIEW

We were organized in the State of New Jersey on March 4, 1995, under the name Interactive Multimedia Network, Inc.  We were reincorporated in the State of Delaware on September 13, 1995.  We changed our name to RECOV Energy Corp. effective March 29, 2005.  On or about January 12, 2006, we changed our name to General Metals Corporation.

On January 20, 2006, we entered into a Share Purchase Agreement with General Gold Corporation, a Nevada company incorporated on July 17, 1988, and the former shareholders of General Gold set out in the Agreement.  The closing of the transactions contemplated in the Agreement and the acquisition by our company of all of the issued and outstanding and convertible securities of General Gold occurred on March 15, 2006.  For financial statement purposes, General Gold, the acquired entity, is regarded as the predecessor entity as of March 15, 2006.

*Our Current Business*

We are a junior mineral resource exploration company engaged in the business of mineral exploration.

On November 14, 2004, as amended December 31, 2004, we entered into a letter of intent with Independence Mines, LLC and Gold Range, LLC with respect to the purchase of substantially all of the assets Gold Range, LLC uses to conduct the business of Independence Mines, LLC.  We did not proceed with the acquisition in this form, instead electing to directly acquire the lease on the subject property.

On April 29, 2005, we entered into an agreement for an assignment of a lease with Gold Range, LLC.  The lease to be assigned was the lease to be entered into between Gold Range, LLC and Independence Gold-Silver Mines Inc., pursuant to which Independence Gold-Silver Mines Inc. would lease to Gold Range, LLC certain unpatented mining claims located in the Battle Mountain District, Lander County, State of Nevada, as more particularly described in the lease, known also as the “Independence Mine”.

The purchase price payable by us to Gold Range, LLC in consideration for the assignment of the lease was 5,000,000 of our restricted common shares and a 1% net smelter return royalty payable to Gold Range, LLC in addition to other underlying net smelter return requirements. 

On March 15, 2007, we purchased a 100% interest in Mikite Gold Resources, a Ghanaian corporation with exclusive exploration rights to the 150 square kilometer Nyinahin mining concession near Bibiani, Ghana. Consideration paid was 1,000,000 restricted common shares with 1,000,000 share purchase warrants attached, priced at $0.26 for a period of 2 years in satisfaction of full and complete payment. 

On August 17, 2007, we entered into the First Amendment to the Mining Lease with Independence Gold-Silver Mines, Inc. and added 4 additional mining claims and 2 additional easements. These claims cover the area where the existing cyanide decantation mill and operating facilities are currently sited and the area where the Pioneer haul road to and from the Sunshine pit crosses the Independence claims; specifically, Independence #1, #2, DC#83 and An Old Glory. Our annual lease payments increase by $5,000.00.

 

 

 

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*The Independence Mines Property*

We currently control a 100% undivided leasehold interest in the Wilson-Independence Gold – Silver Mine, situated in the Battle Mountain Mining District, Lander County, Nevada.  The property consists of 14 whole and fractional mining claims encompassing 240 acres.  Due diligence by our company shows that all claims are valid and in good standing through and for the assessment year ending August 31, 2008. 

The Wilson-Independence project is wholly owned by General Metals through a mining lease/option agreement with Independence Gold Silver Mines of Seattle, Washington.  Under the terms of the agreement General Metals must expend a minimum of $625,000 towards exploration development and commercial production of ores, minerals or materials prior to September 30, 2010 as per the following schedule:

September 30, 2006

$50,000

September 30, 2007

$75,000

September 30, 2008

$125,000

September 30, 2009

$175,000

September 30, 2010

$200,000

Any expenditure in excess of the minimum expenditure may be applied to subsequent years.  The term of the lease is for a period of 20 years commencing October 1, 2005.  There is a production royalty payable for the sale of all gold, silver or platinum based upon the average daily price of gold on the London Metal Exchange of 3% when the price of gold per ounce is less than $375, 4% when the price of gold per ounce is between $375 and $475 and 5% when the price of gold is over $475.  There is also a production royalty of 3% payable on the sale of all substances other than gold, silver and platinum.

We have the option to purchase the property for $3.0 million within 10 years of the date the lease commenced provided all obligations have been met.  To date, we have expended approximately $300,000 on exploration.

Location and Access

All infrastructure necessary for the exploration, development and operation of a mine is readily available.  The property is accessed via federal, state and county maintained all weather paved and gravel roads from the nearby town of Battle Mountain. A well-trained work force is available in the town of Battle Mountain, situated 30 miles north of the property along Interstate highway 80.  Adequate ground water is available for diversion for future mining operations which enjoy special treatment as temporary or interim uses under Nevada water laws.  Electrical power has recently been extended to within one mile of the project to service the Phoenix project, and the trans-continental natural gas line passes within 1.5 miles of the property. 

The property has been the sight of intermittent historic exploration and mining activities since the late 1920s. Past mining operations extracted 65,000 tons of high grade gold and silver ores from the property.  The bulk of this activity occurred during two periods, the first from high grade ores shipped for direct smelting during the late 1940s and early 1950s, and a second from 1975 to 1983 when a significant amount of underground development took place, and a mill erected on the property.  Production grades have historically been high, with individual samples from stopes reported to contain up to 19,000 ounces of silver, and 64 ounces of gold.  During its peak period of production in 1976 the mine shipped up to 1 ton of gold and silver bullion per month. 

The Independence Mines property consists of 14 whole and fractional unpatented lode mining claims, which cover approximately 240 acres. 

 

 

 

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Core and reverse circulation drilling to date indicate two targets.  These two targets are referred to as the Independence Deep (A Target), and the Independence Surface (B Target). Historic mining operations have generated in excess of 70,000 tons of waste dumps, mill tailings, and other waste rock products on the property.  Samples of this material contain gold and silver values which suggest potential to recover gold and silver values.

The Wilson-Independence Property covers a mineralized zone on strike with the World Class, Fortitude / Phoenix Gold Skarn Deposit.  The property has potential to develop a high grade underground resource in the Antler Sequence, together with a smaller surface / near surface resource in the overlying Pumpernickel Formation.  Situated at the intersection of the Battle Mountain-Eureka Gold Trend and the Northern Nevada Rift (Twin Creeks-McCoy lineament), the Independence Project, like Fortitude and Cove Mcoy, is one of a number of Gold Skarns which occur along the Battle Mountain – Eureka and Northern Nevada Rift Zone mineral lineaments. 

Mineralized outcrops are common on the property.  Many have been prospected by shallow prospect shafts, pits and trenches.  In addition, over 100 Reverse Circulation and Core holes, and extensive shallow underground mine workings in the Independence Mine indicate wide spread, near surface mineralization which we feel represents a valid exploration target for potential future surface, bulk mining operations. 

Historic drilling and underground mine workings indicate wide spread mineralization, both in surface - near surface, and deep targets.  There are presently no identified reserves or resources on the property.  We intend to conduct phased exploration programs to evaluate the mineral potential of this property, with the objective of identifying and developing mineral resources and reserves reportable under SEC Industry Guide 7. 

Independence Deep Target

A large body of mineralized material is clearly indicated by previous drilling in the Deep Target.  It is likely that proper logging and subsequent geologic modeling has potential to result in the identification of an economic resource.  All core, approximately 25,000 feet, is stored on site, and re-logging was completed during the summer of 2006.  As part of our Phase I exploration program, we have spent approximately $300,000, including limited additional drilling and sampling. 

Mineralization identified in the deep target to date is contained in the lower plate of the Golconda Thrust in rocks of the Battle Mountain and Edna Formations of the Antler Sequence.

Independence Surface Target

The Surface Target consists of both historic mill tailings and oxidized mineralization in the near surface.  The tailings consists of roughly 70,000 tons with an additional 60,000 tons of oversize already mined stockpiled material.  

Promising surface and near surface mineralization has been identified.  The Surface Target contains an oxide target.  This target is hosted entirely in the Pumpernickel Formation.  To date over 100 drill holes and roughly eight (8) miles of underground workings have penetrated portions of this target, all of which have encountered highly anomalous to high grade mineralization.  The principle limiting factor for surface resources is the lack of drilling information.  We anticipate that it is highly likely that additional drilling will develop resources sufficient to increase the near surface resource substantially.

Mill & Building On Site

A relatively intact 50 to 75 ton per day Counter Current – Decantation cyanide mill is situated on the property.  The present condition of the jaw crusher, cone crusher and ball mill are being evaluated and could possibly be returned to serviceable condition.  A complete set of  new rubber liners for the ball mill are on site.  The mill is housed in a metal clad building erected in 1987.

 

 

 

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Surrounding Land and Mineral Ownership

The Wilson-Independence claims are completely surrounded by Newmont Mining’s holdings and are an island with legal access. Newmont’s Phoenix Project is adjacent to the Independence claims and is in operation as the largest operating gold mine in the US.  Newmont enjoys 8.5 million ounces of gold and 660 million ounces of silver in reserves with substantial additional mineralized material under exploration.

**Plan of Operations**

Situated in the Battle Mountain – Cortez gold belt, the Wilson-Independence gold project represents an opportunity for a gold-sliver operation with potential for near surface open pit and deeper high grade underground production.  Gold is indicated in three discrete drilled zones with sufficient values and spacing  to warrant additional exploration drilling.  Based on drill intercepts and drill hole spacing, we believe there is potential to develop a near surface mineralized deposit with between 3Mt and 5 Mt of material with a grade of 0.03 to 0.05 opt and a deeper deposit containing 5 to 6 Mt of material with grades between 0.27 and 0.35 opt.  

We believe that with compilation of the historic data and small amount of additional field work, a mineralization model can be developed that will enhance target vectors and enable rapid confirmation of gold mineralization.  Following data evaluation, we plan a series of staged drill campaigns designed to:

1)

Rapidly evaluate and delineate the near surface deposits with the intent to bring them to a proven and probable reserve/resource, reportable under Industry Guide 7 and to aid in the development of an early production stage.

2)

Identify structures interpreted as mineralized fluid conduits from lower the mineralized zone.

3)

Evaluate and delineate the deep high grade gold potential. 

We will begin concurrent environmental baseline studies to facilitate a rapid production track pending a successful conclusion of the drill programs.

Management’s plan for 2007 -2008, Drill Targets: Previous exploration campaigns by Tech Exploration, Noranda Exploration, Northern Dynasty Minerals and Great Basin resulted in an estimated 1.5 million ounces of gold being identified in three separate drill targets with over 80 holes being reported, all containing gold. 

Surface/Shallow Target: 3 million tons @ .02 opt gold (60,000 oz) 

A shallow bench of low grade mineralized material that goes from surface to around 50' deep has been identified. There is no overburden and mining is inexpensive. Our drilling will be infill to identify a mineable resource to add to the proposed heap leach.

Independence Mine Target: 3- 5 million tons @ .05 opt gold ( 250,000 oz)

The surface and near surface mineralization contains drill intercepts to 40' @ 0.148 opt gold and several holes have been ended in mineralized material containing in excess of 0.10 opt gold. The surface target contains an oxide target potential in the range of 250,000-300,000 ounces of gold (See Carrington Report). We plan to drill the Independence Mine area from above to establish the feasibility of an open pit mining approach for the remaining mineralized material. There are over 8 miles of underground workings currently developed. 

Independence Deep Target: 1.4 - 2 million ounces of gold @ 3,000 feet deep

This target has immediate potential to develop 1.4 to 2 million ounces of contained gold, according to the 1997 Carrington Report, Northern Dynasty Minerals reported an estimated resource of 818,000 ounces of contained gold, with an average grade of 0.27 opt gold and Noranda Exploration, in an interoffice memo estimated 2 million ounces. Approximately 25,000 feet of drill core is on site and has been recently relogged.

 

 

 

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Recent and Future Planned Exploration:

General Metals has completed a small characterization drilling program on the tailings. A total of 36 reverse circulation holes were drilled on a nominal 50 spacing, indicating approximately 61,000 tons of material with an average grade of 0.026 opt gold and 0.52 opt silver remain in the tailings.  Based on 30 samples collected from the old mill stockpile, potential exists for an estimated 31,600 tons of material grading 0.046 opt Au and 3.39 opt Ag remaining on the property.   

Evaluation of all available structural, geologic and drill data is underway and required to generate an accurate geologic model for mineralization in the three target areas.  Work is progressing as follows:

1.

Surface and underground geology be re-mapped in detail, the new data combined with the existing data to form a geologic model for targeting mineralization in the three areas.

2.

Review and sample select portions of the Noranda core in the upper parts of the drill holes within the Independence target.

3.

Based on the results of the above, a two phase drill program to test the drill target model in the Independence and Wilson Deep targets.

 

a)

Phase 1: A drill program of 30 to 50 RC drill holes of 500’ or less to establish continuity of the near surface Independence mineralization and 2 RC drill holes 1000’ deep to test vertical location and continuity of mineralized structures. Target date: October 2007

 

b)

Phase 2: Twenty additional RC drill holes of 500’ or less in the Independence target and five 3,000 ft. RC pre-collar/core finish drill holes in the Wilson Deep to confirm continuity of the gold mineralization and facilitate resource estimate for both deposits. Target date: December 2007

4.

A shallow 5-10 hole RC drill program be conducted in the North target to test potential for continuity and higher grade gold values.  Target date: November, 2007]

Phase 1 Program and Budget (Shallow Target)

General Metals’ program is up to $2.0 million in order to carry out phase-one of a three-phased drilling program on the Wilson-Independence project, proposed initial drilling of the deep target as well as for working capital purposes.  The program is as follows:  

 

Data review

$2,750

Surface/subsurface surveying

5,500

Underground mapping and sampling

16,500

Surface mapping and sampling

11,000

Core sampling

11,000

Permitting

15,000

Site Construction

65,000

Drilling (RC)

212,500

Sample preparation and analysis

60,000

Supervision

59,000

 

 

 

 

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Supplies

12,000

Field expenses

42,000

Section and map preparation

24,250

Geologic interpretation & modeling

22,000

Report

11,000

Independence Deep modeling & resource study

100,000

Pre-construction baseline studies, preliminary permitting

75,000

Reclamation

48,750

Miscellaneous/Contingency

556,000

Subtotal Wilson-Independence project phase 1

1,349,250

Proposed initial deep drilling (2 holes)

350,000

Working capital

300,750

**Total**

**$2,000,000**

*Cash Requirements*

For the next 12 months we plan to continue to explore for base and precious metals on our Independence Mines property in Nevada pursuant to the budgets indicated above. We also plan to advance operational permitting for a 5-6 million ton cyanide heap leach operation to enable early processing of the shallow and near surface mineralized material which contains both gold and silver. The target estimated recoverable material is 235,000 ounces of gold and 2,500,000 ounces of silver from the shallow targets.

We will require additional funds to implement our exploration and development programs.  These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares.  There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock.  Further, we may continue to be unprofitable.  We need to raise additional funds in the immediate future in order to proceed with our exploration program.  

**Liquidity and Capital Resources**

As at July 31, 2007, we had $45,955 in current liabilities, and our working capital was $303,838.  Our financial statements report a net loss of $337,967 for the three month period ended July 31, 2007 compared to a net loss of $174,384 for the three month period ended July 31, 2006.  Our accumulated loss increased to $1,679,767 from inception to July 31, 2007.  Our losses increased in part as a result of increase in expenses in all categories for the three month period ended July 31, 2007.  We realized an overall increase in all expense categories during the three month period ended July 31, 2007 as we were actively involved in the investigation and acquisition of resource properties, as compared to the three month period ended July 31, 2006.  

During the three month period ended July 31, 2007, we received aggregate proceeds of $289,323 in connection with the exercise of share purchase warrants.

 

 

 

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During the three month period ended July 31, 2007, we raised aggregate proceeds of $82,700 in connection with the closing of two private placements for which we issued 536,000 shares and 374,000 share purchase warrants.  The warrants issued are exercisable at prices ranging from $0.125 to $0.25 per share. 

We have suffered recurring losses from operations.  The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital.  In this regard we have raised additional capital through the equity offerings noted above.  We need to raise additional funds in the immediate future in order to proceed with our exploration program.

The continuation of our business is dependent upon obtaining further financing, a successful program of acquisition and exploration, and, finally, achieving a profitable level of operations.  The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to obtain further funds required for our continued operations.  As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements.  There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.  If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due.  In such event, we will be forced to scale down or perhaps even cease our operations.

*Product Research and Development*

Our business plan is focused on a strategy for maximizing the long-term exploration and development of our Independence Mines property in Nevada and more recently our proposed acquisition in Ghana.  To date, execution of our business plan has largely focused on acquiring prospective leases.  We intend to establish a going forward exploration and development plan.

*Purchase of Significant Equipment*

We do not intend to purchase any significant equipment (excluding exploration activities) over the twelve months ending July 31, 2008.  To the extent that equipment is required for our exploration program it will be provided by third party contractors or leased.

*Employees*

Currently we have three employees that assist our directors, officers and advisory board members.  We do not expect any material changes in the number of employees over the next 12 month period.  We do and will continue to outsource contract employment or independent contractors as needed.  However, if we are successful in our initial and any subsequent drilling programs we may retain additional employees or independent contractors.

**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 or 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 outline 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”.

 

 

 

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**Risks Related To Our Business:**

*Going Concern.*

We do not expect positive cash flow from operations in the near term.  There is no assurance that actual cash requirements will not exceed our estimates.  In particular, additional capital may be required in the event that:

- drilling, exploration and completion costs for our Independence mine project increase beyond our expectations; or

- we encounter greater costs associated with general and administrative expenses or offering costs.

The occurrence of any of the aforementioned events could adversely affect our ability to meet our business plans.

We will depend almost exclusively on outside capital to pay for the continued exploration and development of our properties.  Such outside capital may include the sale of additional stock and/or commercial borrowing.  We can provide no assurances that any financing will be successfully completed.  

Capital may not continue to be available if necessary to meet these continuing development costs or, if the capital is available, that it will be on terms acceptable to us.  The issuance of additional equity securities by us would result in a significant dilution in the equity interests of our current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business and as a result may be required to scale back or cease operations for our business, the result of which would be that our stockholders would lose some or all of their investment.

*We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.*

We have no history of revenues from operations and have no significant tangible assets.  We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably.  Our company has a limited operating history and must be considered in the development stage. The success of our company is significantly dependent on a successful acquisition, drilling, completion and production program. Our company’s operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history.  We may be unable to locate recoverable reserves or operate on a profitable basis.  We are in the development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage.  If our business plan is not successful, and we are not ableto operate profitably, investors may lose some or all of their investment in our company. 

*Because of the early stage of development and the nature of our business, our securities are considered highly speculative.*

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We are engaged in the business of exploring and, if warranted, developing commercial reserves of gold and silver. Our properties are in the exploration stage only and are without known reserves of gold and silver. Accordingly, we have not generated any revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term. Any profitability in the future from our business will be dependent upon locating and developing economic reserves of gold, silver or other minerals, which itself is subject to numerous risk factors as set forth herein.  Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or debtin order to continue our business operations. 

 

 

 

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*As our properties are in the exploration and development stage there can be no assurance that we will establish commercial discoveries on our properties.*

Exploration for mineral reserves is subject to a number of risk factors.  Few properties that are explored are ultimately developed into producing mines.  Our properties are in the exploration and development stage only and are without proven reserves.  We may not establish commercial discoveries on any of our properties.

*Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.*

Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises.  The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake.  These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.  The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits.  Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.  If the results of our exploration programs do not reveal viablecommercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration.  The acquisition of additional claims will be dependent upon us possessing capital resources at the time in order to purchase such claims.  If no funding is available, we may be forced to abandon our operations. 

*Because of the speculative nature of exploration of mineral properties, there is no assurance that our exploration activities will result in the discovery of new commercially exploitable quantities of minerals.*

We plan to continue exploration on our Nevada mineral properties.  The search for valuable minerals as a business is extremely risky.  We can provide investors with no assurance that additional exploration on our properties will establish that additional commercially exploitable reserves of precious metals on our properties.  Problems such as unusual or unexpected geological formations or other variable conditions are involved in exploration and often result in exploration efforts being unsuccessful.  The additional potential problems include, but are not limited to, unanticipated problems relating to exploration and attendant additional costs and expenses that may exceed current estimates.  These risks may result in us being unable to establish the presence of additional commercial quantities of ore on our mineral claims with the result that our ability to fund future exploration activities may be impeded. 

*Because we anticipate our operating expenses will increase prior to our earning revenues, we may never achieve profitability.*

Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues.  We therefore expect to incur significant losses into the foreseeable future.  We recognize that if we are unable to generate significant revenues from the exploration of our mineral claims, we will not be able to earn profits or continue operations.  There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever achieve profitability.  If we are unsuccessful in addressing these risks, our business will most likely fail. 

*Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.*

The search for valuable minerals involves numerous hazards.  As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure.  At the present time we have no coverage to insure against these hazards.  The payment of such liabilities may have a material adverse effect on our financial position. 

 

 

 

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*If our exploration costs are higher than anticipated, then our profitability will be adversely affected.*

We are currently proceeding with exploration of our mineral properties on the basis of estimated exploration costs.  If our exploration costs are greater than anticipated, then we will not be able to carry out all the exploration of the properties that we intend to carry out.  Factors that could cause exploration costs to increase are: adverse weather conditions, difficult terrain and shortages of qualified personnel. 

*As we face intense competition in the mining industry, we will have to compete with our competitors for financing and for qualified managerial and technical employees.*

The mining industry is intensely competitive in all of its phases.  Competition includes large established mining companies with substantial capabilities and with greater financial and technical resources than we have.  As a result of this competition, we may be unable to acquire additional attractive mining claims or financing on terms we consider acceptable.  We also compete with other mining companies in the recruitment and retention of qualified managerial and technical employees.  If we are unable to successfully compete for financing or for qualified employees, our exploration and development programs may be slowed down or suspended. 

*As we undertake exploration of our mineral claim, we will be subject to compliance with government regulation that may increase the anticipated cost of our exploration program.*

There are several governmental regulations that materially restrict mineral exploration.  We will be subject to the laws of the State of Nevada as we carry out our exploration program.  We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws.  While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program. 

*Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.*

The laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in the United States or any other jurisdiction, may be changed, applied or interpreted in a manner which will fundamentally alter the ability of our company to carry on our business.

The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative impact on our ability to operate and/or our profitably.

*Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.*

Our By-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officers.

*Investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.*

Our constating documents authorize the issuance of 200,000,000 shares of common stock with a par value of $0.001 and 50,000,000 preferred shares with a par value of $0.001.  In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold.  If we issue any such additional shares, such issuances also will cause a 

 

 

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reduction in the proportionate ownership and voting power of all other shareholders.  Further, any such issuance may result in a change in our control.

*Some of our directors and officers are residents of countries other than the United States and investors may have difficulty enforcing any judgments against such persons within the United States.*

Some of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States.  As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our company or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

**Risks Associated With Our Common Stock:**

*Our stock is a penny stock.  Trading of our stock may be restricted by the Securities and Exchange Commission’s penny stock regulations and the National Association of Securities Dealers Inc.’s sales practice requirements, which may limit a stockholder's ability to buy and sell our stock.*

Our stock is a penny stock.  The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions.  Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors".  The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.  The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a formprepared by the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation.  In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive thepurchaser's written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules.  Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities.  We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, the National Association of Securities Dealers Inc. has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.  Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information.  Under interpretations of these rules, the National Association of Securities Dealers Inc. believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers.  The National Association of Securities Dealers Inc. requirements make it more difficult for broker-dealersto recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

*Going Concern*

We have suffered recurring losses from operations.  The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital.  The financial statements do not include any adjustment relating to the recovery and classification of recorded asset 

 

 

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amounts or the amount and classification of liabilities that might be necessary should our company discontinue operations.

Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in their report on the annual financial statements for the year ended April 30, 2007, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern.  Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

The continuation of our business is dependent upon us raising additional financial support.  The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.  

There are no assurances that we will be able to obtain further funds required for our continued operations.  As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements.  There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.  If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due.  In such event, we will be forced to scale down or perhaps even cease our operations.

*Recently Issued Accounting Standards*

Statement No. 155 – Accounting for Certain Hybrid Financial Instruments 

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, which amends SFAS No. 133, Accounting for Derivatives Instruments and Hedging Activities and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities.  SFAS No. 155 amends SFAS No. 133 to narrow the scope exception for interest-only and principal-only strips on debt instruments to include only such strips representing rights to receive a specified portion of the contractual interest or principle cash flows.  SFAS No. 155 also amends SFAS No. 140 to allow qualifying special-purpose entities to hold a passive derivative financial instrument pertaining to beneficial interests that itself is a derivative instrument. 

Statement No. 156 – Accounting for Servicing of Financial Assets 

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, which provides an approach to simplify efforts to obtain hedge-like (offset) accounting.  This Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. The Statement (1) requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations; (2) requires that a separately recognized servicing asset or servicing liability be initially measured at fair value, if practicable; (3) permits an entity to choose either the amortization method or the fair value method for subsequent measurement for each class of separatelyrecognized servicing assets or servicing liabilities; (4) permits at initial adoption a one-time reclassification of available-for-sale securities to trading securities by an entity with recognized servicing rights, provided the securities reclassified offset the entity's exposure to changes in the fair value of the servicing assets or liabilities; and (5) requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the balance sheet and additional disclosures for all separately recognized servicing assets and servicing liabilities. SFAS No. 156 is effective for all separately recognized servicing assets and liabilities as of the beginning of an entity's fiscal year that begins after September 15, 2006, with earlier adoption permitted in certain circumstances. The Statement also describes the manner in which it should be initially applied. 

Statement No. 157 – Fair Value Measurements 

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, to clarify how to measure fair value 

 

 

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and to expand disclosures about fair value measurements.  The expanded disclosures include the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value on earnings and is applicable whenever other standards require (or permit) assets and liabilities to be measured at fair value.  SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. 

The adoption of these new Statements is not expected to have a material effect on the Company’s current financial position, results or operations, or cash flows.

*Application of Critical Accounting Policies*

Our audited financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States.  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 financial statements is critical to an understanding of our financials.

**Item 3.**

**Controls and Procedures.**

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this quarterly report, being July 31, 2007, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures.  This evaluation was carried out under the supervision and with the participation of our company's management, including our company's president and chief executive officer and our company’s chief financial officer.  Based upon that evaluation, our company's president and chief executive officer****and our company’s chief financial officer****concluded that our company's disclosure controls and procedures are effective as at the end of the period covered by this report. There have been no changes in our internal controls overfinancial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.**

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Exchange Act is accumulated and communicated to management, including our company's chairman and chief financial officer as appropriate, to allow timely decisions regarding required disclosure.

**PART II  -  OTHER INFORMATION**

**Item 1.**

**Legal Proceedings**

In a lawsuit commenced by SunTrust Bank, we have been added to the action by defendants Hollywood Honda and Maroone Chevrolet wherein they  have sued by a cross claim the company, alleging that we are liable for the debts of Autosmart USA Leasing, Inc., a former subsidiary of the company. Autosmart was an automobile dealer broker that purchased cars from the above dealers to sell to their customers as a broker. The total claimed in the action is approximately $200,000.00.  The basis of the alleged claim against the company is that it operated Autosmart for an improper purpose and as the alter ego of the parent who is allegedly then liable.  The transactions that the claims are based upon occurred in 2002, far before the commencement of our current business under our current management in March of 2006.  We feel that the action against our company is completelywithout merit and intend to vigorously defend.  The action was commenced in 2002 in the 17th Judicial Circuit in Broward County, Florida.  However, we have only just become aware of the litigation, having recently been added to the action as a third party defendant due to the cross claim.

 

 

 

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**Item 2.**

**Unregistered Sales of Equity Securities and Use of Proceeds**

On May 17, 2007, we closed a private placement consisting of 18,000 units of our securities at a price of US$0.25 per unit for gross proceeds of $4,500. Each unit consists of two common shares in the capital of our company and one common share purchase warrant, with each whole warrant entitling the holder to purchase one share of our common stock at a price of US$0.125 per share for a period of 12 months from the effective date of a registration statement pertaining to the warrant shares. 

We issued the securities to eight accredited investors pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

On May 18, 2007, we issued 3,064,532 shares in connection with the exercise of share purchase warrants for aggregate proceeds of $267,340.

We issued the securities to eight non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933 and to five accredited investors pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

On May 18, 2007, we issued 260,000 share purchase warrants as an incentive bonus for the exercise of share purchase warrants.  Each whole warrant entitles the holder to purchase one share of our common stock at a price of $0.25 per share until April 30, 2008.

We issued the securities to six non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933 and to two accredited investors pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

On May 21, 2007, we issued 597,333 shares in connection with the exercise of share purchase warrants for aggregate proceeds of $79,925.

We issued the securities to three non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933 and to five accredited investors pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

On May 18, 2007, we issued 265,000 share purchase warrants as an incentive bonus for the exercise of share purchase warrants.  Each whole warrant entitles the holder to purchase one share of our common stock at a price of $0.25 per share until April 30, 2008.

We issued the securities to two non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933 and to two accredited investors pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

On May 22, 2007, we issued 90,000 shares in connection with the exercise of share purchase warrants for aggregate proceeds of $18,000.

We issued the securities to two accredited investors pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

On May 22, 2007, we issued 90,000 share purchase warrants as an incentive bonus for the exercise of share purchase warrants.  Each whole warrant entitles the holder to purchase one share of our common stock at a price of $0.25 per share until April 30, 2008.

 

 

 

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We issued the securities to two accredited investors pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

On May 30, 2007, we closed a private placement consisting of 160,000 units of our securities at a price of US$0.25 per unit for gross proceeds of $25,000 and certain assets.  Each unit consists of two common shares in the capital of our company and one common share purchase warrant, with each whole warrant entitling the holder to purchase one share of our common stock at a price of US$0.125 per share for a period of 12 months from the effective date of a registration statement pertaining to the warrant shares.  

We issued the securities to two accredited investor pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

On August 3, 2007, we issued 52,470 shares in connection with the exercise of share purchase warrants for aggregate proceeds of $6,558.75.

We issued the securities to one non-U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933, as amended.

On August 3, 2007, we closed a private placement consisting of 216,000 units of our securities at a price of US$0.20 per unit for gross proceeds of $43,200.  Each unit consists of one common share in the capital of our company and one common share purchase warrant, with each whole warrant entitling the holder to purchase one share of our common stock at a price of US$0.25 per share for a period of 12 months from closing.

We issued the securities to eight (8) U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) relying upon Rule 506 of Regulation D of the Securities Act of 1933. 

**Item 3.**

**Defaults Upon Senior Securities**

None.

**Item 4.**

**Submission of Matters to a Vote of Security Holders**

None.

**Item 5.**

**Other Information**

None.

**Item 6.**

**Exhibits.**

*Exhibits required by Item 601 of Regulation S-B*

**(3)**

**Articles of Incorporation and By-laws**

3.1

Certificate of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB12G filed on August 24, 1999)

3.2

By-Laws (incorporated by reference from our Registration Statement on Form 10-SB12G filed on August 24, 1999)

3.3

Amendment to Certificate of Incorporation (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006) 

 

 

 

 

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**(10)**

**Material Contracts**

10.1

Letter of Intent between General Gold Corporation and Gold Range, LLC dated November 14, 2004  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)

10.2

Amendment to Letter of Intent between General Gold Corporation and Gold Range, LLC dated December 31, 2004 (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006).

10.3

Assignment of Lease Agreement between General Gold Corporation and Gold Range Company, LLC dated April 29, 2005  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006).

10.4

Assignment of Lease and Consent Agreement between Independence Gold-Silver Mines Inc., Gold Range Company, LLC and General Gold Corporation dated June 29, 2005  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006).

10.5

Lease Agreement between Independence Gold-Silver Mines Inc. and Gold Range Company, LLC dated July 13, 2005  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)

10.6

Share Purchase Agreement dated January 20, 2006 among General Gold Corporation, Recov Energy Corp. and the selling shareholders of General Gold Corporation  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006).

10.7

Share Purchase Agreement dated March 15, 2007 between our company and Sanibel Investments Ltd. (incorporated by reference from our Current Report on Form 8-K filed on March 22, 2007).

**(14)**

**Code of Ethics**

14.1

Code of Ethics  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)

**(21)**

**Subsidiaries**

 

General Gold Corporation, a Nevada company

**(31)**

**Section 302 Certification**

31.1

Section 302 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2

Section 302 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith).

**(32)**

**Section 906 Certification**

32.1

Section 906 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith)

32.2

Section 906 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith).

 

 

 

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**SIGNATURES**

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

**GENERAL METALS CORPORATION**

By: /s/ Stephen Parent                                                    

Stephen Parent, Chief Executive Officer and President

(Principal Executive Officer)

Date:  September 20, 2007.

 

By: /s/ Daniel Forbush                                                  

Daniel Forbush, Chief Financial Officer 

(Principal Financial Officer and Principal Accounting Officer)

Date:  September 20, 2007.

 

 

 

 

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