UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



FORM 20-F



[]

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[ X ]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2009

OR

[     ]

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

For the transition period from ____________ to __________

OR

[     ]

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report



Portal Resources Ltd.

(Exact name of Registrant as specified in its charter)



British Columbia, Canada

(Jurisdiction of incorporation or organization)



Suite 750  625 Howe Street, Vancouver, British Columbia, Canada V6C 2T6

(Address of principal executive offices)



Securities to be registered pursuant to Section 12(b) of the Act:

None



Securities to be registered pursuant to Section 12(g) of the Act:

Common Shares, without par value

(Title of Class)



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None



Indicate the number of outstanding shares of each of the Companys classes of capital or common stock as of the close of the period covered by the annual report.                                           29,651,539 Common Shares



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ___     No   xxx



If this report is an annual or a transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes XXX  No ___



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ninety days.

Yes XXX  No ___



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.



Large accelerated filer __  Accelerated filer  __  Non-accelerated filer X



Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



U.S. GAAP [  ]

International Financial Reporting Standards as issued

Other [ X]

by the International Accounting Standards Board [  ]



Indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 _X_  Item 18 ___



If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ___   No  _X_ N/A __









Page 2 of 100

Index to Exhibits on Page 71

















2













Portal Resources Ltd.

Form 20-F Annual Report



Table of Contents



|          | PART I                                                                       | Page
|--------- | ---------------------------------------------------------------------------- | ----
|          |                                                                              |     
|Item 1.   | Identity of Directors, Senior Management and Advisors                        | 4   
|Item 2.   | Offer Statistics and Expected Timetable                                      | 4   
|Item 3.   | Key Information                                                              | 5   
|Item 4.   | Information on the Company                                                   | 13  
|Item 5.   | Operating and Financial Review and Prospects                                 | 26  
|Item 6.   | Directors, Senior Management and Employees                                   | 36  
|Item 7.   | Major Shareholders and Related Party Transactions                            | 46  
|Item 8.   | Financial Information                                                        | 47  
|Item 9.   | The Offer and Listing                                                        | 48  
|Item 10.  | Additional Information                                                       | 52  
|Item 11.  | Quantitative and Qualitative Disclosures about Market Risk                   | 64  
|Item 12.  | Description of Other Securities Other Than Equity Securities                 | 64  
|          |                                                                              |     
|          | PART II                                                                      |     
|          |                                                                              |     
|          |                                                                              |     
|Item 13.  | Defaults, Dividend Arrearages and Delinquencies                              | 65  
|Item 14.  | Material Modifications to the Rights of Security
Holders and Use of Proceeds | 65  
|Item 15.  | Controls and Procedures                                                      | 65  
|Item 16.  | Reserved                                                                     | 65  
|Item 16A. | Audit Committee Financial Expert                                             | 65  
|Item 16B. | Code of Ethics                                                               | 66  
|Item 16C. | Principal Accountant Fees and Services                                       | 66  
|Item 16D. | Exemptions from Listing Standards for Audit
Committees                       | 66  
|Item 16E. | Purchase of Equity Securities by the Issuer and
Affiliated Purchasers        | 67  
|          |                                                                              |     
|          | PART III                                                                     |     
|          |                                                                              |     
|Item 17.  | Financial Statements                                                         | 67  
|Item 18.  | Financial Statements                                                         | 67  
|Item 19.  | Exhibits                                                                     | 67  







3







METRIC EQUIVALENTS



For ease of reference, the following factors for converting metric measurements into imperial equivalents are provided:



|To Convert from Metric | To Imperial        | Multiply by
|---------------------- | ------------------ | -----------
|                       |                    |            
|Hectares               | Acres              | 2.471      
|Meters                 | Feet (ft.)         | 3.281      
|Kilometers (km)        | Miles              | 0.621      
|Tonnes                 | Tons (2000 pounds) | 1.102      
|Grams/tonne            | Ounces (troy/ton)  | 0.029      







Part I



Item 1.  Identity of Directors, Senior Management and Advisors



Table No. 1

Company Officers and Directors



|Name             | Position                    | Business Address                                      
|---------------- | --------------------------- | ------------------------------------------------------
|David N. Hottman | President, CEO and Chairman | Suite 750  625 Howe Street
Vancouver, B.C. V6C 2T6   
|Mark T. Brown    | CFO and Director            | 325 Howe Street
Suite 410
Vancouver, B.C. V6C 1Z7     
|Joe Tai          | Director                    | 3368 - 1199 West Pender Street
Vancouver, B.C. V6E 2R1
|Frank Wheatley   | Director                    | 5168 Redonda Drive
North Vancouver, B.C. V7R 3K3      
|Winnie Wong      | Director                    | 325 Howe Street,  #410
Vancouver, BC, Canada  V6C 1Z7 



The Companys auditor is Devisser Gray, Chartered Accountants, 401  995 West Pender Street, Vancouver, British Columbia, Canada, V6C 1L6. Devisser Gray has been auditor of the Company since inception.



Item 2.  Offer Statistics and Expected Timetable



Not Applicable





4





Item 3.  Key Information



As used within this Annual Report, the terms Portal, Portal de Oro Resources Ltd., Gateway, the Company, Issuer and Registrant refer collectively to Portal Resources Ltd., its predecessors, subsidiaries and affiliates.



SELECTED FINANCIAL DATA



The selected financial data of the Company for the Years Ended June 30, 2009, 2008, and 2007 were derived from the financial statements of the Company which have been audited by De Visser Gray, Chartered Accountants, as indicated in its audit reports which are included elsewhere in this Annual Report. The financial data for the years ended June 30, 2006 and June 30, 2005 has also been derived from the financial statements of the Company as audited by De Visser Gray, although the financial statements and audit report are not included in this Annual Report.



The selected financial data should be read in conjunction with the financial statements and other financial information included elsewhere in the Annual Report.



The Company has not declared any dividends on its common shares since incorporation and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain future earnings, if any, for use in its operations and the expansion of its business.



Table No. 2 is derived from the financial statements of the Company, which have been prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the years presented with US GAAP, except as disclosed in Note 15 to the financial statements.





Table No. 2

Selected Financial Data

(CDN$ in 000, except per share data)



|                            | Year     | Year     | Year     | Year     | Year    
|--------------------------- | -------- | -------- | -------- | -------- | --------
|                            | Ended    | Ended    | Ended    | Ended    | Ended   
|                            | 6/30/09  | 6/30/08  | 6/30/07  | 6/30/06  | 6/30/05 
|                            |          |          |          |          |         
|Revenue                     | $0       | $0       | $0       | $0       | $0      
|Interest Income             | $65      | $161     | $106     | $33      | $3      
|Net Income (Loss)           | ($6,366) | ($3,288) | ($1,877) | ($1,094) | ($735)  
|Net Income (Loss) Per Share | ($0.21)  | ($0.11)  | ($0.09)  | ($0.08)  | ($0.08) 
|Dividends Per Share         | $0       | $0       | $0       | $0       | $0      
|Wtg. Avg. Shares  (000)     | 29,652   | 29,323   | 21,184   | 13,868   | 9,445   
|Working Capital             | $1,494   | $3,194   | $726     | $4,700   | $519    
|Mineral Properties          | $0       | $4,966   | $5,683   | $2,602   | $1,544  
|Oil and Gas Properties      | $361     | $0       | $0       | $0       | $0      
|Long-Term Debt              | $0       | $0       | $0       | $0       | $0      
|Shareholders Equity        | $1,894   | $8,238   | $6,503   | $7,338   | $2,105  
|Total Assets                | $1,966   | $8,320   | $7,007   | $7,726   | $2,347  
|US GAAP Net Loss            | ($1,762) | ($2,571) | ($4,957) | ($2,153) | ($1,703)
|US GAAP Loss Per Share      | ($0.06)  | ($0.09)  | ($0.23)  | ($0.16)  | ($0.18) 
|US GAAP Wtg. Avg. Shares    | 29,652   | 29,323   | 21,184   | 13,868   | 9,445   
|US GAAP Equity              | $1,532   | $3,273   | $820     | $4,735   | $561    
|US GAAP Total Assets        | $1,605   | $3,354   | $1,324   | $5,123   | $803    
|US GAAP Mineral Properties  | $0       | $0       | $0       | $0       | $0      





5









In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).



Table No. 3 sets forth the rate of exchange for the Canadian Dollar at the end of the five most recent years ended December 31st, the average rates for the period, and the range of high and low rates for the period. Table No. 3 also sets forth the rate of exchange for the Canadian Dollar at the end of the six most recent months, and the range of high and low rates for these periods.



For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.  The table sets forth the number of Canadian dollars required under that formula to buy one U.S. Dollar.  The average rate means the average of the exchange rates on the last day of each month during the period.



Table No. 3

Canadian Dollar/U.S. Dollar



|Period                       | Average | High  | Low   | Close
|---------------------------- | ------- | ----- | ----- | -----
|                             |         |       |       |      
|Year Ended 12/31/08          | $1.08   | $1.30 | $0.97 | $1.22
|Year Ended 12/31/07          | $1.07   | $1.19 | $0.92 | $0.99
|Year Ended 12/31/06          | $1.13   | $1.17 | $1.10 | $1.17
|Year Ended 12/31/05          | $1.21   | $1.27 | $1.16 | $1.17
|Year Ended 12/31/04          | $1.28   | $1.40 | $1.19 | $1.20
|                             |         |       |       |      
|Three Months Ended   9/30/09 | $1.08   | $1.17 | $1.06 | $1.07
|Three Months Ended   6/30/09 | $1.15   | $1.26 | $1.08 | $1.16
|Three Months Ended   3/31/09 | $1.27   | $1.30 | $1.18 | $1.26
|Three Months Ended 12/31/08  | $1.23   | $1.30 | $1.06 | $1.22
|Three Months Ended   9/30/08 | $1.05   | $1.08 | $1.00 | $1.06
|Three Months Ended   6/30/08 | $1.01   | $1.03 | $0.98 | $1.02
|Three Months Ended   3/31/08 | $1.00   | $1.03 | $0.97 | $1.03
|Three Months Ended 12/31/07  | $0.98   | $1.02 | $0.92 | $0.99
|Three Months Ended   9/30/07 | $1.04   | $1.08 | $1.00 | $1.00
|Three Months Ended   6/30/07 | $1.08   | $1.16 | $1.06 | $1.06
|Three Months Ended   3/31/07 | $1.17   | $1.19 | $1.15 | $1.15
|Three Months Ended 12/31/06  | $1.14   | $1.17 | $1.12 | $1.17
|                             |         |       |       |      
|November 2009                |         | $1.08 | $1.05 | $1.06
|October 2009                 |         | $1.08 | $1.03 | $1.08
|September 2009               |         | $1.11 | $1.06 | $1.07
|August 2009                  |         | $1.11 | $1.07 | $1.10
|July 2009                    |         | $1.16 | $1.08 | $1.08
|June 2009                    |         | $1.16 | $1.09 | $1.16



The exchange rate was $1.06 on November 30, 2009.





6









Forward Looking Statements



Certain Statements presented in this Annual Report are forward-looking statements which may include conclusions of prefeasibility and feasibility studies, estimates of future production, capital and operating costs, prices of resource commodities, and other known and unknown risks.  These and other factors and uncertainties may cause material differences from future results as expressed or implied by these forward-looking statements.  These risks, uncertainties and other factors include but are not limited to the risks involved in the exploration, development and mining business.



Statement of Capitalization and Indebtedness



Not Applicable





Risk Factors



An investment in the Common Shares of the Company must be considered speculative due to the nature of the Companys business and the present stage of exploration and development of its non producing mineral properties. In particular, the following risk factors apply:



Risks Associated with Oil and Gas Production and Exploration



Oil and Gas Exploration Has A High Degree of Risk and the Companys Exploration Efforts May Be Unsuccessful Which Would Have A Negative Effect on The Companys Operations:

There is no certainty that the expenditures to be made by the Company in the exploration of its current projects, or any additional project interests the Company may acquire, will result in discoveries of recoverable oil and gas in commercial quantities.  An exploration project may not result in the discovery of commercially recoverable reserves and the level of recovery of hydrocarbons from a property may not be a commercially recoverable (or viable) reserve which can be legally and economically exploited. If exploration is unsuccessful and no commercially recoverable reserves are defined, management would be required to evaluate and acquire additional projects which would require additional capital, or the Company would have to cease operations altogether.



Hydrocarbon Exploration and Production has Substantial Operating and Drilling Hazards Which Could Result in Failure of the Companys Projects or Substantial Liabilities Which May Not Be Covered By Insurance:

Oil and natural gas exploration and production operations are subject to all the risks and hazards typically associated with such operations. Hazards include well fires, explosions, blowouts, and oil or chemical spills, each of which could result in substantial damage to oil and natural gas wells, producing facilities, other property and the environment or in personal injury. Although the Operator of each property in which the Company has an interest typically maintains liability insurance in an amount which they consider adequate the nature of these risks is such that liabilities could exceed policy limits, in which event the Company as an owner of an interest in these wells could incur significant costs that could have a materially adverse effect upon its financial condition. Oil and natural gas production operations are also subject to all the risks typically associated with such operations, including premature decline of reservoirs and the invasion of water into producing formations. Any unforeseen hazard could result in the failure of the Companys operations on that project, which would have a negative effect on the Companys financial condition or cause the Company to cease operations altogether.





7









The Oil and Gas Industry is Highly Competitive, and if the Company is Unsuccessful in Competing With Other Oil and Gas Companies, It Would Negatively Effect the Companys Ability to Operate:

The Oil and Gas industry is highly competitive, including the acquisition of property interests, equipment, skilled personnel, and product marketing. The Company is required to directly compete with a substantial number of other oil and gas companies. Many of these other companies, both public and private, have significantly greater financial and personnel resources than the Company. Such competitors could outbid the Company for such projects, equipment or personnel, or produce oil and gas at lower costs which would have a negative effect on the Companys operations and financial condition, including forcing the Company to cease operations altogether.



Commodity Prices May Not Support Corporate Profit:

The petroleum industry in general is intensely competitive and there is no assurance that, even if commercial quantities of oil or gas are discovered and developed, a profitable market will exist for the sale of same.  Factors beyond the control of the Company may affect the marketability of any substances discovered.  The price of natural resources are volatile over short periods of time, and is affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production due to improved recovery techniques. If the Company is unable to economically produce oil and gas from its projects, it would have a negative effect on the Companys financial condition, or require the Company to cease operations altogether.



The Company Has No Known Reserves and No Economic Reserves May Exist on Its Properties

All of the properties in which the Company has an interest are at the exploration stage, and no economic oil and gas reserves have been established on any of the properties. Finding oil and gas deposits is dependent on a number of factors, not the least of which is the technical skill of exploration personnel involved.  Even in the event commercial quantities of oil and gas are discovered, the exploration properties might not be brought into a state of commercial production. The commercial viability of an oil and gas deposit once discovered is also dependent on a number of factors, some of which are particular attributes of the property, such as size, proximity to infrastructure, taxes, environmental laws, and commodity prices.  Most of these factors are beyond the control of the Company. The Company is an exploration stage company with no history of pre-tax profit and no income from its operations.  Even if the Companys properties are brought into production, operations may not be profitable.





8









The Companys Operations are Subject to Substantial Environmental Regulations Which Could Have a Negative Effect on the Companys Operations and Financial Condition:

The current and anticipated future operations of the Company require permits from various federal, provincial and local governmental authorities and such operations are and will be governed by laws and regulations governing various elements of the petroleum industry.  The Companys exploration activities are subject to various laws governing land use, the protection of the environment, prospecting, development, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, and other matters. Such operations and exploration activities are also subject to substantial regulation under these laws by governmental agencies and may require that the Company obtain permits from various governmental agencies.



The Company believes it is in substantial compliance with all material laws and regulations which currently apply to its activities. All permits which the Company may require for future exploration may not be obtainable on reasonable terms or such laws and regulations, or new legislation or modifications to existing legislation, could have an adverse effect on any project that the Company might undertake.



Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.



Amendments to current laws, regulations and permits governing operations and activities of oil and gas companies, or more stringent implementation thereof, could have a material adverse impact on the Company, which may adversely effect the Companys financial condition, or require the Company to cease operations altogether.



The Companys Title to Its Properties May Be Disputed By Third Parties Which Could Result in the Company Losing Title to Its Properties:

The Company has only done a preliminary title survey of its exploration properties in accordance with industry standards. These procedures do not guarantee the Companys title and therefore, in accordance with the laws of the jurisdictions in which these properties are situated, their existence and area could be in doubt. Unregistered agreements or transfers, or native land claims, may affect title.  If title is disputed, the Company will have to defend its ownership through the courts, which would likely be an expensive and protracted process and have a negative effect on the Companys operations and financial condition. In the event of an adverse judgment, the Company would lose its property rights.



Canada is a Signatory to the Kyoto Protocol Which Could Negatively Change Future Operations by Restricting the Companys Activities or Increasing Operating Costs:

Canada is a signatory to the United Nations Framework Convention on Climate Change and has ratified the Kyoto Protocol to set legally binding targets to reduce nationwide emissions of greenhouse gases, including carbon dioxide, methane, and nitrous oxide. Oil and gas exploration and production and other petroleum operations and related activities emit some greenhouse gases, which may subject the Canadian oil and gas industry, including the Company, to legislation or other regulatory initiatives designed to regulate emissions of greenhouse gasses. The federal Government of Canada has proposed a Climate Change Plan for Canada, which suggests further legislation will set greenhouse gases emission reduction requirements for various industrial activities, including oil and gas exploration and production. Future federal legislation as well as Provincial emission reduction requirements, may require the reduction of emissions produced by the Companys operations and facilities. These new requirements and the additional costs required to comply could have a material effect on the Companys operations and financial condition.





9









Risks Associated with Mineral Exploration



Mineral Exploration is Highly Speculative and has Certain Inherent Exploration Risks which Could have an Negative Effect on the Company

Mineral exploration is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production.  The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environment protection, the combination of which factors may result in the Company not receiving an adequate return on investment capital.



The Mining Industry is Highly Competitive

The Company will be required to compete in the future directly with other corporations that may have greater resources.  Such corporations could outbid the Company for potential projects or produce minerals at lower costs which would have a negative effect on the Companys operations.



Mineral Operations are Subject to Market Forces Outside of the Companys Control

The marketability of minerals is affected by numerous factors beyond the control of the entity involved in their mining and processing.  These factors include market fluctuations, government regulations relating to prices, taxes royalties, allowable production, import, exports and supply and demand.  One or more of these risk elements could have an impact on costs of an operation and if significant enough, reduce the profitability of the operation and threaten its continuation.



Risks Relating to the Financing of the Company



The Companys Auditors Have Expressed a Going Concern Opinion:

The Companys auditor has included a going concern opinion in its audit report to Portals consolidated financial statements for the fiscal year ended June 30, 2009. The qualification was included as a result of the Company not yet achieving profitable operations, its accumulated net losses, and significant uncertainty as to the Companys ability to fund ongoing operations. If the Company is unable to meet its obligations, it will not be able to fulfill its business plan and be forced to reduce certain operations or cease operations altogether.





10









The Company is Likely to Require Additional Financing which Could Result in Substantial Dilution to Existing Shareholders

The Company, while engaged in the business of exploring resource properties, is dependent on additional financing for planned exploration programs for the next twelve months as outlined herein.  Management anticipates being able to raise the necessary funds by means of equity financing.  The ongoing exploration of the Companys properties is dependent upon the Companys ability to obtain financing through the joint venturing of projects, debt financing, equity financing or other means. Such sources of financing may not be available on acceptable terms, if at all.  Failure to obtain such financing may result in delay or indefinite postponement of exploration work on the Companys resource properties, as well as the possible loss of its interest in such properties. Any transaction involving the issuance of previously authorized but unissued shares of common or preferred stock, or securities convertible into common stock, could result in dilution, possibly substantial, to present and prospective holders of common stock. These financings may be on terms less favorable to the Company than those obtained previously.



The Company Has a History of Net Losses and Expects Losses to Continue for the Foreseeable Future

The Company has had a history of losses and there is no assurance that it can reach profitability in the future.  The Company will require significant additional funding to meet its business objectives.  The Company may not be able to obtain additional financing on reasonable terms, or at all.  If equity financing is required, as expected, then such financings could result in significant dilution to existing shareholders.  If the Company is unable to obtain sufficient financing, the Company might have to dramatically slow exploration efforts and/or lose control of its projects. The Company has historically obtained the preponderance of its financing through the issuance of equity, and the Company has no current plans to obtain financing through means other than equity financing.



The Company has a Lack of Cash Flow to Sustain Operations and Does Not Expect to Begin Receiving Operating Revenue in the Foreseeable Future

None of the Companys properties have advanced to the commercial production stage and the Company has no history of earnings or cash flow from operations.  The Company has paid no dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future.  Historically, the only source of funds available to the company has been through the sale of its common shares. Any future additional equity financing would cause dilution to current stockholders. If the Company does not have sufficient capital for its operations, management would be forced to reduce or discontinue its activities which would likely have a negative effect on the stock price.





11









Risks Relating to an Investment in the Securities of the Company



The Market for the Companys Stock has Been Subject to Volume and Price Volatility which Could Negatively Effect a Shareholders Ability to Buy or Sell the Companys Shares

The market for the common shares of the Company may be highly volatile for reasons both related to the performance of the Company or events pertaining to the industry (ie. mineral price fluctuation/high production costs/accidents) as well as factors unrelated to the Company or its industry.  In particular, market demand for products incorporating resource commodities fluctuate from one business cycle to the next.  The Companys common shares can be expected to be subject to volatility in both price and volume arising from market expectations, announcements and press releases regarding the Companys business, and changes in estimates and evaluations by securities analysts or other events or factors.  In recent years the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly small-capitalization companies such as the Company, have experienced wide fluctuations that have not necessarily been related to the operations, performances, underlying asset values, or prospects of such companies.  For these reasons, the price of the Companys common shares can also be expected to be subject to volatility resulting from purely market forces over which the Company will have no control.  Further, despite the existence of a market for trading the Companys common shares in Canada, stockholders of the Company may be unable to sell significant quantities of common shares in the public trading markets without a significant reduction in the price of the stock.



The Company has a Dependence Upon Key Management Employees, the Absence of Which Would Have a Negative Effect on the Companys Operations

The Company strongly depends on the business and technical expertise of its management and key personnel, including President and Chief Executive Officer David Hottman and Chief Financial Officer Mark Brown.  There is little possibility that this dependence will decrease in the near term.  As the Companys operations expand, additional general management resources will be required. The Company may not be able to attract and retain additional qualified personnel and this would have a negative effect on the Companys operations.



Certain Officers and Directors May Have Conflicts of Interest

Certain of the directors and officers of the Company are also directors and/or officers and/or shareholders of other natural resource companies.  While the Company was engaged in the business of exploiting mineral properties, such associations may have given rise to conflicts of interest from time to time.  The Directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest that they may have in any project or opportunity of the Company.  If a conflict of interest arises at a meeting of the board of directors, any director in a conflict must disclose his interest and abstain from voting on such matter.  In determining whether or not the Company will participate in any project or opportunity, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at the time.



The Company Could be Deemed a Passive Foreign Investment Company Which Could have Negative Consequences for U.S. Investors

The Company could be classified as a Passive Foreign Investment Company (PFIC) under the United States tax code. If the Company is declared a PFIC, then owners of the Companys Common Stock who are U.S. taxpayers generally will be required to treat any so-called "excess distribution" received on its  common  shares, or any  gain  realized  upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distribution or gain, unless the taxpayer makes a qualified electing fund ("QEF") election or a mark-to-market election with respect to the Companys shares. A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of the Companys net capital  gain and  ordinary earnings for any year in which the Company is classified as a PFIC, whether or not the Company distributes any amounts to its shareholders.





12









U.S. Investors May Not Be Able to Enforce Their Civil Liabilities Against The Company or Its Directors, Controlling Persons and Officers

It may be difficult to bring and enforce suits against the Company. The Company is a corporation incorporated in Canada under the laws of British Columbia. All of the Companys directors and officers are residents of Canada and all of the Companys assets and its subsidiaries are located outside of the United States.  Consequently, it may be difficult for United States investors to effect service of process in the United States upon those directors or officers who are not residents of the United States, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under United States securities laws.  There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or the Company predicated solely upon such civil liabilities under the U.S. Securities Act.



Broker-Dealers May Be Discouraged From Effecting Transactions In Our Common Shares Because They Are Considered Penny Stocks And Are Subject To The Penny Stock Rules

Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, impose sales practice and disclosure requirements on FINRA broker-dealers who make a market in "a penny stock".  A penny stock generally includes any non-NASDAQ equity security that has a market price of less than $5.00 per share. The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.



Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with net worth in excess of US$1,000,000 or an annual income exceeding US$200,000, or US$300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.



In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the US Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt.  A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities.  Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.



As a Foreign Private Issuer, the Company is Exempt From the Section 14 Proxy Rules and Section 16 of the 1934 Securities Act

The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result is shareholders having less complete and timely data.  The exemption from Section 16 rules regarding sales of common shares by insiders may result in shareholders having less data.





13









Item 4.  Information on the Company



DESCRIPTION OF BUSINESS



Introduction



The Companys executive office is located at:

Suite 750  625 Howe Street, Vancouver, British Columbia, Canada V6C 2T6

Telephone: (604) 629-1929

Facsimile: (604) 629-1930

E-Mail: info@portalresources.net

Website: www.portalresources.net



The Contact person in Vancouver is David Hottman, President, CEO and Chairman.



The Company currently leases its corporate office space in Vancouver under a lease in effect through February 28, 2013.



The Company's fiscal year ends June 30th.



The Company's common shares trade on the TSX Venture Exchange under the symbol "PDO".



The authorized share capital of the Company consists of 100,000,000 common shares and 100,000,000 preferred shares. As of June 30, 2009, the end of the most recent fiscal year, there were 29,651,539 common shares and no preferred shares issued and outstanding.



Corporate Background



The Company was originally incorporated under the Company Act of British Columbia under the name of Gateway Enterprises Ltd. on August 14, 2000. On January 6, 2004, the Company changed its name to Portal de Oro Resources Ltd. due to the acquisition of Portal de Oro Resources (B.V.I.) Ltd. by Gateway. On December 20, 2004, the Company changed its name to Portal Resources Ltd. in order to simplify and shorten its name in English.



At the Companys Annual General Meeting held on December 20, 2004, shareholders approved new Articles of Incorporation under the new British Columbia Business Corporations Act which replaced the Company Act of British Columbia.



The Company presently has two wholly owned subsidiaries, Portal Resources US Inc., a company incorporated under the laws of the State of Colorado, and Portal de Oro (B.V.I.) Ltd., a company incorporated under the laws of the British Virgin Islands.



Currently, the Company conducts oil and gas exploration in Canada, and all of the Companys assets are located in Canada.





14









History and Development of the Business



The Company was originally incorporated as a Capital Pool Company (CPC) under the policies of the TSX Venture Exchange. On September 18, 2002, the Company entered into a Letter of Intent to acquire Foodterminal.com, a private Canadian company, in exchange for 7,741,000 common shares at a deemed price of $0.50 cents per share. The acquisition would represent the Companys Qualifying Transaction under TSX Venture Exchange Policy 2.4. Foodterminal.com was a grower of sprouts and distributor of food products. On February 28, 2003, the Companys directors determined that the acquisition of Foodterminal.com would not proceed due to regulatory hurdles and that the shareholders would be better served by seeking to acquire a different project. Therefore, the pending acquisition was terminated and non-refundable deposit advanced to Foodterminal.com of $25,000 was written-off.



On March 15, 2004, the Company completed the acquisition of all the outstanding shares of Portal de Oro (B.V.I.) Ltd. as its qualifying transaction under the policies of the TSX Venture Exchange. Portal de Oro (B.V.I.) Ltd. had an option to earn a 100% interest in the Arroyo Verde gold exploration project located in Argentina through its 100% owned subsidiary, El Portal de Oro, S.A. Consideration for the acquisition of Portal de Oro (B.V.I.) Ltd. was 2,000,000 common shares of the Company at a deemed value of $0.10 per share. Since the acquisition, the Company has been primarily focused on exploration in the Arroyo Verde, San Rafael and Anchoris areas. The Company has increased the size of the Arroyo Verde property to approximately 40,000 hectares through: application for an additional three cateos totaling approximately 22,000 hectares in December 2004; and acquisition in July 2004 of approximately 18,000 hectares of mineral exploration property in Chubut and Rio Negro provinces through application for four separate cateos.



In July 2004, the Company acquired an option to acquire a 100% interest in the San Rafael project located in Mendoza Province, Argentina. The option consists of two separate agreements. Under the first, the Company can acquire a 100% interest in mineral exploration concessions totaling 133,996 hectares by making cash payments of US$15,000 in each of the first three years, with an extension of up to three years for additional yearly payments totaling US$265,000. The Company can exercise its right to acquire a 100% interest in any of up to four project areas by paying US$50,000 for each area that it many elect to designate. The acquisition is subject to a 15-20% Net Profits Interest (NPI) of which the Company can purchase 10% at any time for US$1.0 million. Under the second agreement, Portal may acquire a 100% interest in concessions totaling 47,357 hectares by making payments of US$830,000 over 7 years. In the fourth quarter 2004, the Company increased its mineral rights holdings in the San Rafael area through the application for an additional 20 cateos totaling 85,000 hectares.



In February 2007, the Company announced that it had assembled the Tiger Uranium project consisting of six cateos totaling over 26,000 hectares in the Sierra Pintada Uranium district. The project is held under the two existing San Rafael project agreements.



In April 2007, through an agreement with Consolidated Pacific Bay Minerals Ltd., an unrelated public company, Portal has the right to earn a 60% interest in the Cerro Solo uranium joint venture of 3 concessions totaling 30,000 hectares located in Chubut Province, Argentina. Under the agreement, the Company was required to pay a total of US$145,000 cash on or before April 20, 2010, and expend an aggregate of US$1,200,000 in exploration expenditures on the property on or before April 20, 2011, to earn a 60% interest in Consolidated Pacific Bays concessions. In February 2009, the Company terminated the Cerro Solo agreement.





15









In June 2007, Portal entered into an option agreement to earn an initial 60% interest in the Slick Rock Uranium exploration project in San Miguel County, Colorado. Under the agreement, the Company issued 100,000 common shares and must pay US$101,000 cash on or before June 22, 2009, and expend an aggregate of US$445,000 by June 22, 2010, with a minimum expenditure of US$100,000 required in each year. Portal could earn an additional 15% interest (for a total of 75%) in the project through the expenditure of an additional US$250,000 on exploration over the following two years. In June 2008, after disappointing drill results, the Company dropped its option to acquire an interest in the property.



In May 2008, the Company announced that it had expanded the Tiger Uranium project to 9 claims totaling 44,924 hectares (174 square miles) and rescheduled the US$70,000 payment due on June 10, 2008 under the MRDP agreement to July 10, 2008. As part of the reorganization of the San Rafael project, the San Pedro agreement was terminated and the 53 claims totaling 144,856 held under the MRDP agreement, including the Anchoris copper-gold project, were returned to the vendor.  On June 10, Portal informed MRDP of the Companys decision to declare the 9 claims comprising the Tiger project to be a Development Area under the MRDP agreement, and pay MRDP US$50,000. MRDP subsequently informed the Company that it rejected the declaration of a Development Area, and notified the Company that the MRDP contract was null and void for failure to make the US$70,000 payment on the new due date of July 10, 2008.  Portal believes the declaration of a Development Area was valid, and thus the MRDP contact is in good standing. The Company announced that it retained legal counsel to defend its position and was seeking avenues to resolve the dispute.



The Company terminated its option on the Arroyo Verde property and disposed of all its remaining assets in Argentina during the fourth quarter or the year. In May 2009, the Company sold its Portal de Oro S.A. subsidiary for $99,127.



In September 2008, the Company announced that it had optioned 3 metal exploration projects located in the State of Nevada. The projects include the Golden Snow property, an advanced Carlin-type gold exploration project, the Fish Project, a skarn-manto gold/silver and base metal exploration project, and the CPG Project, an early-stage porphyry and skarn copper-gold-molybdenum prospect. In May 2009, the company closed an assignment agreement with Pengram Corporation to transfer all the rights on these Nevada properties in exchange for 150,000 shares of Pengram common stock.



In November 2008, the Company signed a joint-venture agreement to participate in the exploration, exploitation and production of petroleum and natural gas from lands located in Central Alberta, Canada. Under the original Bigwave Joint Venture agreement, the Company agreed to participate for a 15% interest and agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations. The Company later modified the agreement in December 2008 to a 20% interest, and subsequent to the year-end, the Company increased its interest to 22% in the 10,720 acres of the JV. In January 2009, the Company signed an agreement, Participation Agreement, with certain other partners in the Bigwave Joint Venture. Portal agreeing to pay 100% of the Companys cost per Drill Spacing Unit to earn 100 % of their interest until pay-out and then after pay-out to drop to 70% interest per Drill Spacing Unit.



In March 2009, the Company entered into the Manito JV agreement to participate a 33.3% interest in the exploration, exploitation and production of petroleum and natural gas from an area of interest in central Alberta, Canada. The Company agreed to pay a 5.5% GORR on all products produced from certain geological formations. To date, the Manito JV has acquired one section of land.





16









In June 2009, the Company initiated a project search for mineral exploration projects in Mexico. An administrative office was established in Hermosillo, Sonora State, to focus on the acquisition of gold and silver projects.



Capital Pool Companies (CPC)

Under the TSX Venture Exchanges Policy 2.4, a company with only minimal working capital is allowed to list on the Exchange for the purposes of negotiating an acquisition of, or the participation in, assets or businesses. Such companies are classified as a Capital Pool Company, or CPC and are governed by a specific set of rules and regulations.



The sole purpose of a CPC is to identify and evaluate existing businesses or assets for possible acquisition which, if acquired, would provide the company with a full listing on the TSX-V. The only business a CPC is allowed to conduct prior to its Initial Public Offering and listing on the TSX-V is to prepare for its offering. This typically consists of raising a limited amount of seed capital, establishing a management team and board of directors, as well as hiring professionals to assist in the offering, including an auditor, legal counsel, and an agent for the Offering.



The minimum total of seed capital raised must be equal to or greater than $100,000. The maximum gross proceeds from the IPO must be at least $200,000 but not exceed $1,900,000. Once the IPO is completed, the company will use the net proceeds to seek and finance a business in order to complete its Qualifying Transaction (QT). Once a suitable asset or business has been identified, the CPC will attempt to negotiate an acquisition or participation in the asset or business. The management of the CPC will negotiate with the targeted acquisition regarding acquisition terms. The Board of Directors of the CPC will examine proposed acquisitions on the basis of business fundamentals before approving any proposed transaction.



From the date of listing on the TSX-V, the CPC originally had 18 months (now 24 months) to complete its QT. If the CPC had not completed its QT in that timeframe, the CPCs shares would be suspended from trading, and possibly face delisting, until such time as a QT has been approved and completed.



The CPC may use cash, secured or unsecured debt, the issuance of securities, or a combination thereof, in order to finance its acquisition as its QT. Any QT is subject to approval by the majority of the minority shareholders of the CPC, approval from the TSX-V, and sponsorship of a TSX-V member firm. Trading in the CPC stock will initially be halted from trading before the announcement of a pending QT. The stock will remain halted until the Exchange has completed any preliminary background investigations into the proposed transaction and a sponsor firm has been retained.



All securities which will be held by Principals of the proposed post-QT issuer are required to be held in escrow. Shares will be released from escrow subject to a formula prescribed in the CPC Escrow Agreement which is subject to approval by the TSX-V.



Once the QT is complete, the company will resume trading on the TSX-V under its new name and symbol. Portal resumed trading on the TSX-V upon the completion of its Qualifying Transaction on March 17, 2004.



17









Business Overview



The Company currently has an interest in oil and gas exploration projects located in Alberta, Canada. Portal formerly had interests in mineral exploration operations located in Argentina and the United States, all of which were disposed of in Fiscal 2009. The Company and all of its properties are at the exploration stage. There is no assurance that a commercially viable resource deposit is present on any of the Companys properties, and additional exploration is required before it is determined if any property is economically and legally viable.



Operations are not seasonal as the Company can conduct certain exploration activities on its properties year-round. To date, the Companys revenue has been limited to interest on its cash balances and therefore it is not currently dependent upon market prices for its operations, nor is it dependent upon any patents, licenses or manufacturing processes. The Companys operations are dependent upon exploration rights and claims as well as the terms of option and/or joint venture agreements on those properties. Please see the individual property descriptions below for the details of each of the Companys current exploration projects.



Government Regulations



In Alberta, the Companys operations are primarily subject to the provisions of the Environmental Protection and Enhancement Act(Alberta) and associated regulations. Spilling or otherwise releasing or permitting the release of a substance into the environment, which includes water, land and air, in an amount or concentration or at a rate that may cause a significant adverse effect is prohibited, unless authorized by regulation or by an approval. Where a substance that has caused or may cause an adverse environmental effect is released into the environment, the person responsible for the substance must, as soon as that person becomes aware of the release, take all reasonable measures to remedy and confine the effects and remove or dispose of the substance so as to maximize environmental protection. Any contamination found on, under or originating from the properties may be subject to legislated remediation requirements. A property owner and/or operator could be required to remove or remediate wastes disposed of or released by prior owners or operators. Failure to comply with these environmental laws and regulations could result in the assessment of administrative, civil or criminal penalties and, in some instances, the issuance of injunctions to limit or cease operations.



Oil and Gas Production Royalties

All of the Companys oil and gas properties are currently at the exploration stage. If the Companys exploration efforts are successful, any oil and natural gas produced by the Companys Alberta operations will be subject to both Canadian (Federal) and Alberta (Provincial) regulations. Oil and gas production on Crown lands are subject to Crown royalties which are determined by government regulation and are generally calculated as a percentage of the value of the gross production. The rate of royalties payable generally depends in part on prescribed reference prices, well productivity, geographical location, field discovery date and the type or quality of the petroleum product produced.



Alberta adjusted its oil and gas royalties in 2009. Overall royalty rates on oil and gas production in the Province of Alberta were increased, although changes were also made to rate caps and the price and volume sensitive rates for less productive wells. In March 2009, the Alberta Government announced further changes to the Provincial royalty structure. In order to stimulate new oil and gas drilling in the Province during the period of low commodity prices, the Province introduced temporary lower royalty rates on new conventional oil and gas wells. The new structure dropped royalties on new wells to 5% or less for a year on the first 50,000 barrels of oil or 500 million cubic feet of natural gas. In addition, drilling royalty credits are given to smaller companies.





18









OIL AND GAS PROPERTIES



The Company currently has participation interests in 2 oil and gas exploration ventures located in Alberta, Canada. The individual projects are described below.



Bigwave Joint Venture



The Bigwave JV is located in Central Alberta, Canada. The Company currently has a 22% participation interest in 10,720 acres in the project.



Under an agreement dated November 1, 2008 between the Company, Bigwave Exploration Inc. (Bigwave), Bigwave Exploration 2008 Limited Partnership, Lochfayne Resources Ltd., Genesis Production and Resources Ind, Ran Energy Ltd, Larimide Oil and Gas Ltd., Owlco Resources Ltd. and Discovery Resource Corp., the Company agreed to a 15% participation interest in the exploration, exploitation, and production of petroleum and natural gas relating to lands in Central Alberta, Canada known as the Bigwave Joint-Venture.



Under the agreement, each Joint-Venture partner agrees to pay its participating interest percentage of costs and expenses, with Bigwave as Operator and Manager. The agreement covers an Area of Interest of 100 square miles under which the Operator may bid for or purchase additional lands on behalf of the JV that are prospective for petroleum and natural gas under the same geological type. Within the Area of Interest, the Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations.



In December 2008, the agreement was modified to allow the Company to participate to a 20% interest, and subsequent to the year-end the Company increased its interest in the Joint-Venture to 22%. In January 2009, the Company signed an additional participation agreement with certain other participants in the Bigwave Joint-Venture. On January 5, 2009 the Company signed an agreement, Participation Agreement, with certain other partners in the Bigwave Joint Venture. Portal agreeing to pay 100% of the Companys cost per Drill Spacing Unit to earn 100 % of their interest until pay-out and then after pay-out to drop to 70% interest per Drill Spacing Unit.



The Bigwave JV covers a source oil sand-shale sequence which covers several potential reservoirs in this Bakken Formation type play. The JV leases currently cover 10,720 acres. The first well commenced drilling in August 2009 and in October 2009 the Company announced that drilling was completed. The rock in the prospective formation is less porous than originally anticipated and will require fracture stimulation in order to test the wells productive capacity. Bigwave as operator is reviewing the parameters of the stimulation process and installed a bridge plug as a temporary safety precaution. Bigwave is also beginning a methodical mapping process to define other oil and gas reservoirs in the JVs land package in order to generate additional drill targets.



During Fiscal 2009, the Company contributed $343,437 to the Joint-Venture. During the first quarter of Fiscal 2010 ended September 30, 2009, the Company contributed an additional $28,378 to the JV.





19









Manito Joint Venture



The Manito Joint-Venture is located in Central Alberta, Canada. The Company currently has a 33.3% participation interest in an Area of Mutual Interest covering 72 square miles, in which the JV has acquired one section of land through Alberta Crown Sale.



Under an agreement dated March 19, 2009 between the Company and Bigwave Exploration Inc., the Company agreed to a 33.3% participation interest in the exploration, exploitation, and production of petroleum and natural gas relating to lands in Central Alberta, Canada known as the Manito Joint-Venture. Under the agreement, each Joint-Venture partner agrees to pay its participating interest percentage of costs and expenses, with Bigwave as the Operator of the project. The Joint-Venture covers and Area of Mutual Interest of 72 square miles, and within that area one Petroleum and Natural Gas Lease has been acquired. The Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations within the Area of Mutual Interest.



During Fiscal 2009, the Company contributed $18,000 to the Joint-Venture. During the First Quarter of Fiscal 2010 ended September 30, 2009, no additional funds were contributed by the Company.



Mineral Properties



The Company currently has no operations in the mineral exploration sector as it disposed of all of its mineral exploration property interests during Fiscal 2009. In June 2009, the company announced that it had initiated a project search for new gold and silver projects in Mexico by opening an administrative office in Hermosillo, Mexico. As of  the date of this 20-F Annual Report, the Company has not acquired an interest in any Mexican mineral exploration projects.



Argentina Properties



Arroyo Verde Project



The Arroyo Verde Project is located in Chubut province, Argentina. The Company had an option to earn a 100% interest in the project, subject to a 2% Net Smelter Return (NSR). During the Fiscal Year ended June 30, 2009, the Company disposed of its entire interest in the Arroyo Verde Project.



The project was at the exploration stage and did not contain proven mineral reserves.





20









Arroyo Verde Project Location Map

[portal200920fannual001.jpg]



How Acquired



The Company acquired the option to acquire a 100% interest in the project through its acquisition of 100% of Portal de Oro (B.V.I.) Ltd. on March 15, 2004. Portal de Oro (B.V.I.) Ltd. originally acquired the option through its wholly owned Argentinean subsidiary, El Portal de Oro, S.A. Under an agreement with the concession owner Ruben Davicino, an Argentine national, Portal acquired the mining rights to the Property.



Under the agreement between Portal and Ruben Davicino (the Vendor), the Company could earn a 100% interest, subject to a 2% NSR, in the project by paying the Vendor US$210,000 over the following schedule:



|Milestone                                           | Due Date of Payment | Amount          
|--------------------------------------------------- | ------------------- | ----------------
|                                                    |                     |                 
|Within 60 days of the signing
of a letter of intent | October 18, 2003    | US$1,000 (Paid) 
|On Signing of a Formal
Agreement                    | November 28, 2003   | US$4,000 (Paid) 
|6 months from signing of
Formal Agreement           | May 1, 2004         | US$5,000 (Paid) 
|12 months from signing of
Formal Agreement          | December 1, 2004    | US$20,000 (Paid)
|24 months from signing of
Formal Agreement          | December 1, 2005    | US$40,000 (Paid)
|36 months from signing of
Formal Agreement          | December 1, 2006    | US$60,000 (Paid)
|48 months from signing of
Formal Agreement          | December 1, 2007    | US$80,000 (Paid)





21









The Company was also required to pay the Vendor a preproduction royalty upon the earlier of either the completion of a feasibility study, or December 1, 2008. On November 12, 2008, the Company and the Vendor agreed to defer the preproduction royalty payment until December 1, 2009 in exchange for a payment of US$10,000 made on December 1, 2008. The preproduction royalty is to be calculated at the rate of US$1.00 per ounce of gold in the measured and indicated resource categories, with a minimum payment of US$100,000 and a maximum payment of US$250,000. The Vendor also retains a 2% NSR which will be paid after the recovery of the preproduction royalty payment by the Company. The Company can purchase 1% of the NSR from the Vendor at any time for US$1,000,000.



Disposal of Project Interest



The Company terminated its option on the Arroyo Verde property during the fourth quarter of the year, and wrote-off the remaining $4,102,710 capitalized value of the Arroyo Verde project. The Company has no further interest in the Arroyo Verde project.



San Rafael Project



The San Rafael Project is located in Mendoza Province, Argentina, and included the Anchoris Copper-Gold Porphyry and Tiger Uranium projects. The Company had an option to earn a 100% interest in the project, subject to a 15% to 20% Net Profits Interest (NPI) on a portion of the project. During the Fiscal Year ended June 30, 2008, the Company wrote-off its entire interest in the San Rafael Project.



The project was at the exploration stage and did not contain proven mineral reserves.



How Acquired



The Company acquired its option to earn a 100% interest in the project through two separate option agreements, both dated June 18, 2004. During Fiscal 2008, the Company determined that, based on exploration results to date and the negative mining environment in Mendoza Province, the Company would return all the claims which made up the property except 9 claims totaling 42,094 hectares which forms the Tiger Uranium Project (described separately below). Therefore, the Company has relinquished its interest in the San Rafael and Anchoris properties, with the exception of the Tiger Project claims.



Tiger Uranium Project



The Tiger Uranium Project is located in Mendoza Province, Argentina. The claims were formerly a portion of the San Rafael Project, but the Company has returned the other claims which formed the San Rafael project and retained 9 claims as the Tiger Project. During the Fiscal Year ended June 30, 2009, the Company disposed of its entire interest in the Tiger Uranium Project.



The project was at the exploration stage and did not contain proven mineral reserves.





22









[portal200920fannual003.jpg]



Location and Access



The project is located approximately 30 kilometers southwest of the city of San Rafael and consists of nine mining concessions totaling 42,094 hectares (162.5 square miles) within the Sierra Pintada Uranium District.



How Acquired



The claims are held under the Minera Rio de la Plata Agreement, which originally covered the San Rafael project, of which the claims comprising the Tiger Uranium project were a portion.  The Company could earn a 100% interest in a series of mining rights by making payments totaling US$265,000 over 5 years under the following schedule:



|Due Date of Payment        | Amount ($US)      |        
|-------------------------- | ----------------- | -------
|                           |                   |        
|On signing of agreement    | $   15,000 (Paid) | (Paid) 
|On or before April 9, 2005 | $   15,000 (Paid) | (Paid) 
|On or before April 9, 2006 | $   15,000 (Paid) | (Paid) 
|On or before April 9, 2007 | $   50,000 (Paid) | (Paid) 
|On or before April 9, 2008 | $   70,000        | Amended
|On or before April 9, 2009 | $ 100,000         |        
|Total                      | $ 265,000         |        



The Company has made the first, four payments under the terms of the joint venture agreement with MRDP totaling $95,000.  Should the Company wish to develop up to four areas as defined in the agreement during the term of the option, it must pay the sum of US$50,000 for each area so designated as a Development Area. The Company would then form a new 100% owned subsidiary to which the mining rights in that designated area would be transferred. The new subsidiary would be subject to a 15% to 20% net profits interest to the optioner. The Company has the right to purchase 10% of the net profits interest at any time for the sum of US$1,000,000.





23









On March 3, 2008, the Agreement was modified by Minera Rio de la Plata (MRDP) so that the US$70,000 payment due April 9, 2008 was deferred to June 10, 2008. On April 30, 2008, MRDP and Portal signed an agreement extending the due date of the US$70,000 payment to July 10, 2008.



On June 10, 2008, Portal informed MRDP of the Companys decision to declare the 9 claims comprising the Tiger Uranium Project as a Development Area under clause 6.4 of the agreement and pay MRDP US$50,000. On June 17, 2008, Portal received notification from MRDP of MRDPs rejection of Portals declaration of a Development Area. On July 18, 2008, Portal received notification from MRDP of their declaration that the MRDP contact is null and void for the Companys failure to make the US$70,000 payment due July 10, 2008. Portal contested the declaration by MRDP, and believed the contract was valid and in good standing and therefore retained legal counsel.



Disposal of Project Interest



The Company terminated its option on the Tiger Project during the fourth quarter or the year. The Company wrote-off the remaining $92,483 capitalized value of the Tiger project and has no further interest.



La Pampa Uranium Project



The La Pampa Project is located in Chubut Province, Argentina. During the Fiscal Year ended June 30, 2009, the Company disposed of its entire interest in the La Pampa Uranium Project.



The project was at the exploration stage and did not contain proven mineral reserves.



[portal200920fannual005.jpg]





24









How Acquired



The initial nine mining concessions totaling 73,615 hectares, or 284 square miles, were acquired by the Company by staking. Portal had a 100% interest in these concessions.  The original nine mining concessions were reduced to four mining concession due to negative results encountered during the first phase exploration program on five of the mining concessions.



Under an agreement dated April 20, 2007 between the Company and Consolidated Pacific Bay Minerals Ltd. (Pacific Bay), an unrelated public company, Portal had the option to earn a 60% interest in three additional mining concessions totaling 30,000 hectares, or 115 square miles, known as the Cerro Solo joint venture by paying US$145,000 over 3 years and expending US$1,200,000 in exploration over 4 years under the following schedule:



|Due Date of Cash Payment *  | Amount ($US)   
|--------------------------- | ---------------
|                            |                
|On signing of agreement     | $ 15,000 (Paid)
|On or before April 20, 2008 | $ 30,000       
|On or before April 20, 2009 | $ 50,000       
|On or before April 20, 2010 | $ 50,000       
|Total                       | $145,000       



|Exploration Expenditures *  | Cumulative Amount ($US)
|--------------------------- | -----------------------
|                            |                        
|On or before April 20, 2008 | $ 150,000              
|On or before April 20, 2009 | $ 400,000              
|On or before April 20, 2010 | $ 800,000              
|On or before April 20, 2011 | $1,200,000             



*  On March 11, 2008, the option agreement with Pacific Bay was modified so that the time periods for the above referenced payments and expenditure commitments will begin on the date that the Argentina Department of Mines gives formal notice that the concessions for the properties has been granted to Pacific Bay.



Location and Access



The project is located in central Chubut Province, Argentina. The area is relatively flat with good road access, and is amenable to year-round exploration with the exception of one or two months during particularly severe winters.



Disposal of Project Interest



During Fiscal 2009, the Company reassessed the potential of the project as well as the agreement with Pacific Bay and determined that the potential did not justify further work. Portal renounced the mining rights under the project, and wrote-off the capitalized project expenditures of $92,483.





25









United States Properties





Nevada Properties



[portal200920fannual007.jpg]





On September 2, 2008, the Company announced that it had entered into an option agreement under which it has the right to acquire from Claremont Nevada Mines, Scoonover Exploration, and JR Exploration (the Vendors) 100% interest (subject to a 3% NSR) in three properties located in the Walker Lane Belt and Battle Mountain/Eureka Trend in Nevada. Terms of the renewable ten year option include total cash advance royalty payments of US$10,000 on the first anniversary, $15,000 on the second, $20,000 on the third, $25,000 on the fourth, and $30,000 on the fifth and each subsequent anniversary date to maintain the option in good standing. Portal, through its subsidiary, Portal Resources US Inc., can acquire a 100% interest in the properties by making an additional payment of $1,000 and delivering a final feasibility study on any of the properties. The Vendors will retain a 3% NSR, which Portal may reduce to 1% for a payment of US$1,000,000.





26









The Golden Snow property is an advanced Carlin-type gold target comprised of 114 unpatented lode mining claims (3.5 square miles) on the Battle Mountain / Eureka Trend. Substantial historical exploration has been conducted on the property including geologic mapping, 932 soil samples and detailed ground-based gravity geophysical surveys. Based on this work, several distinct target zones have been outlined and it is interpreted that the Ratto Ridge Fault zone, which controls the mineralization on the South Eureka property contiguous to the north, may continue south onto the Golden Snow property. These target areas are well located and permitting with the U.S. Bureau of Land Management (BLM) for a Phase I drilling program is set to begin.



The Fish Project is situated within the Walker Lane Mineral Belt, Lone Mountain District, Esmeralda County, Nevada about 12 miles west of the historic mining town of Tonopah, Nevada. The project consists of 58 unpatented lode mining claims (1.9 square miles). The project is a skarn-manto gold-silver and base metal prospect where prior rock chip sampling returned gold, silver, zinc and lead values. Permitting with the BLM for a Phase I drilling program is well advanced.

The CPG Project is also situated within the Walker Lane Mineral Belt in Mineral County, Nevada. The property consists of 44 unpatented lode mining claims (1.3 square miles).  The property hosts an early stage porphyry and skarn type copper-gold-molybdenum prospect where samples returned interesting gold, silver, copper and molybdenum values.



Disposal of Project Interest



Under an Assignment Agreement dated May 29, 2009 between the Company and Pengram Corporation, the Company agreed to transfer all the rights on the Nevada claims in exchange for 150,000 Pengram common shares. With the completion of the assignment agreement, the Company has no further interest in the Golden Snow, Fish and CPG properties.





Item 5.  Operating and Financial Review and Prospects



Overview



The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian GAAP, the application of which, in the case of the Company, conforms in all material respects for the years presented with US GAAP, except as disclosed in Note 15 to the financial statements.  The value of the U.S. Dollar in relationship to the Canadian Dollar was $1.06 on November 30, 2009.



The Company has since inception financed its activities through the issuance of equity.  The Company anticipates having to raise additional funds by equity issuance in the next several years, as all of the Companys properties are at the exploration stage. The timing of such offerings is dependent upon the success of the Companys exploration programs as well as the general economic climate.





27









Results of Operations



Year Ended 6/30/09 vs. Year Ended 6/30/08



During the year the Company disposed of all of its mineral exploration properties located in Argentina and Nevada. Interests in two oil and natural gas exploration joint-ventures in Alberta, Canada were acquired. The Company also established an administrative office in Hermosillo, Mexico to search for possible acquisition of gold and silver projects.



The net loss for the year was ($6,366,236), or ($0.21) per share, compared to a loss of ($3,288,433), or ($0.11) per share, in the year ended June 30, 2008. The higher net loss was primarily due to the loss on sale of mineral properties and higher salaries and consulting fees.



The loss of the sale of mineral properties totaled ($5,052,205) as the Company sold its subsidiary which held its Argentina property interests and sold its interests in the Nevada properties. The Company also recorded a Write-off of Unproven Mineral Rights of ($4,215) compared to the prior year which totaled ($1,782,804). General and Administrative expenses decreased to ($1,394,172) from ($1,667,058). Large increases in expenses occurred in Consulting and Management Fees, which rose to ($130,738) from ($55,115) due to finders fees and project search services; Project Investigation, which rose to ($67,119) from ($41,451) as the Company searched for new resource exploration projects; and Legal Fees, which rose to ($74,420) from ($40,236) as the company negotiated and sold its mineral exploration projects. Rent increased to ($101,395) from ($44,991) as a company with directors in common ended its sublease of a portion of the Companys office space, and Salaries and Benefits rose to ($555,415) from ($459,298) due to a compensation package of ($150,000) paid to an officer and director, and lower salary recovery costs from other companies. Large decreases in expenses occurred in Bank Charges and Interest, which fell to ($6,993) from ($21,102); Investor Relations, which declined to ($124,780) from ($412,068) due to lesser attendance at investor conferences and a cost reduction related to the Companys annual report; and Stock-based Compensation, which fell to ($21,811) from ($147,744) as fewer stock options were granted to management and directors in the current year. Certain expenses declined due to the disposal of all of the Companys mineral property interests in Argentina, including Foreign Asset Tax, which fell to ($496) from ($21,938), Valuation Allowance for Foreign Value Added Tax Credit (IVA) which declined to ($1,751) from ($46,197), and Foreign Exchange, which was a gain of $624 compared to a loss of ($34,120) in the prior year.



Interest Income fell to $65,418 from $161,429 due to lower cash balances and lower rates of return on cash and cash equivalents. The Company also had a Gain on the Sale of Equipment of $25,167, and the Unrealized Loss on Marketable Securities of ($6,229).





28









Year Ended 6/30/08 vs. Year Ended 6/30/07



During the year the Company continued exploration at its properties in Argentina, including the La Pampa Uranium project, and the Slick Rock project in Colorado. The San Rafael project was dropped, with the exception of certain claims that were added to the existing Tiger Uranium project. The Slick Rock exploration program was disappointing, and the Company dropped its option on the project.



The net loss for the year was ($3,288,433), or ($0.11) per share, compared to a loss of ($1,877,224), or ($0.09) per common share, in the year ended June 30, 2007. The higher net loss was primarily due to the write-offs of capitalized mineral property expenses and higher salaries and benefits.



Write-off of unproven mineral rights totaled ($1,782,804) compared to nil in the prior year. During fiscal 2008, the Company dropped its options on the San Rafael and Slick Rock properties and wrote-off its entire capitalized acquisition and exploration costs for each property. Excluding property write-offs, General and Administrative expenses declined to ($1,677,058) for the year from ($1,968,607) in the year ended June 30, 2007. Large increases in expense amounts included Salaries and Benefits, which rose to ($459,298) from ($203,089), and Consulting and Management Fees, which increased to ($55,115) from ($22,875), due to changes in management contracts and higher corporate activity. Other increases in expenses include Rent, which increased to ($44,991) from ($30,831), and Office and Miscellaneous, which rose to ($174,332) from ($140.206). The higher rent and office amounts were due to a new lease for the Companys office space in Vancouver. Foreign Asset Tax, a tax charged against current assets in Argentina for those businesses not subject to income taxes fell to ($21,938) from ($35,489), and Valuation Allowance for Foreign Value Added Tax Credit (IVA) fell to ($46,197) from ($395,631), due to a decrease in the calculation allowance. Foreign Exchange declined to ($34,120) from ($63,218) due to more favorable exchange rates. Investor Relations expense fell to ($412,068) from ($454,750) due to decreased attendance at investor conferences. Stock-based Compensation declined to ($147,744) from ($340,206) due to a lower fair market value of employee and non-employee share purchase options which vested during the current fiscal year.



Interest Income increased to $161,429 compared to $106,674 in the prior year due to higher cash balances and higher rates of return on cash and cash equivalents.



Year Ended 6/30/07 vs. Year Ended 6/30/06



During the year exploration continued at the Arroyo Verde Project, including additional testing of the Principal Vein and a new program on the Refugion molybdenum-copper porphyry system discovered on the southern portion of the property. At the Anchoris Project, results were released from the 2200 meter reverse circulation drill program. The Company also acquired interests in, and began exploration on, 3 uranium exploration projects, including the Tiger and La Pampa projects in Argentina, and the Slick Rock project in Colorado.





29









The net loss for the year was ($1,877,224), or ($0.09) per common share, compared to a loss of ($1,094,757) or ($0.08) per share, in the year ended June 30, 2006. The higher net loss was due to higher expenses due to increased corporate activity and the acquisition of new mineral exploration projects. Large increases in expenses occurred in Accounting and Audit, which rose to ($70,248) from ($55,051); Legal, which increased to ($40,182) from ($14,725) as the Company acquired new exploration properties in the current year; Amortization rose to ($23,105) from ($17,929), and Bank Charges and Interest rose to ($42,738) from ($17,530); Foreign Exchange was a loss of ($63,218) compared to ($28,525) as rates of exchange continued their unfavorable trends; Investor Relations expense increased to ($454,750) from ($225,147) due to management attending additional investor conferences and engagement of a European investor relations firm; Office and Miscellaneous rose to ($140,206) from ($68,055) due to additional administrative activity to support property exploration and new project acquisition; Travel rose to ($44,530) from ($25,046), and Project Investigation Costs increases to ($44,071) from ($7,343), which were related to the investigation and acquisition of interests in the uranium properties; Rent rose to ($30,831) from ($19,746) due to the increases in the office lease agreement; and Stock-based Compensation totaled ($340,206) compared to ($138,606) as there were more stock options vesting during the year. The Company also had Foreign Asset Tax of ($35,489) in the current fiscal year, which is a tax charged against current assets in Argentina for those businesses not subject to income taxes. The Company also wrote-off the Valuation Allowance of Foreign Added Tax Credit (IVA) of ($395,631) compared to the write-off of ($143,807) in the prior year. There was no write-off of Unproven Mineral Rights in the current year compared to the write off of ($80,130) in the prior year, although Amounts Receivable totaling ($15,291) were written of as uncollectible in the current year.



Interest Income increased to $106,674 compared to $33,123 in the prior year due to higher cash balances and higher rates of return on cash and cash equivalents.



Liquidity and Capital Resources



The Companys working capital position at June 30, 2009 was $1,493,622, including cash and cash equivalents of $248,572, and short-term investments of $1,255,956. At the close of the most recent fiscal period ended September 30, 2009, the Companys working capital position was $1,278,203, including cash and cash equivalents of $168,723 and short-term investments of $1,074,925.  The Companys current working capital is anticipated to be sufficient to meet its current and anticipated obligations for the remainder of fiscal 2010.



The Company has financed its operations through the issuance of common shares. The following sales and issuances of common stock have been completed in the last 5 fiscal years.



30









Table No. 4

Common Share Issuances



|Fiscal Year
Ended June 30 | Type of Share Issuance           | Number of Common Shares Issued | Price   | Total Proceeds
|------------------------- | -------------------------------- | ------------------------------ | ------- | --------------
|                          |                                  |                                |         |               
|2005                      | Private Placement                | 1,456,000                      | $0.75   | $ 1,092,000   
|                          | Private Placement                | 768,943                        | 0.75    | 576,707       
|                          | Exercise of Options              | 44,000                         | 0.18    | 7,920         
|                          | Exercise of Options              | 10,000                         | 0.25    | 2,500         
|                          |                                  |                                |         |               
|2006                      | Private Placement                | 6,755,000                      | $0.50   | $3,377,500    
|                          | Private Placement                | 2,635,000                      | $1.05   | $2,766,750    
|                          | Exercise of Options              | 166,400                        | Various | $55,954       
|                          | Exercise of Warrants             | 384,471                        | $0.90   | $346,024      
|                          |                                  |                                |         |               
|2007                      | Acquisition of Resource Property | 100,000                        | $0.78   |               
|                          | Exercise of Warrants             | 759,000                        | Various | $569,250      
|                          | Exercise of Options              | 12,500                         | Various | $8,300        
|                          |                                  |                                |         |               
|2008                      | Private Placement                | 7,887,000                      | $0.65   | $5,126,550    
|                          | Exercise of Options              | 5,000                          | $0.52   | $2,600        
|                          |                                  |                                |         |               
|2009                      | None                             |                                |         |               



Fiscal Year Ended 6/30/2009



At the end of the fiscal year, the Companys working capital was $1,493,622 compared to $3,194,438 compared to as of June 30, 2008. During the year, Operating Activities used cash of ($1,097,448), which included the net loss for the year of ($6,366,236). Items not involving cash included Loss on Sale of Mineral Properties of $5,052,205, Stock-based Compensation of $21,811, Amortization of $27,217, Unrealized Loss on Marketable Securities of $6,229, and Write-off of Unproven Mineral Properties of $4,215. The Company also recorded a Gain on Sale of Equipment of ($25,167). Changes in non-cash working capital included decrease in Amounts Receivable of $99,917, decrease in Prepaid Expenses of $100,402, and a decrease in Accounts Payable and Accrued Liabilities of ($18,041). Investing Activities provided cash of $1,158,469, with the largest component consisting of cash provide by the sale of Short-term Investments of $1,605,797. Proceeds from the sale of Equipment provided cash of $63,297, and Proceeds on the Sale of Mineral Properties provided cash of $99,127. Purchase of Equipment used cash of ($25,896), Expenditures on Unproven Mineral Rights used cash of ($261,054), and Expenditures on Oil and Gas Properties used cash of ($322,802). There were no Financing Activities during the Fiscal Year, and no common shares were issued during the year.



Cash and cash equivalents and short-term investments totaled $1,504,528 at June 30, 2009, compared to $3,049,304 at June 30, 2008, a decrease of ($1,544,776).





31









Fiscal Year Ended 6/30/2008



At the end of the fiscal year, the Companys working capital was 3,194,438 compared to $726,003 as of June 30, 2007. During the year, Operating Activities used cash of ($1,580,724), which included the net loss for the year of ($3,288,433). Items not involving cash included Stock-based Compensation of $147,744, Amortization of $26,469, and Write-off of Unproven Mineral Properties of $1,782,804. Changes in non-cash working capital included increase in Amounts Receivable of ($61,651), increase in Prepaid Expenses of ($5,200), decrease in Accounts Payable and Accrued Liabilities of ($179,224), and decrease in Due to Related Parties of ($3,233). Investing Activities used cash of ($4,176,496), including Purchase of Equipment and Software of ($10,150), increase in Short-term Investments of ($2,861,753), and Expenditures on Unproven Mineral Rights of ($1,304,593). Financing Activities provided cash of $4,875,041. Shares Issued for Cash provided cash of $5,126,550 and Exercise of Options provided cash of $2,600. Decrease in shares subscribed was ($59,800) and Share Issue Costs were ($194,309).



During the year, the Company completed one private placement of its common shares. In July 2007, the placement of 7,887,000 units at $0.65 per unit was closed, for gross proceeds of $5,126,550. Each unit consisted of one common share and one-half share purchase warrant, with each full warrant exercisable into one common at a price of $0.85 until July 18, 2009. The Company also received cash proceeds of $2,600 from the exercise of 5,000 share purchase options.



Cash and cash equivalents and short-term investments totaled $3,049,304 at June 30, 2008, compared to $1,069,730 at June 30, 2007, an increase of $1,979,574.



Fiscal Year Ended 6/30/2007



At the close of the fiscal year, the Companys working capital was $726,003 compared to $4,700,770 as of June 30, 2006. During the year, Operating Activities used cash of ($1,704,195), which included the net loss for the year of ($1,877,224). Items not involving cash included Stock-based Compensation of $340,206; Write-off of Amounts Receivable of $15,291, and Amortization of $23,105. Changes in Non-cash Working Capital include increase in Amounts Receivable of ($39,838), increase in Prepaid Expenses of ($11,304), decrease in Accounts Payable and Accrued Liabilities of ($157,664), and increase of Due to Related Parties of $3,233. Investing Activities used cash of ($2,816,215), including Expenditures on Mineral Properties of ($2,732,966), and Purchase of Equipment and Software of ($83,249). Financing Activities provided cash of $624,912. Exercise of Common Share Warrants provided cash of $569,250, Option Exercise provided cash of $8,300, and Common Shares Subscriptions Received provided cash of $59,800. Share Issue Costs related to the above issuances used cash of ($12,438).



During fiscal 2007 the Company had no private placements of its common shares. During the year, the Company issued 759,000 common shares pursuant to the exercise of common stock warrants for cash proceeds of $569,250, and issued 12,500 common shares pursuant to the exercise of options for cash proceeds of $8,300. 100,000 common shares were reserved for issuance for resource property acquisition at a deemed price of $0.78 per share.



Cash and cash equivalents at the end of the fiscal year totaled $1,069,730, a decrease of $3,895,498 during the year.





32









Critical Accounting Policies and Estimates

Management is required to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  On a regular basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form that basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.



Basis of presentation and principles of consolidation

The Companys consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP). The differences between those principles and the ones that would be applied under U.S. generally accepted accounting principles (U.S. GAAP) are disclosed in Note 15 to the Companys audited annual financial statements for the fiscal year ended June 30, 2009.



Foreign Currency Translation

The financial statements are presented in Canadian dollars.  Foreign denominated monetary assets and liabilities are translated to their Canadian dollar equivalent using foreign exchange rates at the balance sheet dates.  Non-monetary items are translated at historical exchange rates.  Revenues and expenses are translated using average rates of exchange during the year.  Exchange gains or losses arising from currency translation are included in the determination of net income.



Cash equivalents

Cash equivalents consist of highly liquid investments with maturity dates of less than three months that are readily convertible into known amounts of cash.  Interest earned is recognized immediately in operations.



Use of estimates

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



Unproven mineral rights

Mineral right acquisition costs and their related exploration costs are deferred until the rights are placed into production or disposed of.  These costs will be amortized over the estimated useful life of the rights following the commencement of production, or written-off if the rights are disposed of.



Cost includes the cash consideration and the fair market value of shares issued on acquisition of mineral rights.  Rights acquired under option agreements or joint ventures, whereby payments are made at the sole discretion of the Company, are recorded in the accounts at such time as the payments are made.  The proceeds from options granted are netted against the cost of the related mineral rights and any excess is applied to operations.





33









The Company reviews capitalized costs on its mineral rights on a periodic basis and will recognize impairment in value based upon current exploration results and upon managements assessment of the future probability of profitable revenues from the rights or from the sale of the rights.  Managements assessment of the rights estimated current fair market value is also based upon a review of other similar mineral rights transactions that have occurred in the same geographic area as that of the rights under review.



Oil and Gas Properties

Oil and natural gas properties are accounted for using the successful efforts method of accounting. Geological and geophysical costs are expensed in the period in which they are incurred and costs of drilling an unsuccessful well are expensed when it becomes known the well did not result in a discovery of proven reserves or where one year has elapsed since the completion of drilling and efforts to establish proved reserves are not practical. All other costs of exploring and developing proven reserves are capitalized as oil and gas properties.



Oil and gas properties are depleted using the unit-of-production method. Unit-of-production rates are based on proven developed reserves, which are reserves estimated to be recovered from existing facilities using current operating methods. Unproved properties are not subject to depletion.



Oil and gas properties are assessed, at least annually, for impairment to ensure that the carrying value of the property on the balance sheet is recoverable. If a property's carrying value exceeds the sum of undiscounted future cash flows resulting from its use and eventual disposition, its value is impaired. An impairment loss is recognized for the amount by which the carrying value exceeds its recoverable amount. This loss is charged to depletion expense.



Asset retirement obligations

The Company recognizes the fair value of a liability for an asset retirement obligation in the year in which it is incurred and when a reasonable estimate of the fair value can be made based on expected future cash outflows discounted to present value.



The associated asset retirement costs are capitalized as part of the carrying amount of long lived assets. The liability is accreted over the estimated time period until settlement of the obligation and the asset is depreciated over its estimated remaining useful life. Changes in the liability for an asset retirement obligation due to the passage of time will be measured by applying an interest method of allocation.  The amount will be recognized as an increase in the liability and an accretion expense in the statement of operations.  Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease in the carrying amount of the liability and the related capitalized asset retirement cost.



Impairment of long-lived assets

Long-lived assets are assessed for impairment when events and circumstances warrant, when the carrying amount of the asset exceeds its estimated undiscounted net cash flow from use or its fair value, at which time the impairment is charged to earnings.





34









Environmental expenditures

The operations of the Company have been and may in the future, be affected in varying degrees by changes in environmental regulations, including those for site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly from country to country and are not predictable. Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against operations as incurred or capitalized and amortized depending on their expected future economic benefit. Estimated future removal and site restoration costs are recognized when the ultimate liability is reasonably determinable, and are charged against operations over the estimated remaining life of the related business operations, net of expected recoveries.



Equipment

Equipment is recorded at cost net of accumulated amortization. Amortization is provided for using the straight-line method at the following annual rates:

Computer equipment

30%

Computer software

50%

Vehicles

30%

Field equipment & Furniture and fixtures

20%.



Share capital

Common shares issued for non-monetary consideration are recorded at their fair market value based upon the trading price of the Companys shares on the TSX Venture Exchange.



Stock-based compensation

The Company accounts for stock options granted to directors, officers, employees and nonemployees using the fair value method of accounting. Accordingly, the fair value of the options at the date of the grant is determined using the Black-Scholes option pricing model and stock-based compensation is accrued and charged to operations, with an offsetting credit to contributed surplus, on a straight-line basis over the vesting periods. The fair value of stock options granted to non-employees is re-measured at the earlier of each financial reporting or vesting date, and any adjustment is charged or credited to operations upon re-measurement. If and when the stock options are exercised, the applicable amounts of contributed surplus are transferred to share capital. The Company has not incorporated an estimated forfeiture rate for stock options that will not vest; rather the Company accounts for actual forfeitures as they occur.



The proceeds received by the Company on the exercise of options are credited to share capital.



Loss per share

Loss per share has been calculated using the weighted-average number of common shares outstanding during the period.  Fully diluted loss per share amounts are not presented, as they are anti-dilutive.





35









Comprehensive income

Comprehensive income is the overall change in the net assets of the Company for the period, other than changes attributed to transactions with shareholders. It is made up of net income and other comprehensive income. The historical make up of net income has not changed. Other comprehensive income includes gains or losses, which GAAP requires to be recognized in a period but excluded from net income for that period. The Company has no items of other comprehensive income in any period presented. Accordingly, net loss as presented in the Companys statement of operations and comprehensive loss equals comprehensive loss.



Income taxes

The Company accounts for the tax consequences of future tax assets and liabilities attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be settled.  When the future realization of income tax assets does not meet the test of being more likely than not to occur, a valuation allowance in the amount of the potential future benefit is taken and no asset is recognized.  The Company has taken a valuation allowance for the full amount of all potential net tax assets.



Financial instruments

The Company classifies its financial instruments into one of the following categories: held-to-maturity investments, loans and receivables, available-for-sale, held for trading or other financial liabilities. The Company has designated its cash and cash equivalents, marketable securities, and short-term investments as held-for-trading, accounts receivable as loans and receivables and accounts payable and accrued liabilities as other financial liabilities.



All financial instruments are measured in the balance sheet at fair value except for loans and receivables, held-to-maturity investments and other liabilities, which are measured at amortized cost. Subsequent measurement and changes in fair value will depend upon initial classification as follows: held-for-trading financial instruments are measured at fair value and changes in fair value are recognized in net income; available-for-sale financial instruments are measured at fair value with changes in fair value in other comprehensive income until the investment is no longer recognized or impaired, at which time the amounts would be recorded in net income.



Transactions costs that are directly attributable to the acquisition or issue of financial instruments and that are classified as other than held-for-trading, are expensed as incurred and included in the initial carrying value of such instruments.





36









US GAAP Reconciliation with Canadian GAAP



Mineral Exploration Costs

Under Canadian GAAP, mineral exploration expenditures are deferred on exploration projects until such time as it is determined that further exploration is not warranted, at which time the mineral rights costs are written-off. Under U.S. GAAP, all exploration expenditures are expensed until an independent feasibility study has determined that the mineral rights are capable of economic commercial production.



Under U.S. GAAP, the Company added (expensed) ($261,054) in fiscal 2009, ($1,065,040) in fiscal 2008, and ($3,080,517) in fiscal 2007.



Variation in Operating Results



The Company derives interest income on its bank deposits, which depend on the Company's ability to raise funds.



Management periodically, through the exploration process, reviews results both internally and externally through mining related professionals.  Decisions to abandon, reduce or expand exploration efforts is based upon many factors including general and specific assessments of mineral deposits, the likelihood of increasing or decreasing those deposits, land costs, estimates of future mineral prices, potential extraction methods and costs, the likelihood of positive or negative changes to the environment, permitting, taxation, labor and capital costs.  There cannot be a pre-determined hold period for any property as geological or economic circumstances render each property unique.



The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian GAAP, the application of which, in the case of the Company, conforms in all material respects for the years presented with US GAAP, except as noted in Note 15 to the financial statements.  The value of the Canadian Dollar in relationship to the US Dollar was $1.06 on November 30, 2009.



Research and Development



The Company conducts no Research and Development activities, nor is it dependent upon any patents or licenses.



Trend Information



The Company knows of no trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the Companys operations or financial condition.



Off-Balance Sheet Arrangements



The Company has no Off-Balance Sheet Arrangements.





37









Tabular Disclosure of Contractual Obligations



The Company currently has several property option agreements in effect which require the Company to make cash payments to the Optionors as described in the property descriptions in Item 4. If the Company decides to drop the option on any of its individual properties, it is no longer required to pay the Optionor any further payments.





Table No. 5

Contractual Obligations

As of June 30, 2009



|                            | Total    | Less than 1
year | 1-3
years | 3-5
years | More than
5 years
|--------------------------- | -------- | ---------------- | --------- | --------- | -----------------
|                            |          |                  |           |           |                  
|Operating Lease Commitments | $337,324 | $86,457          | $185,670  | $65,197   | Nil              



The Companys Operating Lease Commitment is an obligation under a lease for corporate offices in Vancouver that is in effect until February 28, 2013.



Item 6.  Directors, Senior Management and Employees



Table No. 6 lists as of December 10, 2009 the names of the Directors of the Company.  The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company.  All Directors are residents of Canada and are citizens of Canada except for David Hottman, who is a citizen of the United States. The anticipated date of expiry of the current term for directors will be the 2010 Annual General Meeting, which is anticipated to be held in December 2010.



Table No. 6

Directors



|Name                   | Age | Date First Elected/Appointed
|---------------------- | --- | ----------------------------
|Mark T. Brown (1)      | 41  | August 14,2000              
|David Hottman (2)      | 48  | August 14, 2000             
|Joe Tai                | 45  | March 1, 2009               
|Frank Wheatley (1) (2) | 41  | May 4, 2004                 
|Winnie Wong (2)        | 35  | December 2, 2009            



(1)

Member of the Corporate Governance Committee

(2)

Member of Audit Committee.



The Corporate Governance Committee has the responsibility to select (or recommend the board select) the director nominees for the next annual meeting of shareholders, and reviews the adequacy and form of compensation of directors and its senior executives. The Board also reviews the Companys Corporate Governance guidelines and administers the system to ensure it is effective in the discharge of the Companys obligations to shareholders.





38









Members of the audit committee meet periodically to approve and discuss the annual financial statements and each quarterly report before filing and mailing. The committee operates under a written charter as first adopted at the Companys Annual and Extraordinary General Meeting held on December 1, 2005, and as detailed in the Management Information Circular dated October 23, 2009.  Details of the charter are contained in Item 6, Board Practices below.



Table No. 7 lists, as of December 10, 2009, the names of the Executive Officers of the Company.  The Executive Officers serve at the pleasure of the Board of Directors.  All Executive Officers are citizens of Canada except for David Hottman, who is a citizen of the United States.



Table No. 7

Executive Officers



|Name          | Position                    | Age | Date of Appointment
|------------- | --------------------------- | --- | -------------------
|David Hottman | President and CEO           | 48  | August 1, 2008     
|Mark T. Brown | CFO and Corporate Secretary | 41  | February 29, 2008  



David Hottman has over 20 years of experience in the mineral exploration and mining sector in both management and in corporate finance. He was a founder and Director of HRC Development and Eldorado Gold Corporation and was involved in business development for Bema Gold, HRC Development and Eldorado. He was a founder, Director and Chairman of Nevada Pacific Gold Ltd., a gold mining company from 1997 to its acquisition by US Gold Corp in 2007. He currently serves as Chairman of Galileo Minerals, a private mineral exploration company. Mr. Hottman devotes approximately 75% of his time to the Companys affairs.



Mark T. Brown has been a Chartered Accountant since 1993 and is President of Pacific Opportunity Capital Ltd., a private company which provides small and medium sized companies with financial, equity and management solutions. From 1990 to 1994, he worked with PricewaterhouseCoopers before becoming controller of Miramar Mining Corporation. In 1996, he became controller of Eldorado Gold Corporation where his duties included debt and equity financings, international acquisitions, corporate reporting and system implementation. He also is a former and current officer and director of other public companies. His current officer and directorships include: Chief Financial Officer of Almaden Minerals Ltd., a resource exploration company traded on the TSX and the American Stock Exchange; a Director of Animas Resources Ltd., a mineral exploration company traded on the TSX Venture Exchange; Chief Executive Officer and a Director of Everclear Capital Ltd., a Capital Pool Company traded on the TSX Venture Exchange; Chief Executive Officer and a Director of Fox Resources Ltd., a mineral exploration company traded on the TSX Venture Exchange; Chief Financial Officer of Pitchstone Exploration Ltd., a mineral exploration company traded on the TSX Venture Exchange; Chief Financial Officer and Director of Rare Element Resources Ltd., a mineral exploration company traded on the TSX Venture Exchange; Chief Financial Officer of Rye Patch Gold Corp., a mineral exploration company traded on the TSX Venture Exchange;  a Director of Strategem Capital Corporation, a merchant banking company traded on the TSX Venture Exchange; Director of Sutter Gold Mining Inc., a mineral exploration company traded on the TSX Venture Exchange; and Chief Financial Officer of Tarsis Resources Ltd., a mineral exploration company traded on the TSX Venture Exchange; Mr. Brown devotes approximately 10% of his time to Company affairs.





39









Joe Tai has been the managing partner of Goldpac Investments Ltd. since 1994. Goldpac is a private investment firm with offices in Canada and Hong Kong which invests in various public and private companies in North America and Asia and provides assistance with restructuring, securing financing and searching for strategic partnerships and acquisition opportunities. Mr. Tai was the founder of NAI Interactive Ltd. a Chinese language investor relations and public relations firm which was subsequently acquired by Chinese WorldNet.com Inc. a U.S. publicly-held company that was also founded by Mr Tai. Since 2000, Mr. Tai has been President, CEO and a Director of Chinese WorldNet, shares of which are traded on the OTCBB in the United States; a Director of Medifocus Inc., a medical device company traded on the TSX Venture Exchange; and a Director of China Goldcorp Ltd., a Capital Pool Company traded on the TSX Venture Exchange. Mr Tai devotes approximately 5% of his time to the Companys affairs.



Frank Wheatley is an attorney who holds Bachelor of Commerce and Bachelor of Laws degrees from the University of British Columbia. He has 21 years of experience as a director, senior officer and legal counsel to a number of public mining and mineral exploration companies. He was in private legal practice from 1985 until 1996 when he became Vice-President, Legal Affairs with Eldorado Gold Corporation.  Since 1999 Mr. Wheatley has been and is currently Vice-President and General Counsel of Gabriel Resources Ltd., a gold development company developing a gold project in Romania which is traded on the TSX Exchange. Mr. Wheatley is also currently a Director and Corporate Secretary of Lithic Resources, a mineral exploration company traded on the TSX Venture Exchange. Mr. Wheatley devotes approximately 5% of his time to the Companys affairs.



Winnie Wong holds a Bachelor of Commerce Degree (Honours) from Queens University and is a member of the Institute of Chartered Accountants of British Columbia.  She is currently Vice President of Pacific Opportunity Capital Ltd.  Her role is to manage the financial administration team and to assist Pacific Opportunity Capital Ltd.s management group on corporate finance projects.  Prior to joining Pacific Opportunity Capital Ltd., Ms. Wong was the controller of Pivotal Corporation, a company providing software, services and support to a variety of businesses.  Between 1996 and 1999, Ms. Wong worked with Deloitte & Touche, Chartered Accountants.  Ms. Wong currently serves as Chief Financial Officer and Corporate Secretary of Animas Resources Ltd., a mineral exploration company traded on the TSX Venture Exchange; Corporate Secretary of Apoquindo Minerals Inc., a mineral exploration company traded on the TSX Venture Exchange; Chief Financial Officer and a Director of Everclear Capital Ltd., a Capital Pool Company traded on the TSX Venture Exchange; Chief Financial Officer of Fox Resources Ltd., a mineral exploration company traded on the TSX Venture Exchange; Chief Financial Officer of Mediterranean Resources Ltd., a mineral exploration company traded on the TSX; Corporate Secretary of Rare Element Resources Ltd., a mineral exploration company traded on the TSX Venture Exchange; and Chief Financial Officer of Strategem Capital Corporation, a merchant banking company traded on the TSX Venture Exchange. She devotes approximately 5% of her time to Company affairs.



No Director and/or Executive Officer has been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he or she is a Director and/or Executive Officer, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he or she is an officer or director from engaging in or continuing any conduct, practice, or employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.





40









There are no arrangements or understandings between any two or more Directors or Executive Officers, pursuant to which he or she was selected as a Director or Executive Officer. No members of the Board of Directors are related.



COMPENSATION



The Company has no arrangements pursuant to which directors are compensated by the Company for their services in their capacity as directors, or for committee participation.  There are no directors service contracts providing for benefits upon termination of employment.



Independent Directors receive compensation of $2,000 per quarter. Additionally, any Independent Director that acts as chair of a committee receives $2,000 per year.



To assist the Company in compensating, attracting, retaining and motivating personnel, the Companys shareholders approved a formal stock option plan for the granting of incentive stock options during the most recently completed fiscal year. An amendment to the formal stock option plan was approved by shareholders at the Annual General Meeting held on December 14, 2007. Refer to ITEM #10, "Stock Options".



Table No. 8 sets forth the compensation paid to the Companys executive officers and members of its administrative body during the last three fiscal years.



Table No. 8

Summary Compensation Table

All Figures in Canadian Dollars unless otherwise noted





|Name                                                                     | Fiscal
Year    | Salary                          | Directors
Fees   | Options Granted     | Other Compensation                 
|------------------------------------------------------------------------ | -------------- | ------------------------------- | ---------------- | ------------------- | -----------------------------------
|David Hottman,
President and CEO (from 8/1/2008)
Chairman & Director (1) | 2009
2008
2007 | $ 113,583
$   43,000
$   36,583 | Nil
Nil
Nil      | 528,600
Nil
200,000 | $     4,130
Nil
$        160       
|                                                                         |                |                                 |                  |                     |                                    
|Bruce Winfield,
President and CEO (to 8/1/08)
and former Director (1)(2) | 2009
2008
2007 | $   18,992
$ 150,000
$   89,500 | $  7,500
Nil
Nil | 150,000
Nil
225,000 | $ 152,162
Nil
$     4,267          
|                                                                         |                |                                 |                  |                     |                                    
|Mark T. Brown,
CFO (from 2/29/08)
and Director (3)                       | 2009
2008
2007 | Nil
Nil
Nil                     | Nil
Nil
Nil      | 228,600
Nil
141,400 | $     9,707
$     5,674
$     1,219
|                                                                         |                |                                 |                  |                     |                                    
|Alexander Boronowski,
Former VP, Exploration                             | 2008
2007      | $116,700
Nil                    | Nil
Nil          | Nil
300,000         | Nil
Nil                            
|                                                                         |                |                                 |                  |                     |                                    
|Gary Nordin,
Former Director                                             | 2009
2008
2007 | Nil
$   6,000
$ 36,000          | $  6,000
Nil
Nil | 375,000
Nil
200,000 | Nil
Nil
$    4,267                 
|                                                                         |                |                                 |                  |                     |                                    
|Frank Wheatley,
Director                                                 | 2009
2008
2007 | Nil
Nil
Nil                     | $  6,000
Nil
Nil | 200,000
Nil
100,000 | Nil
Nil
Nil                        
|                                                                         |                |                                 |                  |                     |                                    
|Christine West,
Former CFO
and Corporate Secretary                       | 2008
2007      | Nil
Nil                         | Nil
Nil          | Nil
35,000          | Nil
Nil                            
|                                                                         |                |                                 |                  |                     |                                    
|Joe Tai,
Director (from 3/1/09)                                          | 2009
2008      | Nil
Nil                         | $2,000
Nil       | Nil
Nil             | 200,000
Nil                        





41









(1)

Other Compensation for Bruce Winfield, Alexander Boronowski and David Hottman includes insurance benefit obligations paid by the Company.

(2)

$150,000 of Mr. Winfields Other Compensation relates to a compensation package received when he ceased to be the CEO.

(3)

Mark Browns Other Compensation is administrative consulting fees paid to Pacific Opportunity Capital, a private consulting firm for which Mr. Brown is President and a director.



No funds were set aside or accrued by the Company during Fiscal 2009 to provide pension, retirement or similar benefits for Directors or Executive Officers.



Board Practices



The Board of Directors mandate is to manage or supervise the management of the business and affairs of the Company and to act with a view to the best interests of the Company. The Board, among other matters, is responsible for:



•

reviewing and approving the Companys overall business strategies and its annual business plan;

•

reviewing and approving the annual corporate budget and forecast;

•

reviewing and approving significant capital investments outside the approved budget;

•

reviewing major strategic initiatives to ensure that the Companys proposed actions accord with shareholder objectives;

•

reviewing succession planning;

•

assessing managements performance against approved business plans and industry standards;

•

reviewing and approving the reports and other disclosure issued to shareholders;

•

ensuring the effective operation of the Board;

•

and safeguarding shareholders equity interests through the optimum utilization of the Companys capital resources.



The Board meets regularly to review financial and continuous disclosure matters as well as the Companys financial budget and business plan for the ensuing year and its overall strategic objectives. The Board also meets as required to deal with matters requiring decisions between regularly scheduled Board meetings.



Corporate Governance Committee



The duties of the Corporate Governance include:





42









·

selecting (or recommending that the Board select) the director nominees for the next annual meeting of shareholders;

·

developing qualification criteria for Board members for recommendation to the Board in accordance with the Companys corporate governance guidelines;

·

in conjunction with the Chairman, assigning Board members to the various committees of the Board;

·

reviewing annually or more often if appropriate:

(a)

committee members qualifications and requirements;

(b)

committee structure (including authority to delegate); and

(c)

committee performance (including reporting to the Board). The committee is to make recommendations to the Board, as appropriate, based on its review;

·

recommending to the Board compensation policies and guidelines for the Company and for implementing and overseeing compensation policies approved by the Board;

·

developing and recommending to the Board corporate governance principles applicable to the Company;

·

monitoring the Companys overall approach to corporate governance issues and administering a corporate governance system which is effective in the discharge of the Companys obligations to its shareholders;

·

in conjunction with the Chairman, overseeing the evaluation of the Board and of the Company and making recommendations to the Board as appropriate;

·

reviewing and reassessing at least annually the adequacy of the Companys corporate governance guidelines and the Corporate Governance Committees terms of reference and recommending any proposed changes to the Board for approval. The Corporate Governance Committee must also annually review its own performance;

·

monitoring and making recommendations to the Board in respect of total compensation paid by the Company to its senior executives; and

·

reviewing the adequacy and form of compensation of directors and ensure that the compensation realistically reflects the responsibilities and risks involved in being a director.



The Board annually, and at such other times as it deems appropriate, reviews the performance and effectiveness of the Board, the directors and its committees to determine whether changes in size, personnel or responsibilities are warranted. To assist in its review, the Board conducts informal surveys of its directors, receives an annual report from the Corporate Governance Committee on its assessment of the functioning of the Board and reports from each committee respecting its own effectiveness. As part of the assessments, the Board or the individual committee may review their respective mandate or charter and conduct reviews of applicable corporate policies.



The Board determines new nominees to the Board through recommendations of the Corporate Governance Committee. The nominees may also be the result of recruitment efforts by other Board members, including both formal and informal discussions among Board members and the President and Chief Executive Officer. The Corporate Governance Committee monitors the performance of individual Board members or committee members or their contributions.





43









The Board expects management to operate the business of the Company in a manner that enhances shareholder value and is consistent with the highest level of integrity. Management is expected to execute the Company's business plan and to meet performance goals and objectives.



Audit Committee



At the Companys Annual and Extraordinary General Meeting held on December 1, 2005, shareholders approved a revised Audit Committee Charter. The Audit Committee currently consists of David Hottman, Frank Wheatley, and Winnie Wong.



A copy of the current Audit Committee Charter was included in the Companys Management Information Circular dated October 23, 2009.



The Audit Committees primary functions are to assist the Board of Directors (the "Board") in fulfilling its financial oversight responsibilities with respect to financial reporting and disclosure requirements; ensure that an effective risk management and financial control framework has been implemented by management of the Company; and be responsible for external and internal audit processes.



Composition



The Committee shall be comprised of three directors as determined by the Board, the majority of whom shall be independent, financially literate and free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee. The Board may remove or replace a member of the Committee at any time and from time to time. The Company adopts: (a) the meaning of independence described in Multilateral Instrument 52-110 Audit Committees(the "Instrument") for the purpose of determining whether a member of the Committee is independent; and (b) the provisions of Sections 3.3 to 3.5, inclusive, of the Instrument relating to certain membership requirements.



The Board will appoint the Chairman of the Committee. The Secretary of the Company will act as the secretary at meetings of the Committee or, in his absence, the Chairman of the committee may appoint any member or any other person to act as secretary. The secretary will keep minutes of the proceedings at any meeting of the Committee setting out in reasonable detail the business conducted at such meeting. Minutes of the meetings of the Committee will be distributed by the Secretary to the members of the Committee and to the Board.





44









Membership and Procedures



Meetings of the Committee will be held at such times and places as the Chairman may determine, but in any event not less than four times per year. Twenty-four (24) hours notice of each meeting will be given orally, by electronic transmission or by facsimile to all members of the Committee and to the external auditors of the Company and such notice will set out in reasonable detail the business proposed to be conducted at the meeting. Notice of a meeting may be waived if all members of the Committee are present at a meeting and waive notice or if a member who is not present waives notice before or after such meeting. A resolution signed by all members of the Committee shall have the same force and effect as a resolution passed at a meeting of the Committee duly called and regularly constituted for the transaction of business.



A majority of members of the Committee will constitute a quorum and decisions of the Committee will be by an affirmative vote of the majority with the Chairman having a deciding vote in the event of a tie.



At the request of the external auditors of the Company, the Chief Executive Officer or the Chief Financial Officer of the Company or any member of the Committee, the Chairman will convene a meeting of the Committee. Any such request will set out in reasonable detail the business proposed to be conducted at the meeting so requested.



The Committee has the authority to: (a) engage independent counsel and other advisors as it determines necessary or desirable to carry out its duties; (b) set and pay the compensation for any advisors engaged by the Committee; and (c) communicate directly with internal and external auditors.



Responsibilities and Duties



The responsibilities of the Committee are as follows:



Financial Reporting and Disclosure



1.

Review and recommend to the Board for approval, the quarterly financial statements, management discussion and analysis, financial reports and any public release of financial information through press release or otherwise.



2.

Review and recommend to the Board for approval, the audited annual financial statements, including the auditors report thereon, management discussion and analysis and financial reports.



3.

Review and recommend to the Board for approval, where appropriate, financial information contained in any prospectuses, annual information forms, material change disclosures of a financial nature and similar disclosure documents.





45









4.

Review with management of the Company and with external auditors significant accounting principles and disclosure issues and alternative treatments under Canadian generally accepted accounting principles ("GAAP") all with a view to gaining reasonable assurance that financial statements are accurate, complete and present fairly the Companys financial position and the results of its operations in accordance with Canadian GAAP.



External Audit



1.

Review the performance of the external auditors who are accountable to the Committee and the Board as representatives of the shareholders, including the lead partner of the independent auditors team and recommend to the Board the external auditors to be nominated for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company and the compensation of the external auditors.



2.

Oversee the work of the external auditors appointed by the shareholders of the Company with respect to preparing and issuing an audit report or performing other audit, review or attest services for the Company, including the resolution of issues between management of the Company and the external auditors regarding financial disclosure.



3.

Review the results of the external audit and the report thereon including, without limitation, a discussion with the external auditors as to the quality of accounting principles used, any alternative treatments of financial information that have been discussed with management of the Company, the ramifications of their use as well as any other material changes. Review a report describing all material written communication between management and the auditors such as management letters and schedule of unadjusted differences.



4.

Discuss with the external auditors their perception of the Companys financial and accounting personnel, records and systems, the cooperation which the external auditors received during their course of their review and availability of records, data and other requested information and any recommendations with respect thereto.



5.

Review the reasons for any proposed change in the external auditors which is not initiated by the Committee or Board and any other significant issues related to the change, including the response of the incumbent auditors, and enquire as to the qualifications of the proposed auditors before making its recommendations to the Board.



6.

Review the independence of the external auditors, including a written report from the external auditors respecting their independence and consideration of applicable auditor independence standards.



7.

Review annually a report from the external auditors in respect of their internal quality-control procedures, any material issues raised by the most recent internal quality-control review, or peer review of the external auditors, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the external auditors, and any steps taken to deal with any such issues.





46









Internal Controls and Audit



1.

Review and assess the adequacy and effectiveness of the Companys system of internal control and management information systems through discussions with management and the external auditor to ensure that the Company maintains: (a) the necessary books, records and accounts in sufficient detail to accurately and fairly reflect the Companys transactions; (b) effective internal control systems; and (c) adequate processes for assessing the risk of material misstatement of the financial statement and for detecting control weaknesses or fraud. From time to time the Committee will assess whether a formal internal audit department is necessary or desirable having regard to the size and stage of development of the Company at any particular time.



2.

Satisfy itself that adequate procedures are in place for the review of the Companys disclosure of financial information extracted or derived from the Companys financial statements.



3.

Periodically assess the adequacy of such systems and procedures to ensure compliance with all regulatory requirements and recommendations.



4.

Review and discuss the Companys major financial risk exposures and the steps taken to monitor and control such exposures, including the use of any financial derivatives and hedging activities.



5.

Review annually insurance programs relating to the Company and its investments.



Non-Audit Services



1.

Pre-approve all non-audit services to be provided to the Company or any subsidiary entities by its external auditors or by the external auditors of such subsidiary entities. The Committee may delegate to one or more of its members the authority to pre-approve non-audit services but pre-approval by such member or members so delegated shall be presented to the full audit committee at its first scheduled meeting following such pre-approval.



2.

Review and assess the adequacy of the Companys risk management policies and procedures with regard to identification of the Companys principal risks and implementation of appropriate systems to manage such risks including an assessment of the adequacy of insurance coverage maintained by the Company.



Associated Responsibilities



Establish, monitor and periodically review procedures for:



1.

The receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and



2.

The confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.





47









Staffing



The Company currently has 2 employees and 2 executive officers. The employees are an accountant and a public relations representative and are located in Vancouver.



During fiscal 2009, the Company shared office space with other mineral exploration companies that have officers/directors in common with Portal. Portal charges these companies for Rent, Human Resources, and Office Expenses. In fiscal 2009, these charges totaled $69,366 (fiscal 2008 - $93,699).



Mineral Exploration has conducted by employees, as well as outside contractors under the supervision of Company personnel. Oil and Gas exploration is currently conducted by the Companys joint-venture partners as operator.



Share Ownership



The Registrant is a publicly owned Canadian corporation, the shares of which are owned by U.S. residents, Canadian residents and other foreign residents.  The Registrant is not controlled by another corporation as described below.



Table No. 9 lists, as of December 15, 2009, Directors and Executive Officers who beneficially own the Registrant's voting securities and the amount of the Registrant's voting securities owned by the Directors and Executive Officers as a group.



Table No. 9

Shareholdings of Directors and Executive Officers



|Title
of
Class | Name of Beneficial Owner | Amount and Nature
of Beneficial
Ownership | Percent
of
Class
|-------------- | ------------------------ | ----------------------------------------- | ----------------
|               |                          |                                           |                 
|Common         | David Hottman (1)        | 1,867,700                                 | 6.16%           
|Common         | Mark T. Brown (2)        | 802,200                                   | 2.67%           
|Common         | Frank Wheatley (3)       | 372,700                                   | 1.25%           
|Common         | Joe Tai (4)              | 100,000                                   | 0.03%           
|Common         | Winnie Wong              | 9,000                                     | <0.01%          
|               |                          |                                           |                 
|               | Total Directors/Officers | 3,151,600                                 | 10.16%          



(1)

Of these shares, 689,300 represent exercisable share purchase options. An additional 114,300 share purchase options have been granted but not yet vested.

(2)

Of these shares, 60,000 are owned in Spartacus Management Inc., a private company which is beneficially owned by Mark T. Brown; 353,000 are owned by Pacific Opportunity Capital, a private company controlled by Mark T. Brown; and 355,700 represent exercisable share purchase options. An additional 39,300 share purchase options have been granted but not yet vested.

(3)

Of these shares, 237,500 represent exercisable share purchase options. An additional 112,500 share purchase options have been granted but not yet vested.

(4)

Of these shares, 100,000 represent exercisable share purchase options. An additional 100,000 share purchase options have been granted but not yet vested



Based upon 29,651,539 shares outstanding as of December 15, 2009, share purchase warrants and Stock options held by each beneficial holder exercisable within sixty days as detailed in Table No. 13, Stock Options Outstanding below.





48









Item 7.  Major Shareholders and Related Party Transactions



The Registrant is a publicly owned Canadian corporation, the shares of which are owned by U.S. residents, Canadian residents and other foreign residents.  The Registrant is not controlled by another corporation as described below.  The Company's common shares are issued in registered form and the following information is taken from the records of Computershare Investor Services, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1.



On November 30, 2009 the shareholders' list for the Company's common shares showed 20 registered shareholders, including depositories, and 29,651,539 shares issued and outstanding. Of the total registered non-depository shareholders, 4 are resident in Canada holding 27,634,374 common shares, or 93.2% of the total issued and outstanding; 11 shareholders are resident in the United States holding 1,715,000 common shares, or 5.78% of the issued and outstanding, and 5 shareholders are resident in other nations, holding 302,165 common shares, or 1.02% of the issued and outstanding.



The Company is aware of three persons/companies who beneficially own 5% or more of the Registrant's voting securities. Table No. 10 lists as of December 15, 2009, persons and/or companies holding 5% or more beneficial interest in the Companys outstanding common stock.



Table No. 10

5% or Greater Shareholders



|Title of
Class | Name of Owner                 | Amount and Nature of
Beneficial Ownership | Percent of Class
|-------------- | ----------------------------- | ----------------------------------------- | ----------------
|               |                               |                                           |                 
|Common         | Pinetree Resource Partnership | 3,250,000                                 | 10.96%          
|Common         | David Hottman (1)             | 1,867,700                                 | 6.16%           
|Common         | Bruce Winfield (2)            | 1,533,500                                 | 5.09%           



(1)

Of these shares, 689,300 represent exercisable share purchase options. An additional 114,300 share purchase options have been granted but not yet vested.

(2)

Of these shares, 450,000 represent exercisable share purchase options.



Based upon 29,651,539 shares outstanding as of December 15, 2009, share purchase warrants and Stock options held by each beneficial holder exercisable within sixty days as detailed in Table No. 13, Stock Options Outstanding below.



No shareholders of the Company have different voting rights from any other shareholder.





49









RELATED PARTY TRANSACTIONS



During Fiscal 2009, the Company received $18,832 (Fiscal 2008 - $27,060) from Galileo Minerals Ltd, a private mineral exploration company with David Hottman and Gary Nordin as Directors in common, for Rent, Human Resources, and Office expenses.



During Fiscal 2009, the Company received $42,374 (Fiscal 2008 - $35,939) from Canasil Resources Inc., a public mineral exploration company with Gary Nordin as Director in common, for Rent and Office expenses.



During Fiscal 2009, the Company received $3,124 (Fiscal 2008 - $Nil) from Discovery Resource Corp., a private mineral exploration company with Gary Nordin as Director in common, for Rent expense.



During Fiscal 2009, the Company received $Nil (Fiscal 2008 - $27,095) from Mexico Pacific Gold, a private mineral exploration company with David Hottman and Gary Nordin as Directors in common, for Rent, Human Resources, and Office expenses.



The Company paid Pacific Opportunity Capital, a private company with Mark T. Brown as an officer and director in common, an aggregate of $9,707 (Fiscal 2008 - $5,674; Fiscal 2007 - $1,219) for fees and expense reimbursements.



During Fiscal 2007, the Company paid Nevada Pacific Gold Ltd., a public company with directors David Hottman and Gary Nordin in common, $121,207 for shared rent, human resources, and office services. Nevada Pacific ceased to be a related party in March 2007.





Item 8.  Financial Information



The financial statements as required under ITEM #8 are attached hereto and found immediately following the text of this Annual Report.  The audit report of De Visser Gray, Chartered Accountants, is included herein immediately preceding the financial statements and schedules.



Current Legal Proceedings



The Company knows of no material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any other material proceeding or pending litigation.  The Company knows of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.



Dividends



The Company has not declared any dividends on its common shares since inceptions and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain future earnings, if any, for use in its operations and the expansion of its business.





50









Item 9.  Offer and Listing of Securities



As of June 30, 2009 the authorized capital of the Company consisted of 100,000,000 Common Shares without par value and 100,000,000 Preferred Shares without par value.  There were 29,651,539 Common Shares and no Preferred Shares issued and outstanding as of June 30, 2009 and December 15, 2009.



NATURE OF TRADING MARKET



The Company's common shares trade on the TSX Venture Exchange in Vancouver, British Columbia, Canada under the stock symbol is PDO. The CUSIP number is 736114 10 9. The Company's common shares are not registered to trade in the United States in the form of American Depository Receipts (ADR's) or similar certificates.



Table No. 11 lists the volume of trading and high, low and closing sale prices on the TSX Venture Exchange for the Company's common shares for:



•

each of the last six months ending November 2009;



•

each of the last twelve fiscal quarters ending the three months ended September 30, 2009; and



•

each of the last five fiscal years ending June 30, 2009.



The Company commenced trading under the name Gateway Enterprises Ltd. on May 28, 2001. From September 23, 2002 until March 17, 2004, the Companys shares were suspended from trading by the TSX Venture Exchange for review, approval and completion of the Companys Qualifying Transaction as per TSX-V Capital Pool Company regulations.



Table No. 11

TSX Venture Exchange

Common Shares Trading Activity



|                             | - Sales-        
|---------------------------- | ----------------
|                             | Canadian Dollars
|Period                       | High            
|                             |                 
|November 2009                | $0.09           
|October 2009                 | $0.09           
|September 2009               | $0.12           
|August 2009                  | $0.12           
|July 2009                    | $0.11           
|June 2009                    | $0.12           
|                             |                 
|Three Months Ended   9/30/09 | $0.12           
|Three Months Ended   6/30/09 | $0.12           
|Three Months Ended   3/31/08 | $0.11           
|Three Months Ended 12/31/08  | $0.11           
|                             |                 
|Three Months Ended   9/30/08 | $0.21           
|Three Months Ended   6/30/08 | $0.27           
|Three Months Ended   3/31/08 | $0.39           
|Three Months Ended 12/31/07  | $0.52           
|                             |                 
|Three Months Ended   9/30/07 | $0.78           
|Three Months Ended   6/30/07 | $0.90           
|Three Months Ended   3/31/07 | $0.94           
|Three Months Ended 12/31/06  | $0.58           



|Three Months Ended   9/30/06 | $0.67 | $0.39 | $0.51
|---------------------------- | ----- | ----- | -----
|Three Months Ended   6/30/06 | $1.53 | $0.48 | $0.59
|Three Months Ended   3/31/06 | $1.17 | $0.55 | $1.17
|Three Months Ended 12/31/05  | $0.65 | $0.52 | $0.57
|                             |       |       |      
|Fiscal Year Ended 6/30/09    | $0.21 | $0.03 | $0.09
|Fiscal Year Ended 6/30/08    | $0.78 | $0.17 | $0.23
|Fiscal Year Ended 6/30/07    | $0.94 | $0.32 | $0.76
|Fiscal Year Ended 6/30/06    | $1.53 | $0.48 | $0.59
|Fiscal Year Ended 6/30/05    | $1.05 | $0.40 | $0.63





51









Table No. 12 lists, as of December 15, 2009, share purchase warrants outstanding, the exercise price, and the expiration date of the share purchase warrants.



Table No. 12

Share Purchase Warrants Outstanding



|Number of Share Purchase Warrants Outstanding | Exercise Price/share                   | Expiration Date
|--------------------------------------------- | -------------------------------------- | ---------------
|                                              | No Share Purchase Warrants Outstanding |                



American Depository Receipts.  Not applicable.

Other Securities to be Registered. Not applicable



The TSX Venture Exchange



The TSX Venture Exchange (TSX-V) is a result of the acquisition of the Canadian Venture Exchange by the Toronto Stock Exchange.



The Canadian Venture Exchange was a result of the merger between the Vancouver Stock Exchange and the Alberta Stock Exchange which took place on November 29, 1999. On August 1, 2001, the Toronto Stock Exchange completed its purchase of the Canadian Venture Exchange from its member firms and renamed the Exchange the TSX Venture Exchange. The TSX-V currently operates as a complementary but independent exchange from its parent.



The initial roster of the TSX-V was made up of venture companies previously listed on the Vancouver Stock Exchange or the Alberta Stock Exchange and later incorporated junior listings from the Toronto, Montreal and Winnipeg Stock Exchanges. The TSX-V is a venture market as compared to the TSX Exchange which is Canadas senior market and the Montreal Exchange which is Canadas market for derivatives products.



The TSX-V currently has five service centers: Calgary, Toronto, Vancouver, Winnipeg and Montreal.  These service centers provide corporate finance, surveillance and marketing expertise.  The corporate office for the TSX-V is located in Calgary and the operations office is located in Vancouver.



The TSX-V is a self-regulating organization owned and operated by the TSX Group.  It is governed by representatives of its member firms and the public.



The TSX Group acts as a business link between TSX Venture Exchange members, listed companies and investors.  TSX-V policies and procedures are designed to accommodate companies still in their formative stages and recognize those that are more established. Listings are predominately small and medium sized companies.



Regulation of the TSX Venture Exchange, its member firms and its listed companies is the responsibility of Market Regulation Services Inc. (RS) which was created as a joint initiative of TSX Inc. and the Investment Dealers Association of Canada.





52









RS is recognized as a self-regulatory entity in the provinces of British Columbia, Alberta, Manitoba, Ontario and Quebec. As a Regulation Service Provider, RS provides independent regulation services to marketplaces (existing exchanges, quotation and trade reporting systems (QTRSs) and alternative trading systems (ATSs) and their participants in Canada that contract with RS Inc. for the provision of regulation services. As a national regulator for the Canadian marketplace, it is the first independent regulator of its kind for the Canadian securities market.



RS administers, oversees and enforces the Universal Market Integrity Rules (UMIR). To ensure compliance with UMIR, RS monitors real-time trading operations and market-related activities of marketplaces and participants. RS also enforces compliance with UMIR by investigating alleged rule violations and administering any settlements and hearings that may arise in respect of such violations.



RS's areas of responsibility include Market Surveillance; Operations and General Counsel (Market Policy); and Investigations and Enforcement.



The Market Surveillance division monitors all securities trading for compliance with the Universal Market Integrity Rules and marketplace specific rules. Market Surveillance also investigates irregularities and complaints relating to trading on marketplaces for which RS acts as regulation services provider to ensure a fair and orderly marketplace for all participants. This division is responsible for market supervision, which includes monitoring trading activity and timely disclosure, as well as preliminary investigations and trade desk compliance.



The market surveillance department issues TSX-V notices to inform the public of halts, suspensions, delistings, and other enforcement actions.  All TSX-V notices can be found on the TSX website at www.tsx.com.  In the public interest, trading halts or suspensions are maintained until the surveillance department is satisfied that there is adequate disclosure of the companys affairs and a level playing field for investors. By Exchange policy, the department also reviews and approves certain types of transactions for all TSX listed companies. These types of transactions include option grants, private placements and other share issuances, mergers and acquisitions, property-asset acquisitions and dispositions, loans, bonuses and finders fees, changes of business, name changes, stock splits, and related party transactions. If the Exchanges review of such transactions finds them to be contrary to the public interest or is in violation of policy, approval for the transaction will be denied and any action taken by the company towards the completion of the transaction must be reversed.



The Operations and General Counsel division is responsible for the development and implementation UMIR as well as providing interpretations of, or exemptions from, UMIR with the goal of promoting market integrity. This division also coordinates all operational activities of RS including strategic planning and overall organizational matters. Finally, the General Counsel's office of this division is responsible for all legal services and matters relating to RS's Board of Directors.



The Investigation and Enforcement division is responsible for conducting investigations and prosecutions of violations of the UMIR and Policies and market integrity and market quality rules specific to the TSX Venture Exchange. Functions of this division include Investigations, Enforcement and Investigative Research.





53









a) Investigations

Investigations focus on activities that may be in breach of the UMIR and/or the rules of the TSX Venture Exchange. The types of violations frequently investigated include high closings, market manipulation, client priority trading violations, unapproved trading, trading in restricted securities and conduct inconsistent with the just and equitable principles of trade.



Requests for investigations come primarily from the Market Surveillance division of RS. Other sources include the provincial securities commissions, the Operations and General Counsel division, marketplaces, and in some instances, the general public. Investigators also lend assistance to investigations conducted by provincial securities commissions.



b) Enforcement

Once an investigation is complete and a decision has been made to proceed with a prosecution a statement of allegations is served upon the concerned party which references the rule or rules alleged to have been in violation. An Offer of Settlement is also presented to the concerned party, who can either accept or reject the Offer of Settlement. If accepted, the Offer of Settlement must be approved by a hearing panel of RS. The hearing panel may accept the Offer of Settlement or reject it. If the Offer of Settlement is rejected by either the concerned party or by a settlement hearing panel, a Notice of Hearing is issued and served upon the concerned party and the matter proceeds to a hearing before a hearing panel. If the hearing panel determines that an applicable requirement has been violated, it may impose a range of penalties, including a reprimand, a fine, or the restriction, suspension or revocation of access to a marketplace. After all hearings, there is an official public notification concerning the outcome of the hearing and the penalty or remedy imposed.



c) Investigative Research

The Investigative Research Division performs in-depth corporate research relating to officers, directors, and significant shareholders of organizations applying to list securities on the TSX Venture Exchange, or applying to obtain access to the marketplace's trading systems. Due diligence is a major function of the Enforcement division. The overall goal is to improve communication and to raise the standards of compliance in the securities trading industry.



Investors in Canada are protected by the Canadian Investor Protection Fund (CIPF). The CIPF is a private trust fund established to protect customers in the event of the insolvency of a member of any of the following Self-Regulatory Organizations: the TSX Venture Exchange, the Montreal Exchange, the TSX, the Toronto Futures Exchange and the Investment Dealers Association of Canada.



United States Market



Portal is a Reporting Issuer with the United States Securities and Exchange Commission, and the Company is subject to the reporting obligations and requirements under the Exchange Act of 1934. However, as a Foreign Private Issuer, the Company is exempt from sections 14(a), 14(b), 14(c), 14(f) and 16 of the Act, which includes the Proxy Rules of Section 14 and the Short-Swing Profit Rules of Section 16.





54









Item 10.  Additional Information



Share Capital



The Company has financed its operations through the issuance of common shares through private placements, the exercise of warrants issued in the private placements, and the exercise of stock options. The changes in the Companys share capital during the last 3 fiscal years are as follows:



No common shares were issued during Fiscal 2009.



During Fiscal 2008, the Company completed one private placement of its common shares. On July 20, 2007, the placement of 7,887,000 units at $0.65 per unit was completed for gross proceeds of $5,126,550. Each unit consisted of one common share and one-half of a common share purchase warrant, with each full warrant exercisable at a price of $0.85 until July 18, 2008 (subsequently extended to July 18, 2009). Finders fees of $151,997 were paid on the placement. During the year, the Company also received $2,600 pursuant to the exercise of 5,000 common share purchase options.



During Fiscal 2007, the Company had no private placements of its common shares. The Company issued 759,000 pursuant to the exercise of common share purchase warrants for proceeds of $569,250, and issued 12,500 common shares pursuant to the exercise of options for proceeds of $8,300. The Company also reserved 100,000 common shares at a deemed price of $0.78 per share for resource property interests.



Shares Issued for Assets Other Than Cash



On March 15, 2004, the Company issued 2,000,000 common shares at a deemed price of $0.10 per share in relation to the acquisition of Portal de Oro (B.V.I) Ltd. On February 3, 2006, the Company issued 148,225 common share units, with each consisting of one common share and one common share purchase warrant, as Finders Fees for a private placement. During the fiscal year ended June 30, 2007, the Company reserved 100,000 common shares for property interests.



Shares Held By Company



-No Disclosure Necessary-



Stock Options



Stock Options to purchase securities from Registrant can be granted to Directors and Employees of the Company on terms and conditions acceptable to the regulatory authorities in Canada, notably the TSX Venture Exchange.





55









Under a Stock Option Plan approved by shareholders at the Companys Annual and Extraordinary General Meeting held on December 10, 2004 and amended at the Companys Annual and Extraordinary General Meetings held on December 5, 2006 and at the Companys Annual General Meeting held on December 14, 2007, stock options may be issued to qualified Officers, Directors, Employees and Consultants. The number of common shares reserved for issuance under the Plan is 4,447,730. The number of shares reserved for issue may not exceed 15% of the common shares outstanding at the time of the grant. These options may be granted from time to time, provided that stock options in favor of any one individual who is an insider or associate of an insider may not exceed 5% of the issued and outstanding common shares, while grants to any one consultant may not exceed 2% of the issued and outstanding common shares.



The exercise prices for stock options are determined in accordance with TSX Venture Exchange guidelines and reflect the closing price of the Registrant's common shares immediately preceding the day on which the Directors grant the stock options and the maximum term of each stock option does not exceed five years from the date of grant.



A complete copy of the Companys Stock Option Plan is included in the Companys Management Information Circular for the Annual and Extraordinary General Meeting held on December 10, 2004 which has been filed as an exhibit to Portals 20-F Registration Statement. The details of the Amended Stock Option Plan is included in the Companys Management Information Circular for the Annual and Extraordinary General Meeting held on December 14, 2007 which was filed in Form 6-K on EDGAR on November 30, 2007.



The names and titles of the Directors/Executive Officers of the Registrant to whom outstanding stock options have been granted and the numbers of common shares subject to such options are set forth in Table No. 13 as of December 15, 2009, as well as the number of options granted to Directors and all employees as a group.





56









Table No. 13

Stock Options Outstanding



|Name                                                | Number of
Shares of
Common
Stock      | Number of
Options
Currently
Vested    | CDN$
Exercise
Price       | Expiration
Date                                                              
|--------------------------------------------------- | ------------------------------------- | ------------------------------------- | ------------------------- | -----------------------------------------------------------------------------
|                                                    |                                       |                                       |                           |                                                                              
|David Hottman,
President,
Chairman and Director     | 50,000
25,000
200,000
300,000
228,600 | 50,000
25,000
200,000
300,000
114,300 | $0.86
0.70
0.52
0.20
0.12 | April 14, 2010
January 20, 2011
December 5, 2011
October 7, 2013
June 8, 2014
|                                                    |                                       |                                       |                           |                                                                              
|Mark T. Brown,
CFO, Secretary and
Director          | 25,000
141,400
150,000
78,600         | 25,000
141,400
150,000
39,300         | $0.86
0.52
0.20
0.12      | April 14, 2010
December 5, 2011
October 7, 2013
June 8, 2014                 
|                                                    |                                       |                                       |                           |                                                                              
|Gary Nordin,
Consultant and Former Director         | 175,000
200,000                       | 175,000
100,000                       | $0.20
0.12                | October 7, 2013
June 8, 2014                                                 
|                                                    |                                       |                                       |                           |                                                                              
|Joe Tai,
Director                                   | 200,000                               | 100,000                               | $0.12                     | June 8, 2014                                                                 
|                                                    |                                       |                                       |                           |                                                                              
|Frank Wheatley,
Director                            | 25,000
25,000
100,000
150,000
50,000  | 25,000
25,000
100,000
150,000
25,000  | $0.86
0.70
0.52
0.20
0.12 | April 14, 2010
January 20, 2011
December 5, 2011
October 7, 2013
June 8, 2014
|                                                    |                                       |                                       |                           |                                                                              
|Bruce Winfield,
Former President, CEO
and Director  | 50,000
25,000
225,000
150,000         | 50,000
25,000
225,000
150,000         | $0.86
0.70
0.52
0.20      | April 14, 2010
January 20, 2011
December 5, 2011
October 7, 2013             
|                                                    |                                       |                                       |                           |                                                                              
|Winnie Wong,
Director                               | Nil                                   | Nil                                   | N/A                       | N/A                                                                          
|                                                    |                                       |                                       |                           |                                                                              
|Employees/Consultants                               | 100,000
60,000
280,000                | 100,000
60,000
70,000                 | $0.52
0.20
0.12           | December 5, 2011
October 7, 2013
June 14, 2014                               
|                                                    |                                       |                                       |                           |                                                                              
|Total Officers and Directors                        | 2,573,600                             | 2,195,000                             |                           |                                                                              
|                                                    |                                       |                                       |                           |                                                                              
|Total Employees/
Consultants                        | 440,000                               | 230,000                               |                           |                                                                              
|                                                    |                                       |                                       |                           |                                                                              
|Total Officers/Directors/
Employees and Consultants | 3,013,600                             | 2,425,000                             |                           |                                                                              





57









Pursuant to the Companys Stock Option Plan as approved by shareholders on December 10, 2004, all stock options granted under the Plan will vest under the following schedule:



25% Three months following the award date

25% Six months following the award date

25% Nine months following the award date

25% Twelve months following the award date





Resolutions/Authorization/Approvals



-No Disclosure Necessary-



Memorandum and Articles of Association



The Company was originally incorporated under the Company Act of British Columbia on August 14, 2000 under the name Gateway Enterprises Ltd.. After the completion of the acquisition of Portal de Oro (B.V.I.) on March 15, 2004, the Company changed its name to Portal De Oro Resources Ltd.. At the Annual and Extraordinary General Meeting held on December 10, 2004, shareholders approved the change of name to Portal Resources Ltd. and adopted a new Charter and Articles under the Business Corporations Act (British Columbia) which replaced the Company Act of British Columbia.



There are no restrictions on the business the company may carry on in the Articles of Incorporation.



Under the Companys articles and bylaws a director is not allowed to vote on any transaction or contract with the Company in which he has a disclosable interest unless all directors have a disclosable interest in that transaction.



Part 16 of the Companys bylaws address the duties of the directors, while Part 8 discusses the Borrowing Powers. The Company may, if authorized by the directors, may:



a)

borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that the directors consider appropriate;



b)

issue bonds, debentures, and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;



c)

guarantee the repayment of money by any other person or the performance of any obligation of any other person;



d)

mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.





58









There are no age limit requirements pertaining to the retirement or non-retirement of directors and a director need not be a shareholder of the Company.



The Company may determine that directors may receive remuneration for acting as directors. Any remuneration will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such. The Company may also reimburse each director for the reasonable expenses that he or she may incur in or about the business of the Company. If any director performs any professional or other services for the Company that in the opinion of the directors is outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Companys business, he or she may be paid remuneration fixed by the directors and such remuneration may be either in addition to or substitution for any other remuneration they may be entitled to receive.



Part 21 deals with Indemnification of individuals. The directors must cause the Company to indemnify its officers and directors, and former officers and directors, and alternate directors, and their respective heirs and personal or other legal representatives to the greatest extent permitted by the Business Corporations Act. Each director and officer is deemed to have contracted with the Company on the terms of the indemnity contained in this section. Subject to any restrictions in the Act, the Company may indemnify any other person. The failure of a director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.



The rights, preferences and restrictions attaching to each class of the Companys shares are as follows:



Common Shares



The authorized shares of common stock of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets.  Holders of common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders.  Holders of common stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefore.



Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receive pro rata the assets of Company, if any, remaining after payments of all debts and liabilities.  No shares have been issued subject to call or assessment.  There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.



The Company may by special resolution, create, define, and attach special rights or restrictions on any shares and by special resolution and by otherwise complying with any applicable provision of its Memorandum or these Articles to vary or abrogate any special rights and restrictions attached to any shares, but no right or special right attached to any issued shares shall be prejudiced or interfered with unless all members holding shares of each affected class consent thereto in writing, or unless a resolution consenting thereto is passed at a separate class meeting of the holders of the shares of each such class by a majority of three-fourths of the rest of such shares..





59









An annual general meeting shall be held once every calendar year at such time (not being more than 13 months after holding the last preceding annual meeting) and place as may be determined by the Directors. The Directors may, as they see fit, convene an extraordinary general meeting. An extraordinary general meeting, if requisitioned in accordance with the Company Act, shall be convened by the Directors or, if not convened by the Directors, may be convened by the requisitionists as provided in the Corporations Act.



There are no limitations upon the rights to own securities.



There are no provisions that would have the effect of delaying, deferring, or preventing a change in control of the Company.



There is no special ownership threshold above which an ownership position must be disclosed.



A copy of the Companys Articles has been filed as an exhibit to Portals 20-F Registration Statement.



Material Contracts



1.

Under an agreement dated April 20, 2007 between the Company and Consolidated Pacific Bay Minerals Ltd., an unrelated public company, Consolidated Pacific Bay granted Portal the right to earn a 60% interest in the La Pampa uranium project located in Chubut Province, Argentina. Under the agreement, the Company is required to pay a total of US$145,000 cash on or before April 20, 2010, and expend an aggregate of US$1,200,000 in exploration expenditures on the property on or before April 20, 2011, to earn a 60% interest in Consolidated Pacific Bays concessions. A copy of this agreement has been filed as an exhibit to the Companys fiscal 2007 20-F Annual Report.



2.

Under an agreement dated May 1, 2007 between the Company and Nevada Pacific Gold Ltd., the Company agreed to sublease approximately 3,926 square feet of office space from Nevada Pacific through February 28, 2008. A copy of this agreement has been filed as an exhibit to the Companys fiscal 2007 20-F Annual Report.



3.

Under an agreement dated August 28, 2008, the Company, through its subsidiary Portal Resources US Inc., has the right to acquire from Claremont Nevada Mines, Scoonover Exploration, and JR Exploration (the Vendors) 100% interest (subject to a 3% NSR) in three properties located in the Walker Lane Belt and Battle Mountain/Eureka Trend in Nevada. Terms of the renewable ten year option include total cash advance royalty payments of US$10,000 on the first anniversary, $15,000 on the second, $20,000 on the third, $25,000 on the fourth, and $30,000 on the fifth and each subsequent anniversary date to maintain the option in good standing. Portal can acquire a 100% interest in the properties by making an additional payment of $1,000 and delivering a final feasibility study on any of the properties. The Vendors will retain a 3% NSR, which Portal may reduce to 1% for a payment of US$1,000,000. A copy of this agreement has been filed as an exhibit to the Companys Fiscal 2008 20-F Annual Report.





60









4.

Under an agreement dated May 14, 2009, the Company agreed to sell 100% of its wholly-owned subsidiary, Portal del Oro S.A., the holder of all of the Companys Argentina property interests to Omar Pereyra and Guillermo Pereyra. Consideration for the sale was US$85,000 cash. A copy of this agreement has been filed as an exhibit to this 20-F Annual Report.



5.

Under an Assignment Agreement dated May 29, 2009 between the Company and Pengram Corporation, the Company agreed to transfer all the rights on the Nevada claims in exchange for 150,000 Pengram common shares. A copy of this agreement has been filed as an exhibit to this 20-F Annual Report.







EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS



Canada has no system of exchange controls.  There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors.  There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of Portals securities, except as discussed in ITEM 10, Taxation" below.



Restrictions on Share Ownership by Non-Canadians:  There are no limitations under the laws of Canada or in the organizing documents of Portal on the right of foreigners to hold or vote securities of Portal, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian". The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company. "Non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.



TAXATION



The following summary of the material Canadian federal income tax consequences are stated in general terms and are not intended to be advice to any particular shareholder. Each prospective investor is urged to consult his or her own tax advisor regarding the tax consequences of his or her purchase, ownership and disposition of shares of Common Stock. The tax consequences to any particular holder of common stock will vary according to the status of that holder as an individual, trust, corporation or member of a partnership, the jurisdiction in which that holder is subject to taxation, the place where that holder is resident and, generally, according to that holders particular circumstances.



This summary is applicable only to holders who are resident in the United States, have never been resident in Canada, deal at arms length with the Company, hold their common stock as capital property and who will not use or hold the common stock in carrying on business in Canada.  Special rules, which are not discussed in this summary, may apply to a United States holder that is an issuer that carries on business in Canada and elsewhere.





61









This summary is based upon the provisions of the Income Tax Act of Canada and the regulations thereunder (collectively, the "Tax Act" or ITA)and the Canada-United States Tax Convention (the Tax Convention) as at the date of the Annual Report and the current administrative practices of Canada Customs and Revenue Agency.  This summary does not take into account provincial income tax consequences.



Management urges each holder to consult his own tax advisor with respect to the income tax consequences applicable to him in his own particular circumstances.



CANADIAN INCOME TAX CONSEQUENCES



Disposition of Common Stock



The summary below is restricted to the case of a holder (a Holder) of one or more common shares (Common Shares) who for the purposes of the Tax Act is a non-resident of Canada, holds his Common Shares as capital property and deals at arms length with the Company.



Dividends



A Holder will be subject to Canadian withholding tax (Part XIII Tax) equal to 25%, or such lower rates as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on his Common Shares. Under the Tax Convention, the rate of Part XIII Tax applicable to a dividend on Common Shares paid to a Holder who is a resident of the United States is, if the Holder is a company that beneficially owns at least 10% of the voting stock of the Company, 5% and, in any other case, 15% of the gross amount of the dividend. The Company will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount directly to the Receiver General for Canada for the account of the Holder.



Disposition of Common Shares



A Holder who disposes of Common Shares, including by deemed disposition on death, will not be subject to Canadian tax on any capital gain thereby realized unless the common Share constituted taxable Canadian property as defined by the Tax Act. Generally, a common share of a public corporation will not constitute taxable Canadian property of a Holder unless he held the common share as capital property used by him carrying on a business in Canada, or he or persons with whom he did not deal at arms length alone or together held or held options to acquire, at any time within the 60 months preceding the disposition, 25% or more of the issued shares of any class of the capital stock of the Company.



A Holder who is a resident of the United States and realizes a capital gain on disposition of Common Shares that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the Common Shares is derived from, or from an interest in, Canadian real estate, including Canadian mineral resources properties, (b) the Common Shares formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 months preceding disposition, or (c) the Holder (i) was a resident of Canada at any time within the ten years immediately preceding the disposition, and for a total of 120 months during any period of 20 consecutive years, preceding the disposition, and (ii) owned the Common Shares when he ceased to be resident in Canada.





62









A Holder who is subject to Canadian tax in respect of a capital gain realized on disposition of Common Shares must include one half of the capital gain (taxable capital gain) in computing his taxable income earned in Canada. The Holder may, subject to certain limitations, deduct one half of any capital loss (allowable capital loss) arising on disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect to taxable Canadian property and, to the extent not so deductible, from such taxable capital gains of any of the three preceding years or any subsequent year.



UNITED STATES FEDERAL INCOME TAX CONSEQUENCES



The following is a discussion of material United States Federal income tax consequences, under the law, generally applicable to a U.S. Holder (as defined below) of common shares of the Company. This discussion does not cover any state, local or foreign tax consequences.



The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations, published Internal Revenue Service (IRS) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possible on a retroactive basis, at any time.  In addition, the discussion does not consider the potential effects, both adverse and beneficial, or recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time. The discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Company. Each holder and prospective holder of common shares of the Company is advised to consult their own tax advisors about the federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Company applicable to their own particular circumstances.



U.S. Holders



As used herein, a (U.S. Holder) includes a holder of common shares of the Company who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States or of any political subdivision thereof, an estate whose income is taxable in the United States irrespective of source or a trust subject to the primary supervision of a court within the United States and control of a United States fiduciary as described in Section 7701(a)(30) of the Code. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals, persons or entities that have a functional currency other than the U.S. dollar, shareholders who hold common shares as part of a straddle, hedging or conversion transaction, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services.



This summary is limited to U.S. Holders who own common shares as capital assets. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire common shares.





63









Distribution on Common Shares of the Company



U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that the Company has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions.  Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holders United States Federal Income tax liability or, alternatively, individuals may be deducted in computing the U.S. Holders United States Federal taxable income by those individuals who itemize deductions.  (See more detailed discussion at Foreign Tax Credit below).  To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holders adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Dividend income will be taxed at marginal tax rates applicable to ordinary income while preferential tax rates for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust.  There are currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a corporation.



In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale of other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss.



Dividends paid on the common shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations.  A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a foreign personal holding company or a passive foreign investment company, as defined below) if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Company.  The availability of this deduction is subject to several complex limitations which are beyond the scope of this discussion.



Under current Treasury Regulations, dividends paid on the Companys common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends and the proceeds from a sale of the Companys common shares paid in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 31% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holders U.S. federal income tax liability, provided the required information is furnished to the IRS.





64









Foreign Tax Credit



For individuals whose entire income from sources outside the United States consists of qualified passive income, the total amount of creditable foreign taxes paid or accrued during the taxable year does not exceed $300 ($600 in the case of a joint return) and an election is made under section 904(j), the limitation on credit does not apply.



A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld.  Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayers income subject to tax.  This election is made on a year-by-year basis and applies to all foreign income taxes (or taxes in lieu of income tax) paid by (or withheld from) the U.S. Holder during the year.  There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holders United States income tax liability that the U.S. Holders foreign source income bears to his/her or its worldwide taxable income in the determination of the application of this limitation. The various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process.  In addition, this limitation is calculated separately with respect to specific classes of income such as passive income, high withholding tax interest, financial services income, shipping income, and certain other classifications of income. Dividends distributed by the Company will generally constitute passive income or, in the case of certain U.S. Holders, financial services income for these purposes.  The availability of the foreign tax credit and the application of the limitations on the credit are fact specific and management urges holders and prospective holders of common shares of the Company to consult their own tax advisors regarding their individual circumstances.



Disposition of Common Shares of the Company



A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between (I) the amount of cash plus the fair market value of any property received, and (ii) the shareholders tax basis in the common shares of the Company.  Preferential tax rates apply to long-term capital gains of U.S. Holders, which are individuals, estates or trusts. This gain or loss will be capital gain or loss if the common shares are capital assets in the hands of the U.S. Holder, which will be a short-term or long-term capital gain or loss depending upon the holding period of the U.S. Holder.  Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year.  Deductions for net capital losses are subject to significant limitations.  For U.S. Holders, which are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted, but individuals may not carry back capital losses. For U.S. Holders, which are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.





65









Other Considerations



In the following circumstances, the above sections of the discussion may not describe the United States Federal income tax consequences resulting from the holding and disposition of common shares of the Company.



Foreign Personal Holding Company



If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Companys outstanding shares is owned, actually or constructively, by five or fewer individuals who are citizens or residents of the United States and 60% (50% after the first tax year) or more of the Companys gross income for such year was derived from certain passive sources (e.g. from interest income received from its subsidiaries), the Company would be treated as a foreign personal holding company.  In that event, U.S. Holders that hold common shares of the Company would be required to include in gross income for such year their allocable portions of such passive income to the extent the Company does not actually distribute such income.



The Company does not believe that it currently has the status of a foreign personal holding company. However, there can be no assurance that the Company will not be considered a foreign personal holding company for the current or any future taxable year.



Foreign Investment Company



If 50% or more of the combined voting power or total value of the Companys outstanding shares are held, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31), and the Company is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that the Company might be treated as a foreign investment company as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares of the Company to be treated as ordinary income rather than capital gains.



Passive Foreign Investment Company



As a foreign corporation with U.S. Holders, the Company could potentially be treated as a passive foreign investment company (PFIC), as defined in Section 1297 of the Code, depending upon the percentage of the Companys income which is passive, or the percentage of the Companys assets which is held for the purpose of producing passive income.



Certain United States income tax legislation contains rules governing PFICs, which can have significant tax effects on U.S. shareholders of foreign corporations.  These rules do not apply to non-U.S. shareholders.  Section 1297 (a) of the Code defines a PFIC as a corporation that is not formed in the United States and, for any taxable year, either (I) 75% or more of its gross income is passive income, which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if the company is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of passive income is 50% or more.  The taxation of a US shareholder who owns stock in a PFIC is extremely complex and is therefore beyond the scope of this discussion.  Management urges US persons to consult with their own tax advisors with regards to the impact of these rules.





66









Controlled Foreign Corporation



A Controlled Foreign Corporation (CFC) is a foreign corporation more than 50% of whose stock by vote or value is, on any day in the corporations tax year, owned (directly or indirectly) by U.S. Shareholders. If more than 50% of the voting power of all classes of stock entitled to vote is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts, each of whom own actually or constructively 10% or more of the total combined voting power of all classes of stock of the Company could be treated as a controlled foreign corporation under Subpart F of the Code.  This classification would affect many complex results, one of which is the inclusion of certain income of a CFC, which is subject to current U.S. tax. The United States generally taxes United States Shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such United States Shareholders are generally treated as having received a current distribution out of the CFCs Subpart F income and are also subject to current U.S. tax on their pro rata shares of the CFCs earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts.



In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Corporation which is or was a United States Shareholder at any time during the five-year period ending with the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Company (accumulated in corporate tax years beginning after 1962, but only while the shares were held and while the Company was controlled) attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to the United States Shareholders of the CFC. This rule generally will be effective for taxable years of United States Shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of United States Shareholders. The PFIC provisions continue to apply in the case of PFIC that is also a CFC with respect to the U.S. Holders that are less than 10% shareholders. Because of the complexity of Subpart F, a more detailed review of these rules is outside of the scope of this discussion.



The amount of any backup withholding will not constitute additional tax and will be allowed as a credit against the U.S. Holders federal income tax liability.



Filing of Information Returns.  Under a number of circumstances, United States Investor acquiring shares of the Company may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns with a duplicate copy to the Internal Revenue Service Center, Philadelphia, PA 19255. In particular, any United States Investor who becomes the owner, directly or indirectly, of 10% or more of the shares of the Company will be required to file such a return. Other filing requirements may apply, and management urges United States Investors to consult their own tax advisors concerning these requirements.



Statement by Experts



The Companys auditors for its financial statements as at June 30, 2009, 2008 and 2007 was DeVisser Gray, Chartered Accountants. Their audit report is included with the related financial statements in this Annual Report.





67









Documents on Display



All documents incorporated and referred by reference in this 20-F Annual Report are available on IDEA at www.sec.gov, or may be viewed at the Companys Executive Office located at Suite 750, 625 Howe Street, Vancouver, British Columbia, Canada.



Item 11.  Disclosures about Market Risk



The Company competes with other resource companies for exploration properties and possible joint venture agreements.  There is a risk that this competition could increase the difficulty of concluding a negotiation on terms that the Company considers acceptable.



Item 12.  Description of Other Securities



Not Applicable





Part II



Item 13.  Defaults, Dividend Arrearages and Delinquencies



Not Applicable



Item 14.  Modifications of Rights of Securities Holders and Use of Proceeds



Not Applicable





68









Item 15.  Controls and Procedures



As of the end of the period covered by this annual report, an evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and the Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures.  Based upon that evaluation, the CEO and the CFO have concluded that the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.



The Company's disclosure controls and procedures operated such that important information flowed to appropriate collection and disclosure points in a timely manner and were effective so as to allow the Exchange Act reporting information to flow to the Company's CEO and CFO, including the period when this Annual Report on Form 20-F was prepared, as appropriate to allow timely decision regarding the required disclosure. In addition, the CEO and CFO have certified that the disclosure and procedures were effective so that the information in our Exchange Act reports was communicated to our management.



There have been no changes in the Company's internal controls over financial reporting during the period covered by this annual report that have materially affected or are reasonably likely to materially affect the Companys internal control over financial reporting.  Nor have there been any corrective actions with regard to deficiencies or material weaknesses.



This annual report does not include an attestation of the Companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this annual report.



Item 16.  Reserved



Item 16A.  Audit Committee Financial Expert

The Company has not identified an Audit Committee Financial Expert among the 3 directors currently serving on the audit committee. The current members are David Hottman, Frank Wheatley, and Winnie Wong. All 3 members are financially literate, have extensive experience as officers and directors of public mineral exploration companies, and understanding of internal controls and procedures.



Item 16B.  Code of Ethics

The Company has not adopted a written code of ethics that meets the new United States' Sarbanes-Oxley standards; the Board of Directors believes that the compliance with existing Canadian standards and procedures, including the regulations to which it subject under Canadian securities laws as a reporting issuer as a company listed on the TSX Venture Exchange, are adequate for its immediate purposes. The board is evaluating the adoption of a code of ethics during the 2010 fiscal year.





69









Item 16C.  Principal Accountant Fees and Services

The audit committee is directly responsible for the appointment, compensation and oversight of auditors; the audit committee has in place procedures for receiving complaints and concerns about accounting and auditing matters; and has the authority and the funding to engage independent counsel and other outside advisors.



The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to grant pre-approvals required by this policy and procedure.  The decisions of any Audit Committee member to whom authority is delegated to pre-approve a service shall be presented to the full Audit Committee at its next scheduled meeting.



In accordance with the requirements of the US Sarbanes-Oxley Act of 2002 and rules issued by the Securities and Exchange Commission, the Companys Audit Committee Charter includes a procedure for the review and pre-approval of any services performed by DeVisser Gray, including audit services, audit related services, tax services and other services.  The procedure requires that all proposed engagements of DeVisser Gray for audit and permitted non-audit services are submitted to the finance and audit committee for approval prior to the beginning of any such services.



Fees, including reimbursements for expenses, for professional services rendered by DeVisser Gray to the Company are included in the following table.



Table No. 14

Principal Account Fees and Services



|Type of Service    | Fiscal Year
2009 | Fiscal Year
2008
|------------------ | ---------------- | ----------------
|                   |                  |                 
|Audit Fees         | $ 22,500         | $ 21,000        
|Audit Related Fees | -                | -               
|Tax Fees           | $   1,300        | $   1,200       
|All Other Fees     | -                | -               
|Total              | $ 23,800         | $ 22,200        





Item 16D.  Exemptions from Listing Standards for Audit Committees



Not Applicable





Item 16E.  Purchase of Equity Securities by the Issuer and Affiliated Purchasers



Not Applicable





70









Part III



Item 17.  Financial Statements



The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian GAAP, the application of which, in the case of the Company, conforms in all material respects for the years presented with US GAAP, except as disclosed in Note 15 to the financial statements.



The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report.  The audit report of DeVisser Gray, Chartered Accountant, is included herein immediately preceding the financial statements.



Item 18.  Financial Statements



The Company has elected to provide financial statements pursuant to ITEM #17.



Item 19.  Exhibits



(A1)  The financial statements thereto as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report.  The audit report of DeVisser Gray, Chartered Accountants, for the audited financial statements is included herein immediately preceding the audited financial statements.



Audited Financial Statements



Independent Auditors Report, dated October 19, 2009.



Balance Sheets at June 30, 2009 and 2008.



Statements of Operations for the years ended June 30, 2009, 2008, and 2007.



Statements of Cash Flows for the years ended June 30, 2009, 2008, and 2007.



Consolidated Statements of Deferred Expenditures on Unproven Mineral Rights for the years ended June 30, 2009 and 2008.



Notes to Financial Statements





71









ITEM 19.  FINANCIAL STATEMENTS AND EXHIBITS (cont.)



(B)  Index to Exhibits:



|1.
Certificate of Incorporation, Certificates of Name Change, Articles of Incorporation, Articles of Amalgamation and By-Laws (Previously Filed)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|2. Instruments defining the rights of holders of the securities being registered
***See Exhibit Number 1***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|3. Voting Trust Agreements  N/A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|4. Material Contracts
A)        Copy of the Option Agreement between the Company and Consolidated Pacific Bay Minerals Ltd regarding La Pampa uranium project, dated April 20, 2007. (Previously Filed)
B)    Copy of the sublease agreement for office space between the Company and Nevada Pacific Gold Ltd. dated May 1, 2007 (Previously Filed)
C)   Copy of the option agreement between the Company and Claremont Nevada Mines LLC, Scoonover Exploration LLC, and JR Exploration LLC regarding the Golden Snow, Fish and CPG projects, dated August 28, 2008. (Previously Filed)
D)      Copy of the sale agreement between the Company and Omar Pereyra and Guillermo Pereyra for Portal del Oro S.A. dated May 14, 2009.
E)   Copy of the assignment agreement between the Company Pengram Corporation for the Companys Nevada claims dated May 29, 2009. | 
|5. List of Foreign Patents  N/A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|6. Calculation of earnings per share  N/A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|7. Explanation of calculation of ratios  N/A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|8. List of Subsidiaries  N/A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|9. Statement pursuant to the instructions to Item 8.A.4, regarding the financial statements filed in registration statements for initial public offerings of securities  N/A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|10.Other documents
Documents incorporated by reference to the Form 6-Ks filed by the Company on EDGAR.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 









72













PORTAL RESOURCES LTD.

















Consolidated Financial Statements





June 30, 2009

June 30, 2008

June 30, 2007







(An exploration stage company)

























|Portal Resources Ltd.                       |  | Trading Symbol: PDO      
|------------------------------------------- |  | -------------------------
|Head Office: Suite 750  625 Howe Street    |  | Telephone:  604-629-1929 
|Vancouver, British Columbia, Canada V6C 2T6 |  | Facsimile:   604-629-1930







73











MANAGEMENTS RESPONSIBILITY FOR FINANCIAL REPORTING



The consolidated financial statements and the information contained in the management discussion and analysis have been prepared by the management of the Company.  The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles and, where appropriate, reflect managements best estimates based on currently available information.  A system of internal accounting control is maintained to provide reasonable assurance that financial information is accurate and reliable.



The Companys independent auditors, De Visser Gray LLP, who have been appointed by the shareholders, conduct an audit in accordance with generally accepted auditing standards in Canada to allow them to express an opinion on the financial statements.



The Audit Committee of the Board of Directors meets periodically with management and the independent auditors to review the scope and results of the annual audit and to review the financial statements and related reporting matters prior to submission to the Board.







David Hottman

Mark Brown



David Hottman,

Mark Brown

President and CEO

Chief Financial Officer

Vancouver, Canada

Vancouver, Canada

October 19, 2009

October 19, 2009

















74









AUDITORS' REPORT



To the Shareholders of Portal Resources Ltd.



We have audited the consolidated balance sheets of Portal Resources Ltd. as at June 30, 2009 and 2008 and the consolidated statements of operations and deficit and cash flows for the years ended June 30, 2009, 2008 and 2007. These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with generally accepted auditing standards (GAAS) in Canada and the standards of the Public Company Accounting Oversight Board (United States) (PCAOB).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.



In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2009 and 2008 and the results of its operations and its cash flows for the years ended June 30, 2009, 2008 and 2007 in accordance with Canadian generally accepted accounting principles.





De Visser Gray LLP



CHARTERED ACCOUNTANTS



Vancouver, British Columbia

October 19, 2009





COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA - U.S. REPORTING CONFLICT



In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by significant uncertainties and contingencies such as those referred to in note 1 to these financial statements.  Although we conducted our audits in accordance with both Canadian GAAS and the standards of the PCAOB, our report to the shareholders dated October 19, 2009 is expressed in accordance with Canadian reporting standards which do not require a reference to such matters when the uncertainties are adequately disclosed in the financial statements.





De Visser Gray LLP



CHARTERED ACCOUNTANTS



Vancouver, British Columbia

October 19, 2009







75









PORTAL RESOURCES LTD.

CONSOLIDATED BALANCE SHEETS

(stated in Canadian dollars)

As at June 30th





|                                         |   | 2009         |   | 2008       
|---------------------------------------- | - | ------------ | - | -----------
|                                         |   |              |   |            
|ASSETS                                   |   |              |   |            
|Current                                  |   |              |   |            
|Cash and cash equivalents                | $ | 248,572      | $ | 187,551    
|Short-term investments (Note 3)          |   | 1,255,956    |   | 2,861,753  
|Marketable securities (Note 4)           |   | 34,875       |   | -          
|Amounts receivable                       |   | 4,395        |   | 104,312    
|Prepaid expenses                         |   | 21,916       |   | 122,318    
|                                         |   | 1,565,714    |   | 3,275,934  
|                                         |   |              |   |            
|Equipment (Note 5)                       |   | 38,839       |   | 78,290     
|Unproven mineral rights (Note 6)         |   | -            |   | 4,965,595  
|Oil and gas properties (Note 7)          |   | 361,437      |   |            
|                                         |   |              |   |            
|                                         | $ | 1,965,990    | $ | 8,319,819  
|                                         |   |              |   |            
|LIABILITIES                              |   |              |   |            
|                                         |   |              |   |            
|Current                                  |   |              |   |            
|Accounts payable and accrued liabilities | $ | 72,092       | $ | 81,496     
|                                         |   |              |   | 81,496     
|                                         |   |              |   |            
|SHAREHOLDERS EQUITY                     |   |              |   |            
|                                         |   |              |   |            
|Share capital (Note 8)                   | $ | 14,760,161   | $ | 14,760,161 
|Contributed surplus (Note 8)             |   | 805,151      |   | 783,340    
|Deficit                                  |   | (13,671,414) |   | (7,305,178)
|                                         |   | 1,893,898    |   | 8,238,323  
|                                         |   |              |   |            
|                                         | $ | 1,965,990    | $ | 8,319,819  



Nature of operations (Note 1)

Commitments (Note 9)

Subsequent events (Note 16)







Approved by the Board of Directors:





|David Hottman        |  | Mark T. Brown     
|---------------------- |  | --------------------
|David Hottman Director |  | Mark Brown, Director





76









PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the years ended June 30,

(stated in Canadian dollars)



|                                                             |  | 2009              |  | 2008               |  | 2007               
|------------------------------------------------------------ |  | ----------------- |  | ------------------ |  | -------------------
|                                                             |  |                   |  |                    |  |                    
|                                                             |  |                   |  |                    |  |                    
|Revenue                                                      |  | $               - |  | $            -     |  | $              -   
|                                                             |  |                   |  |                    |  |                    
|Expenses                                                     |  |                   |  |                    |  |                    
|Accounting and audit                                         |  | $      62,116     |  | $   62,248         |  | $    70,248        
|Amortization                                                 |  | 27,217            |  | 26,469             |  | 23,105             
|Bank charges and interest                                    |  | 6,993             |  | 21,102             |  | 42,738             
|Consulting and management fees                               |  | 130,738           |  | 55,115             |  | 22,875             
|Foreign asset tax                                            |  | 496               |  | 21,938             |  | 35,489             
|Foreign exchange                                             |  | (624)             |  | 34,120             |  | 63,218             
|Investor relations                                           |  | 124,780           |  | 412,068            |  | 454,750            
|Legal                                                        |  | 74,420            |  | 40,236             |  | 40,182             
|Office and miscellaneous                                     |  | 137,482           |  | 174,332            |  | 140,206            
|Rent                                                         |  | 101,395           |  | 44,991             |  | 30,831             
|Project investigation                                        |  | 67,119            |  | 41,451             |  | 44,071             
|Salaries and benefits                                        |  | 555,415           |  | 459,298            |  | 203,089            
|Stock-based compensation (Note 8)                            |  | 21,811            |  | 147,744            |  | 340,206            
|Travel                                                       |  | 70,775            |  | 63,235             |  | 44,530             
|Transfer agent and filing fees                               |  | 12,288            |  | 16,514             |  | 17,438             
|Valuation allowance for foreign value added
tax credit (IVA) |  | 1,751             |  | 46,197             |  | 395,631            
|                                                             |  |                   |  |                    |  |                    
|                                                             |  | 1,394,172         |  | 1,667,058          |  | 1,968,607          
|                                                             |  |                   |  |                    |  |                    
|Other items                                                  |  |                   |  |                    |  |                    
|Gain on sale of equipment                                    |  | (25,167)          |  | -                  |  | -                  
|Interest income                                              |  | (65,418)          |  | (161,429)          |  | (106,674)          
|Loss on the sale of mineral properties                       |  | 5,052,205         |  | -                  |  | -                  
|Write-off of unproven mineral rights                         |  | 4,215             |  | 1,782,804          |  | -                  
|Write-off of amounts receivable                              |  | -                 |  | -                  |  | 15,291             
|Unrealized loss on marketable securities (Note 4)            |  | 6,229             |  | -                  |  | -                  
|                                                             |  | 4,972,064         |  | 1,621,375          |  | (91,383)           
|                                                             |  |                   |  |                    |  |                    
|Net loss and comprehensive loss for the year                 |  | (6,366,236)       |  | (3,288,433)        |  | (1,877,224)        
|                                                             |  |                   |  |                    |  |                    
|Loss per share (Note 2)                                      |  | $          (0.21) |  | $           (0.11) |  | $            (0.09)
|                                                             |  |                   |  |                    |  |                    
|Weighted average number of
common shares outstanding         |  | 29,651,539        |  | 29,322,706         |  | 21,183,935         





77









PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



|                                             | Number of
Shares | Amount        | Shares
Subscribed | Contributed
Surplus | Deficit          | Total
Shareholders
Equity
|-------------------------------------------- | ---------------- | ------------- | ----------------- | ------------------- | ---------------- | -------------------------
|Balance as at June 30, 2006                  | 20,888,039       | $   9,177,125 | $              -  | $    300,473        | $    (2,139,521) | $  7,338,077             
|Share issues:                                |                  |               |                   |                     |                  |                          
|Private placement                            |                  |               | 59,800            |                     |                  | 59,800                   
|Issued for resource property                 | 100,000          | 78,000        | -                 | -                   |                  | 78,000                   
|Exercise of warrants                         | 759,000          | 569,250       | -                 |                     |                  | 569,250                  
|Exercise of options                          | 12,500           | 8,300         | -                 | -                   |                  | 8,300                    
|Fair market value of stock options exercised | -                | 3,681         | -                 | (3,681)             | -                | -                        
|Stock based compensation                     | -                | -             | -                 | 340,206             | -                | 340,206                  
|Share issue costs                            | -                | (12,438)      | -                 | -                   | -                | (12,438)                 
|Net loss and comprehensive loss              | -                | -             | -                 | -                   | (1,877,224)      | (1,877,224)              
|                                             |                  |               |                   |                     |                  |                          
|Balance at June 30, 2007                     | 21,759,539       | 9,823,918     | 59,800            | 636,998             | (4,016,745)      | 6,503,971                
|Share issues:                                |                  |               |                   |                     |                  |                          
|Private placement                            | 7,887,000        | 5,126,550     | (59,800)          | -                   | -                | 5,066,750                
|Exercise of options                          | 5,000            | 2,600         | -                 | -                   | -                | 2,600                    
|Fair market value of stock options exercised | -                | 1,402         | -                 | (1,402)             | -                | -                        
|Stock based compensation                     | -                | -             | -                 | 147,744             | -                | 147,744                  
|Finders fees                                 | -                | (151,997)     | -                 | -                   | -                | (151,997)                
|Share issue costs                            | -                | (42,312)      | -                 | -                   | -                | (42,312)                 
|Net loss and comprehensive income            | -                | -             | -                 | -                   | (3,288,433)      | (3,288,433)              
|                                             |                  |               |                   |                     |                  |                          
|Balance at June 30, 2008                     | 29,651,539       | 14,760,161    | -                 | 783,340             | (7,305,178)      | 8,238,323                
|Share issues:                                |                  |               |                   |                     |                  |                          
|Stock based compensation                     | -                | -             | -                 | 21,811              | -                | 21,811                   
|Net loss and comprehensive income            | -                | -             | -                 | -                   | (6,366,236)      | (6,366,236)              
|                                             |                  |               |                   |                     |                  |                          
|Balance at June 30, 2009                     | 29,651,539       | $  14,760,161 | $              -  | $    805,151        | $ (13,671,414)   | $  1,893,898             





78









PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended June 30,

(stated in Canadian dollars)

|                                                                                                         |  | 2009                 |  | 2008                   |  | 2007             
|-------------------------------------------------------------------------------------------------------- |  | -------------------- |  | ---------------------- |  | -----------------
|                                                                                                         |  |                      |  |                        |  |                  
|Cash provided by (used for):                                                                             |  |                      |  |                        |  |                  
|Operating Activities                                                                                     |  |                      |  |                        |  |                  
|Net loss for the year                                                                                    |  | $  (6,366,236)       |  | $  (3,288,433)         |  | $ (1,877,224)    
|Items not involving cash:                                                                                |  |                      |  |                        |  |                  
|Stock-based compensation                                                                                 |  | 21,811               |  | 147,744                |  | 340,206          
|Write-off of unproven mineral properties                                                                 |  | 4,215                |  | 1,782,804              |  | -                
|Write-off of amounts receivable                                                                          |  | -                    |  | -                      |  | 15,291           
|Loss on sale of mineral properties                                                                       |  | 5,052,205            |  | -                      |  | -                
|Amortization                                                                                             |  | 27,217               |  | 26,469                 |  | 23,105           
|Unrealized loss on marketable securities                                                                 |  | 6,229                |  | -                      |  | -                
|Gain on sale of equipment                                                                                |  | (25,167)             |  | -                      |  | -                
|                                                                                                         |  |                      |  |                        |  |                  
|                                                                                                         |  | (1,279,726)          |  | (1,331,416)            |  | (1,498,622)      
|                                                                                                         |  |                      |  |                        |  |                  
|Changes in non-cash working capital:                                                                     |  |                      |  |                        |  |                  
|Amounts receivable                                                                                       |  | 99,917               |  | (61,651)               |  | (39,838)         
|Prepaid expenses                                                                                         |  | 100,402              |  | (5,200)                |  | (11,304)         
|Accounts payable and accrued liabilities                                                                 |  | (18,041)             |  | (179,224)              |  | (157,664)        
|Due to related parties                                                                                   |  | -                    |  | (3,233)                |  | 3,233            
|                                                                                                         |  |                      |  |                        |  |                  
|                                                                                                         |  | (1,097,448)          |  | (1,580,724)            |  | (1,704,195)      
|                                                                                                         |  |                      |  |                        |  |                  
|Investing Activities                                                                                     |  |                      |  |                        |  |                  
|Purchase of equipment                                                                                    |  | (25,896)             |  | (10,150)               |  | (83,249)         
|Proceeds from the sale of equipment                                                                      |  | 63,297               |  | -                      |  | -                
|Short-term investments                                                                                   |  | 1,605,797            |  | (2,861,753)            |  | -                
|Proceeds on sale of mineral properties                                                                   |  | 99,127               |  | -                      |  | -                
|Expenditures on unproven mineral rights                                                                  |  | (261,054)            |  | (1,304,593)            |  | (2,732,966)      
|Expenditures on oil and gas properties                                                                   |  | (322,802)            |  | -                      |  | -                
|                                                                                                         |  |                      |  |                        |  |                  
|                                                                                                         |  | 1,158,469            |  | (4,176,496)            |  | (2,816,215)      
|                                                                                                         |  |                      |  |                        |  |                  
|Financing Activities                                                                                     |  |                      |  |                        |  |                  
|Shares issued for cash                                                                                   |  | -                    |  | 5,126,550              |  | -                
|On warrant exercise                                                                                      |  | -                    |  | -                      |  | 569,250          
|On option exercise                                                                                       |  | -                    |  | 2,600                  |  | 8,300            
|Shares subscribed                                                                                        |  | -                    |  | (59,800)               |  | 59,800           
|Share issue costs                                                                                        |  | -                    |  | (194,309)              |  | (12,438)         
|                                                                                                         |  |                      |  |                        |  |                  
|                                                                                                         |  | -                    |  | 4,875,041              |  | 624,912          
|                                                                                                         |  |                      |  |                        |  |                  
|Net increase (decrease) in cash and cash equivalents                                                     |  | $         61,021     |  | $      (882,179)       |  | (3,895,498)      
|                                                                                                         |  |                      |  |                        |  |                  
|Cash and cash equivalents  beginning of year                                                            |  | 187,551              |  | 1,069,730              |  | 4,965,228        
|                                                                                                         |  |                      |  |                        |  |                  
|Cash and cash equivalents end of year                                                                   |  | $       248,572      |  | $        187,551       |  | $      1,069,730 
|                                                                                                         |  |                      |  |                        |  |                  
|Supplemental disclosure of non-cash Investing and Financing Activities:                                  |  |                     
|                                                                                                         |  |                      |  |                        |  |                  
|Cash and cash equivalents consist of:                                                                    |  |                      |  |                        |  |                  
|Cash balances with banks                                                                                 |  | $      248,572       |  | $        187,551       |  | $         307,977
|Term deposits                                                                                            |  | $                  - |  | $                    - |  | $         761,753
|Total cash and cash equivalents                                                                          |  | $      248,572       |  | $         187,551      |  | $      1,069,730 
|                                                                                                         |  |                      |  |                        |  |                  
|Marketable securities received on the sale of mineral properties                                         |  | $        41,104      |  | -                      |  | -                
|                                                                                                         |  |                      |  |                        |  |                  
|Shares reserved for issue for Slick Rock Uranium Project                                                 |  | $                  - |  | $                    - |  | $          78,000
|                                                                                                         |  |                      |  |                        |  |                  
|Deferred expenditures on unproven mineral rights and oil and
gas properties included in accounts payable |  | $        38,635      |  | $          29,998      |  | $        269,551 





79









PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF DEFERRED EXPENDITURES ON UNPROVEN MINERAL RIGHTS

For the year ended June 30,

(stated in Canadian dollars)



|                                  | Arroyo Verde
(Argentina) | San Rafael
(Argentina) | La Pampa Uranium
(Argentina) | Tiger Uranium
(Argentina) | Slick Rock Uranium
(USA) | Project Investigation | Total             
|--------------------------------- | ------------------------ | ---------------------- | ---------------------------- | ------------------------- | ------------------------ | --------------------- | ------------------
|                                  |                          |                        |                              |                           |                          |                       |                   
|Total as at June 30, 2006         | 2,022,825                | 580,017                | -                            | -                         | -                        | -                     | 2,602,842         
|                                  |                          |                        |                              |                           |                          |                       |                   
|Land acquisition & holding costs  | 72,695                   | 221,715                | 17,143                       | 1,131                     | 132,448                  | -                     | 445,132           
|Environment                       | 1,203                    | 2,116                  | -                            | 2,027                     | -                        | -                     | 5,346             
|Geology                           | 413,219                  | 262,537                | 152,632                      | 56,292                    | 1,070                    | -                     | 885,750           
|Geophysics                        | 27,607                   | 64,260                 | -                            | -                         | -                        | -                     | 91,867            
|Surface geochemistry              | 40,404                   | 23,768                 | 1,861                        | 1,789                     | -                        | -                     | 67,822            
|Drilling                          | 1,261,256                | 323,344                | -                            | -                         | -                        | -                     | 1,584,600         
|Total expenditures                | 1,816,384                | 897,740                | 171,636                      | 61,239                    | 133,518                  | -                     | 3,080,517         
|                                  |                          |                        |                              |                           |                          |                       |                   
|Total as at June 30, 2007         | 3,839,209                | 1,477,757              | 171,636                      | 61,239                    | 133,518                  | -                     | 5,683,359         
|                                  |                          |                        |                              |                           |                          |                       |                   
|Land acquisition & holding costs  | 108,687                  | (27,301)               | 11,523                       | -                         | 16,873                   | -                     | 109,782           
|Environment                       | 3,611                    | 206                    | 4,778                        | 1,894                     | 21,907                   | -                     | 32,396            
|Geology                           | 155,866                  | 101,517                | 415,886                      | 6,416                     | 62,353                   | -                     | 742,038           
|Geophysics                        | 6,164                    | 26,985                 | 104                          | -                         | -                        | -                     | 33,253            
|Surface geochemistry              | 4,654                    | 297                    | 4,806                        | -                         | 9,848                    | -                     | 19,605            
|Drilling                          | 3,636                    | 499                    | -                            | -                         | 123,831                  | -                     | 127,966           
|Total expenditures                | 282,618                  | 102,203                | 437,097                      | 8,310                     | 234,812                  | -                     | 1,065,040         
|Property write-offs               | -                        | (1,414,474)            | -                            | -                         | (368,330)                | -                     | (1,782,804)       
|                                  | 282,618                  | (1,312,271)            | 437,097                      | 8,310                     | (133,518)                | -                     | (717,764)         
|                                  |                          |                        |                              |                           |                          |                       |                   
|Total as at June 30, 2008         | $  4,121,827             | $     165,486          | $   608,733                  | $    69,549               | $              -         | $              -      | $   4,965,595     
|                                  |                          |                        |                              |                           |                          |                       |                   
|Land acquisition & holding costs  | 53,853                   | 2,087                  | 37,481                       | -                         | -                        | 30,677                | 124,098           
|Environment                       | 123                      | -                      | -                            | -                         | -                        | -                     | 123               
|Geology                           | 26,034                   | 15,342                 | 32,958                       | 22,934                    | 4,215                    | 4,136                 | 105,619           
|Geophysics                        | -                        | -                      | -                            | -                         | -                        | -                     | -                 
|Surface geochemistry              | -                        | 852                    | 171                          | -                         | -                        | 193                   | 1,216             
|Drilling                          | -                        | -                      | -                            | -                         | -                        | -                     | -                 
|Total expenditures                | 80,010                   | 18,281                 | 70,610                       | 22,934                    | 4,215                    | 35,006                | 231,056           
|Proceeds on sale of properties    | (99,127)                 | -                      | -                            | -                         | -                        | (41,104)              | (140,231)         
|Gain (loss) on sale of properties | (4,102,710)              | (183,767)              | (679,343)                    | (92,483)                  | -                        | 6,098                 | (5,052,205)       
|Property write-offs               | -                        | -                      | -                            | -                         | (4,215)                  | -                     | (4,215)           
|                                  |                          |                        |                              |                           |                          |                       |                   
|Total as at June 30, 2009         | $                 -      | $                -     | $              -             | $              -          | $              -         | $             -       | $                -





80









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



1.

NATURE OF OPERATIONS AND GOING CONCERN



Portal Resources Ltd. was incorporated on August 14, 2000 under the Company Act of the Province of British Columbia.



The Company is an exploration stage company whose business activity is the exploration of mineral rights located in Mexico, and the exploration of oil and gas in Central Alberta, Canada. The Company has not yet determined if any of these rights contain economic mineral reserves, oil or gas reserves, and, accordingly, the amounts shown for deferred exploration costs represent costs incurred to date, less write-downs, and do not necessarily reflect present or future values.  The recovery of these amounts is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration of the rights, and upon the commencement of future profitable production or, alternatively, upon the Companys ability to dispose of its interests on an advantageous basis. To date, the Company has not earned significant revenues and has an accumulated operation deficit of $13,671,414.



Current economic conditions have limited the Companys ability to access financing through equity markets and this has created significant uncertainty as to the Companys ability to fund ongoing operations for the next operating period. In a response to conserve capital the Company has significantly curtailed operations. See Note 13 for further discussion on the Companys conservation and management of capital.



The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and the classification of liabilities that might be necessary should the Company be unable to continue in the normal course of business.



2.

SIGNIFICANT ACCOUNTING POLICIES



Basis of presentation and principles of consolidation

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP). The differences between those principles and the ones that would be applied under U.S. generally accepted accounting principles (U.S. GAAP) are disclosed in Note 15.



References to the Company are inclusive of the Canadian parent company; its wholly owned U.S. subsidiary, Portal Resources US Inc, and its formerly owned Argentinean subsidiary, Portal del Oro S.A. (Portal S.A.). All significant inter-company transactions and balances have been eliminated.



Foreign Currency Translation

The financial statements are presented in Canadian dollars.  Foreign denominated monetary assets and liabilities are translated to their Canadian dollar equivalent using foreign exchange rates at the balance sheet dates.  Non-monetary items are translated at historical exchange rates.  Revenues and expenses are translated using average rates of exchange during the year.  Exchange gains or losses arising from currency translation are included in the determination of net income.



Cash equivalents

Cash equivalents consist of highly liquid investments with maturity dates of less than three months that are readily convertible into known amounts of cash.  Interest earned is recognized immediately in operations.



Use of estimates

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





81









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES, (Continued)



Unproven mineral rights

Mineral right acquisition costs and their related exploration costs are deferred until the rights are placed into production or disposed of.  These costs will be amortized over the estimated useful life of the rights following the commencement of production, or written-off if the rights are disposed of.



Cost includes the cash consideration and the fair market value of shares issued on acquisition of mineral rights.  Rights acquired under option agreements or joint ventures, whereby payments are made at the sole discretion of the Company, are recorded in the accounts at such time as the payments are made.  The proceeds from options granted are netted against the cost of the related mineral rights and any excess is applied to operations.



The Company reviews capitalized costs on its mineral rights on a periodic basis and will recognize impairment in value based upon current exploration results and upon managements assessment of the future probability of profitable revenues from the rights or from the sale of the rights.  Managements assessment of the rights estimated current fair market value is also based upon a review of other similar mineral rights transactions that have occurred in the same geographic area as that of the rights under review.



Oil and Gas Properties

Oil and natural gas properties are accounted for using the successful efforts method of accounting. Geological and geophysical costs are expensed in the period in which they are incurred and costs of drilling an unsuccessful well are expensed when it becomes known the well did not result in a discovery of proven reserves or where one year has elapsed since the completion of drilling and efforts to establish proved reserves are not practical. All other costs of exploring and developing proven reserves are capitalized as oil and gas properties.



Oil and gas properties are depleted using the unit-of-production method. Unit-of-production rates are based on proven developed reserves, which are reserves estimated to be recovered from existing facilities using current operating methods. Unproved properties are not subject to depletion.



Oil and gas properties are assessed, at least annually, for impairment to ensure that the carrying value of the property on the balance sheet is recoverable. If a property's carrying value exceeds the sum of undiscounted future cash flows resulting from its use and eventual disposition, its value is impaired. An impairment loss is recognized for the amount by which the carrying value exceeds its recoverable amount. This loss is charged to depletion expense.



Asset retirement obligations

The Company recognizes the fair value of a liability for an asset retirement obligation in the year in which it is incurred and when a reasonable estimate of the fair value can be made based on expected future cash outflows discounted to present value.



The associated asset retirement costs are capitalized as part of the carrying amount of long lived assets. The liability is accreted over the estimated time period until settlement of the obligation and the asset is depreciated over its estimated remaining useful life. Changes in the liability for an asset retirement obligation due to the passage of time will be measured by applying an interest method of allocation.  The amount will be recognized as an increase in the liability and an accretion expense in the statement of operations.  Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease in the carrying amount of the liability and the related capitalized asset retirement cost.



Impairment of long-lived assets

Long-lived assets are assessed for impairment when events and circumstances warrant, when the carrying amount of the asset exceeds its estimated undiscounted net cash flow from use or its fair value, at which time the impairment is charged to earnings.





82









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES, (Continued)



Environmental expenditures

The operations of the Company have been and may in the future, be affected in varying degrees by changes in environmental regulations, including those for site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly from country to country and are not predictable. Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against operations as incurred or capitalized and amortized depending on their expected future economic benefit. Estimated future removal and site restoration costs are recognized when the ultimate liability is reasonably determinable, and are charged against operations over the estimated remaining life of the related business operations, net of expected recoveries.



Equipment

Equipment is recorded at cost net of accumulated amortization. Amortization is provided for using the straight-line method at the following annual rates: Computer equipment  30%; Computer software  50%, Vehicles  30%, Field equipment & Furniture and fixtures  20%.



Share capital

Common shares issued for non-monetary consideration are recorded at their fair market value based upon the trading price of the Companys shares on the TSX Venture Exchange.



Stock-based compensation

The Company accounts for stock options granted to directors, officers, employees and nonemployees using the fair value method of accounting. Accordingly, the fair value of the options at the date of the grant is determined using the Black-Scholes option pricing model and stock-based compensation is accrued and charged to operations, with an offsetting credit to contributed surplus, on a straight-line basis over the vesting periods. The fair value of stock options granted to non-employees is re-measured at the earlier of each financial reporting or vesting date, and any adjustment is charged or credited to operations upon re-measurement. If and when the stock options are exercised, the applicable amounts of contributed surplus are transferred to share capital. The Company has not incorporated an estimated forfeiture rate for stock options that will not vest; rather the Company accounts for actual forfeitures as they occur.



The proceeds received by the Company on the exercise of options are credited to share capital.



Loss per share

Loss per share has been calculated using the weighted-average number of common shares outstanding during the period.  Fully diluted loss per share amounts are not presented, as they are anti-dilutive.



Comprehensive income

Comprehensive income is the overall change in the net assets of the Company for the period, other than changes attributed to transactions with shareholders. It is made up of net income and other comprehensive income. The historical make up of net income has not changed. Other comprehensive income includes gains or losses, which GAAP requires to be recognized in a period but excluded from net income for that period. The Company has no items of other comprehensive income in any period presented. Accordingly, net loss as presented in the Companys statement of operations and comprehensive loss equals comprehensive loss.



Income taxes

The Company accounts for the tax consequences of future tax assets and liabilities attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be settled.  When the future realization of income tax assets does not meet the test of being more likely than not to occur, a valuation allowance in the amount of the potential future benefit is taken and no asset is recognized.  The Company has taken a valuation allowance for the full amount of all potential net tax assets.





83









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES, (Continued)



Financial instruments

The Company classifies its financial instruments into one of the following categories: held-to-maturity investments, loans and receivables, available-for-sale, held for trading or other financial liabilities. The Company has designated its cash and cash equivalents, marketable securities, and short-term investments as held-for-trading, accounts receivable as loans and receivables and accounts payable and accrued liabilities as other financial liabilities.



All financial instruments are measured in the balance sheet at fair value except for loans and receivables, held-to-maturity investments and other liabilities, which are measured at amortized cost. Subsequent measurement and changes in fair value will depend upon initial classification as follows: held-for-trading financial instruments are measured at fair value and changes in fair value are recognized in net income; available-for-sale financial instruments are measured at fair value with changes in fair value in other comprehensive income until the investment is no longer recognized or impaired, at which time the amounts would be recorded in net income.



Transactions costs that are directly attributable to the acquisition or issue of financial instruments and that are classified as other than held-for-trading, are expensed as incurred and included in the initial carrying value of such instruments.



Comparative figures

Certain comparative figures have been reclassified to conform with the presentation adopted in the current year.



New accounting policies

Effective July 1, 2008, the Company adopted the following provisions of the Canadian Institute of Chartered Accountants (CICA) Handbook Sections. There was no material impact on the Companys financial condition or operating results as a result of the adoption of these new standards:



(a)

Section 3862  Financial Instruments  Disclosures, which replaces Section 3861 and provides expanded disclosure requirements that provide additional detail by financial asset and liability categories (see Note 12).



(b)

Section 3863  Financial Instruments  Presentation, to enhance financial statement users understanding of the significance of financial instruments to an entitys financial position, performance and cash flows (see Note 12).



(c)

Section 1535  Capital Disclosures, which establishes standards for disclosing information about an entitys capital and how it is managed (see Note 13). Under this standard, the Company will be required to disclose the following:



a.

qualitative information about its objectives, policies and processes for managing capital;

b.

summary quantitative data about what it manages as capital;

c.

whether during the period it complied with any externally imposed capital requirement to which it is subject; and

d.

when the Company has not complied with such externally imposed capital requirements, the consequences of such non-compliance.



(d)

Section 1400  General Standards of Financial Statements Presentation, to include requirements for management to assess and disclose an entitys ability to continue as a going concern (see Note 1).





84









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES, (Continued)



New accounting policies(continued)





(e)

Credit risk and fair value of financial assets and financial liabilities

In January 2009, the CICA issued the Emerging Issues Committee (EIC) Abstract EIC-173, Credit Risk and the Fair Value of Financial Assets and Financial Liabilities, effective for interim an annual financial statements ending on or after January 20, 2009. EIC-173 provides further information on the determination of the faire value of financial assets and financial liabilities under Section 3855, Financial Instruments  Recognition and Measurement. It states that an entitys own credit and the credit risk of the counterparty should be taken into account in determining the fair value of financial assets and financial liabilities, including derivative instruments. EIC-173 is applied retroactively, without restatement of prior periods, to all financial assets and liabilities measured at fair value. The Company adopted this abstract during fiscal 2009 and this standard did not have a material impact on the Companys consolidated financial statements.



(f)

Mining exploration costs

On March 27, 2009, the CICA approved EIC-174 Mining Exploration Costs. This guidance clarified that an entity that has initially capitalized exploration costs has an obligation in the current and subsequent accounting periods to test such costs for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The application of EIC174 did not have any impact on the Companys consolidated financial statements.



Accounting Policies Not Yet Adopted

Convergence to international Financial Reporting Standards (IFRS)



In February 2008, the CICA announced that Canadian GAAP for publicly accountable enterprises will be replaced by International Financial Reporting Standards (IFRS) for fiscal years beginning on or after January 1, 2011. Companies will be required to provide IFRS comparative information for the previous fiscal year. The transition date of July 1, 2011 will require the restatement for comparative purposes, amountsreported by the Company for the year ended June 30, 2011, for which the current and comparative information will be prepared under IFRS.



The Company has commenced its IFRS conversion project in 2008. The Companys IFRS project consists of three phases  scoping, evaluation and design, and implementation and review. The Company has commenced the scoping phase of the project, which consists of project initiation and awareness, identification of high-level differences between Canadian GAAP and IFRS and project planning and resourcing. The Company has completed a high level scoping exercise and has prepared a preliminary comparison of financial statement areas that will be impacted by the conversion.



A detailed assessment of the impact of adopting IFRS on the Companys consolidated financial statements, accounting policies, information technology and data systems, internal controls over financial reporting, disclosure controls and procedures, and the various covenants and capital requirements and business activities has not been completed. The impact on such elements will depend on the particular circumstances prevailing at the adoption date and the IFRS accounting policy choices made by the Company. The Company has not completed its quantification of the effects of adopting IFRS. The financial performance and financial position as disclosed in our Canadian GAAP financial statements may be significantly different when presented in accordance with IFRS.



Goodwill and intangible assets



In February 2008, the CICA issued CICA Handbook Section 3064  Goodwill and Intangible Assets replacing Section 3450, Research and Development Costs. The new standard, which applies to annual and interim financial statements relating to fiscal years beginning on or after October 1, 2008, establishes guidelines for the recognition, measurement, presentation and disclosure of research and development costs. The Company does not expect that the adoption of this standard will have a material impact on its consolidated financial statements.





85









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES, (Continued)



Accounting Policies Not Yet Adopted(continued)



Business combinations



In January 2009, the CICA issued the new handbook Section 1582, Business Combinations effective for fiscal years beginning on or after January 1, 2011. Earlier adoption of Section 1582 is permitted. This pronouncement further aligns Canadian GAAP with US GAAP and IFRS and changes the accounting for business combinations in a number of areas. It establishes principles and requirements governing how an acquiring company recognizes and measures in its financial statements identifiable assets acquired, liabilities assumed, any non-controlling interest in the acquisition, and goodwill acquired. The section also establishes disclosure requirements that will enable users of the acquiring companys financial statements to evaluate the nature and financial effects of its business combinations. Although the Company is considering the impact of adopting this pronouncement on the consolidated financial statements, it will be limited to any future acquisitions beginning in fiscal 2012.



Consolidated financial statement and non-controlling interests



In January 2009, the CICA issued the new handbook Section 1601, Consolidated Financial Statements, and Section1602, Non-controlling Interests, effective for fiscal years beginning on or after January 1, 2011. Earlier adoption of these recommendations is permitted. These pronouncements further align Canadian GAAP with US GAAP and IFRS. Sections 1601 and 1602 change the accounting and reporting for ownership interest in subsidiaries held by parties other than the parent. Non-controlling interests are to be presented in the consolidated statement of financial position within equity but separate from the parents equity. The amount of consolidated net income attributable to the parent and to the non-controlling interest is to be clearly identified and presented on the face of the consolidated statement of income. In addition, these pronouncements establish standards for a change in a parents ownership interest in a subsidiary and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. They also establish reporting requirements for providing sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. The Company is currently considering the impact of adopting these pronouncements on its consolidated financial statements in fiscal 2012 in connection with the conversion to IFRS.





3.

SHORT TERM INVESTMENTS



Short term investments consists of highly liquid investments, including guaranteed investment certificates with major financial institutions, having a maturity of 12 months or less at acquisition and that are readily convertible to contracted amounts of cash.





4.

MARKETABLE SECURITIES



On May 29, 2009 Portal Resources Inc. acquired 150,000 shares of Pengram Corporation (Pengram) in return of assigning all of its interest in an option agreement (see Note 6). The shares were recorded at fair value of $41,104. At June 30, 2009, the fair value of the Pengram shares was $34,875. Consequently, Portal recorded a loss of $6,229.





86









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



5.

EQUIPMENT



| |                      | 2009       |  | 2008                    
| | -------------------- | ---------- |  | ------------------------
| |                      |            |  |                         
| |                      | Cost       |  | Accumulated
amortization
| |                      |            |  |                         
| | Computer equipment   | $   16,603 |  | $   13,815              
| | Computer software    | 20,854     |  | 20,553                  
| | Furniture & fixtures | 5,655      |  | 2,717                   
| | Vehicles             | 25,896     |  | 3,884                   
| | Field equipment      | 20,867     |  | 10,067                  
| |                      | $   89,875 |  | $   51,036              





6.

UNPROVEN MINERAL RIGHTS



The Companys mineral properties are all located in Argentina and the United States.



Arroyo Verde (Argentina)

On November 27, 2003, Portal S.A. signed an option to acquire a 100% interest in a series of mining rights in Chubut province of Argentina.  Under the terms of the agreement the Company had to make cash payments totaling US$210,000 (paid) on or before December 1, 2007.



On or before December 1, 2008 or upon receipt of the feasibility study, the Company had to pay an advance royalty payment of US$1 for each ounce of gold equivalent contained within the measured and indicated resource categories with a minimum payment of US$100,000 and a maximum payment of US$250,000. This advance royalty could be applied against subsequent royalty obligations.  The vendor retained a 2% net smelter royalty that the Company can purchase 1% of, at any time, for US$1,000,000.



On November 12, 2008 an amendment to the agreement was signed where the owner agreed to defer the payment due on December 1, 2008 until December 1, 2009 in exchange for a payment of US$10,000 on December 1, 2008.



The Company after reviewing work done on the property to date, concluded that the potential did not justify further work and renounced the mining rights held under the project. As such the project expenditures were written off and subsequently Portals Argentinean subsidiary was sold.



The Company wrote off $4,102,710 of mineral properties. On May 14, 2009 the Company sold the subsidiary that held rights to the option agreements for $99,127.





San Rafael (Argentina)

The properties in the San Rafael project have been acquired through two separate option agreements.



San Pedro

On June 18, 2004, Portal S.A. signed an option to acquire a 100% interest in a series of mining rights in Mendoza province of Argentina.  Under the terms of the agreement the Company must make cash payments totaling US$ 830,000 (US$120,000 paid) on or before June 18, 2012.



On March 27, 2008, the Company notified the owners of the San Pedro claims of the decision to return the claims and has no further commitments with respect to this agreement.





87









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



6.

UNPROVEN MINERAL RIGHTS, (Continued)



Minera Rio de la Plata

On June 18, 2004, Portal S.A. signed an option to acquire a 100% interest in a series of mining rights in Mendoza, province of Argentina.  Under the terms of the original agreement, the Company has paid US$95,000 to date and the subsequent payment requirements to exercise the option are as follows:



|                           | US$                             
|-------------------------- | --------------------------------
|On or before April 9, 2008 | $  70,000 (subsequently amended)
|On or before April 9, 2009 | $100,000                        



The Company is obligated to make the initial three annual payments of $15,000 (paid).  Should the Company wish to develop any of the four areas defined in the agreement, during the term of the option, it must pay the sum of US$50,000 for each area so designated.  The Company would then form a new 100% owned subsidiary to which the mining rights in that designated area would be transferred.  The new subsidiary would be subject to a 15% to 20% net profit interest to the owner.



The Company has the right to purchase 10% of the net profits interest at any time for the sum of US$1,000,000.



On March 3, 2008 the Minera Rio de la Plata (MRDP) agreement was modified so the US$70,000 payment due April 9, 2008 was deferred to June 10, 2008.



Subsequently, management returned all the claims held under the MRDP agreement, with the exception of nine claims, which will continue to form the Tiger uranium project. On April 22, 2008, an amendment to the MRDP agreement was executed by the Company and MRDP to this effect.



On April 30, 2008, MRDP and the Company signed an agreement whereby the due date for the US$70,000 payment as amended to June 10, 2008 was extended until July 10, 2008.



On June 10, 2008, the Company informed MRDP of the Companys decision to declare the nine claims comprising the Tiger Uranium Project as a Development Area under clause 6.4 of the MRDP agreement and to pay MRDP the sum of US$50,000.



On June 17, 2008, the Company received from MRDP notification of its rejection of the Companys declaration of a Development Area.



On July 18, 2008, the Company received notification from MRDP of their declaration that the MRDP contract is null and void for failure to make the US$70,000 payment due July 10, 2008.



The Company retained legal counsel in the matter and was of the opinion that the declaration of a Development Area on June 10, 2008 was valid and thus the MRDP contract was valid and in good standing. The Company pursued both legal avenues as well as negotiating with MRDP to resolve the dispute.

The company after reviewing work done on the property to date concluded that the potential did not justify further work and decided to cease legal measurers and negotiations to resolve the dispute arising from Portals having declared a Development Area under terms of the joint venture agreement with MRPD. As such the project expenditures were written off and subsequently Portal's Argentinean subsidiary was sold

The Company wrote off $276,250 of mineral properties which included $92,483 from the Tiger Uranium property. On May 14, 2009 the Company sold the subsidiary that held rights to the option agreements.





88









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



6.

UNPROVEN MINERAL RIGHTS, (Continued)



La Pampa Uranium (Argentina)

On April 20, 2007 the Company signed a letter agreement with Consolidated Pacific Bay Minerals Ltd. whereby the Company has an option to earn a 60% interest in a series of mining rights in Chubut province of Argentina.  Under the original terms of the agreement the Companys payment requirements are as follows:

|                            | US$             
|--------------------------- | ----------------
|On signing of the agreement | $  15,000 (paid)
|On or before April 20, 2008 | $  30,000       
|On or before April 20, 2009 | $  50,000       
|On or before April 20, 2010 | $  50,000       



In order to maintain the option in good standing, the Company must expend an aggregate of US$1,200,000 by April 20, 2011.  The required cumulative required expenditures are as follows:



|On or before April 20, 2008 | $    150,000
|--------------------------- | ------------
|On or before April 20, 2009 | $    400,000
|On or before April 20, 2010 | $    800,000
|On or before April 20, 2011 | $ 1,200,000 



On March 11, 2008, the agreement of April 20, 2007 was modified so that the time periods for the above referenced payment and expenditure commitments will begin on the date that the Argentina Department of Mines gives formal notice that the concessions for the properties have been granted to Consolidated Pacific Bay Minerals Ltd.



The Company reassessed the potential of its wholly owned claims as well as the agreement with Consolidated Pacific Bay Minerals Ltd. and concluded that the potential did not justify further work, and renounced the mining rights held under the project. As such the project expenditures were written off and subsequently Portals Argentinean subsidiary was sold The Company wrote off $679,343 during the year. On May 14, 2009 the Company sold the subsidiary that held rights to the option agreements.





Slick Rock Uranium (USA)

The property was returned to the vendor with no further commitments necessary on behalf of the Company in June 20, 2009 and the Company wrote off $4,215 during the period.



Nevada Properties (USA)

On September 2, 2008, the Company announced that it had entered into an option agreement under which it has the right to acquire, from Claremont Nevada Mines, Scoonover Exploration and JR Exploration, three properties located in the Walker Lane Belt and Battle Mountain/Eureka Trend in Nevada, USA. Terms of the renewable ten year option include total cash advance royalty payments of US$10,000 on the first anniversary, $15,000 on the second, $20,000 on the third, $25,000 on the fourth and $30,000 on the fifth and each subsequent anniversary date to maintain the option in good standing. The Company, through its subsidiary, Portal Resources US Inc., can acquire a 100% interest in the properties by making an additional payment of $1,000 and delivering a final feasibility study on any of the properties.



The vendors will retain a 3% net smelter returns royalty. The Company has the right to reduce the net smelter returns royalty to 1% for a payment of US$1,000,000.





89









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



6.

UNPROVEN MINERAL RIGHTS, (Continued)



Nevada Properties (USA)(continued)



Golden Snow Property



The Golden Snow property is an advanced Carlin-type gold target comprised of 114 unpatented lode mining claims or 3.5 square miles on the Battle Mountain/Eureka Trend.



Fish Project



The Fish Project is situated within the Walker Lane Mineral Belt, Lone Mountain District, Esmeralda County, Nevada about 12 miles west of the historic mining town of Tonopah, Nevada. The project consists of 58 unpatented lode mining claims or 1.9 square miles.



CPG Project



The CPG Project, also within the Walker Lane Mineral Belt, is in Mineral County, Nevada and consists of 44 unpatented lode mining claims or 1.3 square miles. The property is 10 miles south of Kennecott's now closed Denton-Rawhide Mine.



On May 29, 2009, the Company closed an Assignment Agreement with Pengram Corporation (Pengram) to transfer all the rights on the Nevada claims, in exchange of 150,000 shares of Pengrams common stock. The stock was valued at $41,104 on the date of the exchange and resulted in a gain on sale of $6,098. The Company has no further commitments on the Nevada properties.



7.          OIL AND GAS PROPERTIES



The Companys oil and gas interests are all located in Central Alberta, Canada.



Oil and Gas Joint Ventures



Bigwave Joint Venture



On November 1, 2008 the Company signed a Joint Venture Agreement to participate for a 15% in the exploration, exploitation and production of petroleum and natural gas relating to lands located in Central Alberta. In December of 2008 the agreement was modified to allow the Company to participate to a 20% interest. Subsequent to year end, the Company increased its interest in the Joint Venture to 22%.



Within the area of interest, the Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations.



During the year the Company contributed $343,437 to the Operator (Bigwave).



On January 5, 2009 the Company signed an agreement, Participation Agreement, with certain other partners in the Bigwave Joint Venture. Portal agreeing to pay 100% of the Companys cost per Drill Spacing Unit to earn 100 % of their interest until pay-out and then after pay-out to drop to 70% interest per Drill Spacing Unit.





90









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



7.          OIL AND GAS PROPERTIES (Continued)



Manito Joint Venture



On March 9, 2009 the Company signed the Manito Joint Venture Agreement to participate as to a 33.3% interest for the exploration, exploitation and production of petroleum and natural gas resources in Central Alberta.



The area of interest covered by the agreement is 72 square miles and the Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced.



The Manito Joint Venture has acquired one section of land to date through Alberta Crown Sale.



During the year the Company contributed $18,000 to the Operator (Bigwave).



| |                          | Bigwave        | Manito         | Total        
| | ------------------------ | -------------- | -------------- | -------------
| |                          |                |                |              
| | Oil and gas expenditures | $      343,437 | $       18,000 | $     361,437





8.

SHARE CAPITAL



Authorized

100,000,000 Common Shares without par value

100,000,000 Preferred shares issuable in series



Stock-based Compensation

The Company has a stock option plan (the Stock Option Plan) which provides for equity participation in the Company by its directors, officers, employees and consultants through the acquisition of common shares pursuant to the grant of options to purchase common shares. The maximum aggregate number of common shares reserved and authorized to be issued pursuant to options granted under the Stock Option Plan is 4,447,730 common shares.



The exercise price for options granted under the Stock Option Plan is determined by committee upon grant provided the price is not less than the closing trading price on the day immediately preceding the date of grant, less any discounts permitted by the TSX Venture Exchange or such other stock exchanges on which the common shares are listed.  Options granted under the Stock Option Plan are subject to a minimum one year vesting schedule whereby 25% of each option will vest on each of the three month anniversaries of the date of grant, up to and including the end of the first year after such grant, or such other more restrictive vesting schedule as the administrator of the Stock Option Plan may determine.  Options are non-assignable and are exercisable for a period of up to five years from the date the option is granted, subject to earlier termination after certain events such as the optionees cessation of service to the Company or death.



The Company accounts for its grants in accordance with the fair value method of accounting for stock-based compensation.  For the year ended June 30, 2009, the Company recognized $21,811 (2008 - $147,774) in stock-based compensation for employees, directors and consultants.





91









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



8.

SHARE CAPITAL, (Continued)



The fair value of the options has been calculated using the Black-Scholes option-pricing model, based on the following assumptions:



|                                | 2009          |  | 2008         |  | 2007          
|------------------------------- | ------------- |  | ------------ |  | --------------
|                                |               |  |              |  |               
|Stock compensation              | $      21,811 |  | $    147,744 |  | $      340,206
|                                |               |  |              |  |               
|Risk-free interest rate         | 1.50% - 2.90% |  | 4.00%        |  | 3.4%  4.6%   
|Expected stock price volatility | 121% - 227%   |  | 74%          |  | 49% - 76%     
|Expected option life in years   | 5 years       |  | 1 year       |  | 3 years       
|Expected dividend yield         | Nil           |  | Nil          |  | Nil           



Option prices models require the input of highly subjective assumptions regarding the expected volatility and expected life. Changes in assumptions can materially affect the fair value estimate, and therefore, the existing models do not necessarily provide the reliable measure of the fair value of the companys stock options at the date of grant.



A summary of changes to stock options outstanding is as follows:



|                                           | 2009             | 2008             | 2007            
|------------------------------------------ | ---------------- | ---------------- | ----------------
|                                           |                  | Weighted
Average |                 
|                                           | Number
of shares | Exercise
Price   | Number
of shares
|Outstanding at beginning of period         | 2,753,600        | $0.54            | 2,766,100       
|Granted under plan                         | 2,132,200        | $0.16            | 100,000         
|Exercised                                  | -                | N/A              | (5,000)         
|Forfeited or cancelled                     | (1,197,200)      | $0.44            | (107,500)       
|Outstanding at end of year                 | 3,688,600        | $0.35            | 2,753,600       
|                                           |                  |                  |                 
|Options vested and exercisable at year end | 2,113,900        | $0.50            | 2,750,000       



At June 30, 2009, the weighted average remaining life of the outstanding options is 3.59 years (2008  2.63 years, 2007  3.47 years).



On October 7, 2008, the Company granted Directors and employees 1,095,000 stock options with an exercise price of $0.20. These options have a term of 5 years and vest in equal amounts every three months for 1 year. The fair value of these options was estimated at approximately $0.05 per option at grant date.



On June 9, 2009, the Company granted Directors, employees and consultants 1,037,200 stock options with an exercise price of $0.12. These options have a term of 5 years and vest in equal amounts every three months for 1 year. The fair value of these options was estimated at approximately $0.12 per option at grant date.





92









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



8.

SHARE CAPITAL, (Continued)



Stock options outstanding as at June 30, 2009 are as follows:



|Number    | Exercise Price | Expiry Date
|--------- | -------------- | -----------
|200,000   | $0.86          | 14-Apr-10  
|100,000   | $0.70          | 20-Jan-11  
|25,000    | $0.75          | 18-Oct-11  
|1,041,400 | $0.52          | 5-Dec-11   
|200,000   | $0.70          | 6-Jun-12   
|1,085,000 | $0.20          | 7-Oct-13   
|1,037,200 | $0.12          | 8-Jun-14   
|3,688,600 |                |            



Warrants



A summary of changes to warrants during the year are as follows:



| |                                  | 2009               | 2008                           
| | -------------------------------- | ------------------ | -------------------------------
| |                                  | Number of
warrants | Weighted
Average
Exercise Price
| |                                 
| | Outstanding at beginning of year | 3,943,500          | $0.85                          
| | Granted                          | -                  | -                              
| | Expired                          | -                  | -                              
| | Outstanding at end of year       | 3,943,500          | $0.85                          



Warrants outstanding as at June 30, 2009 are as follows:



|Number    | Exercise Price     | Expiry Date      
|--------- | ------------------ | -----------------
|3,943,500 | $             0.85 | July 18, 2009 (i)



(i)

Subsequent to year end, these warrants expired.





9.

COMMITMENTS



The Company has obligations under an operating lease for its corporate office that is in effect until February 28, 2013.  The remaining future minimum lease payments for the non-cancellable lease are:



|2010 | $    86,457
|---- | -----------
|2011 | $    90,709
|2012 | $    94,961
|2013 | $    65,197
|     | $  337,324 





93









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



10.

RELATED PARTY TRANSACTIONS



Payments to related parties were made in the normal course of operations and were valued at fair value as determined by management.  Amounts due to or from related parties are unsecured, non-interest bearing and due on demand.



For the years ended June 30, 2009, 2008 and 2007



During the year ended June 30, 2009, $42,374 (2008 - $35,939; 2007 - Nil) was charged to a public company with a director in common with the Company for rent.  As at June 30, 2009, $Nil (2008 - $34; 2007  Nil) was receivable from this public company.



During the year ended June 30, 2009, $Nil (2008 - $27,095; 2007 - Nil) was charged to another private company with certain directors in common with the Company for administrative fees and rent. As at June 30, 2009, $Nil (2008 - $806; 2007 - Nil) was receivable from this private company



During the year ended June 30, 2009, $18,832 (2008 - $27,060; 2007 - Nil) was charged to a private company with certain directors in common with the Company for administrative fees and rent. As at June 30, 2009, $Nil (2008 - $18; 2007 - Nil) was receivable from this private company.



During the year ended June 30, 2009, $3,124 (2008 - $Nil; 2007 - Nil) was charged to a private company with a director in common with the Company for rent and expenses.  As at June 30, 2009, $Nil (2008 - $Nil; 2007 - Nil) was receivable from this public company.



During the year ended June 30, 2009 the Company paid a private company with a director in common with the Company an aggregate of $9,707 (2008 - $5,674; 2007 - $1,219) for fees and expenses.  As at June 30, 2009, the Company owed this private company an aggregate of $Nil (2008 - $Nil; 2007 - Nil).





94









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



11.

INCOME TAXES



The Company follows the liability method based on the accounting recommendations for income taxes issued by the Canadian Institute of Chartered Accountants.  Under the liability method future income tax assets and liabilities are computed based on differences between the carrying amount of assets and liabilities on the balance sheet and their corresponding tax values, using tax rates anticipated to apply in the periods when the differences between the carrying amounts and tax values are expected to reverse.  Future income tax assets can also result from unused loss carry-forwards and other deductions.  The valuation of future income tax assets is reviewed annually and adjusted, if necessary, by use of a valuation allowance to reflect the estimated realizable amount.



A reconciliation of income taxes at statutory rates with reported taxes is as follow:



| |                                                                          | 2009                  |  | 2008                 |  | 2007                
| | ------------------------------------------------------------------------ | --------------------- |  | -------------------- |  | --------------------
| | Loss before income taxes                                                 | $  (6,366,236)        |  | $ (3,288,433)        |  | $ (1,094,757)       
| |                                                                          |                       |  |                      |  |                     
| | Expected income taxes (recovery)                                         | $  (1,909,871)        |  | $ (1,019,414)        |  | (373,531)           
| | Non-deductible (deductible) expenses for tax purposes                    | 1,510,592             |  | 641,662              |  | 20,360              
| | Unrecognized benefit on non-capital losses and exploration  expenditures | 399,279               |  | 377,752              |  | 353,171             
| | Total income taxes                                                       | $                   - |  | $                  - |  | $                  -





The significant components of the Companys future income tax assets are as follows:



| |                                                     | 2009                         |  | 2008                    
| | --------------------------------------------------- | ---------------------------- |  | ------------------------
| | Future income tax assets                            |                              |  |                         
| | Non-capital loss carryforwards                      | $            1,335,070       |  | $          989,085      
| | Exploration expenditures                            | -                            |  | 336,993                 
| | Share issue costs                                   | 55,072                       |  | 92,551                  
| | Equipment                                           | 13,176                       |  | 10,289                  
| | Future income tax assets before valuation allowance | 1,403,318                    |  | 1,428,918               
| | Less: valuation allowance                           | (1,403,318)                  |  | (1,428,918)             
| | Net future income tax assets                        | $                          - |  | $                      -



The Company has incurred losses for Canadian income tax purposes of approximately $5.0 million, which can be carried forward to reduce taxable income in future years. The losses expire in the following periods:



| | Year of Origin | Year of Expiry | Non Capital Losses
| | -------------- | -------------- | ------------------
| |                |                |                   
| | 2003           | 2010           | $         62,768  
| | 2004           | 2014           | 146,935           
| | 2005           | 2015           | 567,494           
| | 2006           | 2026           | 816,604           
| | 2007           | 2027           | 894,120           
| | 2008           | 2028           | 1,218,558         
| | 2009           | 2029           | 1,330,930         
| |                |                | $    5,037,409    





95









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



12.

FINANCIAL INSTRUMENTS



The fair values of the Companys cash and cash equivalents, marketable securities, short-term investments, amounts receivable, accounts payables and accrued liabilities approximate their carrying values.



The Companys financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk and interest risk.



(a)

Currency risk



The Companys property interests in the United States and Argentina make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Companys financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian Dollar and foreign functional currencies. The Company does not invest in foreign currency contracts to mitigate the risks.



(b)

Credit risk



The Companys cash and cash equivalents are held in a Canadian financial institution. The Company does not have any asset-backed commercial paper in its cash and cash equivalents or short-term investments. The Companys amount receivable consists primarily of recovered rent and office expense, and tax due from the federal government of Canada.



(c)

Liquidity risk



Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities are due within the current operating period.



(d)

Interest rate risk



Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss as a result of a decline in the fair value of the cash and cash equivalents is limited because they are generally held to maturity.





13.

MANAGEMENT OF CAPITAL RISK



The Company manages its cash and cash equivalents, common shares, stock options and warrants as capital (see Note 8). The Companys objectives when managing capital are to safeguard the Companys ability to continue as a going concern in order to pursue the development of its mineral and oil and gas properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.



The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash and cash equivalents.



In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.





96









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



13.

MANAGEMENT OF CAPITAL RISK, (Continued)



In order to maximize ongoing development efforts, the Company does not pay out dividends. The Companys investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments with maturities 90 days or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations.



The Company expects its current capital resources will be sufficient to carry its exploration plans and operations through its current operating period.





14.

SEGMENTED INFORMATION



The Company operates in a single reportable operating segment, being exploration and development of mineral properties.



Summarized financial information for the geographic segments the Company operates in are as follows:



| |                            | Canada       | USA                | Argentina          | Total     
| | -------------------------- | ------------ | ------------------ | ------------------ | ----------
| | As at June 30, 2009
Assets | $  1,965,990 | $                - | $                - | $1,965,990
| | As at June 30, 2008
Assets | $  4,817,647 | $                - | $  3,502,172       | $8,319,819
| | As at June 30, 2007
Assets | $  2,787,095 | N/A                | $  4,220,382       | $7,007,477





| |                                                    | Canada       | USA             | Argentina     | Total     
| | -------------------------------------------------- | ------------ | --------------- | ------------- | ----------
| | For the year ended June 30, 2009
Loss for the year | $  2,816,010 | $         5,774 | $  3,544,452  | $6,366,236
| | For the year ended June 30, 2008
Loss for the year | $  1,700,802 | $     138,098   | $  1,449,533  | $3,288,433
| | For the year ended June 30, 2007
Loss for the year | $  1,199,088 | N/A             | $     678,136 | $1,877,224





97









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



15.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)



Under Canadian GAAP for junior mining exploration companies, mineral exploration expenditures can be deferred on prospective mineral rights until such time as it is determined that further exploration work is not warranted, at which time the mineral right costs are written-off. Under U.S. GAAP, all exploration expenditures are expensed until an independent feasibility study has determined that the mineral rights are capable of economic commercial production. The following items (a) to (g) provide a summary of the impact of these financial statements that would result from the application of U.S. accounting principles to deferred mineral rights.



|                                                                         | Years ended
|------------------------------------------------------------------------ | -----------
|                                                                         |            
|                                                                         |            
|a)Assets                                                                 |            
|Unproven Mineral Rights Costs                                            |            
|Unproven mineral rights costs under Canadian GAAP:                       |            
|Add oil and gas properties costs under Canadian GAAP                     |            
|Less unproven mineral rights costs and oil and gas properties            |            
|Unproven mineral rights and oil and gas properties costs
under U.S. GAAP |            



|b)  Operations                                                    |  |               |  |               |  |             
|----------------------------------------------------------------- |  | ------------- |  | ------------- |  | ------------
|Net loss under Canadian GAAP                                      |  | $ (6,366,236) |  | $(3,288,433)  |  | $(1,877,224)
|Unproven mineral rights costs expensed under U.S. GAAP            |  | 4,965,595     |  | 717,764       |  | (3,080,517) 
|Oil and Gas Properties under U.S. GAAP                            |  | (361,437)     |  | -             |  | -           
|                                                                  |  |               |  |               |  |             
|Net loss under U.S. GAAP                                          |  | $ (1,762,078) |  | $(2,570,669)  |  | $(4,957,741)
|                                                                  |  |               |  |               |  |             
|c)  Deficit                                                       |  |               |  |               |  |             
|Closing deficit under Canadian GAAP                               |  | $(13,671,414) |  | $(7,305,178)  |  | $(4,016,745)
|Adjustment to deficit for accumulated unproven mineral rights and |  |               |  |               |  |             
|expensed under U.S. GAAP net of income items                      |  | (361,437)     |  | (4,965,595)   |  | (5,683,359) 
|                                                                  |  |               |  |               |  |             
|Closing deficit under U.S. GAAP                                   |  | $(14,032,851  |  | $(12,270,773) |  | $(9,700,104)



|d)  Cash Flows  Operating Activities                                    |               |  |              |  |             
|------------------------------------------------------------------------ | ------------- |  | ------------ |  | ------------
|Cash applied to operations under Canadian GAAP                           | $(1,097,448)  |  | $(1,580,724) |  | $(1,704,195)
|Add net loss following Canadian GAAP                                     | 6,366,236     |  | 3,288,433    |  | 1,877,224   
|Add change in non cash unproven mineral rights expensed
under U.S. GAAP  | 8,637         |  | (239,553)    |  | 347,551     
|add proceeds on sale of mineral properties                               | 99,127        |  | -            |  | -           
|Less net loss under U.S. GAAP                                            | (1,762,078)   |  | (2,570,669)  |  | (4,957,741) 
|Less unproven mineral rights costs expensed under Canadian GAAP          | (5,056,420)   |  | (1,782,804)  |  | -           
|                                                                         |               |  |              |  |             
|Cash applied to operations under U.S. GAAP                               | $ (1,441,946) |  | $(2,885,317) |  | $(4,437,161)
|                                                                         |               |  |              |  |             
|e)  Cash Flows  Investing Activities                                    |               |  |              |  |             
|Cash applied under Canadian GAAP                                         | $   1,158,469 |  | $(4,176,496) |  | $(2,816,215)
|Less change in non cash unproven mineral rights expensed under
U.S. GAAP | -             |  | 239,553      |  | (347,551)   
|Less proceeds on sale of mineral properties                              | (99,127)      |  | -            |  | -           
|Add unproven mineral right costs expensed under U.S. GAAP                | 261,054       |  | 1,065,040    |  | 3,080,517   
|Add oil and gas properties under U.S. GAAP                               | 322,802       |  | -            |  | -           
|                                                                         |               |  |              |  |             
|Cash applied under U.S. GAAP                                             | $  1,643,198  |  | $(2,871,903) |  | $(83,249)   





98









PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended June 30, 2009, 2008 and 2007

(stated in Canadian dollars)



15.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP), (Continued)



Other Differences between Canadian and U.S. GAAP



f)

Stockholders Equity

Common Stock

There are no differences between Canadian and U.S. GAAP for the years ended June 30, 2009, 2008 and 2007 or the year ended June 30, 2009 with respect to the disclosure of stock-based compensation.



g)

Loss per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted loss per share calculations.  Diluted loss per share is not presented as it is anti-dilutive.



|                                                        |  | Years ended
June 30,
|------------------------------------------------------- |  | --------------------
|                                                        |  | 2009                
|                                                        |  | $                   
|                                                        |  |                     
|Numerator: Net loss for the year under U.S. GAAP        |  | (1,762,078)         
|Denominator: Weighted-average number of shares under    |  |                     
|Canadian and U.S. GAAP                                  |  | 29,651,539          
|                                                        |  |                     
|Weighted-average number of shares under U.S. GAAP       |  | 29,651,539          
|                                                        |  |                     
|Basic and fully diluted loss per share under U. S. GAAP |  | $ (0.06)            



16.

SUBSEQUENT EVENTS



Subsequent to year end, the Company increased its interest in the Bigwave JV from 20% to 22%







99













Signature Page



Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.





Portal Resources Ltd.

Registrant



|Dated: January 15, 2010 | Signed:  /s/  David Hottman               
|----------------------- | ------------------------------------------
|                        | David Hottman,
President, CEO and Chairman

















100



























#