----

| UNITED      STATES SECURITIES AND EXCHANGE COMMISSION     |
|-----------------------------------------------------------|
| Washington,      DC 20549                                 |
|                                                      |
| FORM      10-Q                                            |
|                                                      |
| x                                                         | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES |
|                                                      | EXCHANGE      ACT OF 1934 |
|                                                      | For      the Quarterly Period Ended March 31,      2010 |
|                                                      |   |
| o                                                         | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES |
|                                                      | EXCHANGE      ACT OF 1934 |
|                                                      | For      the Transition Period From ________ to _________ |
|                                                      |
| Commission      File Number 0-50218                       |
|                                                      |
| BEKEM METALS, INC.                                        |
| Exact      name of registrant as specified in itscharter) |

| Utah                                          |   | 87-0669131               |
|-----------------------------------------------|--------|--------------------------|
| (State      or other jurisdiction of          |   | (I.R.S.      Employer    |
| incorporation      or organization)           |   | Identification      No.) |
|                                          |   |                     |
| 149      Kyz Zhibek Street, Office 11,        |   |                     |
| Almaty, Kazakhstan                            |   | 050020                   |
| (Address      of principal executive offices) |   | (Zip      Code)          |

| +7 (727) 227-94-05                                                                                                                                                                                                                                                                                                                                                                                                         |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Registrant's      telephone number, including area code)                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Indicate      by check mark whether the registrant (1) has filed all reports required to      be filed by Section 13 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 90 days.                                          | Yes      x No o |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
| Indicate      by check mark whether the registrant has submitted electronically and      posted on its corporate Web site, if any, every Interactive Data File      required to be submitted and posted pursuant to Rule 405 of Regulation S-T      (§ 232.405 of this chapter) during the preceding 12 months (or for such      shorter period that the registrant was required to submit and post such      files). | Yes       oNo o |

| Indicate      by check mark whether the registrant is a large accelerated filer, an      accelerated filer, a non-accelerated filer, or a smaller reporting      company. See the definitions of “large accelerated filer,” “accelerated      filer” and “smaller reporting company” in Rule 12b-2 of the Exchange      Act. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Large      accelerated filer | o |   | Accelerated      filer         | o |   |
|------------------------------|---|--------|--------------------------------|---|--------|
| Non-accelerated      filer   | o |   | Smaller      reporting company | x |

| Indicate      by check mark whether the registrant is a shell company (as defined in      Rule 12b-2 of the Act).                | Yes      o No      x |
|----------------------------------------------------------------------------------------------------------------------------------|----------------------|
|                                                                                                                             |                 |
| As      of April 30, 2010, the registrant had 124,980,296 shares of common stock,      par value $0.001, issued and outstanding. |

----

| Item      1. Financial Statements                                                                                                  |                                                                                                                                                                                                                 |
|------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                               |                                                                                                                                                                                                                 |   |
|                                                                                                                               |  Condensed      Consolidated Balance Sheets (Unaudited) as of  March 31, 2010      and December 31, 2009                                                                                              |  3 |
|                                                                                                                               |                                                                                                                                                                                                                 |   |
|                                                                                                                               | Condensed      Consolidated Statements of Operations (Unaudited) for the Three Months      Ended March 31, 2010 and 2009, and for the Period from March 5, 2004      (Date of Inception) through March 31, 2010 |  4 |
|                                                                                                                               |                                                                                                                                                                                                                 |   |
|                                                                                                                               | Condensed      Consolidated Statements of Cash Flows (Unaudited) for the Three Months      Ended March 31, 2010 and 2009, and for the Period from March 5, 2004      (Date of Inception) through March 31, 2010 |  5 |
|                                                                                                                               |                                                                                                                                                                                                                 |   |
|                                                                                                                               | Notes      to Condensed Consolidated Financial Statements (Unaudited)                                                                                                                                                | 6 |
|                                                                                                                               |                                                                                                                                                                                                                 |
| Item      2.  Management’s Discussion and Analysis of Financial      Condition and      Results of Operations | 16                                                                                                                                                                                                                   |
|                                                                                                                               |                                                                                                                                                                                                                 |
| Item      3.  Qualitative and Quantitative Disclosures About Market      Risk                                            | 24                                                                                                                                                                                                                   |
|                                                                                                                               |                                                                                                                                                                                                                 |
| Item      4T.  Controls and Procedures                                                                                   | 25                                                                                                                                                                                                                   |
|                                                                                                                               |                                                                                                                                                                                                                 |
| PART      II — OTHER INFORMATION                                                                                             |                                                                                                                                                                                                                 |
|                                                                                                                               |                                                                                                                                                                                                                 |
| Item      1A. Risk Factors                                                                                                         | 26                                                                                                                                                                                                                   |
|                                                                                                                               |                                                                                                                                                                                                                 |
| Item      6.  Exhibits                                                                                                   | 26                                                                                                                                                                                                                   |
|                                                                                                                               |                                                                                                                                                                                                                 |
| Signatures                                                                                                                         | 27                                                                                                                                                                                                                   |

----

| BEKEM      METALS, INC. AND SUBSIDIARIES                              |
|-----------------------------------------------------------------------|
| (An      Exploration Stage Company)                                   |
| CONDENSED      CONSOLIDATED BALANCE SHEETS                            |
| (UNAUDITED)                                                           |
|                                                                  |   |   |   |   |   |
|                                                                  |   | March      31, |   |   | December      31, |
|                                                                  |   | 2010 |   |   | 2009 |
|                                                                  |   |   |   |   |   |
| ASSETS                                                                |   |   |   |   |   |
|                                                                  |   |   |   |   |   |
| Current      Assets                                                   |   |   |   |   |   |
| Cash                                                                  | $  |            101,312 |   | $  |            534,619 |
| Trade      accounts receivable                                        |   |                30,069 |   |   |                22,439 |
| VAT      recoverable                                                  |   |              181,217 |   |   |              179,012 |
| Inventories                                                           |   |              545,178 |   |   |              542,245 |
| Prepaid      expenses and other current assets                        |   |                74,191 |   |   |                46,444 |
| Deferred      compensation                                            |   |                      - |   |   |                 6,390 |
| Total      Current Assets                                             |   |              931,967 |   |   |           1,331,149 |
|                                                                  |   |   |   |   |   |
| Property,      plant and mineral interests (net of accumulated        |   |   |   |   |   |
| depreciation      of $589,565 and $564,990)                           |   |           2,816,925 |   |   |           2,852,697 |
| Other      assets                                                     |   |                20,644 |   |   |                41,883 |
| Total      Assets                                                     | $  |          3,769,536 |   | $  |          4,225,729 |
|                                                                  |   |   |   |   |   |
| LIABILITIES      AND SHAREHOLDERS' DEFICIT                            |   |   |   |   |   |
|                                                                  |   |   |   |   |   |
| Current      Liabilities                                              |   |   |   |   |   |
| Notes      payable to related parties                                 | $  |          2,031,981 |   | $  |          2,031,981 |
| Accounts      payable                                                 |   |              188,801 |   |   |              122,610 |
| Accrued      expenses                                                 |   |              167,314 |   |   |              151,064 |
| Total      Current Liabilities                                        |   |           2,388,096 |   |   |           2,305,655 |
|                                                                  |   |   |   |   |   |
| Asset      retirement obligations                                     |   |              953,504 |   |   |              911,297 |
| Total      Liabilities                                                |   |           3,341,600 |   |   |           3,216,952 |
|                                                                  |   |   |   |   |   |
| Commitments      and Contingencies                                    |   |                      - |   |   |                      - |
|                                                                  |   |   |   |   |   |
| Shareholders'      Deficit                                            |   |   |   |   |   |
| Preferred      stock; $0.001 par value, 20,000,000 shares authorized, |   |   |   |   |   |
| no      shares outstanding                                            |   |                      - |   |   |                      - |
| Common      stock; $0.001 par value, 300,000,000 shares authorized,   |   |   |   |   |   |
| and      124,980,296 shares issued and outstanding                    |   |              124,980 |   |   |              124,980 |
| Additional      paid-in capital                                       |   |          28,387,055 |   |   |          28,387,055 |
| Accumulated      deficit                                              |   |      (30,613,114) |   |   |       (30,229,302) |
| Accumulated      other comprehensive income                           |   |           2,529,015 |   |   |           2,726,044 |
| Total      Shareholders' Deficit                                      |   |              427,936 |   |   |           1,008,777 |
|                                                                  |   |   |   |   |   |
| Total      Liabilities and Shareholders' Deficit                      |        $ |         3,769,536 |   | $  |          4,225,729 |
|                                                                  |   |   |   |   |   |

----

| BEKEM      METALS, INC. AND SUBSIDIARIES                             |
|----------------------------------------------------------------------|
| (An      Exploration Stage Company)                                  |
| CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS                 |
| (UNAUDITED)                                                          |
|                                                                 |
|                                                                 |   | For      the Three MonthsEnded      March 31, |   | For      the Period from March 5, 2004 (Date of Inception)  through |
|                                                                 |   | 2010 |   | 2009 |   | March      31, 2010 |
|                                                                 |   |   |   |   |   |   |
| Revenue                                                              | $  |                    - |  $ |                   - |  $ |                             - |
|                                                                 |   |   |   |   |   |   |
| Operating      Expenses                                              |   |   |   |   |   |   |
| General      and administrative expenses                             |   |              555,004 |   |              647,056 |   |                    13,992,427 |
| Research      and development costs                                  |   |                      - |   |                      - |   |                     1,057,970 |
| Exploratory      costs                                               |   |                54,169 |   |                11,876 |   |                     2,969,926 |
| Loss      from impairment of property                                |   |                      - |   |                      - |   |                    10,243,178 |
| Accretion      expense on asset retirement obligations               |   |                34,326 |   |                13,827 |   |                        634,179 |
| Grant      compensation expense                                      |   |                 6,390 |   |              154,295 |   |                     1,473,681 |
|                                                                 |   |   |   |   |   |   |
| Total      Operating Expenses                                        |   |              649,889 |   |              827,054 |   |                    30,371,361 |
|                                                                 |   |   |   |   |   |   |
| Loss      From Operations                                            |   |            (649,889) |   |            (827,054) |   |                  (30,371,361) |
|                                                                 |   |   |   |   |   |   |
| Other      Income/(Expense)                                          |   |   |   |   |   |   |
| Exchange      gain from remeasurement                                |   |                (3,588) |   |                    360 |   |                          48,146 |
| Exchange      (loss) gain                                            |   |              218,568 |   |          (2,802,998) |   |                    (2,718,310) |
| Interest      income                                                 |   |                 1,265 |   |                74,517 |   |                        708,515 |
| Interest      expense                                                |   |                      - |   |                      - |   |                    (1,337,317) |
| Other      income, net                                               |   |                49,832 |   |                34,140 |   |                     1,001,190 |
|                                                                 |   |   |   |   |   |   |
| Net      Other Income/(Expense)                                      |   |              266,077 |   |          (2,693,981) |   |                    (2,297,776) |
|                                                                 |   |   |   |   |   |   |
| Loss      from Continuing Operations                                 |   |            (383,812) |   |          (3,521,035) |   |                  (32,669,137) |
|                                                                 |   |   |   |   |   |   |
| Income      (Loss) from Discontinued Operations                      |   |   |   |   |   |   |
| (including      gain on disposal of Kaznickel of $6,082,390 in 2009) |   |                      - |   |              151,641 |   |                    (1,475,786) |
|                                                                 |   |   |   |   |   |   |
| Net      Loss Before Taxes                                           |   |            (383,812) |   |          (3,369,394) |   |                  (34,144,923) |
|                                                                 |   |   |   |   |   |   |
| Deferred      tax benefit                                            |   |                      - |   |                      - |   |                     3,390,601 |
|                                                                 |   |   |   |   |   |   |
| Consolidated      Net Loss                                           |   |            (383,812) |   |          (3,369,394) |   |                  (30,754,322) |
|                                                                 |   |   |   |   |   |   |
| Less:      Loss attributable to noncontrolling interests             |   |                      - |   |                      - |   |                        141,208 |
|                                                                 |   |   |   |   |   |   |
| Net      Loss Attributable To Shareholders of Bekem Metals Inc.      |  $ |           (383,812) |  $ |         (3,369,394) |  $ |                (30,613,114) |
|                                                                 |   |   |   |   |   |   |
| Basic      Loss per Common Share                                     |   |   |   |   |   |   |
| Loss      from continuing operations                                 |  $ |                (0.00) |  $ |                (0.03) |   |   |
| Income      from discontinued operations                             |   |                      - |   |                   0.00 |   |   |
|                                                                 |   |   |   |   |   |   |
| Consolidated      net loss                                           |  $ |                (0.00) |  $ |                (0.03) |   |   |
|                                                                 |   |   |   |   |   |   |
| Weighted-Average      Shares used in                                 |   |   |   |   |   |   |
|    Basic      Loss per Common Share                   |   |        124,980,296 |   |        125,172,011 |   |   |

----

| BEKEM      METALS, INC. AND SUBSIDIARIES                                               |
|----------------------------------------------------------------------------------------|
| (An      Exploration Stage Company)                                                    |
| CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS                                   |
| (UNAUDITED)                                                                            |
|                                                                                   |   | For      the Three MonthsEnded      March 31, |   |   | For      the Period from March 5, 2004 (Date of Inception)  through |
|                                                                                   |   | 2010 |   | 2009 |   |   | March      31, 2010 |
|                                                                                   |   |   |   |   |   |   |   |
| Cash      Flows from Operating Activities                                              |   |   |   |   |   |   |   |
| Net      loss                                                                          |        $ |           (383,812) |        $ |        (3,369,394) |   |  $ |                              (30,613,114) |
| (Income)      Loss from discontinued operations                                        |   |                           - |   |             (151,641) |   |   |                                    1,475,786 |
|                                                                                   |   |   |   |   |   |   |   |
| Adjustments      to reconcile net loss to                                              |   |   |   |   |   |   |   |
|    net      cash provided by operating activities:                      |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                     |   |                   51,446 |   |                   57,834 |   |   |                                       894,511 |
| Accretion      expense on asset retirement obligations                                 |   |                   34,326 |   |                   13,827 |   |   |                                       634,179 |
| Interest      expense from debt discount                                               |   |                           - |   |                           - |   |   |                                       963,231 |
| Shares      issued on option modification                                              |   |                           - |   |                           - |   |   |                                         19,426 |
| Deferred      tax benefit                                                              |   |                           - |   |                           - |   |   |                                  (3,390,601) |
| Foreign      currency exchange loss / (gain) and loss / (gain) from      remeasurement |   |              (214,980) |   |              2,827,642 |   |   |                                    2,670,164 |
| Impairment      loss on property, plant and mineral interests                          |   |                           - |   |                           - |   |   |                                  10,243,178 |
| Loss      / (gain) on disposal of property and equipment                               |   |                   24,596 |   |                   22,364 |   |   |                                       (71,448) |
| Stock      grant compensation expense                                                  |   |                     6,390 |   |                 154,295 |   |   |                                    1,473,681 |
| Change      in operating assets and liabilities:                                       |   |   |   |   |   |   |   |
| Trade      accounts receivable                                                         |   |                 (7,410) |   |                   26,546 |   |   |                                       (30,003) |
| VAT      recoverable                                                                   |   |                    (681) |   |                 (3,726) |   |   |                                     (121,415) |
| Inventories                                                                            |   |                     1,668 |   |                     7,996 |   |   |                                     (538,549) |
| Prepaid      expenses and other current assets                                         |   |               (19,308) |   |               (62,959) |   |   |                                       (96,339) |
| Change      in related party receivables / payables                                    |   |                           - |   |                           - |   |   |                                     (206,171) |
| Accounts      payable                                                                  |   |                   65,551 |   |                   77,057 |   |   |                                         23,598 |
| Advances      received                                                                 |   |                           - |   |               (51,762) |   |   |                                                - |
| Accrued      expenses                                                                  |   |                     7,290 |   |               (67,593) |   |   |                                              560 |
| Cash      From Operating Activities - Continuing operations                            |   |             (434,924) |   |             (519,514) |   |   |                                (16,669,326) |
| Cash      From Operating Activities - Discontinuing operations                         |   |                           - |   |                 (1,904) |   |   |                                  (5,816,257) |
| Net      Cash From Operating Activities                                                |   |             (434,924) |   |             (521,418) |   |   |                                (22,485,583) |
|                                                                                   |   |   |   |   |   |   |   |
| Cash      Flows from Investing Activities                                              |   |   |   |   |   |   |   |
| Purchase      of property and equipment                                                |   |                           - |   |                           - |   |   |                                  (4,051,384) |
| Purchase      of intangible assets                                                     |   |                    (302) |   |                           - |   |   |                                       (47,221) |
| Proceeds      from disposal of property and equipment                                  |   |                     2,001 |   |                 149,805 |   |   |                                       473,218 |
| Loans      provided to related parties                                                 |   |                           - |   |                           - |   |   |                                (14,900,000) |
| Cash      received from sale of subsidiary                                             |   |                           - |   |                 500,000 |   |   |                                    5,000,000 |
| Cash      acquired in acquisitions / received from discontinued      operations        |   |                           - |   |                           - |   |   |                                         52,364 |
| Cash      From Investing Activities - Continuing operations                            |   |                     1,699 |   |                 649,805 |   |   |                                (13,473,023) |
| Cash      From Investing Activities - Discontinuing operations                         |   |                           - |   |                           - |   |   |                                       425,377 |
| Net      Cash From Investing Activities                                                |   |                     1,699 |   |                 649,805 |   |   |                                (13,047,646) |
|                                                                                   |   |   |   |   |   |   |   |
| Cash      Flows from Financing Activities                                              |   |   |   |   |   |   |   |
| Proceeds      from notes payable                                                       |   |                           - |   |                           - |   |   |                                  13,946,817 |
| Payments      on notes payable                                                         |   |                           - |   |                           - |   |   |                                (21,649,038) |
| Proceeds      from loans / notes payable - related parties                             |   |                           - |   |                           - |   |   |                                  18,210,606 |
| Payments      on loans / notes payable - related parties                               |   |                           - |   |                           - |   |   |                                  (6,815,004) |
| Issuance      of shares for cash                                                       |   |                           - |   |                           - |   |   |                                  26,728,842 |
| Cash      From Financing Activities - Continuing operations                            |   |                           - |   |                           - |   |   |                                  30,422,223 |
| Cash      From Financing Activities - Discontinuing operations                         |   |                           - |   |                           - |   |   |                                    4,979,594 |
| Net      Cash From Financing Activities                                                |   |                           - |   |                           - |   |   |                                  35,401,817 |
|                                                                                   |   |   |   |   |   |   |   |
| Effect      of Exchange Rate Changes on Cash                                           |   |                      (82) |   |                  (3,456) |   |   |                                       232,724 |
|                                                                                   |   |   |   |   |   |   |   |
| Net      (Decrease) / Increase in Cash                                                 |   |             (433,307) |   |                 124,931 |   |   |                                       101,312 |
| Cash      at Beginning of Period                                                       |   |                 534,619 |   |                 115,459 |   |   |                                                  - |
| Cash      at Beginning of Period - Discontinued Operations                             |   |                             - |   |                        185 |   |   |                                                  - |
| Cash      at End of Period                                                             |   |                 101,312 |   |                 240,575 |   |   |                                       101,312 |
| Less      Cash of Discontinued Operations at End of Period                             |   |                             - |   |                       (37) |   |   |                                                  - |
| Cash      of Continuing Operations at End of Period                                    |  $ | 101,312  |        $ | 240,538  |   |   $ |  101,312 |

----

----

----

|                   | Kempirsai     |        | Mamyt      (1)          |
|------------------------|---------------|-------------|-------------------------|
|  Tons      of Ore | Investments,$ |        | Tons      of Brown Coal |
| 2009                   | -             | 6,000,000   |                    | 200,000 |
| 2010                   | -             | 26,500,000  |                    | 200,000 |
| 2011                   | -             | 42,000,000  |                    | 200,000 |
| 2012                   | -             | 36,500,000  |                    | 200,000 |
| 2013                   | 800,000       | 2,400,000   |                    | 200,000 |
| 2014                   | 800,000       | 2,000,000   |                    | 200,000 |
| 2015                   | 1,000,000     | 2,000,000   |                    | 200,000 |
| 2016                   | 1,000,000     | 2,000,000   |                    | 200,000 |
| 2017                   | 1,500,000     | 1,000,000   |                    | 200,000 |
| 2018                   | 1,500,000     | 1,000,000   |                    | 200,000 |
| 2019                   | 1,600,000     | 1,000,000   |                    |   |
| 2020                   | 1,234,900     | 1,000,000   |                    |   |
| Total                  | 9,434,900     | 123,400,000 |                    | 2,000,000 |

|  (1) | In      December 2009 KKM received a letter from the MEMR granting KKM’s request to      decrease the coal volume production requirements of its work program from      200,000 tons per year to 5,000 tons per year for the period from 2009 to      2012. We anticipated an addendum to this license memorializing the      changes to the annual work program requirements to be prepared some time      in May 2010. However, preparation of the addendum may be postponed to      later dates due to recent reorganizations in the government of the      Republic of Kazakhstan and creation of the new Ministry of Industry and      New Technologies (MINT) in March 2010 to assume the responsibilities of      the MEMR with regard to non-oil-related licenses. These      changes are not reflected in the above table and will be reflected when      these changes are legally approved by the government by the signing of a      new addendum to the existing subsoil use contract. See Note 8 for further      discussion of this addendum. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                          |          |  March      31,                                                                                                                            |   |    |  December      31,                                                                                                        |
|-------------------------------|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------------------------------------------------------------------------------------------------------------------------------|
|                          |          | 2010                                                                                                                                            |   |    | 2009                                                                                                                           |
| Current      accounts (USD)   |        $ |                      2,223             |   |  $ |                   19,289             |
| Current      accounts (Tenge) |          |                      39,476            |   |    |                     75,071 |
| Bank      deposit (USD)       |          |                        4,918 |   |    |                    150,107      |
| Bank      deposit (Tenge)     |          |                      54,695            |   |    |                    290,152      |
| Total                         |        $ |                 101,312                                         |   |  $ |                534,619                              |

|                                    |    |  March      31,                                                                                                                              |   |    |  December      31,                                                                                                                           |
|-----------------------------------------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |    | 2010                                                                                                                                              |   |    | 2009                                                                                                                                              |
| Buildings                               | $  | 1,573,965                                                                                                                                         |   | $  | 1,562,807                                                                                                                                         |
| Machinery      and equipment            |    |              1,759,287                                                           |   |    |              1,744,464                                                           |
| Other      fixed assets                 |    |                  73,238                                      |   |    |                 110,416                                           |
| Unproved      mineral interests         |    |                         - |   |    |                         - |
|                                    |    |              3,406,490                                                           |   |    |              3,417,687                                                           |
| Accumulated      depreciation           |    |               (589,565)                                                     |   |    |               (564,990)                                                     |
| Property,      plant and equipment, net | $  | 2,816,925                                                                                                                                         |   | $  | 2,852,697                                                                                                                                         |

----

----

----

----

----

----

----

| Territory      Name |   | Size      of Territory |   | Primary Minerals           |   | License      Type |   | License      or Contract # |   | License      and SubsoilUse Contract Term   |
|---------------------|--------|------------------------|--------|----------------------------|--------|-------------------|--------|----------------------------|--------|---------------------------------------------|
|                |   |                   |   |                       |   |              |   |                       |   |                                        |
| Kempirsai           |   | 575,756      acres     |   | Nickel      and cobalt ore |   | Production        |   | MG      #420MG      #426   |   | Expires      Oct, 12, 2020 unless extended. |
| Mamyt               |   | 116      acres         |   | Brown      coal            |   | Production        |   | MG      #9-D               |   | Expires      Dec, 11 2018 unless extended.  |

----

----

----

| For      the Three Months Ended March 31,    |   | 2010          |   |   | 2009          |
|----------------------------------------------|--------|---------------|--------|--------|---------------|
|                                         |   |          |   |   |          |
| Net      cash from operating activities      | $      | (434,924)     |   | $      | (521,418)     |
| Net      cash from investing activities      |   | 1,699    |   |   | 649,805  |
| Net      cash from financing activities      |   | –  |   |   | –  |
| Effect      of exchange rate changes on cash |   | (82)          |   |   | (3,456)       |
| NET      (DECREASE) / INCREASE IN CASH       | $      | (433,307)     |   | $      | 124,931  |

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|                                        |   |         |   |        Payments      due by Fiscal Year |
|---------------------------------------------|--------|--------------|--------|----------------------------------------------|
|  Contractual      Commitments          |   |  Total  |   | Less      than1      year                    |   |  1-3      years |   |  3-5      years |   | More      than 5 years |
| KKM’s      work programs (1)      (2) |   | $123,400,000 |   | $32,500,000                                  |   | $78,500,000 |   | $4,400,000 |   | $8,000,000 |
| Operating      leases                       |   | 35,635       |   | 35,635                                       |   | -0- |   | -0- |   | -0- |
|       Total   |   | $123,435,635 |   | $32,535,635                                  |   | $78,500,000 |   | $4,400,000 |   | $8,000,000 |

| (1) | The      current terms of the Kempirsai contract require KKM to invest $135 million      to be applied to its mining and ore processing technology during the      period 2006-2020 (or around $123.4 million for the remaining period).      Also, the estimates include $950,000 for removal of all equipment and to      remediate the property.  This remediation work can be done      during the term of the subsoil use contract or upon completion of the      terms of the contract. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | In      March 2008 KKM entered into a preliminary consortium agreement      with two Kazakhstani companies, GRK Koitas LLP (“GRK”) and      Asia-Invest Corporation LLP (“AI”), who also have exploration and      production licenses near the Company’s Kempirsai deposit in northwestern      Kazakhstan.  Under the preliminary consortium agreement, which      was amended in November 2009, the parties are obliged to jointly      contribute approximately $9.2 million for financing the construction of      the processing plant. Of this amount, KKM is obligated to contribute      approximately $4.6 million. Contributions made by the parties into the      consortium are accounted for in the annual work programs of these parties.      As of December 31, 2009 contributions of GRK equal KZT 192 million      ($1,293,565) and contributions of AI equal KZT 122 million ($820,925),      which were to be used for construction of a processing    plant. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ● | pertain      to the maintenance of records that, in reasonable detail, accurately and      fairly reflect the transactions and dispositions of the assets of the      Company;                                                                                                                                                                                       |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ● | provide      reasonable assurance that transactions are recorded as necessary to permit      preparation of financial statements in accordance with generally accepted      accounting principles, and that receipts and expenditures of the Company      are being made only in accordance with authorizations of management and      directors of the Company; and |
| ● | provide      reasonable assurance regarding prevention or timely detection of      unauthorized acquisition, use or disposition of the Company’s assets that      could have a material effect on the financial  statements.                                                                                                                                   |

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| Exhibit      No. |   | Exhibit      Description                                                                                                                                                                                |
|------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |   |                                                                                                                                                                                                    |
| 10.31            |   | Addenda      No.1 to the Contract on work on Extraction of brown coal on East - Ural a      deposit (A site East - Ural) Located in the Aktyubinsk area Kazakhstan      Republic (English translation)* |
| 31.1             |   | Certification      of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-      Oxley Act of 2002*                                                                                      |
| 31.2             |   | Certification      of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-      Oxley Act of 2002*                                                                                      |
| 32.1             |   | Certification      of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-      Oxley Act of 2002*                                                                                      |
| 32.2             |   | Certification      of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-      Oxley Act of 2002*                                                                                      |

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|                   | BEKEM      METALS, INC.                           |
|------------------------|---------------------------------------------------|
|                   |                                              |
|                   |                                              |
| Date:      May 7, 2010 | /s/      Yermek Kudabayev                         |
|                   | Yermek      KudabayevChief      Executive Officer |
|                   |                                              |
|                   |                                              |
| Date:      May 7, 2010 | /s/      Yermek Kudabayev                         |
|                   | Yermek      Kudabayev                             |
|                   | Interim      Chief Financial Officer              |

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